Barella

In this case we decide whether a plaintiff suing for defamation can be put at risk for payment of a defendant’s costs pursuant to section 998 of the Code of Civil Procedure, if the defendant makes a reasonable settlement offer but attaches to it a condition of confidentiality. In other words, must a plaintiff seeking to vindicate his good name (and to recover damages for its tamishment) reject a generous—but secret—settlement at his peril?

Consistent with the ancient proverb that “A good name is rather to be chosen than great riches” (Proverbs 22: l), we hold that a confidentiality condition attached to a settlement offer in a defamation action is incapable of valuation and, accordingly, renders the offer invalid for purposes of the cost-shifting provisions of Code of Civil Procedure section 998 (hereafter section 998).

Factual and Procedural History

The trial transcripts were not provided on appeal. Therefore, we have gleaned the following account from the papers submitted on defendant’s unsuccessful motion for summary judgment and from the trial briefs.

Plaintiff John E. Barella is a real estate developer who has lived in Petaluma all his life and has conducted…