Saba v. Crater

Opinion

RYLAARSDAM, J.

Defendant’s lawyer purported to make an oral offer to compromise pursuant to Code of Civil Procedure section 998 (all further statutory references are to the Code of Civil Procedure) on the record of a deposition. The offer was never reduced to writing; nonetheless, plaintiff attempted to accept the offer in writing and sought to have it enforced by the

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court. The trial court resolved a dispute concerning the terms of the offer, held that the offer and acceptance were valid and entered judgment. We reverse, holding that section 998 requires a written offer, and the section does not authorize the trial court summarily to resolve a dispute concerning the terms of the offer unless the offer and acceptance meet the requirements of section 664.6.

Facts

John Crater and Jerry Lehman contracted to acquire their partner Aftim K. Saba’s interest in the partnership. Subsequently, a dispute arose and Saba sued Crater and Lehman for fraud; Crater and Lehman cross-complained. The parties agreed certain issues in Saba’s complaint should be resolved by an accounting. The referee who conducted the accounting found that approximately $11,000 was owed to Saba under the contract.

Later, during a break in a deposition, Crater’s lawyer stated he intended to make a “998 offer” for the amount the referee had determined was owed under the contract. Saba’s lawyer stated he thought a “998 offer” must be in writing. The lawyers discussed the terms of the offer off the record and then, on the record, Crater’s lawyer stated: “First of all, I will follow-up with a formal written letter to you, but I want to make an offer under CCP section 998. And I’m intending by putting it on the record that that will qualify for the code requirements. [H] But in any event the offer is for full payment of the principal amount determined by [the referee], which would be 10 percent of the amount that he found and that would be $11,000 and change, plus legal interest from the date of filing of your complaint, whatever that calculates out to be.”

After the deposition, Saba’s lawyer unsuccessfully attempted to obtain a formal written offer. He then served a written acceptance, stating he waived “any purported deficiencies in the CCP section 998 offer . . . placed on the record at Mr. Lehman’s deposition . . . .” Crater’s lawyer objected, in writing, to the purported acceptance.