Peterson v. John Crane, Inc., A115079.

• Decision Date: 23 August 2007
• Docket Number: No. A115079.,A115079.
• Citation: 65 Cal.Rptr.3d 185,154 Cal.App.4th 498
• Court: California Court of Appeals Court of Appeals
• Parties: Gloria PETERSON, Plaintiff and Appellant, v. JOHN CRANE, INC., Defendant and Respondent.

65 Cal.Rptr.3d 185

154 Cal.App.4th 498

Gloria PETERSON, Plaintiff and Appellant, v. JOHN CRANE, INC., Defendant and Respondent.

No. A115079.

Court of Appeal, First District, Division 5.

August 23, 2007.

Brayton Purcell, Alan R. Brayton, Gilbert L. Purcell, Lloyd F. LeRoy, Mary E. Pougiales, Novato, for Plaintiff and Appellant.

Hassard Bonnington, Philip S. Ward, Barry N. Endick, San Francisco, for Defendant and Respondent.

NEEDHAM, J.

Gloria Peterson, individually, and as successor-in-interest to her deceased husband, and as his legal heir, appeals from an adverse judgment entered after a jury trial. She contends that the court erred in awarding expert witness fees to the respondent under Code of Civil Procedure section 998,¹ on the grounds that: (1) respondent's section 998 offer was invalid because Peterson's prosecution of claims in multiple legal capacities made her "multiple plaintiffs" for purposes of determining the validity of a settlement offer under section 998; and (2) the court did not consider the parties' relative economic resources in deciding whether the cost award was reasonable. We will affirm the judgment.

I. FACTS AND PROCEDURAL HISTORY

Gloria Peterson and her husband, John, filed a lawsuit in April 1999 alleging that John's asbestosis and lung cancer were asbestos-related.² They sued a number of manufacturers, suppliers, and users of asbestos products for his injuries, under legal theories including negligence, intentional tort, strict liability, and products liability, alleging that the defendants' activities and products exposed John to asbestos. They also sued for Gloria's loss of consortium. A first amended complaint for personal injury and loss of consortium was filed in July 1999.

John died in October 1999, while the litigation was pending. In March 2000, the court granted Gloria Peterson's motion to appoint her as the successor-in-interest to John's claims, "substituting her for [the] deceased plaintiff," and granted her leave to file a second amended complaint.

A. The Second Amended Complaint

In her "SECOND AMENDED COMPLAINT FOR SURVIVAL, LOSS OF CONSORTIUM, WRONGFUL DEATH-ASBESTOS," Gloria Peterson continued to pursue her individual claim for loss of consortium, added survivor claims as John's successor-in-interest, and also added wrongful death claims as John's legal heir.

The caption of the second amended complaint identified Gloria Peterson, in all of her various capacities, as the singular "Plaintiff' in the case: "GLORIA PETERSON, Individually, and as Successor-in-Interest to JOHN PETERSON, Deceased; and GLORIA PETERSON, as Legal Heir of JOHN PETERSON, Deceased, [¶] Plaintiff." In addition, allegations of the second amended complaint consistently referred to the "plaintiff," singular and to plaintiffs "injury," singular. The prayer sought judgment for "plaintiff."

Similarly, the caption of Peterson's verified answers to standard asbestos case interrogatories indicated that Gloria Peterson, in all her capacities, was the "Plaintiff." She referred to herself as the singular "plaintiff throughout that document and did not contend there was more than one plaintiff. The verification stated: "I, Gloria Peterson, declare: [1] I am the plaintiff in the above-entitled action." (Italics added, underscoring omitted.) She signed the verification once, as "Gloria Peterson."

B. John Crane's Section 998 Offers

Respondent John Crane, Inc. (John Crane) extended two settlement offers under section 998, both after the filing of the second amended complaint.

The first section 998 offer, dated October 30, 2002, was directed to "GLORIA PETERSON, PLAINTIFF, AND TO HER ATTORNEYS OF RECORD." John Crane offered to waive its costs, "including, but not limited to, any and all expert witness fees, in exchange for a dismissal with prejudice, and plaintiff's agreement to bear her own costs." (Italics added.) In this offer, therefore, John Crane indicated there was only one plaintiff. The offer was not accepted.

John Crane's second section 998 offer, dated April 30, 2004, was more specifically directed to Gloria Peterson in all of her capacities, as "plaintiffs": "GLORIA PETERSON, Individually, and as Successor-in-interest to JOHN PETERSON, Decedent, and GLORIA PETERSON, as Legal Heir of JOHN PETERSON, Deceased, Plaintiffs, AND TO THEIR ATTORNEYS OF RECORD." (Italics added.) The caption identified Gloria Peterson, in all her capacities, as "Plaintiffs." The essential term of the offer was the same as the first section 998 offer, except that it referred to "plaintiffs": "Defendant, JOHN CRANE INC., in the above entitled action pursuant to Section 998 of the California Code of Civil Procedure hereby offers a waiver of costs, including, but not limited to, any and all expert witness fees, in exchange for a dismissal with prejudice, and plaintiffs' agreement to bear their own costs."³ (Italics added.) This offer also expired without acceptance.

