MARTINEZ v. BROWNCO CONSTRUCTIONAppellant’s Petition for ReviewCal.March 20, 2012LIU,J. 5200944 Supreme Court CaseNo. 2™ Civil No. B226665 IN THE SUPREME COURT OF THE STATE OF CALIFORNIA RAYMOND MARTINEZ AND GLORIA MARTINEZ, Plaintiffs and Respondents, VS. BROWNCO CONSTRUCTION COMPANY, INC., Defendant, Appellant and Petitioner. After a decision of the Court of Appealfor the State of California Second Appellate District, Division One Case Number B226665 On Appeal from the Superior Court of the County of Los Angeles The Honorable Elihu Berle, Case No. KC050128 PETITION FOR REVIEW LINDAHL BECK LLP George M.Lindahl (SBN 061905) Laura H. Huntley (SBN 166119) 660 S. Figueroa Street, Suite 1500 Los Angeles, CA 90017-3457 — Tel. (213) 488-3900 Fax. (213) 486-9883 ' Electronic Mail: Ihuntley@lindahlbeck.com Attorneys for Defendant, Respondent and Petitiorfer BROWNCO CONSTRUCTION COMPANY,INC. Supreme Court Case No. 2™ Civil No. B226665 IN THE SUPREME COURT OF THE STATE OF CALIFORNIA RAYMOND MARTINEZ AND GLORIA MARTINEZ, Plaintiffs and Respondents, VS. BROWNCO CONSTRUCTION COMPANY,INC., Defendant, Appellant and Petitioner. After a decision of the Court of Appeal for the State of California Second Appellate District, Division One Case Number B226665 On Appeal from the Superior Court of the County of Los Angeles The Honorable Elihu Berle, Case No. KC050128 PETITION FOR REVIEW LINDAHL BECK LLP George M.Lindahl (SBN 061905) Laura H. Huntley (SBN 166119) 660 S. Figueroa Street, Suite 1500 Los Angeles, CA 90017-3457 Tel. (213) 488-3900 Fax. (213) 486-9883 Electronic Mail: lhuntley@lindahlbeck.com Attorneys for Defendant, Respondent andPetitioner BROWNCO CONSTRUCTION COMPANY,INC. Il. UI. IV. IV. TABLE OF CONTENTS Page(s) ISSUE PRESENTED FOR REVIEW ........cccccssccsssstessetescecssscseees 1 WHY REVIEW SHOULD BE GRANTED...ceecssseesevesseees 1 FACTUAL AND PROCEDURAL BACKGROUND...............005 7 LEGAL DISCUSSION uu...eeeescerseessssceteecesssseeseesseessceccssseeees 11 Interpretation of the Language of Section 998.............:ccssecseeee 12 Encouragement of Settlement .......... eee ecscccsssescessteesseccesssseees 21 Preference for “Bright Line” Rules .............cccceseeeesesvaseueseeceesees 26 CONCLUSION 0... cecscssscssssscescesssscssssssesesscesseceseeecesssssessosseecsaees 32 TABLE OF AUTHORITIES Page(s) State Cases Barella v. Exchange Bank, 84 Cal.App.4th 793 (2000) .......:::cssceeeeees 5 Bennett v. Brown, 212 Cal.App.2d 685 (1963)......cccccessnceteeeereteeteeseeees 14 Distefano v. Hall, 263 Cal.App.2d 380 (1968) 0.0...esses passim Elite Show Services, Inc. v. Staffpro, Inc., 119 Cal.App.4th 263 (2004)...... 4 Hutchins v. Waters, 51 Cal.App.3d 69 (1975) .....ccccceeeeteneeereereeeeeeenseenens 4 Long v. Chronicle Publishing Co., 68 Cal.App. 171 (1924) «0... 15 Menees v. Andrews, 122 Cal.App.4™ 1540 (2004) oocece ceesee scenes 12, 29 One Star, Inc. v. Staar Surgical Company, \79 Cal.App.4" 1082 (2009) vuccesueceecnceececececseuceesanecascassaecessgaaeeseeeecceassssucesadeaeeescssoneeseceaeeeseaseeaensias passim Palmer v. Schindler Elevator Operation, 108 Cal.App.4th 154 (2003) vccduuacaccecensececeeuennasecaceesaecenseeseceecesaeeeseteeecssacentensseeeessanseseaeeseeeetenegeonegs passim Poster v. Southern Cal. Rapid Transit Dist. (1990) 52 Cal.3d 266.. 5, 26, 27 Ray v. Goodman,142 Cal.App.4™ at 83 (2006)... cece eeseeseceteeeteeeeeeeenens 24 T. M. Cobb Co.v. Superior Court, 36 Cal.3d 273 (1984)...eee passim Weberv. Pinvan, 9 Cal.2d 226 (1937) ...cccecccecscesseeessesseeeterereeseneeeneteeseesereess 4 Westamerica Bank v. MBG Industries, Inc., 158 Cal.App.4th 109 (2007) vecuucceceuacececncecsacessscucececsceseceseesaneeseaeenseceaeeesseesaecssaseaeesseesneesraetenes 5, 12, 29 Wilson v. Wal-MartStores, Inc., 72 Cal.App.4th 382 (1999)...........-. passim Out of State Cases Abrams—Rodkey v. Summit County Children Servs. (Ohio App. 9 Dist.2005) 163 Ohio App.3d 1, 9, 836 N.E.2d Lesccccssceessssssesssseeseeeeceeeseesesesee 19, 20 Norca Corp. v. Tokheim Corp. (1996) 227 A.D.2d 458, 458-459, 643 N.Y.S.2d 139 cecccccccccccsssssssssssscsecceveseveseessesssssssneessseesesssnuunscseseensnsneeeeetee 19 i TABLE OF AUTHORITIES (continued) Page(s) State Statutes Code of Civil Procedure §997.......cccceecceesscesseeseceseeseeenseeeseseeeseeeeerenae 14, 31 Code of Civil Procedure §998occeccccescceeseseeesseesessesneteesenteeeeaaes passim Code of Civil Procedure §998(b)(2) .0.....ccsccccesseesteceeesseeeeneeeeeneeeetennneeees 20 . Code of Civil Procedure §998(C) oo... cccecceceeteeeeseecneeenseeeeneesenneeeney passim Code of Civil Procedure §1033.5(C) oo. cecccecsscsensseenseeseeeeseeneneeeenseeeeeeaee 9. Civil Code Section 3291 woiciiccececccccccccccccceessesesseneneeaaeseeeeeeeseeeescoeseeteeeeees 31, 32 Cal. Rules of Court, Rule 8.500(D1)...eeeceeeeseeneseeeeeessaseeesseeeeeeeeeenanes 7 Other Authorities § 43; 1 Corbin on Contracts (rev. ed. 1993) § 2.20, pp. 226-227........ 19, 20 ili To the Honorable Chief Justice and the Associate Justices of the Supreme Court of California: Brownco Construction Company,Inc., respondent and defendant below on the issues presented by this Petition, respectfully petitions this Court to review the certified for publication decision of the Second Appellate District, Division 1 in Raymond and Gloria Martinez v. Brownco Construction Company, Inc., filed on February 10, 2012, a copy of which is attached as Exhibit “1.” I. ISSUE PRESENTED FOR REVIEW Whena party elects to serve a series of offers to compromise under Codeof Civil Procedure Section 998, does each successive offer extinguish the preceding offer such that offer made last in timeis the operative offer for purposesof the cost-shifting provisions of Section 998(c)? Il WHY REVIEW SHOULD BE GRANTED The Second Appellate District, Division 1, held in its certified for publication opinion in Raymond and Gloria Martinez v. Brownco Construction Company, Inc. (hereinafter Martinez) that where a plaintiff serves a series of offers to compromise under Code of Civil Procedure Section 998, each new offer does not extinguish the preceding offer and, consequently, the offer madelast in time is not necessarily the operative offer for purposes. ofthecost-shifting provisions of Section 998(c). Based upon the rationale employed by the Second Appellate District, Division |, a plaintiff may delve back in time to any Section 998 offer made during the pendencyofthe lawsuit that was met or exceededinits efforts to shift expert fees and costs to a defendant under Section 998(c). The recent decision in Martinez is in direct conflict with each of the previous appellate decisions to address this issue. See, Wilson v. Wal-Mart Stores, Inc., 72 Cal.App.4th 382, 392 (1999); Palmerv. Schindler Elevator Operation, 108 Cal.App.4th 154, 157 (2003); Distefano v. Hall, 263 Cal.App.2d 380, 385 (1968); One Star, Inc. v. Staar Surgical Company, 179 Cal.App.4" 1082, 1089 (2009). Each of these previous published decisions embracedthe long-standing legal principal that where successive Section 998 offers are made, the earlier offers are extinguished by service of a subsequent offer. See, Wilson, 72 Cal.App.4th at 392 ; Distefano, 263 Cal.App.2d at 385; Palmer, 108 Cal.App.4th at 157; One- Star, 179 Cal.App.4" at 1089. Each of these decisions relied, in whole or part, on the decision in T. M. Cobb Co. v. Superior Court, 36 Cal.3d 273, 279 (1984), wherein this Court held because “... section 998 involvesthe process ofsettlement and compromise and[,] since this processis a contractual one,it is appropriate for contract law principles to govern the offer and acceptance process under Section 998.” In reaching its holding in Martinez, the Second Appellate District, Division 1, did not conclude that the facts before it were distinguishable from the earlier appellate decisions which addressed the issue of the effect of successive offers to compromise under Section 998. Rather, after acknowledging that the holdings in Wilson’ and Distefano’ supported thetrial court’s ruling that Gloria Martinez’s second Section 998 offer extinguished herearlier offer for purposes of the cost-shifting provisions of Section 998(c), the Second Appellate District, Division 1, declined to follow these long-standing decisions stating that the reasoning in these cases was “unpersuasive.” In so holding, the Second Appellate District, Division 1, has created an irreconcilable split of authority on this issue amongthe First, Second and Third Appellate Districts. In addition, although not discussed in the opinion, Martinezis in direct conflict two recent published decisions issued by different divisions of the Second Appellate District in Palmer? and One Star’. Offers to Compromise under Code of Civil Procedure Section 998are a strategic device routinely utilized by litigants. Consequently, the published decision Martinez will have a pervasive and far reaching negative impact on courts andlitigants throughout the State of California. Section "72 Cal.App.4th at 392. * 263 Cal.App.2dat 385. 3108 Cal.App.4th at 157. 4179 Cal.App.4" at 1089. 998 exposes a party to potential liability for enhanced costs in an action which waspreviously nonexistent. Consequently,it is universally accepted that Section 998 “mustbe strictly construed in favor of the persons sought to be subjected to their operation.” Hutchins v. Waters, 51 Cal.App.3d 69, 72-73 (1975)citing Weber v. Pinvan, 9 Cal.2d 226, 229 (1937). While Section 998 was enacted for the laudable purpose of encouraging pre-trial settlements, the legislature’s chosen method for accomplishing this goalis by punishing a non-settling party with what often can be a dramatically increased cost award. Elite Show Services, Inc. v. Staffpro, Inc., 119 Cal.App.4th 263, 268 (2004). As a consequence,to date this Court and the courts of appeal have consistently held that the legislative purpose of 25 section 998 is generally best served by “bright line rules.”” As succinctly stated by the Second Appellate District in Palmer, supra: > See Wilson, supra, 72 Cal.App.4th at 391 (“the purpose of section 998is generally better served by brightline rule in which the parties know that any judgmentwill be measured againsta single valid statutory offer-i.e., the statutory offer most recently rejected-regardless of offers made earlier in the litigation”); Poster v. Southern Cal. Rapid Transit Dist., 52 Cal.3d 266, 272 (1990) (“purpose of § 998is best served by “brightline rule ... under which a section 998 offer is not revoked by a counteroffer and may be accepted by the offeree during the statutory period unless the offer has been Instead of the rule urged by Palmer, we adopt the bright-line rule urged by defendants andutilized by the trial court: A later offer under section 998 extinguishes any earlier offers, regardless of the validity of the offers. This rule best serves the statutory purpose of encouraging settlement of lawsuits prior to trial ( 7.M. Cobb Co. v. Superior Court, supra, 36 Cal.3d at p. 280) by providing offerees with clear direction as to what offers must be accepted on pain of enhanced fees and prejudgment interest. (See Poster v. Southern Cal. Rapid Transit Dist. (1990) 52 Cal.3d 266, 272 [276 Cal.Rptr. 321, 801 P.2d 1072] [purpose of § 998is best served by “bright line rule ... under which a section 998 offeris not revoked by a counteroffer and may be accepted by the offeree during the statutory period unless the offer has been revoked”].) revoked”); Westamerica Bank v. MBG Industries, Inc., 158 Cal.App.4th 109, 129 (2007); Barella v. Exchange Bank, 84 Cal.App.4th 793, 799 (2000). 