Licudine v. Cedars-Sinai Medical Center

Citation: Not availableDocket: B286350

Court: California Court of Appeal; January 2, 2019; California; State Appellate Court

Original Court Document: View Document

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The Court of Appeal of the State of California, Second Appellate District, affirmed an order from the Superior Court of Los Angeles, denying plaintiff Dionne Licudine prejudgment interest related to her medical malpractice lawsuit against Cedars-Sinai Medical Center and associated defendants. According to Code of Civil Procedure section 998, a plaintiff is entitled to prejudgment interest if a valid settlement offer is made and the final verdict is more favorable than that offer. A 998 offer is deemed valid if the offeror knows that the offeree has reasonable access to the relevant facts for evaluating the offer.

Key factors for determining the offeree's ability to assess the offer include: (1) the timing of the offer in relation to the litigation, (2) the information available to the offeree before the offer's expiration, and (3) whether the offeree communicated any lack of sufficient information to the offeror. In this case, the court found that Licudine's 998 offer was not made in good faith, leading to the denial of prejudgment interest.

Licudine underwent gallbladder removal surgery in February 2012, which resulted in complications due to a nicked vein, necessitating additional surgery and leading to significant physical and emotional damages. She filed her lawsuit on January 15, 2013, alleging medical malpractice and claiming damages related to personal injuries and associated costs. Her complaint was served on Cedars on May 23, 2013, with Cedars responding shortly thereafter.

On June 11, 2013, the plaintiff submitted a Section 998 "Offer to Compromise" to Cedars, proposing a judgment of $249,999.99 plus legal costs. Cedars objected on June 27, arguing that the offer was premature as it was made shortly after they filed their answer, preventing adequate evaluation of its reasonableness. The offer expired on July 16, 2013. Following a jury trial, Cedars was found liable for malpractice, resulting in an initial damages award of $1,045,000. After both parties sought a new trial on damages, the trial court granted their motions, leading to a retrial where the jury awarded $7,619,457, later reduced to $5,594,557 due to statutory caps on noneconomic damages. 

The plaintiff then sought $2,335,929.20 in prejudgment interest from the date of her 998 offer to the judgment date. Cedars moved to strike this request, asserting the offer was invalid due to its premature nature. The court agreed, citing that Cedars had not had sufficient opportunity to assess the case when the offer was made, and thus struck the prejudgment interest request. The plaintiff appealed, contending the trial court misapplied the validity of her 998 offer. The appellate review focuses on whether the trial court abused its discretion in ruling the offer invalid, with the plaintiff bearing the burden of proof. A valid 998 offer must be made in "good faith," which is assessed based on the offer's reasonableness given the case circumstances.

Section 998 of the California Code is designed to promote pre-trial settlements by imposing financial consequences on parties that reject reasonable settlement offers. While the statute does not explicitly require good faith from the offeror, such a requirement is implied to prevent abuse of the system. A party must not issue offers that have no reasonable prospect of acceptance, as this would undermine the goal of encouraging settlements and could lead to strategic manipulation by offering parties.

The validity of a section 998 offer hinges on two main factors considered at the time of the offer, without hindsight: (1) whether the offer falls within a "range of reasonably possible results" at trial based on the offeror's knowledge, and (2) whether the offeree had sufficient information to evaluate the offer reasonably. The focus is on the offeror’s conduct in making the offer; the reasonableness of the offeree's rejection is not a determining factor.

Relevant circumstances include the timing of the offer in relation to the litigation process, the information available to the offeree prior to the offer's expiration, and whether the offeree communicated any lack of information to the offeror. If the offeree indicates insufficient information and the offeror fails to respond adequately, this may indicate that the offer was not made in good faith. Courts are tasked with examining all relevant circumstances to assess the reasonableness of the offer and the offeror's intent.

The burden of proof regarding the validity of a 998 offer rests with the offering party, while the offeree must demonstrate that the offer was not made in good faith. The trial court found that the plaintiff's 998 settlement offer of $249,999.99 was made in good faith, supported by the jury's substantial verdict of $5,594,557, which serves as prima facie evidence of its reasonableness. The critical consideration was whether Cedars had adequate information to assess the offer's reasonableness. The trial court concluded that Cedars did not have sufficient information, supported by several factors: the offer was made shortly after the complaint was served and the answer was filed, and the plaintiff's complaint was vague, lacking detail on injuries and damages. Plaintiff failed to file a pre-litigation notice required by law, which would have clarified her claims. Although Cedars received some information, including a letter from the plaintiff asserting negligence and attaching photographs, and limited discovery responses, this information was insufficient for assessing liability or damages. Key details about the extent of negligence, pain and suffering, and medical expenses were not provided. Thus, the trial court appropriately determined that Cedars lacked the necessary information to evaluate the reasonableness of the plaintiff's 998 offer.

Plaintiff expressed uncertainty regarding her potential loss of earning capacity in response to Cedars’s document request. Cedars informed plaintiff that it was premature to assess the reasonableness of her section 998 settlement offer, to which plaintiff did not reply. While plaintiff contended that Cedars had enough information to evaluate her offer, she argued that the lack of details about economic damages was irrelevant since her offer was solely for noneconomic damages at $249,999.99, just under the statutory cap. This argument was rejected, as it contradicted the language of the 998 offer, which did not specify any limitations to part of the case. Even under a retroactive interpretation of her offer, Cedars still lacked adequate information to assess a reasonable amount for noneconomic damages. Plaintiff's strategic decision to make an offer just below the cap raised concerns of gamesmanship, undermining the intent of section 998.

Additionally, plaintiff claimed that Cedars had sufficient information from her extensive medical chart, a peer review of her operation, answers to interrogatories, and argued that any information shortfall did not invalidate her offer since Cedars did not mention "damages" in its objection. However, these sources did not provide the necessary information for Cedars to evaluate the offer, as the medical chart left critical issues unaddressed. Plaintiff did not provide evidence of a peer review conducted by Cedars, and the answers to interrogatories were not part of the record, despite her claims of attempting to include them. Her motion to supplement the record was effectively a request to amend her pleading, governed by section 473, subdivision (b), which only allows amendments due to attorney mistakes that are not strategic. The attorney’s decision to omit responses was a tactical choice rather than an error, indicating no basis for amendment. Lastly, the objection from Cedars addressed the timing of the 998 offer, which was relevant to both liability and damages.

Cedars's failure to explicitly use the terms "liability" or "damages" did not limit the breadth of its objection. Plaintiff argues that Cedars waived its right to contest the lack of information by not requesting an extension of the deadline for her section 998 offer. This argument is rejected, as Cedars's objection was adequate without a continuance request. Plaintiff's claims that the trial court erred by not considering evidence of Cedars's attorney's past practices and hypothetical scenarios regarding Cedars's response to the offer are also dismissed. The court emphasizes that the validity of a section 998 offer is determined by the specific circumstances of each case, and the potential actions Cedars might have taken if the offer had been valid do not impact its validity. Additionally, plaintiff contends that the court wrongly required her to prove good faith instead of placing the burden on Cedars to prove otherwise. However, the record shows that the trial court did not shift the burden to plaintiff, as it sought her responses to Cedars's arguments. The order striking plaintiff’s request for prejudgment interest is upheld, and Cedars is awarded costs on appeal. The decision is certified for publication.