Opinion
NOT TO BE PUBLISHED
APPEALS from a judgment of the Superior Court of San Diego County, No. GIN052847, Michael B. Orfield, Judge.
McDONALD, J.
Plaintiff Linear Electric, Inc. (Linear) was a subcontractor on a construction project for which defendant Moorefield Construction, Inc. (Moorefield) was the general contractor. The subcontract contained an attorney fees clause. Linear filed an action against Moorefield for breach of the subcontract, seeking more than $1 million in damages, plus attorney fees. Moorefield served an offer to compromise pursuant to Code of Civil Procedure section 998, the amount of which included Linear's attorney fees and other court costs incurred through the date of the offer. Linear did not accept Moorefield's section 998 offer.
All statutory references are to the Code of Civil Procedure unless otherwise specified.
The amount recovered by Linear at trial, when combined with the amount awarded by the trial court to Linear as reasonable attorney fees and costs incurred prior to the section 998 offer, did not exceed Moorefield's section 998 offer. Accordingly, the court awarded Moorefield its post-section 998 offer attorney fees and costs under section 998, subdivision (e). However, the court denied Moorefield's request for its expert witness fees.
On appeal, Linear asserts that, for purposes of calculating whether Linear obtained a net recovery in excess of the section 998 offer, the trial court was obligated to add to the damage award the full amount sought by Linear as pre-section 998 offer attorney fees and costs and did not have the discretion to add only reasonable attorney fees and costs. Moorefield's cross-appeal asserts the trial court abused its discretion by denying its requested expert witness fees.
I
FACTUAL AND PROCEDURAL BACKGROUND
A. The Dispute and Litigation
Moorefield was the general contractor on a construction project in Carlsbad, California. In May 2005 Linear, an electrical subcontractor, entered into a standard form subcontract agreement with Moorefield to perform the electrical work for the project. Linear was to receive $593,000 for its work. The subcontract contained an attorney fees clause.
Linear began its work on the project. However, disputes arose over the type of electrical cable Linear was required to install and the scope of the work involved. In May 2006 Linear filed this action for breach of the subcontract, asserting it was entitled to damages in excess of $1 million, plus reasonable attorney fees and costs. Moorefield cross-complained, contending it was entitled to charge Linear for amounts Moorefield incurred to remedy Linear's allegedly defective work.
On April 5, 2007, Moorefield served a section 998 offer on Linear. Moorefield's offer stated it would permit judgment to be taken against it and in favor of Linear for " '$150,033, which sum includes [Linear's] reasonable attorneys' fees and other court costs incurred through the date of this offer,' " and would dismiss its cross-complaint. The offer was not accepted by Linear.
B. The Damage Award
Following a 10-day bench trial, the court rejected Linear's principal claim, which sought over $726,000 for loss of productivity attributable to the delays and problems associated with the construction subcontract. However, the court did award Linear a net damages recovery of $97,211, the bulk of which represented the undisputed unpaid balance owed on the subcontract.
C. The Posttrial Awards
Both parties filed a series of posttrial motions. Linear moved for a determination that it was the prevailing party, and was therefore entitled to recover its attorney fees and costs, because it obtained a net monetary recovery. Linear also asserted that it recovered a more favorable judgment than the section 998 offer because its net damages recovery of $97,211, when added to Linear's pre-section 998 offer attorney fees and costs of nearly $68,000, exceeded Moorefield's $150,033 section 998 offer. Accordingly, Linear asserted it was entitled to recover both its pre- and post-section 998 offer attorney fees and costs.