108 Cal.App.4" at 158-159 [emphasis added]. The holdings in Wilson, Distefano, Palmer and OneStar have long providedlitigants with just such a “bright line rule” — a subsequent offer under section 998 extinguishes any earlier offers. By refusing to follow the decisions in Wilson, Distefano, Palmer and One Star, the Second Appellate District, Division 1, has created confusion and uncertainty for attorneys,litigants and courts. As discussed above,the prior published decisions ofthe First, Second and Third Appellate Districts follow what is often referred to as the “Wilson rule” which provides that where successive Section 998 offers are made, the earlier offers are extinguished by service of a subsequentoffer. Accordingly, for more than 40 yearslitigants and their attorneys were safe in the knowledgethata single, straightforward “bright line” rule would be applied to successive Section 998 offers — the last offer in time wasthe operative offer for purposesofthe cost-shifting provisions of Section 998(c). This well-settled rule has long informed both offerors and offerees of the consequences of making and responding to Offers to Compromise under Section 998. With the published decision in Martinez,all certainty is lost. Courts faced with a request for enhanced costs where successive Section 998 offers are made will have to choose between twodivergent, irreconcilable holdings as to the effect of the successive offers. Consequently, attorneys and litigants will have to “guess” whichline of authority a particular trial judge with employ when evaluating a subsequent offer to compromise under Section 998. In sum, the Second Appellate District, Division 1, has created an unacceptable, irreconcilable split of authority on this issue which will undoubtedly cause uncertainty and confusion for attorneys,litigants and courts throughoutthe state. As a consequence, review of the Martinez decision is necessary to “secure uniformity of decision”and to “settle an important question of law.” (Cal. Rules of Court, Rule 8.500(6)(1).) ll. FACTUAL AND PROCEDURAL BACKGROUND Raymond Martinez was injured when anelectrical panel he and a co-worker were dismantling at the Saint-Gobain Calmar factory in Industry, California exploded on June 2, 2005. [JA 002.] On March 1, 2007, Raymond Martinez filed the present action against Browncofor personal injuries he sustained in the June 2, 2005 incident contendingthat metal dust from Brownco’s demolition work caused the electrical pane! to explode. [JA 001.] His wife, Gloria Martinez, also claimed loss of consortium. [JA 007-008.] Brownco disputed the Martinez’s claims and asserted that the explosion was caused when Raymond Martinez andhis co- worker left an un-taped copper wire hanging loose in an electrified panel while they were working on it. [JA 010-015, 581, 592.] Brownco answered the Complaint on May 18, 2007. [JA 010-015.] On August 30, 2007, a mere three months after Brownco answered the Complaint, Raymond Martinez served Brownco with a Section 998 offer to compromise in the amount of $4,750,000. [JA 114- 116.] Gloria Martinez concurrently served a Section 998 offer to compromise her Joss of consortium claim for $250,000. [JA 110-112.] These combined offers constituted a collective demand for Brownco’s $5,000,000 insurancepolicy limits. At that juncture,all that was known about the accident was that Raymond Martinez hadinitially suffered a significant burn injury at a location where Brownco had been performing demolition activities. [JA 001-009, 110-112, 114-116, 592.] In fact, as of the time the Section 998 offers were served Brownco’s experts had not yet even had an opportunity to examinethe electrical panel that was involved in the accident. [JA 592.] Two and a halfyearslater, on the eve of trial, Raymond Martinez served Browncowith a reduced Section 998 offer to compromise in the amount of $1,500,000. [JA 102-104.] Gloria Martinez concurrently served a Section 998 offer to compromise her loss of consortium claim for $100,000. [JA 106-108.] These offers, in the collective amount of $1,600,000, represented a 68% reduction of the Martinezes’ prior Section 998 offers to compromise. [JA 102-108, 110-116.] On March 29, 2010, the jury rendered a compromise verdict finding Raymond Martinez 10% at fault, his employer Saint-Gobain Calmar 40% at fault and Brownco 50% at fault for the June 5, 2005 accident. [JA 042-045.] The trial court entered judgment on the special verdict on June 15, 2010. [JA 046-050.] The net judgment in favor of Raymond Martinez was $1,646,674. [JA 49.] The net judgment in favor of Gloria Martinez was $250,000. [JA 49.] Following entry of the judgment, Raymond and Gloria Martinezjointly filed a Memorandum ofCosts seeking to recover $561,257.14 in litigation costs and expert fees. [JA 051.] On July 13, 2010, Browncofiled a Motion to Tax Costs. [JA 075-324.] Brownco moved to tax the expert fees plaintiffs paid to Brownco’s experts as each of these experts was deposed prior to Raymond Martinez’s February 8, 2010 C.C.P §998 Demand. [JA 076-077, 083-087.] Brownco movedto tax the fees paid to 14 expert witnesses Raymond Martinezutilized during the pendency ofthe action to the extent that these fees (1) were incurred prior to prior to Raymond Martinez’s February 8, 2010 C.C.P §998 Demand and (2) were not reasonably necessary to the conduct ofthe litigation nor reasonable in amount pursuant to C.C.P. §1033.5(c) as certain of the experts were notutilized at trial (Eskridge, Barden, Grossman and Simons). [JA 077, 088-091.] On August 10, 2010, Brownco’s Motion to Tax came on for hearing before the Honorable Elihu Berle. [JA 620-621; Reporter’s Transcript (“RT”) 1-44.] Judge Berle taxed the expert fees claimedin the amountof $188,536.86, allowing only the $64,577.45 incurred after Raymond Martinez’s February 8, 2010 Section 998 Demand. [JA 620.] Judge Berle also taxed the expert fees claimed for taking the depositions of Brownco’s experts in the amount of $10,609.90. [JA 620.] Relying on the decision in Wilson v. Wal-Mart Stores, Inc., 72 Cal.App.4th 382 (1999), the trial court held that Gloria Martinez could not recover expert fees incurred between August 30, 2007 and February 8, 2010 because her secondoffer to compromise extinguished herprior offer for purposes of the cost-shifting provisions of Section 998(c). [RT 37-39.] The court issued its Minute Order on the Motion to Tax Costs on August 10, 2010. [JA 620-621.] The August 10, 2010 Minute Order contained some minor errors which were corrected by Nunc Pro Tunc Order dated October 5, 2010. [JA 628-629. | On that same date, October 5, 2010, the Court executed the Order for Judgment on Costs. [JA 630-632.] On September 14, 2010 Browncofiled its Notice of Appeal of the Order on its Motion to Tax Costs (on issues not raised by this Petition). [JA 622-624.] On September 29, 2010, Raymond and Gloria Martinez filed their Notice of Cross-Appeal. [JA 632-634. ] On February 10, 2012, the Second Appellate District, Division 1, issued a published decision reversing thetrial court’s order taxing the expert fees incurred prior to February 8, 2010. (Exhibit “1.”) 10 IV. LEGAL DISCUSSION Review should be granted because the published decision in Martinez has created a conflict among the courts of appeal concerning the effect of successive Offers to Compromise under Code of Civil Procedure Section 998. Prior to the publication of the Martinez opinion,litigants and their attorneys were safe in the knowledge that a single, straightforward “bright line” rule would be applied to successive Section 998 offers — the last offer in time wasthe operative offer for purposes of the cost-shifting provisions of Section 998(c). This well-settled rule has long informed both offerors and offerees of the consequences of making and responding to Offers to Compromise under Section 998. With the published decision in Martinez, all certaintyis lost. For more than 40 years, courts of appeal have consistently held that where successive Section 998 offers are made, the earlier offers are extinguished byservice of a subsequent offer. See, Wilson, supra, 72 Cal.App.4th at 392; Distefano, supra, 263 Cal.App.2d at 385; Palmer, supra, 108 Cal.App.4th at 157; One Star, supra, 179 Cal.App.4"at 1089. This “bright line” rule is consistent with the judicial policies underlying Section 998, is consistent with principals of contract law andis consistent with principals of statutory construction and, therefore, was properly applied bythetrial court to Gloria Martinez’s multiple offers to compromise under Section 998. By refusing to follow the well-reasoned 11 and legally sounddecisions in Wilson, Distefano, Palmer and OneStar, the Second Appellate District, Division 1, has not only created confusion and uncertainty, but it has also endorsed a rule which is fraught with pitfalls and invites the very gamesmanship courts have uniformly rejected. See, Wilson, supra, 72 Cal.App.4th at 391; Westamerica Bank v. MBG Industries, Inc., 158 Cal.App.4th at 129; Menees v. Andrews, 122 Cal.App.4™ 1540, 1544 (2004). The decisions of the First, Second and Third Appellate Districts which hold that where successive Section 998 offers are made, the earlier offers are extinguished by service ofa subsequent offer, are based upon several consideration’s: (1) general principles of contractlaw, (2) encouragementof settlement, and (3) a preference for “brightline”rules. A. Interpretation of the Language of Section 998 While the plain language of Section 998is silent as to the effect of a subsequent offer to compromise, this Court has held that because “_. section 998 involvesthe process of settlement and compromiseand[,] since this process is a contractual one,it is appropriate for contract law principles to govern the offer and acceptance process undersection 998.” T. M. Cobb, supra, 36 Cai.3d at 279. In T. M- Cobb Co., this Court specifically described the question of whether a subsequentstatutory offer extinguishes a prior offer as one that “can only be answered by turning to generalprinciples of contract law,” citing with approval the decision in 12 Distefanov. Hall, supra, 36 Cal.3d 380. In each succeeding published decision to address the effect of a subsequent offer to compromise under Section 998 on a prior offer for purposes of cost-shifting, California appellate courts have uniformly turned to principals of contract law for guidance.° In Distefano, the Court of Appeal was confronted with a factual scenario wherein defendants made a series of Offers to Compromise’. 