998 Offer Update

By Monty McIntyre

Important New CCP 998 decision: Mostafavi Law Group, APC v. Larry Rabineau, APC (2021) _ Cal.App.5th _ , 2021 WL 803685!

Last week, on March 3, 2021, the 2^nd District Court of Appeal published an important new decision regarding California Code of Civil Procedure 998 offers in Mostafavi Law Group, APC v. Larry Rabineau, APC (2021) _ Cal.App.5th _ , 2021 WL 803685. Section 998 states that a written offer “shall” include “a provision that allows the accepting party to indicate acceptance of the offer by signing a statement that the offer is accepted.” (Section 998(b).) The Court of Appeal noted there were no California appellate court decisions addressing the validity of a judgment stemming from acceptance of a 998-offer lacking an acceptance provision. It ruled the trial court properly applied the rule in Puerta v. Torres (2011) 195 Cal.App.4th 1267 to this case when it found the judgment for plaintiff, previously entered based upon plaintiff’s acceptance of defendant’s 998 offer without an acceptance provision, was invalid because it was based upon an invalid 998 offer.

THE LESSON TO BE LEARNED: Section 998 offers, whether they are accepted or rejected, must include an acceptance provision to be valid.