Moorefield opposed Linear's motion, arguing the amount claimed as Linear's pre-section 998 offer attorney fees and costs was grossly excessive. Moorefield asserted that because a court need not award the full amount of attorney fees to a prevailing party, but instead has the authority to reduce the requested attorney fees award and limit the award to reasonable attorney fees, the court should limit Linear's pre-section 998 offer attorney fees and costs to the amount of $35,000. Moorefield affirmatively moved for a determination that it was the prevailing party, arguing that once Linear was limited to recovery of a reasonable attorney fees award, Moorefield was the prevailing party under section 998 and was entitled to recover its post-section 998 attorney fees and costs. Among the costs sought by Moorefield was approximately $55,000 for expert witness fees.
Moorefield noted (1) fees claimed by Linear were nearly triple the amount of the comparable pre-section 998 offer attorney fees and costs incurred by Moorefield, (2) over $40,000 was claimed as fees during a period in which the parties were preparing for a mediation and had stayed the bulk of discovery, and (3) some parts of the fees were likely attributable to collateral matters, such as resolving mechanics' liens filed against the project by Moorefield's vendors and suppliers.
Linear opposed Moorefield's request for a determination that Moorefield was the prevailing party, asserting the full amount sought by Linear as its pre-section 998 attorney fees and costs was a reasonable award that, when added to its net monetary recovery, made Linear the prevailing party under section 998. Linear also argued that, even were Moorefield determined to be the prevailing party under section 998, the court should exercise its discretion and deny its requested expert witness fees as neither necessarily nor reasonably incurred.
The trial court found Linear prevailed in the action, and was therefore entitled to recover reasonable costs and attorney fees under section 1033.5, subject to the application of the provisions of section 998. The court found Linear was entitled to recover $51,389.25 as its pre-section 998 offer reasonable attorney fees and costs, and that when those fees and costs were added to the net monetary recovery in the litigation, Linear's total recovery in the litigation was $148,600.25. Because that amount was less than Moorefield's $150,033 section 998 offer, the court found Moorefield was the prevailing party under section 998. Accordingly, the court found Moorefield was entitled to recover its reasonable costs and attorney fees incurred after its section 998 offer and that Linear was not entitled to recover its costs and attorney fees incurred after Moorefield's section 998 offer. Although the court awarded Moorefield certain post-section 998 offer costs and attorney fees, in a total amount of $152,147.45, the court denied its requested award of expert witness fees. After the court entered judgment reflecting these awards, both parties appealed.
II
LINEAR'S APPEAL
Linear argues the trial court did not have discretion to limit its pre-offer attorney fees to reasonable attorney fees for purposes of determining whether Linear's recovery was greater than Moorefield's section 998 offer.
A. Section 998
Section 998, which has been part of California Law since 1851 and (with minor modifications) has remained "essentially unchanged in substance" (Taing v. Johnson Scaffolding Co. (1992) 9 Cal.App.4th 579, 585), is a cost-shifting statute (Barella v. Exchange Bank (2000) 84 Cal.App.4th 793, 798), the goal of which is to encourage parties to settle cases prior to trial by imposing financial disincentive for a party who refuses to settle. (Ibid.; T. M. Cobb Co. v. Superior Court (1984) 36 Cal.3d 273, 280; Elrod v. Oregon Cummins Diesel, Inc. (1987) 195 Cal.App.3d 692, 698-699.) The statutory scheme encourages settlements by providing both a "carrot" and a "stick." (Scott v. Blout, Inc. (1999) 20 Cal.4th 1103, 1116.) The stick is that, although a prevailing party in a civil lawsuit is ordinarily entitled to recover its costs (§ 1032), when a party prevailing at trial obtains a judgment less favorable than a pretrial settlement offer submitted by the other party, the prevailing party may not recover its own postoffer costs and, moreover, must pay its opponent's postoffer costs, potentially including attorney fees and expert witness costs. (Ibid.; accord, Barella v. Exchange Bank, supra.) "The carrot is that by awarding costs to the putative settler the statute provides a financial incentive to make reasonable settlement offers...." (Bank of San Pedro v. Superior Court (1992) 3 Cal.4th 797, 804.)