36 Cal.3d 380. In Distefano, the defendants madetheirfirst statutory offer to compromise(in the amount of $20,000) before the first trial conductedin the case. This offer was not accepted. Four yearslater, they made a secondstatutory offer to compromise (in the amountof $10,000)prior to the retrial. 263 Cal.App.2d at 384-385. The judgmentin plaintiffs favor on retrial was greater than defendants’ secondoffer, but less than the defendants’first offer. Jd. at p. 383. On appeal, the defendants sought to invoke the predecessorstatute to section 998, arguingthat “... whenplaintiff refused to accepttheir first offer, they acquired a vested right to avoid payingplaintiffs costs in the event his verdict wasless than” the ° See, Wilson, supra, 72 Cal.App.4th at 392; Palmer, supra, 108 Cal.App.4th at 157; One Star, supra, 179 Cal-App.4" at 1089. 7 Section 998, enacted in 1971, replaced section 997 which wasthe operative statute in Distefano. 13 amountofthe first offer. Jd. at p. 384. The Court of Appeal disagreed stating: Weagreethat the Legislature enacted section 997 of the Code of Civil Procedure for the purpose of encouraging the settlementoflitigation withouttrial (Bennett v. Brown, 212 Cal.App.2d 685, 688 [28 Cal.Rptr. 485]). But we cannotattribute to the Legislature an intention to give less than full effect to the parties’ reappraisals of the merits of their respective positions where a case has beentried, appealed andreversed forretrial. Under such circumstances, an offer of compromise made before the secondtrial pursuant to section 997 should clearly supersede that madebefore the first trial. To deny the parties this flexibility would actually discourage settlements and defeat the very purposeofthe act. Furthermore, the theory of section 997 is that the process of settlement and compromiseis a contractual one, and the applicable principles are those relating to contracts in general (11 Cal.Jur.2d, § 2, p. 3). Thetrial court’s reasoning here is in accord with the general rules on offers-any new offer communicated prior to a 14 valid acceptanceofa previous offer, extinguishes and replaces the prior one (Long v. Chronicle Publishing Co:, 68 Cal.App. 171 [228 P. 873)). Id. at 385. In Wilson, supra, the court of appeal applied the reasoning in T. M. Cobb Co. and Distefano, to factual circumstances near identical to the facts presented in Martinez and reaffirmed that where successive Section 998 offers are made,the earlier offers are extinguished by service of the subsequent offer. 72 Cal-App.4th 382. In Wilson, a personalinjury plaintiff served an initial Section 998 offer to compromise in the amount of $150,000. Jd. at 387. This offer was not accepted and was “withdrawn” by operation of law pursuantto Section 998 (b)(2). Approximately 16 months later, the plaintiff served a second Section 998 offer to compromise in the amount of $249,000. Jd. Attrial, the jury rendered a verdictin favor of plaintiff in the amountof $175,000. Id. Following the verdict, the plaintiff in Wilson soughtto recover her expert fees arguing that her “‘first Section 998 offer is controlling for all purposes.” Jd. at 388. The Court of Appeal disagreed. To those ends, the court in Wilson discussed the holding in Distefanothat a second offer to compromise should supersede the earlier offer stating: Wefind the reasoning ofDistefano persuasive and applicable to the instant action. Distefano recognizes 15 that which Wilson overlooks; there is an evolutionary aspect to lawsuits and the law, in fairness, must allow the parties the opportunity to review their respective positions as the lawsuit matures. Thelitigants should be given a chance to learn the facts that underlie the dispute and consider how the law applies before they are asked to make a decision that, if made incorrectly, could add significantly to their costs oftrial. Td. at 390. The record belowis clear that Martinezes engaged in precisely the type of reappraisal contemplated by the court in Distefano and acknowledged in Wilson. In Martinez, Gloria Martinez served herinitial Section 998 offer to compromise a mere three months after Brownco answered the Complaint. [JA 010-015, 110-112.] This offer was served concurrently with her husband’s Section 998 offer to compromise the amountof $4,750,000. [JA 114-116.] While Gloria and Raymond Martinez served separate offers as is required to be effective under Section 998, their concurrent offers were collectively a demandto settle the entire action for $5,000,000 — Brownco’s insurance policy limits. [JA 110-112, 114-116.] At that juncture,all that was known aboutthe accidentwas that RaymondMartinez hadinitially suffered a significant burn injury at a location where Browncohad been performing demolition activities. [JA 16 001-009, 110-112, 114-116, 592.] In fact, as of the time the Section 998 offers were served Brownco’s experts had not yet even had an opportunity to examinetheelectrical panel that was involvedin the accident. [JA 592.] Over the ensuing 2 ’% years, the landscapeofthe case altered significantly. Raymond Martinez had a very favorable recovery and significant issues related to causation and Brownco’s potential culpability became apparent. [RA 11:9-14, 23:4-10; JA 381-382.] As a consequence, it was extremely unlikely that the Martinezes would recover equalto or in excess oftheir early Section 998 offers in the collective amountof $5,000,000. For that reason, Raymond Martinez reduced his Section 998 offer to compromise to $1,500,000 on the eve oftrial. [JA 102-104, RA 11:9-14.] Gloria Martinez simultaneously reduced her offer to compromise her loss of consortium claim to $100,000. [JA 106-108.] These reduced Section 998 offers to compromise represent a commontactical decision madebyboth plaintiffs and defendants to reevaluate their prospects attrial after discovery is complete and experts deposed,andto issue a Section 998 offer to compromise thatreflects that reassessment. In short, the Martinezes recognized that they were extremely unlikely to recover equal to, or in excess of, their early Section 998 offers. As a consequence, they issued new offers that constituted an amount they believed they could meet or exceedat trial and which, if accepted, would be adequate to compensate them fortheir alleged injuries. There is simply no other strategic reason for 17 a plaintiff to make a subsequent, reduced Section 998 offer (or for a defendant to make anincreased Section 998 offer). This process of reevaluation and reassessment is consistent with the purpose of Section 998 as it encouragesparties to realistically evaluate the merits of their respective cases and make Section 998 offers that reflect careful consideration. Thus,the trial court’s conclusion that Gloria Martinez’s February, 2010 Section 998offer extinguished her earlier Section 998 offer is consistent with the principle expressed in Wilsonthat in fairness “litigants should be given a chanceto learn the facts that underlie the dispute and consider how the law applies before they are asked to make a decision that, if made incorrectly, could add significantly to their costs of trial.” Id. In reversing the trial court, Second Appellate District, Division 1, disagreed with the holdings in Distefano and Wilson that a second offer to compromise should supersede the earlier offer and in incorrectly concludedthatprincipals of contract law “compelthe opposite result”. In reaching this erroneous conclusion, the Second Appellate District, Division 1, acknowledged general principals of contract law stating: An offer is revoked by communication from the offeror of its intention not to enter into the proposed 18 contract. (Id., § 42.) The manifestation of such an intention may be express, as when the offeror explicitly revokesthe offer, or implied, as whenthe offeree “takes definite action inconsistent with an intention to enter into the proposed contract.” (/d., § 43: 1 Corbin on Contracts (rev. ed. 1993) § 2.20, pp. 226-227.) The making of a second offer involving the same subject matter but with terms different from those ofthe first offer constitutes a definite action inconsistent with an intention to enter into the contract as originally proposed and terminates the offeree’s powerto accept the termsofthe original offer. (1 Corbin on Contracts, supra, § 2.20, p. 229; Abrams— Rodkey v. Summit County Children Servs. (Ohio App. 9 Dist.2005) 163 Ohio App.3d 1, 9, 836 N.E.2d 1 [“a later-made offer will revoke a previous offer to the extent that the offers are inconsistent”]; Norca Corp.v. Tokheim Corp. (1996) 227 A.D.2d 458, 458-459, 643 N.Y.S.2d 139 [same].) Martinez Opinion, p. 14 [emphasis added]. The Second Appellate District, Division1, then incorrectly describes Gloria Martinez’s first offer to 19 compromise as a “lapsedoffer”stating “a lapsed offer has no enduring contractual effect.” Martinez Opinion,p. 14. In fact, Gloria Martinez’s first offer to compromise wasnot a “lapsed offer” with “no enduring contractual effect.” Pursuant to Code of Civil Procedure Section 998(b)(2), when Gloria Martinez’s early offer to compromise wasnot accepted by Brownco within 30 days it was deemed withdrawn by operation of law. While this meant that Brownco no longer had statutory right to acceptthe offer, the statutorily imposed benefits and burdens endured. It was these statutorily imposed benefits and burdensthat were extinguished when Gloria Martinez served a secondoffer to compromise becausethe service of a second offer “constitutes a definite action inconsistent with an intention to enter into the contract as originally proposed.” Martinez Opinion, p. 14 [emphasis added], citing | Corbin on Contracts, supra, § 2.20, p. 229; Abrams—Rodkey v. Summit County Children Servs. (Ohio App. 9 Dist.2005) 163 Ohio App.3d 1, 9, 836 N.E.2d 1 (“a later-madeoffer will revoke a previous offer to the extent that the offers are inconsistent”). Thus, the conclusion of the Second Appellate District, Division 1, in Martinez that principals of contract law “compel the opposite result” from the conclusions reached in Wilson and Distefano,is simply incorrect. 