Saakyan v. Modern Auto, Inc.

• Decision Date: 31 October 2002
• Docket Number: No. B146328.,B146328.
• Citation: 103 Cal.App.4th 383,126 Cal.Rptr.2d 674
• Court: California Court of Appeals Court of Appeals
• Parties: Oganes SAAKYAN, et al., Plaintiffs and Appellants, v. MODERN AUTO, INC., Defendant and Appellant.

126 Cal.Rptr.2d 674

103 Cal.App.4th 383

Oganes SAAKYAN, et al., Plaintiffs and Appellants, v. MODERN AUTO, INC., Defendant and Appellant.

No. B146328.

Court of Appeal, Second District, Division 3.

October 31, 2002.

Certified for Partial Publication.^*

Review Denied Jan. 15, 2003.

Mardirossian & Associates, Inc. and Garo Mardirossian, Los Angeles, for Plaintiff and Appellant Oganes Saakyan.

O'Reilly & Hobart and Charles B. O'Reilly, Marina Del Rey, for Plaintiff and Appellant Garnik Paronyan.

Yoka & Smith, Walter M. Yoka, Los Angeles, and Anthony F. Latiolait; Greines, Martin, Stein & Richland, Kent L. Richland and Barbara S. Perry, Los Angeles, for Defendant and Appellant.

INTRODUCTION

ALDRICH, J.

In this personal injury lawsuit, we deal with a narrow question concerning statutory offers to compromise under Code of Civil Procedure section 998.¹ The issue arises because this case was tried twice. The first trial resulted in a defense verdict and judgment for defendant, Modern Auto, Inc., which were then set aside by the grant of a motion for new trial. The second trial resulted in a verdict for plaintiffs, Oganes Saakyan and Garnick Paronyan.

Following the second trial, the court denied plaintiffs' motions for expert witness fees (§ 998, subd. (d)) and prejudgment interest (Civ.Code, § 3291) on the ground the first verdict extinguished any rights plaintiffs may have acquired by virtue of their section 998 offers.

In the published portion of this opinion, we hold a statutory offer to compromise under section 998 is not extinguished by a judgment that is vacated by a subsequent order for a new trial. Accordingly, we reverse the order taxing costs and remand for reconsideration consistent with this opinion.

In the unpublished portion of this opinion, we hold that there was no jury misconduct in the second trial, and affirm the judgment.

FACTUAL AND PROCEDURAL BACKGROUND

This lawsuit arose after teenagers, Saakyan and Paronyan, along with two others, were involved in a serious accident on the 605 freeway in June 1992.

The evidence adduced at the second trial shows Saakyan, the driver of the 1986 Honda Accord involved in the accident, had the vehicle lowered. Then, he began looking for new rims for his wheels. Attracted to "Aerofin wheels" in an advertisement in Low Rider magazine, Saakyan inquired at Modern Auto about their availability and price.

On June 29, 1992, plaintiffs and two others arrived at Modern Auto, only to discover the Aerofins had been sold. At the suggestion of Modern Auto's owner, Saakyan agreed to purchase a new six-spoke, 15-inch wheel and tire made for a BMW vehicle, which wheel was wider than those normally found on a Honda Accord.

After Modern Auto installed the new wheels and tires on Saakyan's Honda, Saakyan and the three other teens rode the vehicle a mile or two to the 605 freeway. Once on the southbound side of the freeway, Saakyan remained in the number 4 lane. The car drove beautifully. Saakyan had been traveling at about 50 or 55 miles an hour for a mile, when suddenly, the car jerked to the left. Despite Saakyan's attempts to control the vehicle, it drove to the right, off the road. Until the accident, the Honda had been operating just as it had before the wheels and tires were installed at Modern Auto.

Saakyan suffered irreversible injury to the spinal cord, is confined to a wheelchair, and has a shortened work-life expectancy.

Paronyan sustained chest trauma, multiple rib fractures, and a burst fracture of the first lumbar vertebral body. He suffers from chronic pain. He is 35 percent disabled and is capable of semi-sedentary work.²

The focus of the case was causation. Both defendant and plaintiffs put on expert testimony addressing this aspect. Defense expert Ernest Klein concluded nothing about the vehicle, as equipped at the time, would have caused the Honda to veer to one side or cause the car to do anything unusual on the smooth surface of the 605 freeway. There being no physical evidence that the car veered to the left, Klein concluded Saakyan had swerved to the right to avoid a vehicle in front of him.

Plaintiffs expert, Gerald Rosenbluth, brought a "buck,"—a section of a car used as a courtroom model—as demonstrative evidence. Admitted into evidence, the buck consisted of the fender assembly and suspension of the rear portion of a 1986 Honda Accord. Rosenbluth opined the catalyst of the accident was that the left rear wheel was retarded, deflecting the vehicle to the left, followed by an overcorrection causing the car to turn to the right almost 90 degrees. The two precipitating mechanical reasons the left rear wheel became trapped were: (1) the incorrect application of the BMW rims to a Honda, and (2) an out-of-balance condition on the left front tire caused by the manner in which the lug nuts had been tightened. Rosenbluth explained that the BMW wheel that Modern Auto installed on Saakyan's car was not designed for a Honda. The BMW wheel is "hub centric," whereas the Honda is a "lug centric" system.