C. Trial

The case proceeded to trial by jury. During his opening statement, Peterson's attorney asked rhetorically: "Who is the plaintiff and who was the decedent?" Counsel answered: "The plaintiff in this case is Gloria Peterson. Ms. Peterson is here with us today. She is back in the courtroom."

At the conclusion of the case, the jury was provided with a special verdict form, agreed upon by the plaintiff, which referred consistently to the plaintiff, singular, except on one occasion: "Question No. 3:. Was the defect in design a cause of injury, damage, loss or harm to the decedent and thereby to the plaintiff? [¶] ... [¶] Question No. 7: Was the defect from failure to warn a cause of injury, damage, loss or harm to the decedent and thereby to the plaintiff? [¶] ... [¶] Question No. 10: Was the negligence of defendant John Crane, Inc., a cause of injury, damage, loss or harm to the decedent and thereby to the plaintiff? [¶] ... [¶] Question No. 12: Did the comparative fault of the decedent contribute as a cause of injury, damage, loss or harm to the decedent and thereby to the plaintiff? [¶] ... [¶] Question No. 13: What do you find to be the total amount of damages, past and future, including second section 998 offer to "plaintiffs" instead of "plaintiff." eluding economic and non-economic damages, if any, suffered by the plaintiffs. [¶] ... [¶] Question No. 14: Assuming that 100% represents the total causes of the plaintiffs injury, damage, loss or harm, what percentage of this 100% is attributable to the negligence and/or defective product(s) of defendant John Crane, Inc., if any, or the comparative fault of the decedent, John Peterson, if any, or the negligence and/or defective product(s) of all other persons, if any?" (Italics added.) In addition, the special verdict form did not ask the jury to allocate damages among three plaintiffs or among the causes of action or type of claim.

The jury returned a verdict of no liability on the part of John Crane.

D. JOHN CRANE'S MEMORANDUM OF COSTS AND PETERSON'S MOTION TO TAX COSTS

Having prevailed at trial, John Crane filed a memorandum of costs, seeking over $98,000 for items including expert costs and fees pursuant to section 998.

Peterson filed a motion to tax costs, indicating this time that there were really three "plaintiffs"—Gloria Peterson individually (loss of consortium claim), as successor-in-interest (survivor claims), and as legal heir (wrongful death claims). In the written motion, Peterson challenged the memorandum of costs by asserting, among other things, that there was more than one action or claim in the case and more than one plaintiff, and that the section 998 offer "was not allocated to each plaintiff rendering it ambiguous and invalid and therefore CRANE is not entitled to recover expert fees and costs."⁴

At the hearing on Peterson's motion to tax costs on August 3, 2005, Peterson's counsel attacked the second section 998 offer, contending it was invalid because the lawsuit consisted of "three separate actions" and Peterson should be considered to be several different plaintiffs.

The trial court found that John Crane's second section 998 offer was valid and awarded John Crane approximately $72,000 in costs, including nearly $50,000 in expert witness fees. The court did not inquire into the relative financial resources of the parties or Peterson's ability to pay. Nor did Peterson request such an inquiry.

Judgment was entered in accord with the jury's special verdict and the trial court's award of costs to John Crane. This appeal followed.⁵

II. DISCUSSION

Under section 998, until 10 days before trial "any party may serve an offer in writing upon any other party to the action to allow judgment to be taken or an award to be entered in accordance with the terms and conditions stated at that time." (§ 998, subd. (b).) Although section 998 refers to entry of a judgment or award, an offer that provides for the plaintiffs dismissal of the action with prejudice is a valid form of offer under section 998. (Hartline v. Kaiser Foundation Hospitals (2005) 132 Cal.App.4th 458, 470, 33 Cal. Rptr.3d 713 (Hartline).)

If the offer is not accepted within 30 days or before trial, it is deemed withdrawn. (§ 998, subd. (b)(2).) The failure to accept an offer has consequences for a plaintiff who does not obtain a more favorable result at trial. In that event, the plaintiff cannot recover its post-offer costs, must pay the defendant's costs from the time of the offer, and may be held liable (as was the case here) for a reasonable sum to cover the defendant's expert witness fees. (§ 998, subd. (c)(1).)⁶

Peterson contends the award of expert witness fees was erroneous in this matter because: (1) the section 998 offer was invalid, in that it was a single offer addressed to multiple plaintiffs; and (2) the court did not consider the parties' relative economic interests in determining whether the award was reasonable.

A. Validity of Section 998 Offer

In general, `"a section 998 offer made to...