Howell v. Hamilton Meats strikes again! In the recent Lee v. Silveira case, the court extended the Howell analysis, holding that in order to prevail under C.C.P. Section 998, plaintiff can use only the negotiated rate differential in determining whether he/she obtained a more favorable judgment or award than the statutory offer.
In Lee v. Silveira 2015 WL 2374359, plaintiff filed a personal injury lawsuit against defendants and issued an offer to compromise pursuant to C.C.P. section 998 in the amount of $1,000,000. Defendants did not accept the offer. The case went to trial. The trial court denied defendants’ motion in limine requesting the trial court permit only the introduction into evidence of paid medical bills. The court indicated the verdict would be reduced to reflect the amount of paid medical expenses.
The jury returned a verdict of $1,027,014, which explicitly included the amounts billed for plaintiff’s medical treatment. Defendants immediately filed a post-trial motion for reduction of the judgment to incorporate only the amounts paid. Plaintiff agreed to a deduction of these amounts, which would bring the judgment below her $1,000,000 offer to compromise. She concurrently argued her expert fees and prejudgment interest under Civil Code section 3291, which combined totaled over $350,000, should be determined before the negotiated rate differential was deducted as the initial judgment exceeded $1,000,000.
The trial court agreed with plaintiff’s position. The court filed a judgment that included plaintiff’s costs and expert fees and excluded the negotiated rate differential. The amount of the judgment was “987,398.26 plus pre-judgment interest in the amount of $250,231.07.”
The trial court granted defendants’ motion to vacate and modify the judgment and entered judgment in the amount of $887,098.26, which excluded plaintiff’s expert witness fees and prejudgment interest. Plaintiff appealed, contending that in determining whether she is entitled to expert fees under CCP Section 998, the proper comparison is between her offer and the initial judgment, which included an award for past medical expenses in the full amounts billed.
The Court of Appeal, Fifth Appellate District disagreed with plaintiff and affirmed the trial court’s judgment. The court concluded for purposes of determining whether a defendant failed to obtain a more favorable judgment under section 998, any negotiated rate differential included in a jury’s verdict should be subtracted from the judgment or award before it is compared to the offer to compromise “for the simple reason that the injured plaintiff did not suffer any economic loss in that amount” citing Howell. In other words, defendants did not “obtain” a judgment that included the negotiated rate differential.
Howell and its progeny are here to stay. Lee evidences the fact the Howell analysis should be taken into consideration when evaluating a plaintiff’s C.C.P. section 998 offer to compromise. Defense counsel should continue to use Howell and its subsequent cases in motions in limine to exclude evidence of amounts billed for medical treatment.
ABOUT THE AUTHOR: Mr. Rogers is a graduate of University of San Diego School of Law. He specializes in general liability, professional liability, and business litigation. Contact him at firstname.lastname@example.org.
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