Arriagarazo v. BMW of North America, LLC

Summary

The California Court of Appeal held that a Code of Civil Procedure section 998 offer requiring payment in exchange for a general release, but not specifying dismissal, defaults to entry of judgment under the statute. The trial court therefore abused its discretion by vacating the judgment as void on the ground that judgment was not contemplated by the offer. The appellate court reversed the order vacating judgment and awarded appellants their costs on appeal.

Holdings

1. When a section 998 offer specifies settlement terms but does not state that acceptance requires dismissal, the statutory default is entry of judgment. A requirement that the offeree execute a general release does not, without more, require dismissal rather than judgment.
2. The trial court abused its discretion and improperly modified the accepted section 998 offer by finding the judgment void; the order vacating the judgment must be reversed.

Questions Presented

1. Whether the trial court abused its discretion by vacating as void a judgment entered pursuant to an accepted section 998 offer that required a general release but did not specify dismissal or otherwise state how the litigation would be finally resolved.
2. Whether the statutory default under Code of Civil Procedure section 998 is entry of judgment when an accepted offer does not specify dismissal or another method of disposition.

Disposition

reversed