Ignacio v. Caracciolo
2 Cal. App. 5th 81
| Cal. Ct. App. | 2016Background
- On April 10, 2013, Ignacio was struck by Caracciolo’s vehicle and sued for negligence.
- On March 20, 2015, Caracciolo served a Code of Civil Procedure § 998 offer of $75,000 plus costs, conditioned on execution of an attached two‑page “Release of All Claims” and dismissal without prejudice.
- The attached release (exemplar) used very broad language releasing “any and all claims…whether now known or unknown” against defendant and many related parties, with an express waiver of Civil Code § 1542.
- Ignacio rejected the offer; at trial the jury awarded $100,000 in damages but found Ignacio 30% negligent, yielding a $70,000 judgment.
- Caracciolo sought cost‑shifting under § 998 because the judgment was less than her offer; the trial court found the § 998 offer invalid because the release was overbroad and denied Caracciolo cost benefits.
- Caracciolo appealed; the Court of Appeal affirmed, holding the release’s broad language rendered the § 998 offer incapable of valuation and therefore invalid.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a § 998 offer that attaches a release is invalid when the release purports to release claims beyond the pending litigation | Ignacio: release was overbroad and would bar claims outside the suit (e.g., invasion of privacy), making the offer incapable of valuation under § 998 | Caracciolo: release was limited to accident‑related claims (the litigation) per the exemplar’s qualifying language | Held: Offer invalid — the release’s unqualified “any and all claims…whether now known or unknown” language extended beyond the suit and made the offer incapable of valuation under § 998 |
| Whether attaching an “exemplar” release without a final signed release invalidates a § 998 offer | Ignacio: exemplar left uncertainty as to actual terms and thus rendered offer ambiguous | Caracciolo: exemplar identified material terms sufficiently; release would be limited to accident claims | Held: Court focused on substantive overbreadth rather than merely exemplary status; ambiguity construed against proponent, so offer invalid due to overbreadth |
| Whether a dismissal without prejudice defeats finality required for § 998 offers | Ignacio: dismissal without prejudice may not provide a final resolution equivalent to judgment | Caracciolo: dismissal without prejudice was part of common § 998 settlement structure | Held: Court did not rest its decision on this point; primary defect was release overbreadth making offer invalid |
| Burden and standard for construing § 998 offers | Ignacio: any ambiguity should be construed against offeror | Caracciolo: urged narrow reading of release terms | Held: Offeror bears burden to show § 998 validity; ambiguities strictly construed against offeror (affirmed) |
Key Cases Cited
- Chen v. Interinsurance Exchange of the Automobile Club, 164 Cal.App.4th 117 (interpreting § 998 offers and construing ambiguities against the offeror)
- Barella v. Exchange Bank, 84 Cal.App.4th 793 (offering party bears burden to establish § 998 offer validity)
- McKenzie v. Ford Motor Co., 238 Cal.App.4th 695 (offers releasing claims/parties not in litigation are invalid under § 998)
- Fassberg Constr. Co. v. Housing Auth. of City of Los Angeles, 152 Cal.App.4th 720 (additional terms that prevent valuation invalidate § 998 offers)
- Valentino v. Elliott Sav‑On Gas, Inc., 201 Cal.App.3d 692 (reversing cost shift where offer released unfiled claims against nonparties; valuation would require speculation)
- Goodstein v. Bank of San Pedro, 27 Cal.App.4th 899 (discusses when a “general release” in a § 998 offer may be interpreted as limited to the litigation)
- Linthicum v. Butterfield, 175 Cal.App.4th 259 (distinguishing valid releases limited to claims arising from the litigation)