The purpose of CPLR § 3221 is to encourage settlements. (Zeitlin v. N.Y. Islanders Hockey Club, L.P. (2015) 49 Misc. 3d 511, 514.)
CPLR § 3221 states in part:
[A]t any time not later than ten days before trial, any party against whom a claim is asserted, and against whom a separate judgment may be taken, may serve upon the claimant a written offer to allow judgment to be taken against him for a sum or property or to the effect therein specified, with costs then accrued. If within ten days thereafter the claimant serves a written notice that he accepts the offer, either party may file the summons, complaint and offer, with proof of acceptance, and thereupon the clerk shall enter judgment accordingly. If the offer is not accepted and the claimant fails to obtain a more favorable judgment, he shall not recover costs from the time of the offer, but shall pay costs from that time. An offer of judgment shall not be made known to the jury. (Adone v. Paletto (2005) N.Y. Slip Op. 50196 citing CPLR § 3221.)
Although the purpose of CPLR § 3221 is to encourage settlements, there is nothing in the statute suggesting that an unstated dismissal sanction was contemplated or intended. Neither does the statute permit a Court to affirmatively compel a claimant to accept a statutory offer of compromise. (Zeitlin v. N.Y. Islanders Hockey Club, L.P. (2015) 49 Misc. 3d 511, 514 citing Margulis v. Solomon & Berck Co. (1928) 223 A.D. 634, 635.)
“CPLR 3221 provides its own remedy for a party's nonacceptance of such offer by rendering said party liable for any costs accrued subsequent to the time of the offer if the party ultimately fails to obtain a more favorable judgment.” (Show Lain Cheng v. Young (2008) 25 Misc.3d 1227, 2008 WL 7108505,1, 7 [aff'd,60 A.D.3d 989, 878 N.Y.S.2d 367.]) CPLR § 3221 is ostensibly applicable, by its terms, to all offers of compromise, without reference to specific monetary amounts, and expressly limits the consequences of non-acceptance to the payment of costs. If the legislature intended to confer upon a Court the power to unilaterally compel acceptance of a compromise offer, or to permit it to dismiss an action based on a claimant's rejection of an offer, it could, and presumably would, have stated as much. (Zeitlin, supra, 49 Misc. 3d at 515.)
CPLR §4547 provides generally that evidence of any conduct or statement made during compromise negotiations shall be inadmissible in court.
CPLR 4547 codifies the long-established common-law rule in New York that “the settlement of a disputed claim or an offer to settle . . . is inadmissible to prove . . . the liability of the alleged wrongdoer.” (Andresen v Kirschner (2001) 190 Misc 2d 779, 781 [quoting Alexander, Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, CPLR 4547, 2001-2002 Interim Pocket Part, at 105.)
Before CPLR 4547 was passed in 1998, “[t]he traditional rule in New York was that unqualified statements of fact made during settlement negotiations were admissible against the party who made the statements.” (Miller v. Sanchez (2004) 6 Misc. 3d 479, 484 citing Alexander, Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, CPLR 4547, 2004 Pocket Part, at 141; see also Reid & Priest L.L.P. v Realty Asset Group, Ltd. (1998) 250 A.D.2d 380, 380; Bellino v Bellino Constr. Co. (1980) 75 A.D.2d 630, 630-631.)
“This rule is founded upon public policy, and with a view of encouraging and facilitating the settlement of legal controversies by compromise, which object is supposed to be obstructed by the fear entertained by litigants that such a negotiation may be converted into a trap to inveigle the unwary into hazardous admissions. The law, therefore, excludes such admissions as appear to have been made tentatively or hypothetically, but admits those only which concede the existence of a fact.” (Bigelow-Sanford, Inc. v. Specialized Commercial Floors of Rochester, Inc. (1980) 77 A.D.2d 464, 465-66.)
Here are a few examples of how courts have ruled:
“If [a] court were to enforce a previously rejected offer of compromise three months after it was rejected it would breach the provisions of CPLR § 3221 by extending the ten day rule contained within it without any consent of both parties. Disregarding the provisions of CPLR § 3221 would constitute a usurpation of the legislative role in rewriting the statute. But more importantly, it would create chaos within the court system where after a settlement on a case was reached, counsel for the plaintiff would be allowed to add terms such as costs and disbursements and perhaps even interest.” (Adone v. Paletto, 2005 N.Y. Slip Op. 50196 [holding that “the plaintiffs' motion for a judgment to enforce the offer to compromise is denied.”)
In Alternatives Federal Credit Union v. Olbios, the court held that letters in which the defendant openly acknowledged its responsibility for indemnifying plaintiff for the cost of the remediation effort to be outside the scope of CPLR 4547. The letters were not offers to settle or compromise any claim with respect to the issue of liability but rather were written to explain defendant's delay in accepting responsibility for the cost of clean up and only disputed the cost. (Alternatives Federal Credit Union v. Olbios, LLC (2005) 14 A.D.3d 779, 787.)
