Licudine v. Cedars-Sinai Med. Ctr.
Licudine v. Cedars-Sinai Med. Ctr.
Opinion of the Court
*920A plaintiff who sues and prevails at trial is statutorily entitled to prejudgment interest starting from the date she makes a settlement offer under Code of Civil Procedure section 998 (a so-called "998 offer")
FACTS AND PROCEDURAL BACKGROUND
I. Facts
In February 2012, Dionne Licudine (plaintiff) underwent gallbladder removal surgery. The surgery was performed by Dr. Ankur Gupta under the supervision of Dr. Brenden Carroll at defendant Cedars-Sinai Medical Center (Cedars). The surgery was intended to be minimally invasive, but Dr. Gupta nicked a vein inside the abdominal cavity and caused substantial internal bleeding. This necessitated a more invasive surgery that left plaintiff with a large scar, a month-long hospitalization and a chronic abdominal condition.
II. Procedural Background
A. Complaint
On January 15, 2013, plaintiff filed a medical malpractice lawsuit against Cedars, Dr. Gupta, Dr. Carroll and the Regents of the University of California (collectively, defendants). The complaint was three pages long. With respect to liability, plaintiff alleged that the defendants' provision of medical services was "below the standard of care." With respect to damages, plaintiff alleged only that she (1) had suffered "personal injuries and related emotional distress," (2) had incurred "medical, nursing, health care, hospital and *922medical expenses," (3) had suffered a "loss of wages, profits, and earning capacity," and (4) incurred "other damages and injuries to be proven but which at this time are unknown." She prayed "for damages within the jurisdiction of the Court."
It was not until May 23, 2013 that plaintiff served her complaint on Cedars. Cedars filed its answer on June 6, 2013, along with a demand for written discovery and for a statement of damages.
B. Section 998 offer
On June 11, 2013, plaintiff mailed Cedars an "Offer to Compromise" pursuant to section 998. Specifically, she "offer[ed] to allow judgment to be taken against Cedars and in favor of the plaintiff in the amount of $249,999.99, plus legal costs."
On June 27, 2013, Cedars sent plaintiff a written "Objection" to the 998 offer. In its objection, Cedars noted that plaintiff made her 998 offer only five days after Cedars had filed its answer. As Cedars explained, this was "too soon for it to make any determination as to whether plaintiff's [998 offer] was reasonable" because Cedars had "not had an opportunity to fully investigate this action."
The offer expired on July 16, 2013. ( §§ 998, subd. (b)(2) [offer expires 30 days after it is made], 1013, subd. (a) [five additional days added for mailed offers].) Cedars did not accept the offer prior to its expiration.
C. First trial and appeal
The matter proceeded to trial. A jury found Cedars liable for malpractice and *81awarded plaintiff $1,045,000 in damages. Both Cedars and plaintiff moved for a new trial on damages, and the trial court granted both motions and set the matter for a new damages trial. We affirmed the trial court's orders. ( Licudine I , supra ,
D. Damages retrial
A jury returned a total damages award of $7,619,457, comprised of $5,344,557 in economic damages and $2,274,900 in noneconomic damages.
E. Request for prejudgment interest
Plaintiff filed a memorandum of costs seeking, among other things, $2,335,929.20 in prejudgment interest from the date of her 998 offer to the date of judgment.
F. Appeal
Plaintiff filed this timely appeal.