20 B. Encouragementof Settlement It is universally accepted that the purpose of Section 998is the encouragementofpretrial settlement. Often numerousfactors impact a parties’ decision to makeor accept a settlement offer - whether made pursuantto Section 998 or otherwise. In Wilson,the plaintiff argued for the sameresult endorsed by the Second Appellate District, Division 1, in Martinez. In short, the plaintiff in Wilson argued that to reach any conclusion other than that the her prior, exceeded offer was the operative offer for purposesofthe cost-shifting provisions of Section 998(c) would discourage settlement. Wilson, supra, 72 Cal.App.4" at 389-390. The Third Appellate District disagreed: Wilson's argument overlooks a second point. Althoughsettlements achieved earlier rather than later are beneficial to the parties and thus to be encouraged, our public policy in favor of settlement primarily is intended to reduce the burden on the limited resources of the trial courts. The trial of a lawsuit that should have been resolved through compromise and settlement uses court resources that should be reserved for the resolution of otherwise irreconcilable disputes. While Wilson contendsthat the interpretation she 21 urges would support the public policy in favor of settlement, in some cases it might not. Thefactual situation before us is a good example. A plaintiff might be encouraged to maintain a higher settlement demandonthe eveoftrial and refuse to settle a case that should otherwise be settled if the plaintiff finds comfort in the knowledge that, evenif the plaintiff receives an awardless thanhisor herlast demand, the plaintiff might still enjoy the cost reimbursement benefits of section 998 so long as the award exceeded a lower demand madebytheplaintiff sometime during the course ofthe litigation. The reverse mightbe true of the defendant. “Rolling the dice” then becomes somewhatless risky and we note that lawsuits are not often settled by reducing the risk oftrial. Id. at 390-391 [emphasis added]. Underthe facts of Martinez, a holding that Gloria Martinez’s first offer to compromise wasnot extinguished byherlater offer would not have encouragedsettlement and would not have reduced the burden on the trial court. In Martinez, Gloria Martinez’s early August 30, 2007 Section 998 offer to compromise was coupled with her husband’s Section 998 offer 22 to compromisein the amount of $4,750,000. [JA 110-112, 114-116.] Whether Browncoaccepted heroffer or not, the case would havestill proceeded forward as Browncodid not accept her husband’s offer of $4,750,000. [JA 097.] Brownco’s decision to allow Raymond Martinez’s offer of $4,750,000 to expire was obviously correct as he recovered only one-third of that amountattrial. [JA 114-116, 48-50.] Moreover, neither Brownco,nor any other similarly situated defendant, would have accepted an offer of $250,000 to settle a wife’s loss of contortion claim leaving the husband’spersonalinjury claim still pending knowing that whatever monies were paid would be usedas a “war chest”to pursue his far more significant claims. In short, Gloria Martinez’s August 30, 2007 Section 998 offer was a quintessential “no risk” offer for which there waslittle, or no, expectation that it would be accepted. Moreover, even if Brownco had accepted Gloria Martinez’ early offer, the main case wouldhavestill proceededtotrial, taken the same amount of time, required the same expert testimony, and constituted the same burden on the court system as Browncodid not accept Raymond Martinez’s $4.75 million offer. As a consequence, under the circumstances of Martinez, the purpose of Section 998 — to foster the public policy in favor of settlement with the goal of reducing the burden on the limited resources ofthe trial courts - would not have been accomplished by virtue 23 of the acceptance of Gloria Martinez’s early Section 998 offer to compromise. In concludingthat the reasoning in Wilson and Distefano regarding the encouragementofsettlement was “unpersuasivein this case,” the Second Appellate District, Division 1, provided absolutely no discussion ofthe facts or circumstances surrounding the offers made by Gloria Martinez,i.e., her earlier offer was part of a collective $5 million policy limits demand madethree months after Brownco answered the Complaint and before discovery was conducted or that it was served in conjunction with her husband’s $4.75 million offer which wasthree times the amounthe receivedattrial. Instead, the court concluded, without any explanation or discussion, that to deprive her of cost-shifting benefits based upon her early offer of would dissuade plaintiffs from making a later offer and discourage settlement. The Court of Appeal’s, conclusion that to deprive Gloria Martinez of cost-shifting benefits based upon her early offer would dissuade plaintiffs from making successive declining offers is bellied by the very facts in Martinez®. The brightline rule in Wilson had been in place for 8 It is also inconsistent with the facts ofPalmer, supra, 108 Cal.App.4" 154; One Star, supra, 179 Cal.App.4" 1082; Ray v. Goodman, 142 Cal.App.4" 83, 91 (2006). 24. more than 10 years prior to Gloria Martinez issuing her second Section 998 offer. 72 Cal.App.4" 382. Moreover, the holding in Wilson, that a subsequentoffer extinguishes any prior offer under Section 998, had been reaffirmed by three subsequentpublished decisions prior to Gloria Martinez issuing her second Section 998 offer. See, Palmer, supra, 108 Cal.App.4th at 157; One Star, supra, 179 Cal.App.4" at 1089; Ray, supra, 142 Cal.App.4" at 91. Thus, Gloria Martinez had to have been awarethat, based upontheprevailing case law, by serving a secondSection 998 offer her original offer would be extinguished. Despite the obvious consequences, she served a second, reduced offer on the eve of trial. Her reasons for doing so are clear from the record. As discussed above, these reduced Section 998 offers to compromise represented a commontactical decision made by both plaintiffs and defendants to reevaluate their prospects at trial after discovery is complete and experts deposed, andto issue a Section 998offer to compromisethat reflects that reassessment. In short, the Martinezes recognized that they were extremely unlikely to recover equalto, or in excess of, their early Section 998 offers. As a consequence, they issued new offers that constituted an amount they believed they could meetor exceedat trial and which, if accepted, would be adequate to compensate them fortheir alleged injuries. There is simply no other strategic reason for 25 a plaintiff to make a subsequent, reduced Section 998 offer (or for a defendant to make an increased Section 998 offer). In sum,the holding of the Court of Appeal that to deprive Gloria Martinez of the cost-shifting benefits based upon herearly offer would dissuadeplaintiff from making successive declining offers ignores the practicalrealities oflitigation and the effect of a party’s reevaluation of its prospects at trial on the issuing of subsequent Section 998 offers. Cc. Preference for “Bright Line” Rules While Section 998 was enacted for the laudable purpose of encouraging pre-trial settlements, the legislature’s chosen method for accomplishing this goal is by punishing a non-settling party with what often can be a dramatically increased cost award. Elite Show Services, supra, 119 Cal.App.4th at 268. As a consequence, to date this Court and the courts of appeal have consistently held that the legislative purpose of section 998 is generally best served by “bright line rules.”” The court in Wilson explained: * See Wilson, supra, 72 Cal.App.4th at 391; Poster v. Southern Cal. Rapid Transit Dist., 52 Cal.3d 266, 272 (1990) (“purpose of § 998 is best served by “bright line rule ... under which a section 998 offer is not revoked by a counteroffer and maybe accepted bythe offeree during the statutory period unless the offer has been revoked”); Westamerica Bank v. MBG Industries, 26 In addition to the above considerations, the legislative purpose of section 998 is generally better served by a bright line rule in which the parties know that any judgment will be measured against a single valid statutory offer-i.e., the statutory offer most recently rejected-regardless of offers made earlier in the litigation. (See Poster v. Southern Cal. Rapid Transit Dist. (1990) 52 Cal.3d 266, 272 [276 Cal.Rptr. 321, 801 P.2d 1072] [favoring “bright line” rule in interpreting section 998].) Wilson’s argumentthat the proper measure shouldbeherfirst offer could logically be extendedto a rule that a party is entitled to section 998 costsif it does better at trial than it would have under any offer made at anytime before judgment. While a rule such as that arguably might promote settlement in somecases, its potential for mischief, or at least confusion, is apparent. Id. at 391 [emphasis added]. Consequently, the court in Wilson concluded that a “bright line rule” that where successive Section 998 offers are made, Inc., 158 Cal.App.4th 109, 129 (2007); Barellav. Exchange Bank, 84 Cal.App.4th 793, 799 (2000). 27 the earlier offers are extinguished by service of the subsequentoffer, was appropriate. Jd. Notably, whenit crafted the “brightline rule” the Wilson court assumed arguendo a factual scenario in which a party obtained a more favorable judgment than multiple prior offers, and foundthe “bright line rule” should nevertheless be applied. /d. at 91. The conclusion reached by the Third Appellate District in Wilson has been endorsed by other Divisions of the Second Appellate District. See Palmer, supra, 108 Cal.App.4" at 158-159; One Star, supra, 179 Cal.App.4™ at 1094-1095. The Second Appellate District, Division 7, in Palmer, supra, similarly reasoned: Instead of the rule urged by Palmer, we adopt the bright-line rule urged by defendants and utilized by the trial court: A later offer under section 998 extinguishes anyearlier offers, regardless of the validity of the offers. This rule best serves the statutory purpose of encouraging settlement of lawsuits prior to trial ( 7.-M. Cobb Co. v. Superior Court, supra, 36 Cal.3d at p. 280) by providing offerees with clear direction as to what offers must be accepted on pain of enhanced fees and prejudgment interest. (See Poster v. Southern Cal. Rapid Transit Dist. (1990) 52 Cal.3d 266, 272 [276 Cal.Rptr. 321, 28 801 P.2d 1072] [purpose of § 998 is best served by “bright line rule ... under which a section 998offeris not revoked by a counteroffer and may be accepted by the offeree during the statutory period unless the offer has been revoked”].) 108 Cal.App.4™ at 158-159 [emphasis added]. In short, the well-reasoned and widely accepted Wilson “bright line rule,” when applied to the facts of Martinez, mandatedthe finding madebythetrial court that Gloria Martinez’s February, 2010 Section 998 offer extinguishedherearlier offer for cost-shifting purposes under Section 998. [JA 106-108, 110-112.] In declining to follow Wilson, the Second Appellate District, Division 1, states in Martinez that its holding that a plaintiff may go back in time to the earliest offer to compromise that was met or beaten to invoke the cost shifting provisions of Section 998(c)is similarly a “bright line” rule. The Court of Appeal also boldly contendsthatits “bright line” rule was“installed by the Legislature itself.” Martinez Opinion, p. 16. While the rule proposed in Martinez mayalso be a “bright line”rule,it is fraught with the potential for abuse andparties taking unfair advantage by “gaming the system.” See, Wilson, supra, 72 Cal.App.4th at 391; Westamerica Bank v. MBG Industries, Inc., supra, 158 Cal.App.4th at 129; Meneesv. Andrews, supra, 122 Cal.App.4™ at 1544. For example, whatis to prevent 29 a plaintiff from serving monthly declining Section 998 offers over the courseoflitigation, with the hopethat he/she will meet or exceed one ofthe ten or more offers served. Conversely, a defendant could serve a series of strategic successively increasing Section 998 in the hope that he/she might match or beat one of the offers madeattrial. In fact, under the Martinez holding the very gamesmanship employedbythe plaintiff in Wilson would be permissible. In discussing the potential for gamesmanship if subsequent offers do not extinguish the earlier offers, the Court of Appeal in Wilson noted: The factual situation before us is a good example. A plaintiff might be encouraged to maintain a higher settlement demandon the eve oftrial and refuse to settle a case that should otherwise be settled if the plaintiff finds comfort in the knowledgethat, even if the plaintiff receives an awardless thanhisor herlast demand,the plaintiff might still enjoy the cost reimbursementbenefits of section 998 so long as the award exceeded a lower demand madebythe plaintiff sometime during the course ofthe litigation. The reverse mightbetrue of the defendant. “Rolling the dice” then becomes somewhatless risky and we note 30 that lawsuits are not often settled by reducing the risk oftrial. 