Case Number: BC639780 SUZAN HADDAD VS WALID HADDAD8/21/2018 - PLAINTIFF’S MOTION TO STRIKE OR TAX WALID HADDAD’S COSTSTENTATIVE RULINGWalid Haddad served upon Suzane Haddad a Memorandum of Costs on 7/16/2018 detailing a cost bill of $15,578.44. Motion to Strike Memorandum of Costs is DENIED as Walid Haddad is the prevailing party in the litigation pursuant to CCP §1032(a)(4). As stated in detail b...
..plaint.(2) “Defendant” includes a cross-defendant, a person again...
Aug 21, 2018
Los Angeles County, CA
Goodmiller v. Cowham – Case No. 34-2010-00089771 – Defendant's Motion to Tax Plaintiff's Costs and Plaintiff's Motion to Tax Defendant's Costs – Tentative Ruling Plaintiff claims her costs as the prevailing party under Code of Civil Procedure section 1032 and 1033.5. Defendants claim their costs, including expert witness fees, pursuant to Code of Civil Procedure section 998. Plaintiff challenge...
... Code of Civil Procedure section 998 Section 998 provides that up until 10 days prior to 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).) If the offer is accepted, the offer with proof of acceptance shall be filed and the...
May 03, 2012
Personal Injury/ Tort
Sacramento County, CA
I. The 998 Offer to Compromise was Sufficient Defendant's offer to compromise states: "PLEASE TAKE NOTICE that defendant, CONNIE HSAIOYUN CHING, hereby offers to compromise this litigation for a waiver of costs pursuant to Code of Civil Procedure § 998. … 4. This offer to compromise is subject to defendant being provided with a Release of All Claims executed by plaintiff and a Request for Dismiss...
..release" which has been upheld as sufficient. Goodstein v. Bank of San Pedro (1994) 27 Cal.App.4th 899. The language of paragraph 4, coupled also with the preceding language that the offer is made in compromise of "this litigation" is further evidence of the limits contemplated. Finally, the rules of contract construction, necessarily militates against invalidating the offer. Compromise agree...
Apr 07, 2017
Personal Injury/ Tort
Los Angeles County, CA
Plaintiff Bryan Perez’s Motion to Strike and/or Tax Costs Plaintiff Bryan Perez moves to strike and/or tax the costs claimed by Defendant David Ellis Crofton. For the following reasons, Plaintiff’s motion is granted in part and denied in part. In this case arising out of a motor vehicle collision, Defendant served Plaintiff with an August 11, 2017 pretrial “Statutory Offer to Compromise” pursuant...
..compromise and acceptance thereof is expressly conditioned upon the following: . . . This offer to compromise is subject to defendant being provided with a Release of All Claims arising out of this incident executed by plaintiff and a Request for Dismissal, with prejudice. Id. Plaintiff did not accept the offer and obtained a verdict in his favor at trial in the amount $7,500, less than the amount...
Jul 26, 2018
Orange County, CA
The Motion is granted in part and denied in part. As for expert costs, the Court shall tax $12,587.50 as to Defendant Postulka. However, as to Defendant A-Quality, expert costs shall be taxed in its entirety. As for deposition costs, the motion is denied. As for costs of Photocopies, Models and Blowups, the Court shall tax costs in the amount of $3,383.30. SUMMARY OF MATTER This is a motor vehicle...
..Vehicle; and (2) General Negligence. A jury trial was held April 4, 2019. Prior to the trial, Plaintiff sent Defendant Postulka an offer to compromise for $249,999.00 pursuant to Cal. Code Civ. Pro. §998 (“998 Offer”). The 998 Offer expired on June 22, 2018. The jury returned a verdict for Plaintiff and awarded $3,328,841.90. Judgment was entered on July 8, 2019. On July 23, 2019, Plaintiff filed...
Nov 01, 2019
Riverside County, CA
Plaintiff’s Motion for Judgment per CCP § 998 is DENIED without prejudice. On January 6, 2017, Plaintiff Dontae Johnson (“Plaintiff”) filed a complaint against Defendants Ellipz Lighting USA, LLC and Megan Havrdu. On March 24, 2017, Plaintiff lodged a proposed judgment pursuant to CCP § 998 because Defendant Ellipz Lighting USA, LLC (“Defendant”) had accepted Plaintiff’s offer to compromise. On M...
..ompromise, offering to allow judgment to be taken against Defendant in the total sum of $1,001.00. (Scuderi Decl. ¶ 1.) Plaintiff alleges that on March 16, he received an acceptance of Plaintiff’s statutory offer to compromise “signed by Derek Fehmers, Vice President of Operations for Defendant.” (Scuder Decl. ¶ 3.) The Statutory Offer of Compromise does not identify who signed on behalf of Defe...
Sep 14, 2017
Elaine Lu or Georgina Torres Rizk
Los Angeles County, CA
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