Section 998 provides that any party to an action may "serve an offer in writing upon any other party to the action to allow judgment to be taken or an award to be entered in accordance with the terms and conditions stated at that time." (§ 998, subd. (b).) If a defense offer is not accepted and the plaintiff does not obtain a more favorable judgment, the plaintiff may not recover his or her postoffer costs and shall pay the defendant's costs from the time of the offer, which may include expert witness fees. (§ 998, subd. (c)(1).)
"It is well established that where, as here, the section 998 offer includes costs, the plaintiff's preoffer costs are included in deciding whether the 'judgment' is more favorable than the offer; postoffer costs are excluded." (Mesa Forest Products, Inc. v. St. Paul Mercury Ins. Co. (1999) 73 Cal.App.4th 324, 330.) Thus, for purposes of determining whether the judgment obtained by a plaintiff is more favorable than an offer that specified the amount of the offered judgment includes reasonable attorney fees and costs, the court must add the amount of damages recovered by the plaintiff to the amount of his or her recoverable pre-offer costs (ibid.) and the amount of pre-offer attorneys fees authorized by statute (Heritage Engineering Construction, Inc. v. City of Industry (1998) 65 Cal.App.4th 1435, 1441 (Heritage)), and compare that total amount to the amount of the section 998 offer.
B. Analysis
Linear argues that, as a matter of policy and of statutory interpretation, a trial court does not have discretion to limit a party's pre-offer attorney fees to reasonable attorney fees for purposes of determining whether that party has obtained a judgment greater than the section 998 offer.
Moorefield asserts these arguments were not raised below and were therefore waived. However, because these arguments raise purely legal issues, we decline to treat the arguments as waived. (See, e.g., Kinsey v. Union Pacific Railroad Co. (2009) 178 Cal.App.4th 201, 206, fn. 3.)
For purposes of determining whether a plaintiff has obtained a result greater than a section 998 offer, some cases have described the costs to be added to the judgment as the "costs and reasonable attorney fees incurred by [the offeree] prior to the... section 998 offer." (Adam v DeCharon (1995) 31 Cal.App.4th 708, 713, italics added; accord, Duale v. Mercedes-Benz USA, LLC (2007) 148 Cal.App.4th 718, 725-726, fn 3.) Other courts have described the costs to be added to the judgment as the amount of costs "allowed under section 1033.5, subdivision (a)" (Wickware v. Tanner (1997) 53 Cal.App.4th 570, 575, italics added; accord, Wilson v. Wal-Mart Stores, Inc. (1999) 72 Cal.App.4th 382, 392), or the "recoverable costs and attorney's fees authorized by statute and incurred before the settlement offer" (Kelly v. Yee (1989) 213 Cal.App.3d 336, 342, italics added), and both of those formulations appear to incorporate Civil Code section 1717, subdivision (a)'s limitation that in contract actions the recovery of attorney fees as costs is limited to reasonable attorney fees. (See, e.g., § 1033.5, subds. (a)(10)(A), (c)(5).) Linear does not dispute that, insofar as a party may recover attorney fees as costs, the trial court has broad authority to determine what amount constitutes a reasonable fee (see, e.g., PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1094-1095), and its determination will not be disturbed absent an abuse of discretion. (Serrano v. Priest (1977) 20 Cal.3d 25, 49.) We are convinced the interplay between section 998 and Civil Code section 1717 grants the court discretion to determine that the recoverable costs and attorney fees incurred before the settlement offer are limited to the reasonable attorney fees as set by the court.
