21 Cal. App. 5th 933
Cal. Ct. App. 5th2018Background
- Timed Out LLC (assignee of model Eva Pepaj) sued 13359 Corp. (Stir) for misappropriation of likeness under common law and Cal. Civ. Code § 3344; bench trial found liability and a money judgment of $4,483.30.
- Defendant served a Code of Civil Procedure § 998 offer before trial offering a “total sum of Twelve Thousand Five Hundred Dollars ($12,500) exclusive of reasonable costs and attorney fees, if any,” which expired unaccepted.
- Plaintiff sought mandatory statutory attorney fees and costs under § 3344 and argued the 998 offer was ambiguous as to whether the $12,500 included or excluded fees and costs; plaintiff claimed substantially higher fees and costs than awarded.
- Trial court found the 998 offer unambiguous: “exclusive of” meant fees and costs were not included in the $12,500 and thus plaintiff could seek fees/costs in a separate motion.
- The court held plaintiff prevailed on the § 3344 claim but did not obtain a more favorable judgment than the 998 offer when preoffer fees/costs were included, so under CCP § 998(c)(1) plaintiff recovered only preoffer fees/costs and defendant recovered postoffer fees/costs; trial court’s fee awards produced a small net award in favor of defendant.
- Plaintiff appealed, arguing the offer was ambiguous and that the court misapplied § 998 in not counting preoffer fees/costs toward determining which party obtained the more favorable result.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the § 998 offer preserved plaintiff's right to seek attorney fees and costs later | The phrase “total sum... exclusive of reasonable costs and attorney fees, if any” is ambiguous and could be read to include fees in the $12,500; reference to Goodstein and use of “if any” increase ambiguity | “Exclusive of” has its ordinary meaning (not including); the phrase leaves plaintiff free to seek fees/costs later and “if any” does not effect a waiver | Offer was unambiguous: “exclusive of” meant fees and costs were outside the $12,500, so plaintiff could seek fees/costs in a later motion |
| Whether plaintiff was the prevailing party for statute-based fee entitlement | Plaintiff: won on statutory claim and obtained monetary recovery; therefore entitled to fees as prevailing party | Defendant: for § 3344 fee purposes, court should assess who achieved litigation objectives; defendant argued its offer being higher shows it achieved its objectives | Trial court (and appellate court) found plaintiff prevailed on § 3344 (liability and damages) and was entitled to statutory fees; but entitlement and calculation of which fees count for § 998 comparison are distinct |
| Whether preoffer fees/costs are added to judgment to compare against the § 998 amount | Plaintiff: trial court erred in not including preoffer fees/costs when comparing results because offer precluded later fees/costs | Defendant: because offer preserved right to seek fees later, the relevant comparison uses judgment plus preoffer fees/costs against $12,500 | Court treated preoffer fees/costs as part of the plaintiff’s recovery for the § 998 comparison and concluded plaintiff did not obtain a more favorable result than the offer |
| Whether § 998(c)(1) penalties (loser pays postoffer costs/fees) apply | Plaintiff: invalid or ambiguous offer means § 998 penalties should not apply | Defendant: offer valid so § 998(c)(1) applies, entitling defendant to postoffer fees/costs | Court held offer valid and applied § 998(c)(1), awarding plaintiff only preoffer fees/costs and awarding defendant postoffer fees/costs |
Key Cases Cited
- Goodstein v. Bank of San Pedro, 27 Cal.App.4th 899 (Cal. Ct. App.) (upheld a § 998 offer that required parties to bear their own fees; cited in offer but not outcome-determinative)
- Engle v. Copenbarger & Copenbarger, LLP, 157 Cal.App.4th 165 (Cal. Ct. App.) (if § 998 offer is silent on fees, a later fee motion is not barred; waiver must be express)
- Whatley-Miller v. Cooper, 212 Cal.App.4th 1103 (Cal. Ct. App.) (judicial form is not the sole way to preserve/describe fee treatment in a § 998 offer; acceptance documents may be surplusage)
- Barella v. Exchange Bank, 84 Cal.App.4th 793 (Cal. Ct. App.) (section 998 offers are strictly construed in favor of the offeree; plain contract principles apply)
- Elite Show Services, Inc. v. Staffpro, Inc., 119 Cal.App.4th 263 (Cal. Ct. App.) (general contract interpretation rules apply to § 998 offers)
- On-Line Power, Inc. v. Mazur, 149 Cal.App.4th 1079 (Cal. Ct. App.) (supports awarding fees when offer does not expressly preclude them)
- MacQuiddy v. Mercedes-Benz USA, LLC, 233 Cal.App.4th 1036 (Cal. Ct. App.) (distinguishable: found ambiguity where a nonmonetary offer term made comparison of outcomes impracticable)