Valentino

In this case, we confront a fundamental issue in the interpretation of California’s settlement incentive scheme. May costs be shifted against a prevailing party who rejected a statutory settlement offer (under Code Civ. Proc., § 998) that would have required this party to forego other lawsuits as well as dismissing the one involved in the case at trial? The trial court answered this question in the affirmative. Neither the language, legislative intent, nor policy justification of section 998 supports this interpretation. Accordingly, we are compelled to reverse.

Facts and Proceedings Below

On November 11, 1982, appellant Judith Valentino slipped and fell at a gasoline station owned by respondent, Elliott Sav-On Gas, Inc. (Sav-On). She filed suit and claimed serious physical injuries impairing her ability to perform certain routine tasks.

On May 25, 1984, Sav-On’s attorney submitted a section 998 offer to allow judgment to Ms. Valentino’s counsel. Included with the offer was a “Notice of Acceptance” which Ms. Valentino was to sign and file in the superior court within 30 days. In these documents Sav-On offered Ms. Valentino a total of $15,000. To receive payment of this…