Linear, correctly noting the cited authorities did not directly hold that a court has discretion to limit a party's pre-offer attorney fees to reasonable attorney fees for purposes of determining whether that party has obtained a result greater than the section 998 offer, argues policy considerations militate in favor of prohibiting a court from limiting a party's pre-offer attorney fees to reasonable attorney fees. Linear argues the statutory goal of encouraging settlements requires that the offeree be able to determine whether to accept the settlement offer based on the facts existing as of the time the offer is made rather than at the time of the judgment. (See, e.g., Guerrero v. Rodan Termite Control, Inc. (2008) 163 Cal.App.4th 1435, 1441; Burch v. Children's Hospital of Orange County Thrift Stores, Inc. (2003) 109 Cal.App.4th 537, 547-548.) Linear asserts that goal will be frustrated if the offeree must engage in forecasting the extent to which a court might limit the attorney fees incurred prior to the section 998 offer. However, the decision whether to accept an offer always involves some degree of estimation and prediction as to the extent of any ultimate recovery, but this reality does not obviate the operation of section 998. Insofar as the court might exercise its power to limit a party's pre-offer attorney fees, it is only the extent to which that power might be exercised (not whether such power exists ab initio) that must be calculated, and we are unconvinced this reality should thwart the operation of section 998. More importantly, Linear overlooks that its theory would (if adopted) frustrate the objectives of section 998 by denying to the offeror the benefits attending the offer, i.e. section 998's "financial incentive to make reasonable settlement offers" (Bank of San Pedro v. Superior Court, supra, 3 Cal.4th at p. 804), from the cost award under section 998. If an offeror may not calculate the amount of his or her section 998 offer based on estimation of a reasonable attorney fees component, but is instead left at the caprice of whether the opposing party has incurred excessive attorney fees as of the date of the offer, the offeror is threatened with the loss of section 998's financial incentive even though meeting the statutory obligation of making an objectively reasonable settlement offer. We are convinced that policy considerations militate in favor of, rather than against, permitting a court to limit the attorney fees incurred prior to the section 998 offer to reasonable attorney fees.
Linear also asserts the amendments to section 998, and the legislative history surrounding the efforts to amend section 998, evidence a legislative intent to divest the trial court of any discretion to limit attorney fees (incurred prior to a § 998 offer) to reasonable attorney fees. We are convinced the language of the 1997 amendment to section 998, as illuminated by the legislative history surrounding that amendment, reveals the Legislature intended the amendment only to "supersede the holding in [Encinitas Plaza Real v. Knight (1998) 209 Cal.App.3d 996] that attorney fees awarded to the prevailing party were not costs for purposes of [section 998] but were part of the judgment." (§ 998, subd. (c)(2)(B).) There is nothing in either the amendment or the legislative history that convinces us the Legislature intended that amendment to prohibit a trial court from limiting the attorney fees component of pre-offer costs to reasonable attorney fees.
Linear has moved this court for an order under Evidence Code section 459 granting judicial notice of certain legislative history surrounding Senate Bill No. 1510 (1995-1996 Reg. Sess.) and Senate Bill No. 73 (1997-1998 Reg. Sess.). Moorefield's opposition asserts the motion should be denied, but alternatively asserts that if the motion is granted, certain additional documents concerning Senate Bill No. 73 (1997-1998 Reg. Sess.) should also be judicially noticed. We grant both motions for judicial notice.
The intent of the legislative amendments to section 998 can be understood only in their historical context. In its pre-1994 form, section 998 provided no guidance as to the meaning of the phrase "more favorable judgment" but appellate decisions had concluded that, for purposes of determining whether a plaintiff had obtained a judgment more favorable than the offer, a defendant's offer that included costs was to be compared with the judgment the plaintiff received supplemented by the plaintiff's pre-offer costs. (See, e.g., Shain v. City of Albany (1980) 106 Cal.App.3d 294, 299.) However, in Encinitas Plaza Real v. Knight, supra, 209 Cal.App.3d 996, this court addressed the inclusion of attorney fees as costs in determining whether the plaintiff had obtained a more favorable judgment. In that action the plaintiff's verdict was substantially lower than the defendant's statutory offer, but the plaintiff had also been awarded contractual attorney fees under Civil Code section 1717. The court concluded the contractual attorney fees constituted special damages under the contract rather than costs. Accordingly, in considering whether the judgment exceeded the defendant's offer, the court held the full amount of attorney fees (rather than only the pre-offer attorney fees) was to be added to the judgment. (Id. at pp. 1000-1003.)
