AB1141 Amends California Code of Civil Procedure

AB 1141, which was passed on September 28, 2015 and made effective January 1, 2016, revives an expired procedure for filing a motion for summary adjudication to facilitate resolution of a case. A change in the law in 2011 previously amended Section 473c of the Code of Civil Procedure. Under that change, courts were allowed, from January 1, 2012 until December 31, 2014, to summarily adjudicate portions of major causes of action or affirmative defenses, without resolving the entire cause of action or affirmative defense in the case. This change in the law required that both parties stipulate that the resolution of the issue by the court would either: (1) reduce the time of trial; or (2) significantly increase the ability of the parties to resolve the case by settlement. According to an article in the California Bar Journal, To Summarily Adjudicate or Not Adjudicate: The Recent Amendments to Section 437c, the amended statute provided necessary and long-awaited benefits to both defense and plaintiff attorneys. ( http://www.calbarjournal. com/march2012 ). However, the amended statute, which was codified under subsection (s) of Section 437c, expired on January 1, 2015. AB 1141 reenacts this summary adjudication provision, allowing courts to grant motions to resolve certain issues within a cause of action, thereby improving judicial economy, reducing the duration of trials, and encouraging pretrial settlements.

Under the new amendment, before filing a motion for summary adjudication, the moving party must file with the court: (1) a joint stipulation stating the issue or issues to be adjudicated and (2) a declaration from each stipulating party that the motion will further the interest of judicial economy by decreasing trial time or significantly increasing the likelihood of settlement. The moving party must then serve the joint stipulation on any party to the action who is not also a party to the motion. CCP 437c(s).

Within 15 days of receipt of the stipulation and declarations, the court will notify the stipulating parties as to whether the motion may be filed. If the court elects not to allow the filing of the motion, the stipulating parties may request, and upon request the court will conduct, an informal conference with the stipulating parties to permit further evaluation of the proposed stipulation. If the motion is allowed, the motion must contain a statement in the notice of motion that reads substantially similar to the following: “This motion is made pursuant to subdivision (s) of section 437c of the Code of Civil Procedure. The parties to this motion stipulate that the court shall hear this motion and that the resolution of this motion will further the interest of judicial economy by decreasing trial time or significantly increasing the likelihood of settlement.”

In addition to amending the code section governing summary adjudication, AB 1141 also amends Code of Civil Procedure section 998 to equalize the treatment of expert witness costs that are awarded to a defendant and plaintiff after the other side’s rejection of the settlement offer so that a court can order a defendant, like a plaintiff, to pay the other side’s costs of the pre-offer, as well as the post-offer services of an expert witness.

As one court explained, the policy behind a 998 offer is to encourage settlement and provide a severe penalty for failing to settle when the result after trial is less favorable than the offer that was made to settle the case before trial. See Bank of San Pedro v. Superior Court, 3 Cal.4th 797, 804 (1993). This policy is to encourage settlements in order to save court time and reduce court congestion because courts are already overburdened. The legislature also recognized a need for equity in the court’s discretion to award expert witness costs after the rejection of a 998 offer to settle. This bill addresses the inequity in treatment of expert witness costs upon rejection of a settlement offer.

It appears that in a 2005 non-controversial omnibus bill, the word “postoffer” was inserted into subdivision (d) of section 998 of the Code of Civil Procedure. This amendment created what appears to be an unintended inequity between defendants and plaintiffs relating to the discretionary authority of a trial court to award expert witness costs after one party’s rejection of a 998 settlement offer. Before AB 1141, if the plaintiff rejected a 998 settlement offer made by the defendant and failed to receive a better award at trial, the plaintiff could, at the court’s discretion, be required to pay the defendant’s preand post-offer expert witness costs. However, if the defendant rejected the plaintiff’s 998 settlement offer and failed to receive a more favorable judgment or award at trial, the court only had the discretion to order the defendant to pay the plaintiff’s postoffer expert witness costs. By removing the word “postoffer” from Section 998 (d) of the Code of Civil Procedure, AB 1141 allows both a plaintiff and a defendant to recover pre- and post-offer expert witness costs if the opposing party rejects a 998 settlement offer and receives a less favorable result at trial. The Assembly Judiciary Committee was unable to locate any materials indicating that the addition of the word “postoffer” to CCP Section 988(d) was intentional and was not aware of any reason why the Legislature would want to treat the parties differently in terms of their ability to recover expert witness costs if their good faith pre-trial settlement offers are rejected. This bill provides the remedy by equalizing the costs for both plaintiffs and defendants in 998 settlement situations.

Jennifer N. Lutz focuses her practice in employment litigation and counseling. Jennifer represents California’s employers in all aspects of employment disputes in state and federal court, and before administrative and government agencies.
For more info on Jennifer, click here.

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