72 Cal.App.4"at 391. Moreover, there is no support in the statute or legislative history for the statement by Second Appellate District, Division 1, that its “bright line” rule was “installed by the Legislatureitself.” In fact, the legislative record suggests the opposite is true. As this Court previously recognized, the plain language of Section 998is silent as to the effect of a subsequentoffer to compromise onthe prior offers. 7. M. Cobb, supra, 36 Cal.3d at 279. However,at least one statute enacted after Section 998 arguably suggests that the Legislature is in agreement with the statutory interpretation first employedin Distefano, andlater in Wilson, Palmer and OneStar. First, Code of Civil Procedure Section 998 was enacted in 1971 and replaced its similar predecessor, Code of Civil Procedure Section 997. This wasthree years after the decision in Distefano whichheldthata later offer to compromise should clearly supersede any prior offer. 263 Cal.App.3d at 385. Consequently, if the Legislature had any disagreement with, or concern about, the holding in Distefano,it could have been addressed when Section 998 was enacted. It was not. Eleven yearslater, the Legislature enacted Civil Code Section 3291 which provides: 31 If the plaintiff makes an offer pursuant to Section 998 of the Code of Civil Procedure which the defendant does notacceptprior to trial or within 30 days, whicheveroccursfirst, and the plaintiff obtains a more favorable judgment, the judgmentshall bearinterestat the legal rate of 10 percent per annum calculated from the date ofthe plaintiff's first offer pursuant to Section 998 of the Code of Civil Procedure which is exceeded by the judgment... [Emphasis added.}] That the Legislature specifically stated in Civil Code Section 3291 that interest would accrue from thefirst exceeded offer compels the conclusion that the sameis not true for cost-shifting provisions of Section 998(c). As a consequence,there is no support for the statement in Martinez that its “bright line” rule was “installed by the Legislature.” IV. CONCLUSION In sum,the brightline rule set forth in Wilson and its progeny is consistent with the judicial policies underlying Section 998,is consistent with principals of contract law and is consistent with principals of statutory construction and was, therefore, properly applied to Gloria Martinez’s multiple offers to compromise under Section 998bythe trial court. By refusing to follow the decisions in Wilson, Distefano, Palmer and One Star, the Second Appellate District, Division 1, has 32 incorrectly and unjustly exposed Browncoto the potential for significantly increased costs. In addition, by publishing its decision in Martinez the Court of Appeal has created a unacceptable, irreconcilable conflict among the authorities to address this issue and will undoubtedly create confusion and uncertainty for attorneys,litigants and courts throughoutthe State of California. As a consequence, Brownco Construction Company, Inc. respectfully requests that this Court grant review of the Court of Appeal’s decision below to “secure uniformity of decision”and to “settle an important question of law.” Respectfully submitted, Mantle Laura H. Huntley Counsel for Petitioner, Defendant and Kespondent Brownco Construction Company,Inc. 33 CERTIFICATE OF WORD COUNT I certify that this brief contains 7,429 words, including footnotes. I have relied on the word count feature in the Microsoft Word program usedto generate this brief. MaalSinttns- Laura H. Huntley Counsef for Petitioner, Defendant and\Resppndent Brownco Construction Company 34 CERTIFIED FOR PUBLICATION IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA. SECOND APPELLATE DISTRICT RAYMOND MARTINEZetal., Plaintiffs and Respondents, V. BROWNCO CONSTRUCTION COMPANY,INC., Defendant and Appellant. DIVISION ONE B226665 (Los Angeles County Super. Ct. No. KC050128) COURT OF APPEAL » SECOND DIST. © TL Js ID FEB 16 2012 JOSEPH A. Laive Clerk Deputy Clerk APPEAL from an order of the Superior Court of Los Angeles County. Elihu Berle, Judge. Affirmed in part and reversed 1n part. Lindahl Beck, George M. Lindahl and Laura H. Huntley for Defendant and Appellant. Baker, Burton & Lundy and Albro L. LundyITI for Plaintiffs and Respondents. All parties appeal from an order awarding coststo the plaintiffs following a jury trial. Defendant maintainsplaintiffs are not entitled to the cost of presenting an edited video recording of the deposition of a witness or the cost of a PowerPoint presentation used during closing argument. Plaintiff Gloria Martinez contends the court erred in taxing expert witness fees incurred between her successive Code of Civil Procedure _ section 998 settlement offers.!. We conclude plaintiffs are entitled to the cost of the video presentation but not the PowerPoint presentation. Gloria is entitled to expert witness . costs incurred from the date of her earliest reasonable offer. BACKGROUND Raymond Martinez was injured in an electrical explosion at work. He and Gloria, his wife, sued Brownco Construction Company (Brownco), which had performed demolition work at the job site, for negligence and loss of consortium.? Brownco answered,alleging that Raymond’s and his employer’s negligence caused the explosion. On August 30, 2007, Raymond served on Browncoa statutory offer to compromise pursuant to section 998 in the amount of $4,750,000. Gloria offered to compromise for $250,000. Brownco neither accepted norrejected the offers, and they were withdrawn by operation of law after a statutory 30-day period had passed. (§ 998, subd. ((b)(2).) On February 8, 2010, Raymond offered to compromise for $1,500,000. Gloria’s offer was $100,000. Brownco took no action on these offers either, and they were withdrawn by operation of law whentrial began on February 18. (Ibid.) Attrial, plaintiffs’ theory was that as part of the demolition work, Brownco employees sawedthrough several vertical electrical conduits (metal tubes carrying electrical wires) directly abovea live, high voltage electrical panel, causing metal shavingsto fall down through the conduits into the panel. The shavings causedelectrical arcs within the panel, creating superheated plasma which then exploded, severely burning Raymond. Brownco’s theory was that while disassembling the electrical panel, Raymond 1 All undesignated statutory references will be to the Code of Civil Procedure. 2 For simplicity, we will henceforth refer to the Martinezes bytheir first names. left twolive electrical lines unsecured and exposed. The wires cameinto contact with other parts of the panel, causing arcing that ultimately resulted in the explosion. ‘Brownco’s foreman in charge of the demolition was Dwayne Taylor. Taylor allegedly ignored advicethat the proper way to remove the conduits waseither to disconnect them or to cut them “beyond the ’90’,”i.e., at a location beyond a 90 degree bend, so that metal shavings would at worst fall onto the electrical panel’s external housing, not down through the conduits to the panel’s interior. Plaintiffs took a video recording of Taylor’s deposition. Shortly before trial, Brownco notified plaintiffs that Taylor no longer workedforit and could not be found. Attrial, plaintiffs presented video excerpts of Taylor’s deposition. The deposition testimony of other absent witnesses was read into the record by attorneys. During closing argumentto the jury, plaintiffs’ counsel used a PowerPoint presentation that featured several photographic views of the workspace, including the electrical panel, conduits, and signs of arcing, with textual insets setting forth plaintiffs’ argument. The presentation also included photographs ofRaymond’s physicalinjuries, bullet point lists of the impacthis injuries had on his and Gloria’s daily lives, andtables showing his economic damages. In a special verdict, the jury found Raymondto be 10% at fault, his employer 40% at fault, and Brownco 50% at fault. Judgment was entered awarding Raymond $1,646,674 and Gloria $250,000. | Aftertrial, plaintiffs sought $561,257.14 in itemized costs, including $11,956 for editing and presenting video excerpts of Taylor’s deposition, $87,282.86 for the PowerPoint presentation used during closing argument, $188,536.86 in expert fees incurred aftertheir first section 998 offers but before their second offers, and $64,555.45 in expert fees incurred after the secondsetofoffers. Brownco movedto tax the cost items for the video presentation of Taylor’s | deposition, the PowerPoint, and the $188,536.86 in expert fees incurred between plaintiffs’ first and second section 998 offers. It argued the recording of the Taylor deposition was not reasonably necessary fortrial, as attorneys could simply have read the 3 questions and answersinto the record, as is normally done when a witness is unavailable for trial and as was otherwise donein this case. Brownco argued the PowerPoint - presentation wassimilarly unnecessary and Gloria wasnot entitled to expert fees incurred before her second 998 offer to compromise. Plaintiffs opposed the motion, arguing the Taylor video recording and PowerPoint presentations were reasonably necessary and Gloria should recoverall witness fees incurredafter her first section 998 offer. Judge Warren Ettinger, who had presided overthetrial, retired before Brownco’s motion came on calendar. The motion was heard by Judge Elihu Berle, who agreed with Browncothat Gloria was notentitled to witness fees incurred between herfirst and second section 998 offers but foundplaintiffs were entitled to the costs of editing and presenting the Taylor video andcreating and presenting the PowerPointslides. Both sides appeal from the ensuing judgment. DISCUSSION A. Reasonably Necessary Costs Brownco contends it was not reasonably necessary for plaintiffs to present Taylor’s deposition in video formatat trial or to make a PowerPoint presentation during closing argument. 