In 1994, the Legislature reacted by amending section 998, subdivision (c), seeking to abrogate the holding of Encinitas (see Bodell Construction Co. v. Trustees of Cal. State University (1998) 62 Cal.App.4th 1508, 1524), by adding the following sentence to section 998, subdivision (c): "For purposes of this section, a plaintiff in a cause of action not based on tort shall not be deemed to have obtained a more favorable judgment unless the judgment obtained by the plaintiff, exclusive of attorney's fees and costs, exceeds the offer made by the defendant pursuant to this section." (Stats. 1994, ch. 332, § 1.) Although this language abrogated Encinitas, it also appeared to undermine the cases holding a plaintiff's pre-offer costs were to be added to the judgment for purposes of determining whether a more favorable judgment had been obtained. (Heritage, supra, 65 Cal.App.4th at p. 1441.)
It is against this background that the Legislature enacted the 1997 amendments to section 998, by enacting Senate Bill No. 73 (see Stats. 1997, ch. 892, § 1), on which Linear's appellate argument rests. As explained by the court in Heritage, supra, 65 Cal.App.4th at p. 1441, the 1997 amendment:
"removed [the language of the 1994 amendment] and replaced [it] with language providing that postoffer costs are to be excluded in determining whether the plaintiff obtains a more favorable judgment. Further, the amendment expressly indicated that attorney's fees were to be considered as costs.... [¶]... [¶] Legislative history indicates this amendment was proposed because the 1994 amendment had 'created much confusion, and... this new reformulation would avoid the injustices of the former law without the complexity of current law.' (Sen. Com. on Judiciary, Analysis of Sen. Bill No. 73 (1997-1998 Reg. Sess.) as amended May 1, 1997.) [¶] Read in context, the 1997 amendment of... section 998 specifically abrogated Encinitas on the issue of whether attorney's fees are to be considered costs, and otherwise returned the 'more favorable judgment' determination to its pre-Encinitas formulation: When the defendant's offer includes costs, it is to be compared with the plaintiff's judgment plus preoffer costs including attorney's fees."
The Legislature's intent underlying its adoption of Senate Bill 73 is clearly stated: to abrogate Encinitas, and to reinstate the "more favorable judgment" determination to its pre-Encinitas formulation of comparing a defendant's offer to the plaintiff's judgment as supplemented by pre-offer attorney fees. However, that intent is a question distinct from the issue here: whether the Legislature also intended that the amount of the plaintiff's pre-offer attorney fees must be added to the judgment even where that amount was so excessive that such amount would not be recoverable in any resulting judgment. There is nothing in the legislative history surrounding Senate Bill No. 73 suggesting that intent. To the contrary, insofar as the legislative history surrounding Senate Bill No. 73 provides any insight into the issue presented here, it appears the Legislature understood the amendment would codify the holdings of Hoch v. Allied-Signal, Inc. (1994) 24 Cal.App.4th 48 and Stallman v. Bell (1991) 235 Cal.App.3d 740. (See Sen. Judiciary Com., Analysis of Sen. Bill No. 73 (1997-1998 Reg. Sess.) as amended May 1, 1997, p. 7.) Those cases allow a plaintiff who prevailed but recovered less than its section 998 offer to still recover such pre-offer costs as are "due the prevailing party under Code of Civil Procedure section 1032, subdivision (b)." (Hoch, at p. 69; accord, Stallman, at p. 748 [pre-offer costs " 'authorized by statute' " are added to the award of damages].) As previously discussed, because the amount of costs allowed by statute are attorney fees subject to Civil Code section 1717, subdivision (a)'s limitation that attorney fees as costs are limited to reasonable attorney fees, the codification of the holdings in Hoch and Stallman suggest an intent to codify that limitation. (Cf. Sharon S. v. Superior Court (2003) 31 Cal.4th 417, 433.)