The jury returned its special verdict finding Modern Auto was negligent; its negligence was a cause of Saakyan's and Paronyan's injuries and damage; and that Saakyan suffered $12,232,744 in economic and non-economic damages while Paronyan suffered a total of $566,928.32 in damages. The jury also found Saakyan was not negligent.

Defendant moved for a new trial and judgment notwithstanding the verdict on the ground, among others, of juror misconduct. The trial court denied defendant's motions. Defendant's appeal followed.

Plaintiffs moved for more than $8,000,000, in expert witness fees (§ 998, subd. (d)) and prejudgment interest (Civ. Code, § 3291). The court denied the request. Plaintiffs' timely appeal from that order followed.

Additional facts will be recited in the relevant discussion below.

DISCUSSION

I. Defendant's appeal.^**

II. Plaintiffs' cross-appeal.

A. The trial court erred as a matter of law in ruling plaintiffs' rights under section 998 were extinguished by the first judgment.

1. Facts.

Plaintiffs made their statutory offers to compromise in February 1994, before the first trial. Saakyan offered to have judgment entered "in the total amount of $820,000.00." The same document included an offer by Paronyan "in the total amount of $115,000.00." The offers were not accepted. No other offer was made.

The first trial resulted in a special verdict for defendant. Judgment thereon was entered in January 1995. Thereafter, the court granted plaintiffs' motion for a new trial based on serious juror misconduct and ordered the judgment on special verdict be vacated and set aside. In an earlier, unpublished opinion, this Court affirmed the trial court's order for a new trial.

Following the second trial, as noted, the jury returned a special verdict, this time in favor of plaintiffs, awarding Saakyan $12,233,744 and Paronyan $566,928.32 in damages. Plaintiffs' memorandum of costs ensued, requesting prejudgment interest in the amount of $7,976,420.00 for Saakyan, and $369,667.78 for Paronyan, as of the February 1994 offers (Civ.Code § 3291), together with approximately $204,000.00 in expert witness fees (§ 998, subd. (d)).

Defendant opposed the motion for prejudgment interest and moved to tax costs. As one ground for its opposition, defendant argued the entry of judgment in favor of defendant after the first trial extinguished any rights plaintiffs might have acquired pursuant to section 998.

Observing that "so many things occurred" in this case, and that it felt "strongly" it "couldn't in good faith grant the motion on prejudgment interest," the trial court struck plaintiffs' request for prejudgment interest (Civ.Code, § 3291) and denied the request for expert witness fees (§ 998 subd. (d)). The trial court explained: "1) The Code of Civil Procedure section 998 offer filed by plaintiff [sic] in 1994 is extinguished due to the verdict for the defendant in the first trial. [¶] 2) There was not a Code of Civil Procedure section 998 offer filed in the second trial." The court taxed plaintiffs' requested costs and denied them prejudgment interest. Plaintiffs filed their timely appeal.

2. Law.

Pursuant to section 998, subdivision (d), if the plaintiffs statutory offer to compromise is not accepted and the defendant fails to obtain a more favorable judgment, the prevailing plaintiff becomes eligible to seek reasonable and actually incurred expert witness fees and costs.⁶

Additionally, in a personal injury action, if the conditions of Civil Code section 3291 are met, the plaintiff has the right to obtain prejudgment interest. Specifically, under Civil Code section 3291, if the defendant does not accept the plaintiffs offer pursuant to section 998, and the plaintiff obtains a more favorable judgment, the court must award interest at 10 percent per annum on that judgment, from the date of the plaintiffs first section 998 offer until the judgment is satisfied.⁷ The right to prejudgment interest under Civil Code section 3291 is dependent on whether the plaintiff receives a more favorable judgment under section 998. (Gilman v. Beverly California Corp. (1991) 231 Cal. App.3d 121, 126, 283 Cal.Rptr. 17.)

Plaintiffs contend the trial court erroneously ruled that the jury verdict in the first trial extinguished any right plaintiffs may have acquired under section 998 based on their statutory offers to compromise made in 1994, which offers were not accepted. They request that we remand the case to the trial court with instructions to reevaluate the validity and reasonableness of the offers, and if they are valid, calculate reasonable witness fees (§ 998, subd. (d)), and add prejudgment interest (Civ.Code, § 3291) from February 1994.

Where the issue is the application of law to undisputed facts, we review the trial court's order de novo. (Barella v. Exchange Bank (2000) 84 Cal.App.4th 793, 797, 101 Cal.Rptr.2d 167.) We hold the trial court erred here in...