1. Legal Principles Section 1032 permits an award ofcosts to a prevailing party. (Nelson v. Anderson | (1999) 72 Cal.App.4th 111, 128-129.) Section 1033.5 sets forth the items of costs that may or may not be recovered. Subdivision (a) of section 1033.5 itemizes allowable costs, which include: “Taking, video recording, and transcribing necessary depositions.” (§ 1033.5, subd. (a).) Subdivision (b) of section 1033.5 itemizes certain items not allowable as costs. An item not specifically allowed under subdivision (a) or disallowed under subdivision (b) nevertheless may be recoverable in the court’s discretion. (§ 1033.5, subd. (c)(4).) Only costs that are “reasonably necessary to the conduct of the litigation rather than merely convenientor beneficialto its preparation” may be awarded. (§ 1033.5, subd. (c)(2).) If the nonprevailingparty objects to an item of costs, the burden 4 of proof is on the prevailing party to establish the item’s reasonable necessity. (Oak Grove SchoolDist. v. City Title Ins. Co. (1963) 217 Cal._App.2d 678, 698-699.) | Whethera cost item was reasonably necessary to the litigation presents a question of fact for the trial court, whose decision is reviewed for substantial evidence. (Lubetzky v. Friedman (1991) 228 Cal.App.3d 35, 39.) When an issueis tried on declarations, the rule on appealis that declarations favoring the contention of the prevailing party establish the facts stated and all facts reasonably inferable therefrom. (/bid.) Brownco suggests our review should be de novo because Judge Berle, who presided overthe costs hearing, had not presided overtrial, leaving him in no better position than we to assess whether a cost item was reasonably necessary. We disagree. In ruling on a motion to tax costs, the trial court applies the standardsset forth in section 1033.5 to the litigation facts and determines whether a particular cost item was reasonably necessary to produce the successfulresult. Litigation facts include the nature of the action, the underlying facts alleged before and developed duringtrial, the nature and complexity of legal issues presented, and the practical and procedural steps necessary to present the underlying facts, apply the pertinent law, and reach a successful result. A party seeking costs must establish thelitigation facts and persuadethetrial court that _ those facts meet the requirements of section 1033.5. (Evid. Code, § 115; see generally People v. Dubon (2001) 90 Cal.App.4th 944, 953-954.) As a practical matter, establishing the litigation facts is most easily accomplished when the bench officer hearing the costs motion also presided overtrial, as the parties may rely on the officer’s familiarity with the litigation in lieu of an unnecessarily detailed evidentiary showing. If the bench officer did not preside over thetrial, the parties’ evidence must be more complete. That does not mean a bench officer who did not presideat trial is equally positioned with the appellate court to determine the predicate facts. The appellate court would be in no position, for example, to resolve credibility issues or evidentiary conflicts regarding thelitigation facts. That the hearing officer here did not also presideattrial affects only the burden of persuasion, not the standard ofreview. 2. Video of the Taylor Deposition Plaintiffs claimed that Taylor, as foreman on the demolition work performed at — Raymond’s workplace, ordered Brownco employees to cut electrical conduits in a mannerthat caused the explosion. When Brownconotified plaintiffs” counselthatit would be unable to produce Taylorattrial, plaintiffs had the option ofpresenting Taylor’s deposition testimony by readback or by showing video excerpts. Asrelated by plaintiffs’ counsel to Judge Berle at the costs hearing, Judge Ettinger hadasked the jury whetherthey preferred to see deposition testimony “live” on the video screenor haveit read from the witness box. Thejury indicated that testimony read from the witness box was, in plaintiffs’ counsel’s words,“a little boring, digital is more interesting.” Counsel then chose to present video excerpts of Taylor’s deposition. The content of Taylor’s testimony—edited or unedited—isnotin the record on appeal andasfar as we can determine was not related to Judge Berle at the costs hearing. In a declaration filed for the costs hearing, plaintiffs’ counsel stated that he chose to use the edited video because it was an “effective and efficient” method of displaying the evidence and was“reasonably helpful” to the jury. Counsel argued the video was “essential for the Court and the jury to understand the sophisticated and complex analysis ofhow the accident occurred... .” Judge Berle agreed, stating, “to keep the jurors’ attention it would seem to me more reasonable to have the video deposition rather than somebodysitting on the stand and reading a transcript of somebodyelse’s testimony. [{]] First of all, you don’t get the same intonation andinflections as the original testimony, you get somebody whois supposedto read the testimony dry. [{]] You don’t wantan actor on the stand trying to inject his or her own feelings into a dry transcript .... [{] Secondly, it seems to me it would be much moreefficient in terms of handling a case to have an edited video where you go directly to the question and answerthat has, I assume, been pre-approved by the court if there were any objections, rather than having somebody reading and stopping at objections or turning pages. It saves a lot of time in preparation for a witness aside from making it more interesting. [{] So I think things have changed from the daysofjust 6 reading dry transcript... . [{]...[{] This is a reality ofhow cases are presented to [jurors]. ... [T]his is what is the accepted modeoftrying cases to us. Soit’s difficult to suggest that it is not part of the everyday trial work that it should not be covered in the costs.” Judge Berle found that the video “helped thetrier of fact consider the evidence” and “helped expedite the courseofthetrial.” Onthis record, we conclude the awardofcosts for presenting the Taylor video — was not an abuse ofdiscretion. It is undisputed that Taylor, whoset in motion the acts ultimately resulting in Raymond’s injuries, was a crucial witness. Judge Berle reasonably could have concluded from Judge Ettinger’s informalpoll of the jury that evaluation of Taylor’s demeanor wasnecessary to the jury’s task of determining his credibility. Althoughthe existence ofthe alternative methodof reading aloudthe testimony suggests that video editing is not always necessary to the conductoflitigation (Science Applications Internat. Corp. v. Superior Court (1995) 39 Cal.App.4th 1095, 1105), on this record we cannot saythat Judge Berle’s conclusion wasarbitrary. 3. PowerPoint Presentation During closing argument, plaintiffs’ counsel made a PowerPoint presentation comprising 134 slides that included blow-ups of exhibits and testimony, most with textual insets setting forth plaintiffs’ argument, including the following: “[Brownco employees] Knew andIgnored the Electrical Hazards of the Selective Demolition”; “fBrownco employees] Violated Their Own Safety Rule by Sending Untrained Workers into a High Voltage Area”; “Brownco Chose the Most Dangerous Method to Remove Conduit”; “Unsafe Cutting Caused Contaminated Electrical Panel”; “[Brownco’s] Theory is Impossible.” Several slides showed Raymond’sinjuries and discussed his pain and suffering and the financial and psychological impact of the accident. Only four of the slides included in the appellate record were devoid of argument. Plaintiffs attached 16 of the slides to their opposition to Brownco’s motionto tax costs and brought all 134 slides to the costs hearing. . Plaintiffs sought $92,146 for the presentation. In his declaration, plaintiffs’ counsel argued the PowerPoint “was a concise, effective and efficient method of displaying the evidence for the jury, saving on time and judicial resources,” and was “essential for the Court and the jury to understand the sophisticated and complex analysisof how the accident occurred, and plaintiffs’ severe burn and psychological injuries. ... [{] The jurors deliberated for over six (6) days on the liability issue alone. Clearly this was a close call for plaintiffs. Ifthe closing had not been so well presented duein large part to [the PowerPoint], then the outcome most probably would not have been as favorable.” At the costs hearing,plaintiffs’ counsel argued that because Judge Ettinger had granted each party only two hoursfor closing argument, the PowerPoint was “reasonably helpful”to the trier of fact in that it allowedplaintiffs to put on 134 exhibits in two hours. “TA|fter the twenty-three day trial, _.. the jury was out for an additional six and-a-half more days” counsel argued, “[a]nd the questions that they had while they were out were primarily focused on liability. And due to a number of issues, we were onthe cusp ofa mistrial so that the potential of a hung jury was very close and perhaps maybe even potentially a defense verdict. So J think thatthis closing argument wasessential to our winning the case.” . Brownco’s counsel argued the PowerPoint presentation was a “multimedia extravaganza,” with noslide depictingsolely an exhibit. Thetrial court found that the “complicated graphics” were “necessary to demonstrate the[] facts to the jury” and “was appropriate and helpfulto aid the trier of fact.” It allowed the cost. This was an abuse ofdiscretion. The PowerPointpresentation was an allowable cost only if it was reasonably necessary to the conductofthe litigation rather than merely convenient or beneficial. Nothing in the record suggests it was. Asnoted, the presentation set forth plaintiffs’ argument, not evidence. We know ofno authority, and plaintiffs cite none, holding that visual aidssetting forth a party’s argument during closing remarks are reasonably necessary to the conduct of litigation. It appears the trial court and plaintiffs’ counsel applied the wrong standardto the PowerPoint cost item. Counsel repeatedly argued, andthetrial court found, that the presentation was reasonably helpful to the trier of fact. But this standard applies to only “{m]odels and blowupsof exhibits and photocopies of exhibits,” which are allowable ‘costs under subdivision (a) of section 1033.5 if they were “reasonably helpfulto aid the trier of fact,” i.e., to help the trier of fact determine the facts of the case. The reasonably helpful standard does not apply here because the PowerPoint did not comprise blowups of exhibits and did not help the jurors determine the facts of the case, it helped them understandonly plaintiffs’ argument. Plaintiffs argue E7 Dorado Meat Company v. Yosemite Meat (2007) 150 Cal.App.4th 612 and American Airlines, Inc. v. Sheppard, Mullin (2002) 96 Cal.App.4th 1017 support the proposition that high-tech methods used to display documentsto the jury are recoverable as costs. The cases are distinguishable. In E/ Dorado Meat * Company,the prevailing party sought to recoverthe cost of preparing and displaying at trial a 37-page exhibit distilling years’ worth of business data. The appellate courtheld the exhibit was reasonably necessary to the litigation. In American Airlines, the prevailing party sought costs for “imaging documents and deposition transcripts.” (/d. at p. 1057.) Citing the rule that models and blowupsof exhibits are an allowable cost if they are reasonably helpfulto thetrier of fact, the appellate court held the costs were recoverable. The obviousdifference between those cases and the instant oneis that in . them, the prevailing party sought reimbursement for presenting evidenceto the jury, whereashere plaintiffs seek reimbursementfor the cost of presenting their argument. B. Section 998 Expert Fees Thetrial court denied Gloria’s request for expert fees incurred afterherfirst statutory offer but before her second, finding the second offer extinguishedthefirst for. all purposes. Gloria contends this was error. The appeal presents the followingissue: Whena plaintiff makes two reasonable section 998 offers, both ofwhich expire by operation of law, can the plaintiff recover expert fees incurred after the first offer—in addition to those incurred after the second? Theissueis one of statutory interpretation that we review de novo. (Ray v. Goodman (2006) 142 Cal.App.4th 83, 87.) 