Hersey v. VopavaAnnotate this Case
Where an offeree achieves a judgment more favorable than a first offer, the determination of whether an offeree obtained a judgment more favorable than a second offer should include all costs reasonably incurred up to the date of the second offer. This case involved a landlord-tenant dispute which resulted in the tenant rejecting two offers to compromise from the landlord. After a bench trial, the trial court awarded the tenant damages less than the two offers to compromise. The trial court found that the Code of Civil Procedure section 998 offers were reasonable and made in good faith; declared the landlord to be the prevailing party; and awarded him attorney fees.
The Court of Appeal held that the trial court improperly calculated the "net" judgment to ascertain whether tenant had obtained a judgment more favorable than the section 998 offers. In this case, the trial court should have added her costs and attorney fees to the damages award to determine the correct "net" judgment. Therefore, the court reversed the trial court's amended judgment incorporating the order and remanded for a determination of the amount of the tenant's reasonable costs. The court either declined to reach the tenant's remaining arguments or otherwise did not have jurisdiction to consider them.