DISCUSSION
If a plaintiff makes an offer to settle a lawsuit pursuant to section 998 that the defendant does not accept, and if the plaintiff ultimately obtains a "more favorable judgment," she is entitled to have the defendant pay (1) the costs of her expert witnesses incurred after the 998 offer was made ( § 998, subds. (b) & (d) ), and (2) prejudgment interest at the rate of 10 percent starting from the date of the 998 offer ( Civ. Code, § 3291 ; Wilson v. Wal-Mart Stores, Inc. (1999)
*924I. The Pertinent Law on the Validity of 998 Offers
A 998 offer is valid only if it is made in "good faith." ( *82Elrod , supra , 195 Cal.App.3d at p. 698,
Although section 998 's text does not itself condition validity upon an offeror's good faith, such a requirement is necessarily implied by the statute's purpose: Section 998 is meant "to encourage the settlement of lawsuits prior to trial" ( T.M. Cobb v. Superior Court (1984)
Whether a section 998 offer has a reasonable prospect of acceptance is a function of two considerations, both to be evaluated in light of the circumstances "at the time of the offer" and "not by virtue of hindsight." ( Burch v. Children's Hospital of Orange County Thrift Stores, Inc. (2003)
In assessing whether the 998 offeror knew that the offeree had sufficient information to evaluate the offer (the second consideration), the offeree needs information bearing on the issue of liability as well as on the amount of damages because these are the issues upon which a verdict would rest and because the 998 offer, if accepted, would be in lieu of that verdict. ( Nelson v. Anderson (1999)
First, how far into the litigation was the 998 offer made? Although section 998 fixes no "minimum period that must elapse following commencement of suit for service of a valid 998 offer" ( Barba , supra , 166 Cal.App.4th at p. 452,
*926Second, what information bearing on the reasonableness of the 998 offer was available to the offeree prior to the offer's expiration? Information may be obtained (1) by virtue of prior litigation between the parties ( Bender v. County of Los Angeles (2013)
Third, did the party receiving the 998 offer alert the offeror that it lacked sufficient information to evaluate the offer and, if so, how did the offeror respond? An offeree may alert the offeror *84by (1) requesting discovery, either formally or informally ( Barba , supra , 166 Cal.App.4th at pp. 450-451,
Although the party making a 998 offer generally has the burden of showing that her offer is valid ( Timed Out , supra , 21 Cal.App.5th at p. 942,
II. The Trial Court Did Not Abuse Its Discretion In Finding That Plaintiff's 998 Offer Was Not Made In Good Faith
A. Application of pertinent factors
Plaintiff's 998 offer to settle for $249,999.99 was undoubtedly within the "range of reasonably possible results" at trial. The jury's $5,594,557 verdict constitutes prima facie evidence of such ( Elrod , supra , 195 Cal.App.3d at p. 700,
Consequently, and as the trial court properly recognized, whether plaintiff's 998 offer in this case was made in good faith turns entirely on the second *927consideration bearing on good faith-that is, on whether Cedars had sufficient information to assess whether plaintiff's $249,999.99 offer was a reasonable one. The trial court did not abuse its discretion in concluding that Cedars lacked sufficient information. Each of the factors identified in the case law support the trial court's determination.
As to timing, plaintiff made her 998 offer just 19 days after serving Cedars with her complaint and just five days after Cedars filed its answer.
As to the availability of information, Cedars had very little information available to it on the issues of liability and the amount of damages prior to the date plaintiff's 998 offer expired. Plaintiff's three-page complaint was "bare bones," as it listed no specifics as to the injuries she suffered or the amount of damages she sought. Nor was this skeletal complaint fleshed out by the pre-litigation notice required by section 364, which would have set forth the "legal basis of [her] claim and the type of loss sustained, including [the] specific ... nature of injuries suffered" (§ 364, subds. (a) & (b) ), because plaintiff never filed such a notice.
The trial court did not abuse its discretion in concluding that this information, considered in its totality, did not provide Cedars with sufficient information with which to evaluate the reasonableness of plaintiff's section 998 offer. On the question of liability, Dr. Gupta may have admitted to holding the instrument that nicked plaintiff's vein but this information did not indicate which doctor *928(Dr. Gupta or Dr. Carroll) was responsible for any negligence or the extent to which plaintiff's injuries were related to or exacerbated by any pre-existing medical conditions she might have. On the question of the amount of damages, this information did not speak at all to plaintiff's pain and suffering, to the amount of her medical expenses (including any offset due to insurance), or to any possible loss in her earning capacity. Indeed, plaintiff's response to Cedars's request for documents indicated she was unsure whether she would suffer any loss of earning capacity.
As to providing notice of the lack of sufficient information and any response to that notice, Cedars alerted plaintiff to its concern that it was "too soon for it to make any determination as to whether" her 998 offer was reasonable, and plaintiff never responded.
Plaintiff responds that Cedars had sufficient information to evaluate her section 998 offer.
As a threshold matter, she argues that any absence of information regarding her economic damages is of no consequence because her 998 offer was an offer only to settle the noneconomic damages portion of her case for $249,999.99, which is just below the statutory cap for noneconomic damages in medical malpractice cases. We reject this argument because it contradicts the plain language of the 998 offer itself, which offers to "allow judgment to be taken against [Cedars] ... in the amount of $249,999.99" without any hint that the offer would settle only part of the case. Even if we were to accept plaintiff's invitation to retroactively rewrite her 998 offer, Cedars still lacked sufficient information to make an intelligent determination as to a reasonable amount of noneconomic damages for the reasons described above. What is more, plaintiff's conduct in making an offer as to noneconomic damages that, in her counsel's own words, was "one penny below" the statutory cap for such damages mere weeks after serving Cedars raises more than a specter of gamesmanship, which, as noted above, is antithetical to the legitimate operation of section 998.