1. Procedural History . As stated,Raymondalleged one cause ofactionfor negligence. Gloria alleged one causeof action for loss of consortium. Plaintiffs each made offers to compromise pursuantto section 998 on August 30, 2007 and February 8, 2010, Gloriafirst for $250,000 and then for $100,000, Raymondfirst for $4,750,000 and then for $1,500,000. Eachoffer lapsed by operation of law after Browncotooknoaction to acceptorrejectit. At trial, Raymond’s recovery of $1,646,674 was less than his first 998 offer but more than his second. Gloria’s recovery of $250,000 equaledherfirst offer and exceeded her. second. Plaintiffs incurred $188,536.86 in expert fees between August 30, 2007 and February 8, 2010, and an additional $64,555.45 in expert fees after February 8, 2010. Plaintiffs do not contend Raymondisentitled to fees incurred between August 30, 2007 and February 8, 2010 and defendantdoesnot dispute that Gloria and Raymondare both entitled to fees incurred after February 8, 2010. Brownco movedto tax the $188,536.86 cost item on the groundthat pursuant to Wilson v. Wal-Mart Stores, Inc. (1999) 72 Cal.App.4th 382 (Wilson), Gloria was notentitled to fees incurred in the time between the offers because her second offer nullified her first offer. Thetrial court agreed, and disallowed the cost item. 2. Interpretation of Section 998 To interpret section 998 we follow “‘[t]he fundamental rule of statutory construction . . . that the court should ascertain the intent of the Legislature soas to effectuate the purpose ofthe law. [Citations.]’ [Citation.] In determining that intent, we first examine the wordsofthe statute itself. [Citation.] Under the so-called ‘plain meaning’rule, courts seek to give the words employed by the Legislature their usual and ordinary meaning. [Citation.] If the languageofthe statute is clear and unambiguous, there is no needfor construction. [Citation.] However, the ‘plain meaning’ rule does not prohibit a court from determining whethertheliteral meaning ofa statute comports with 10 its purpose. [Citation.] If the terms ofthe statute provide no definitive answer, then courts may resort to extrinsic sources, including the ostensible objects to be achieved and the legislative history. [Citation.] ‘““We must select the construction that comports most closely with the apparentintent of the Legislature, with a view to promoting rather than | defeating the general purposeofthe statute, and avoid aninterpretation that wouldleadto absurd consequences.” [Citation.]’ [Citation.] The legislative purpose will not be sacrificed to a literal construction of any part of the statute.” (Bodell Construction Co.v. Trustees ofCal. State University (1998) 62 Cal.App.4th 1508, 1515-1516.) The Legislature enacted section 997 and its successor, section 998, to encourage pretrial settlementof litigation? (7. M. Cobb Co. v. Superior Court (1984)36 Cal.3d 273, 280 (Cobb) [{“the clear purpose of section 998 and its predecessor, former section 997,is to encourage the settlement of lawsuits priorto trial”]; Scott Co. ofCalifornia v. Blount, Inc. (1999) 20 Cal.4th 1103, 1114 [the “very essence of section 998”is its encouragementof settlement].) Section 998 provides that not less than 10 days prior to trial, “any party may serve an offer in writing upon anyotherparty to the action to allow judgmentto be taken or an award to be entered in accordance with the terms and conditions stated.” (§ 998, subd. (b).) Ifthe offer is accepted, proof of acceptanceis filed with the court and judgment is entered accordingly. U/d., subd. (b)(1).) “If the offer is not accepted priorto trial or arbitration or within 30 daysafter it is made, whichever occursfirst, it shall be deemed withdrawn.” (d., subd. (b)(2).) “If an offer made by plaintiff is not accepted and the defendantfails to obtain a more favorable judgment or award in any action or proceeding .. ., the court . . . , in its discretion, may require the defendant to pay a reasonable sum to cover postoffer costs of the services of expert witnesses . . . actually incurred and reasonably necessary in either, or both, preparation fortrial or arbitration, or duringtrial or arbitration, of the case by the 3 Section 998, enacted in 1971 (Stats. 1971, ch. 1679, § 3, pp. 3605-3606), replaced section 997 (added by Stats. 1851, ch. 5, § 390, p. 113, repealed by Stats. 1971, ch. 1679, § 1, p. 3605). 1] plaintiff, in addition to plaintiff's costs.” (§ 998, subd. (d).)4 “If an offer made by a defendantis not accepted andtheplaintiff fails to obtain a more favorable judgment or award,the plaintiff shall not recover his or herpostoffer costs and shall pay the defendant’s costs from the timeofthe offer. In addition, in any action or proceeding ..: , the court .. ., in its discretion, may require the plaintiff to pay a reasonable sum to cover costs of the services ofexpert witnesses . . . actually incurred and reasonably necessary in either, or both, preparation fortrial or arbitration, or duringtrial or arbitration, of the case by the defendant.” (§ 998, subd. (c)(1).) Pursuantto the terms of subdivision (d) of section 998, Gloria wasentitled (in the court’s discretion) to expert witness fees incurred after August 30, 2007 because on that date she made a reasonablestatutory offer to settle that Browncofailed to accept. (§ 998, subd.(d).) Brownco contends Gloria’s second section 998 offer supersededthe first offer for purposesof cost shifting. We disagree. | 3. Multiple Section 998 Settlement Offers Section 998is silent as to the effect of a later section 998 offer on an earlier offer. Browncoinvites usto fill this silence essentially by adding the following language to subdivision (d): If an offer made by a plaintiff is not accepted and the defendant fails to obtain a more favorable judgment, the court may require the defendantto pay the plaintiff's expert witness fees “unless plaintiffmakes a later offer to compromise.” Two cases would seem to support the modification. a. Distefano v. Hall In Distefano v. Hall (1968) 263 Cal.App.2d 380 (Distefano), the defendants served a first statutory offer to settle for $20,000, which was not accepted. (/d. at pp. 383-384.) Fouryears later, after a full trial and reversal of the judgment on appeal, defendants made a secondstatutory offer, for $10,000, which was also not accepted. After a second full trial, the plaintiff obtained a verdict in the amount of $12,559.96 and was allowedcosts. 4 Expert fees are generally disallowed as costs otherwise. (§ 1033.5, subd. (b)(1).) 12 On appeal, defendants contended they were not required to pay plaintiff's costs; on the contrary, plaintiffwas required to pay their costs because he refused to accepttheirfirst offer of $20,000 and failed to obtain a more favorable judgment. (d. at p. 384.) The appellate court disagreed, concluding that defendants’ second offer extinguished thefirst, and becauseplaintiff's verdict of $12,559.96 was more favorable than defendant’s second offer he was not required to pay defendants’ costs. (/bid.)°. b. Wilson v. Wal-Mart In Wilson, supra, the plaintiff served an initial offer to compromise for $150,000. Oneyear later she madea secondoffer, for $249,000. The defendant accepted neither offer, and a jury subsequently awardedplaintiff $175,000. (72 Cal.App.4th at p. 387.) Thetrial court granted defendant’s motion to tax the expert witness fee component of plaintiffs cost bill on the groundthat her second offer “superseded and extinguished”her first offer for purposes ofsection 998. (id. at p. 388.) Relying heavily on Distefano, our colleaguesin the Third Appellate District affirmed the order, holding that any new offer communicated prior to a valid acceptance of a previous offer extinguished and replacedtheprioroffer. (Wilson, at pp. 389-390.) Distefano and Wilson set forth the rule defendant urges here: When a second -section 998 offer is made after the first has been withdrawn by operation of law, the second offer controls the benefits afforded by section 998 to the offeror and the burdens to which the section exposes the offeree. The cases support the rule with several rationales. c. General Contract Law Principles Theprimary rationale for the rule that subsequent section 998 offers extinguish prior offers is that it comports with general principles of contract law, specifically the principle that “any new offer communicatedprior to a valid acceptance of a previous > The court limited its holding to the facts before it. (263 Cal.App.2d at p. 384 [where a case has beentried, appealed and reversed forretrial . . . an offer of compromise made before the secondtrial pursuant to section 997 should clearly supersede that made before the first trial”].) 