All of the language cited by Linear in support of its argument is drawn from comments made by various parties in connection with a prior bill, Senate Bill No. 1510 (1995-1996 Reg. Sess.), which never became law because it was vetoed by Governor Wilson. However, Linear cites nothing to suggest that the legislative history of a bill that never became law may be relied on to construe the intent of a bill enacted by a different Legislature. Additionally, the comments relied on by Linear in connection with the Legislature's consideration of Senate Bill No. 1510 at most demonstrate that certain provisions of that bill (which would have given a judge discretion to include or exclude attorney fees for purposes of determining whether the judgment was "more favorable" than the offer) were deleted from the final version of the bill and replaced by language that entirely excluded attorney fees from the judgment obtained by the plaintiff. However, the final version of Senate Bill No. 1510 was substantively different from the bill ultimately adopted by the Legislature, because Senate Bill No. 73 did not entirely exclude attorney fees and costs from the calculus, but instead excluded only postoffer costs from the calculus. We are unconvinced that any concerns expressed over versions of a bill that never became law, and that contained provisions substantially different from a bill that did become law, are of value in construing the intent of the enacted bill.
For the foregoing reasons, we are not persuaded by Linear's construction of section 998, subdivision (c)(2)(A), and conclude the trial court had discretion to limit Linear's pre-offer costs to reasonable attorney fees for purposes of applying section 998.
III
MOOREFIELD'S APPEAL
Moorefield sought $55,391.64 as expert witness fees. It argued that, as the prevailing party, the provisions of section 998, subdivision (c)(1), gave the court discretion to award those fees to Moorefield. It supported its claim for fees by asserting that, after its section 998 offer was rejected by Linear, Moorefield retained and paid an expert (Mr. Silva) for trial testimony rebutting the "loss of productivity" evidence that Linear's expert was expected to provide at trial. Linear opposed Moorefield's request for expert witness fees, and the trial court denied the request. Moorefield's appeal argues the denial of expert witness fees was an abuse of discretion.
A. Legal Standards
A trial court has the discretion to award expert witness fees under section 998, subdivision (c), to a defendant who made an unaccepted offer to the plaintiff and thereafter prevailed, but the award is not automatic. (Santantonio v. Westinghouse Broadcasting Co. (1994) 25 Cal.App.4th 102, 121-124.) The purpose of section 998—to encourage the settlement of lawsuits prior to trial by penalizing litigants who fail to accept what in retrospect is determined to have been a reasonable settlement offer—is implemented by providing mandatory and discretionary penalties against a plaintiff who fails to obtain a "more favorable judgment" after rejecting the defendant's offer to compromise. (Bodell Construction Co. v. Trustees of Cal. State University, supra, 62 Cal.App.4th at pp. 1518-1519.) The mandatory penalties are contained in the first sentence of section 998, subdivision (c): a plaintiff who does not obtain a more favorable judgment forfeits his or her postoffer costs and must pay the defendant's costs incurred after the time of the offer. (Bodell, at p. 1519.) "The discretionary penalty provisions of subdivision (c) are set forth in the third sentence, and give the trial court discretion in any action or proceeding other than an eminent domain action to require the plaintiff to pay not only the defendant's ordinary court costs from the date of filing of the complaint, but also the defendant's reasonable expert witness costs 'actually incurred and reasonably necessary in either, or both, the preparation or trial of the case by the defendant.' " (Id. at pp. 1519-1520, fn. omitted.)
A trial court's ruling on whether to award the discretionary penalties provided by section 998, subdivision (c), will not be reversed on appeal absent a clear showing that the ruling was an abuse of discretion. (Santantonio v. Westinghouse Broadcasting Co., supra, 25 Cal.App.4th at p. 121.)