Even if we reject her retroactively narrowed reading of her 998 offer, plaintiff continues, Cedars still had enough information to evaluate a global settlement offer because (1) Cedars had access to her 9,662-page medical chart, (2) Cedars conducted a peer review of the operation that provided greater information, (3) Cedars *86had the answers to Dr. Carroll's form interrogatories, and (4) any shortfall of information regarding damages could not in any event invalidate her 998 offer because Cedars's objection never used the word "damages."
However, none of these sources provided Cedars with sufficient information to evaluate plaintiff's offer.
*929Plaintiff's medical chart, as noted above, supplied some information regarding liability. But it left several issues unaddressed, including plaintiff's loss of earning capacity and her pain and suffering.
Plaintiff provided no evidence that Cedars ever conducted a peer review regarding the operation. All she offers is her counsel's assertion that "of course" Cedars did.
We cannot evaluate whether plaintiff's answers to Dr. Carroll's form interrogatories provided Cedars with sufficient information because those answers were never made part of the record in this case. Plaintiff asserts that she tried to make them a part of the record and that the trial court was wrong to deny her request to supplement her briefing with the interrogatory answers. Plaintiff's request to supplement was, in effect, a motion to amend her pleading; as such, it was governed by section 473, subdivision (b). ( Garcia v. Hejmadi (1997)
Plaintiff's criticism of Cedars's objection lacks merit because the plain language of that document registered an objection to the timing of plaintiff's 998 offer that applied with equal force to the issues of liability and to the amount of damages. Cedars's purported failure to use the words "liability" or "damages" did not somehow narrow the scope of its otherwise inclusive objection.
B. Plaintiff's further arguments
Plaintiff makes what boils down to three further categories of arguments for reversal.
*930She contends that Cedars effectively waived any right to object to the lack of information because it never asked her to extend the deadline of her section 998 offer. We reject this contention. Although a request for a continuance is one method by which a section 998 offeree may put the offeror on notice that it lacks sufficient information to evaluate the offer, it is not the only method of doing so; Cedars's objection sufficed.
*87She asserts that the trial court erred in refusing to consider evidence that (1) Cedars's attorney had a practice of making "boilerplate prematur[ity] claim[s]" to section 998 offers in other cases, and (2) Cedars would have rejected plaintiff's 998 offer even if Cedars had possessed sufficient information to evaluate it. We reject each assertion. Cedars's position regarding the timing of section 998 offers in other cases (and, relatedly, whether plaintiff was electing to disregard Cedars's objection in this case in light of its position in the other cases) is neither here nor there because whether a party's 998 offer is made in good faith turns on the particular circumstances of each case. ( Arno , supra , 130 Cal.App.4th at p. 1024,
And plaintiff posits that the trial court impermissibly required her to prove her good faith rather than requiring Cedars to prove its absence. As noted above, the law squarely places the burden on Cedars. (E.g., Elrod , supra , 195 Cal.App.3d at p. 700,
DISPOSITION
The order striking plaintiff's request for prejudgment interest is affirmed. Cedars is entitled to its costs on appeal.
We concur:
ASHMANN-GERST, Acting P. J.
CHAVEZ, J.
All further statutory references are to the Code of Civil Procedure unless otherwise indicated.
We draw these facts largely from our prior published opinion in Licudine v. Cedars-Sinai Medical Center (2016)
While the trial court miscalculated the total unreduced damages award as $7,619,257, this miscalculation is of no consequence. The court correctly calculated the total reduced damages award.
The parties do not dispute plaintiff's calculation of the amount of prejudgment interest.
For this reason, we decline Cedars's invitation to erect either a rule or a presumption that any 998 offer in a malpractice lawsuit is invalid if not served at least 90 days after a pre-litigation demand pursuant to section 364 or, absent such a demand, at least 90 days after the complaint was served.
What is more, plaintiff's attorney misrepresented to the trial court in a sworn affidavit that he had filed a section 364 notice after certifying to Cedars that he had not.
Thus, the parties' debate regarding the applicability of Evidence Code section 1157, the evidentiary privilege applicable to such peer reviews, is irrelevant.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.