13 offer, extinguishes and replaces the prior one.” (Distefano, supra, 263 Cal.App.2d at: p. 385; Wilson, supra, 72 Cal.App.4th at pp. 389-390.) We think application of contract principles compels theopposite result here. | | Section 998 involves the contractual process of settlement and compromise, so “it is appropriate for contract law principles to govern the offer and acceptance process undersection 998” where such principles “neither conflict with the statute nor defeat its purpose.” (Cobb, supra, 36 Cal.3d at p. 280.) Because the issue here is whether Gloria’s second offer extinguishedherfirst, the principles most pertinent concern termination of offers, also called termination of the power of acceptance. An offeree’s power of acceptance may be terminated by revocation ofthe offer, rejection by the offeree, the making of a counteroffer, lapse oftime, incapacity of the offeror, or the “non-occurrence of any condition of acceptance underthe terms of the offer.” (Rest.2d Contracts, § 36.) “Most offers are revocable.” (/d., § 42, com. a.) An - offer is revoked by communication from the offeror of its intention not to enter into the proposed contract. (/d., § 42.) The manifestationof such an intention may be express, as whenthe offeror explicitly revokes the offer, or implied, as whenthe offeree “takes definite action inconsistent with an intention to enter into the proposed contract.” (Id., § 43; 1 Corbin on Contracts (rev. ed. 1993) § 2.20, pp. 226-227.) The making of a second offer involving the same subject matter but with terms different from those of the first offer constitutes a definite action inconsistent with an intention to enter into the contractas originally proposed and terminates the offeree’s powerto acceptthe terms of the original offer. (1 Corbin on Contracts, supra, § 2.20, p. 229; Abrams-Rodkey v. Summit County Children Servs. (Ohio App. 9 Dist. 2005) 163 Ohio.App.3d 1, 9 [a later- madeoffer will revoke a previous offer to the extent that the offers are inconsistent”]; Norca Corp. v. Tokheim Corp. (N.Y.A.D. 1996) 227 A.D.2d 458, 458-459 [same].) Lapse occurs whenthe time specified for acceptance in the offer expires, or, if no time is specified, a reasonable time passes. (Rest.2d Contracts, § 41.) A lapsed offer has noenduring contractual effect. (/d., § 35 [“A contract cannotbe created by acceptance of 14 an offer after the power of acceptance has been terminated in one of the wayslisted in § 36.”}) A later offer therefore cannot “extinguish”a lapsed offer. Here, Gloria’s first offer lapsed long before she madeher secondoffer. It thereafter retained no contractual significance and thus could not have beenrevoked or extinguished by the second offer. (See Gallagher v. Heritage (1983) 144 Cal.App.3d 546, 550 [“when an acceptance has not been effected under the terms of Code of Civil Procedure section 998, subdivision (b) . . . . [b]y its terms the offer has been withdrawn, but the statutorily imposed benefits and burdens remain”], disapproved on another ground in Cobd,supra, 36 Cal.3d at p. 280, fn. 8). The sole significance ofthe first offer was that pursuant to section 998 it entitled Gloria to cost shifting if Browncofailed to obtain a more favorable judgment. This conditional entitlement vested when Browncoallowed Gloria’s first offer to lapse. Nothing in contract law requires that Gloria be divested of the entitlement simply because she later made anotheroffer. d. Encouragement of Settlement Acknowledging that the purpose of former section 997 was to encourage the settlement of litigation without trial, the Distefano court observedthat “to give less than full effect to the parties’ reappraisals of the merits of their respective positions where a case has beentried, appealed and reversed for retrial” would deny the parties flexibility and discourage settlement. (263 Cal-App.2d at p. 385.) The Wilson court posed a somewhat different scenario that might arise if a late settlement demand doesnot extinguish an earlier demand. “A plaintiffmight be encouraged to maintain a higher settlement demand onthe eveoftrial and refuse to settle a case that should otherwise be settled if the plaintiff finds comfort in the knowledge that, even if the plaintiff receives an awardless than his or her last demand,the plaintiff mightstill enjoy the cost reimbursementbenefits of section 998 so long as the award exceeded a lower demand madebythe plaintiff sometime during the course ofthe litigation. The reverse might be true of the defendant. ‘Rolling the dice’ then becomes somewhat less risky and we note that lawsuits are not often settled by reducing the risk oftrial.” (Wilson, supra, 72 Cal.App.4th at p. 391.) 15 Wefind this reasoning to be unpersuasivein this case. The purpose of section 998 is to encourage settlement by affording benefits to those who make reasonable settlement offers and imposing concomitant burdens on those who unreasonablyreject them. Here, Gloria made tworeasonable offers. To deny her the benefit of makingthefirst offer simply because she madea later offer would actually discourage her makingthelater offer, and thus discourage settlement. e. Preference for Bright Line Rules Finally, the Wilson court supported its holding with the observation that “the legislative purpose of section 998 is generally better served by brightline rule in which the parties know that any judgmentwill be measured against a single valid statutory offer—i.e., the statutory offer most recently reyected—+egardless of offers madeearlier in the litigation.” ( Wilson, supra, 72 Cal.App.4th at p. 391.) Assuming for the sake of argumentthat bright line rules are to be preferred generally, the existing statutory rule, that a judgment will be measured against the earliest reasonable section 998 offer regardless of later offers, seems clear enough andhas the addedbenefit of having been installed by the Legislature itself. The Wilson court suggested that while such a rule “arguably might promote settlement in some cases, its potential for mischief, or at least confusion, is apparent.” (/bid.) But a prevailing party who has madea reasonable pretrial offer pursuant to Code of Civil Procedure section 998is eligible for specified costs only so long as the offer was made in good faith. (Nelson v. Anderson (1999) 72 Cal.App.4th 111, 134.) Whether a section 998 offer was made in good faith is left to the sound discretion ofthe trial court. ([bid.) Here, any mischief or confusion may be addressed bythetrial court whenit exercises its discretion in awarding costs. 4. Conclusion | Where a party makes two section 998 offers to compromise more than 30 days apart, the purpose of section 998 is adequately served by the statute’s existing language, which entitles an offeror to cost shifting from the date of the earliest reasonable offer. This rule encouragesearly settlement, respects the Legislature’s preference for early discovery and evaluation of the merits of lawsuits, and presents a certain, bright line rule 16 by which settlement negotiations may be guided. Ifany mischief or confusion results from later offers, or any gamesmanshiparises, the court can address such concerns when it awards costs. Here, it is undisputed that if Gloria had not madeher secondsection 998 offer she would have been entitled (in the court’s discretion) to an award of expert fees incurred after the first offer. No principle requires a different result simply because she madethe second offer. The trial court thus abusedits discretion when, albeit following Wilson,it found that Gloria’s second offer to settle extinguished her first. The matter will be remandedto afford the court an opportunity to reexamine Gloria’s entitlement to expert fees. Browncoarguesthat even if Gloria is theoretically entitled to expert fees under section 998, she cannot obtain them here because the experts, whose opinionspertained only to the circumstances surrounding Raymond’sinjury, were not reasonably necessary to litigation of Gloria’s claim for loss of consortium. Because the record doesnot clearly reflect the content of the experts’ opinions, we will leaveit to the trial court to determine the necessity of their evidence. DISPOSITION The order on defendant’s motion to tax costs is reversed as to the $92,146 plaintiffs sought for their PowerPoint presentation and the $188,536.86 Gloria Martinez sought for expert fees incurred between August 30, 2007 and February 8, 2010. The matter is remandedto thetrial court for its discretionary determination of Gloria’s entitlement to these expert fees. In all other respects, the judgmentis affirmed. All parties are to bear their owncosts. CERTIFIED FOR PUBLICATION. CHANEY,J. We concur: MALLANO,P.J. JOHNSON,J. 17 Laura H. Huntley Lindahl Beck LLP 660 S Figueroa St #1500 Los Angeles, CA 90017-3457 Division 1 RAYMOND MARTINEZetal., Plaintiffs, Cross-complainants and Appellants, V. BROWNCO CONSTRUCTION COMPANY,INC., Defendant and Appellant. B226665 .AHLBECK LLP 1. Figueroa Street 1500 o N DW N AN H e h W Y \ O 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Angeles, CA 90017-3457 488-3900 187837 foregoing 1s true and correct. PROOF OF SERVICE STATE OF CALIFORNIA, COUNTY OF LOS ANGELES Iam employedin the County of Los Angeles, State of California. | am over the age of 18 and not a party to the within action; my business address is 660 South Figueroa Street, Suite 1500, Los Angeles, California 90017-3457. On March 19, 2012, I served the foregoing document described as PETITION FOR REVIEWonall interested parties by placing the true copies thereof enclosed in sealed envelopes addressed as indicated below: Supreme Court of California Office of the Clerk 350 McAllister Street San Francisco, CA 94102 {Original and 13 copies, plus one for conforming/return] BY MAIL: I am “readily familiar” with the firm’s practice of collection and processing correspondence for mailing. Under that practice, it would be deposited with U.S. Postal Service on that same day with postage thereon fully prepaid at Los Angeles, California in the ordinary course of business. BY FEDERAL EXPRESSas follows: I caused said document to be sent Federal Ex ress for overnight delivery (next business morning) to the offices of the addressee. Executed on March 19, 2012, at Los Angeles, California. I declare under penalty of perjury under the laws of the State of California that the == 1 PROOF OF SERVICE 2 |)STATE OF CALIFORNIA, COUNTY OF LOS ANGELES Iam employed in the County of Los Angeles, State of California. I am 4 |/over the age of 18 and not a party to the within action; my business address is 660 South Figueroa Street, Suite 1500, Los Angeles, California 90017-3457, 5 6 On March 19, 2012, I served the foregoing document described as PETITION FOR REVIEWonall interested parties by placing the true copies thereof 7 enclosed in sealed envelopes addressed as indicated below: 8 Albro L. Lundy,III, Esq. Los Angeles Superior Court ? Norman Coe, Esq. Central Civil West Courthouse 10 Baker, Burton & Lundy Clerk of the Court for 515 Pier Avenue The Honorable Elihu M.Berle il Hermosa Beach, CA 90254 600 South Commonwealth Avenue 12 Tel: (610) 376.9893 Los Angeles, CA 90005 3 Fax: (310) 376.7483 [lcopy] — 14 Victor George, Esq. 20355 Hawthorne Blvd., Second Floor Court of Appeal 15 Torrance, CA 90503 Clerk of the Court 16 Tel: (310) 856-5410 Second Appellate District, Division 1 Fax: (310) 856-5420 300 South Spring Street, Suite 2217 7 Los Angeles, CA 90013 18 Attorneys for Plaintiffs [1 copy] Raymond Martinez and Gloria Martinez 19 30 _X_ BY MAIL: I am “readily familiar” with the firm’s practice of collection and processing correspondence for mailing. Under that practice, it would be deposited with U.S. Postal Service on that same day with postage thereon fully 21 prepaid at Los Angeles, California in the ordinary course of business. 22 Executed on March 19, 2012, at Los Angeles, California. 23 ||| »+=BY FEDERAL EXPRESSasfollows: I caused said documentto be sent Federal Express for overnight delivery (next business morning)to the offices of the 24 addressee. 25 I declare under penalty of perjury unde laws of the State of California that the 26 foregoing is true and correct. DAHLBECK LLP 8. Figueroa Street e 1500 Angeles, CA 90017-2457 ) 488-3900 187837