B. Evaluation
Moorefield asserts that, under Thompson v. Miller (2003) 112 Cal.App.4th 327, the order denying request for expert fees was an abuse of discretion. However, we cannot conclude that, on the facts of this case, the trial court's ruling " 'exceed[ed] the bounds of reason, all of the circumstances before it being considered.' " (Denham v. Superior Court (1970) 2 Cal.3d 557, 566.) In this case, the trial court could well have concluded, from the fact the offered amount ($150,033) so closely approximated the actual recovery ($148,600.25), that it was not unreasonable for Linear to have rejected the offer as inadequate because it contained no component of compensation for the harm it suffered from the delays caused by Moorefield's breach, and therefore that imposition of additional penalties (beyond the mandatory penalties imposed under § 998) was inappropriate. Indeed, there was some evidence from which the trial court could have concluded Moorefield's offer represented a sufficiently nominal offer that any award of expert fees would be inappropriate. (See, e.g., Wear v. Calderon (1981) 121 Cal.App.3d 818, 821 [where settlement offer by defendant is so disproportionate to plaintiff's demand that it was not reasonable and offeror had no expectation it would be accepted, trial court need not award expert fees]; Elrod v. Oregon Cummins Diesel, Inc., supra, 195 Cal.App.3d at p. 700 [whether § 998 offer was reasonable and made in good faith is a matter left to the sound discretion of the trial court].)
Moorefield cites Fassberg Construction Co. v. Housing Authority of City of Los Angeles (2007) 152 Cal.App.4th 720 for the claim that an order denying expert fees is an abuse of discretion and should be reversed when the court does not state reasons for denying the fee request. However, Fassberg reversed because it premised its order denying fees on a reason (e.g. the overbreadth of the proposed release) the appellate court determined was erroneous. (Id. at pp. 765-767.) Here, the trial court's order was simply silent on the reason for denying fees and, contrary to Moorefield's apparent argument, there is no mandate that a court state reasons for its order denying fees. (Cf. Ketchum v. Moses (2001) 24 Cal.4th 1122, 1140-1141.) Accordingly, we reject Moorefield's claim that the absence of stated reasons requires reversal.
Although Moorefield asserts a $150,000 offer could not be deemed nominal, we note that a more appropriate comparison would be to examine the offer after first deducting both the amounts Moorefield effectively stipulated were owed (approximately $60,000 in contract installments due to Linear) and the pre-offer fees and costs found reasonable by the court (approximately $51,000). After deducting these amounts, Moorefield's offer was actually less than $40,000 to compromise a set of claims that, according to Linear, had a value of over $900,000 if the "loss of productivity" claim had been shown, and had a value of $175,000 even if the "loss of productivity" claim was entirely ignored. A trial court might well have concluded an offer worth 4 cents on the dollar (in the former scenario) or less than 23 cents on the dollar (in the latter scenario) was not sufficiently reasonable that the discretionary penalties were appropriate.
In contrast to this case, the court in Thompson v. Miller, supra, 112 Cal.App.4th 327 concluded the denial of expert fees was an abuse of discretion in large part because the disparity between the amount offered ($300,000) and the amount recovered by the plaintiff ($0). The Thompson court, finding the denial of expert fees to be an abuse of discretion, reasoned that this huge disparity showed the offer was well within the approximate range for which defendants could have been found liable, and indeed "exceeded the alleged underpayment... that plaintiffs' own expert placed on the stock. Plaintiffs had this information; nevertheless, they declined the offer. This was not a token offer. It was generous." (Id. at pp. 338-340.)
On this record, we cannot conclude the order denying expert fees was a clear abuse of discretion, and we therefore affirm the order denying Moorefield its expert fees.
DISPOSITION
The judgment is affirmed. Each party shall bear its own costs on appeal.
WE CONCUR: BENKE, Acting P. J. O'ROURKE, J.