Opinion
A148301
06-26-2017
ALBERT LEE, Plaintiff and Appellant, v. SAFEWAY INC. et al., Defendants and Respondents.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (San Francisco County Super. Ct. No. CGC14543445)
Plaintiff, an attorney, was driving his car in downtown San Francisco when a door on defendants' delivery truck opened, hitting plaintiff's car on the driver's side, damaging the front door and rearview mirror. The damage was $2,045.20.
Plaintiff filed a complaint alleging five causes of action, including a claim under Business and Professions Code section 17200, seeking among other things punitive damages. Defendants filed a demurrer and motion to strike, set by the court for hearing four months in the future. In the interim, defendants filed a Code of Civil Procedure section 998 offer (998 offer) to allow judgment for $2,495.20. Plaintiff responded with his own 998 offer, for $2,669.69—an offer defendants accepted by letter.
Plaintiff refused to accept the acceptance, claiming it was not in proper form. Defendants filed a motion to enforce the offer. The trial court granted it, and entered judgment for plaintiff for $2,669.69, the exact amount of his offer. Plaintiff nevertheless appeals. We affirm.
The Parties and the Incident
Plaintiff/appellant is Albert Lee, an attorney, California State Bar No. 161237. Defendants/respondents are Safeway, Inc. and GroceryWorks.com Operating Company, LLC (collectively, Safeway).
On February 10, 2014, as Lee was driving his car on 10th Street in San Francisco, the door of a Safeway delivery truck "flew open," hitting the driver's side of Lee's car, causing damage to the rearview mirror and the door—$2,045.20 in damage to be exact.
Some 10 months later, and apparently without attempting to resolve the incident, and acting as co-counsel for himself, Lee prepared and filed a complaint in the superior court. His co-counsel is John J. Hartford, California State Bar No. 50714, of Manton, California. The complaint alleged five causes of action, styled as follows: (1) motor vehicle negligence; (2) general negligence; (3) motor vehicle owner liability—permissive use of vehicle; (4) statutory liability; and (5) violation of Business and Professions Code sections 17200, et seq.
Safeway's brief says that on December 24, 2014, before Lee filed his lawsuit, Safeway sent Lee a letter offering to settle his property damage claim for a total of $2,495.20. Lee's reply does not take issue with this representation.
Manton is a town of some 300 people, located partially in Tehama County, partially in Shasta County. A review of the files in our clerk's office shows Hartford himself has been a party in at least 13 matters in this court, represented in all of them by Lee. That review also shows that Lee has been the attorney of record in some 40 other matters. In addition, Lee has been a party in at least six other matters, always as a defendant.
The complaint alleged no personal injury to Lee. Rather, it alleged that the "damages include but [are] not limited to damage to plaintiff's property, loss of use of plaintiff's vehicle, lost [sic] in value of plaintiff's vehicle . . . and lost [sic] of plaintiff's time." The complaint also alleged this:
"17. At the scene of the collision, the driver of defendants' delivery truck and plaintiff stopped the vehicles. They talked and the driver of defendants' delivery truck admitted to plaintiff that he had informed his supervisors that the delivery truck's side door was broken for over a month and that he had been attempting for over a month—without success—to have the delivery truck's broken side door repaired. [¶] . . . [¶]
"19. Defendants . . . through the aforementioned managing agents knew that the side door of the delivery truck was broken, egregiously failed to have repairs performed, and knowingly, intentionally and without any regard for public safety allowed that delivery truck with the broken side door to operate on the highways and streets of California including but not limited to the streets of San Francisco.
"20. On information and belief, defendants . . . were aware of the probable dangerous consequences of their conduct and deliberately failed to avoid those consequences.
"21. Said conduct of defendants . . . was despicable and was done with willful and knowing disregard of the rights and safety of others including the plaintiff." Among other things, the complaint prayed for punitive damages, injunctive relief, restitution, and statutory damages and penalties.
Lee did not timely serve the complaint, and on June 26 the trial court issued an order to show cause. Lee responded to the order, and then on August 3 served the complaint. Eleven days later, on August 14, Lee served Safeway with voluminous discovery, including requests for production of documents, requests for admissions, and form interrogatories.
On September 1, Safeway filed a demurrer and a motion to strike, set for hearing by the court for December 30.
On October 2, Safeway served Lee with a 998 offer to compromise, for the amount of $2,495.20. On October 15, Safeway served notice of Lee's deposition with production of documents. The deposition was scheduled for November 23.
Lee's response was to file his own 998 offer, the offer leading to the issue here.
On October 19, Lee served a 998 offer offering to accept $2,669.69. The offer provided in its entirety as follows: "PLEASE TAKE NOTE THAT pursuant to section 998, Code of Civ. Pro., plaintiff Albert Lee hereby offers to settle this entire above-captioned action on the following terms: a judgment pursuant to C.C.P. section 995 shall be entered in favor of plaintiff in the sum of $2,669.69 and against Safeway, Inc. and Groceryworks.com Operating Company, LLC (collectively, 'defendants'). If this offer is not accepted within thirty days of service or before the commencement of trial, whichever comes first, it shall be deemed withdrawn. If defendants accept this C.C.P. section 998 offer, please have their attorney of record sign below without any changes and return this offer to Albert Lee Attorney at Law via FAX (888-432-1854) and First-Class U.S. Mail at 1640 Stockton Street, Suite 330222, San Francisco, CA 94133-0222. This offer will automatically expire 30 days after service."
Lee claims his offer to compromise was served by express mail, an assertion with which defendants take exception. But even assuming Lee is correct, two extra days are added to Safeway's time to accept the offer (Code Civ. Proc., § 1013), thus extending the time to respond to November 20.
On November 20, Katherine Eng, a legal assistant at the office of Safeway's attorneys, sent to Lee and Hartford a letter signed by Safeway's attorney advising that Safeway accepted the offer. Around noon that day, Eng also called Lee's office, claiming she did so to advise that Safeway had accepted the offer and that Lee's deposition was off calendar. The call was not answered, and Eng left a message to call back (though apparently not mentioning the reason for the call). Lee got the message, but did not call back. Rather, in the words of Lee's brief, "Because of difficulties with defense counsel, Lee has a standing policy of not accepting calls from defense counsel's office and thus he quickly faxed a letter to Ms. Eng within ten minutes or so of her November 20 voice mail message: [¶] 'We are in receipt of your voice mail message of today which merely asked us to call you back. You did not specify the reason for your call. As previously stated, all communications must be in writing to ensure that there is an accurate record.' [¶] Defense counsel's office received Lee's fax at 12:52 p.m., November 20, 2015. Despite this, nobody from defense counsel's office replied, nor did Lee ever receive any notice by November 20, 2015 that Safeway had any intent to accept the section 998 offer. Nor did anyone notify Lee that the deposition would not proceed."
Safeway's primary attorney, David Streza, had filed a notice of nonavailability from November 16 to 20, as his wife was to deliver a baby. So Streza instructed his partner, Michael Burke, to sign the acceptance for him, and directed his legal assistant Eng to mail the acceptance and call Lee to advise of the settlement.
This apparently brought another attorney into the picture: Ben Gharagozli, California State Bar No. 272302, Canyon Country, California.
Canyon Country is in a community and district within the city of Santa Clarita, in northwestern Los Angeles County.
Against that background, Lee (and apparently attorney Gharagozli) appeared for Lee's deposition on November 23, Lee's brief claiming that they spent much time and effort beforehand. As the brief describes it, "Because no acceptance was faxed by the November 20, 2015 deadline date, Lee and his counsel searched for the documents and prepared the documents for production during the November 21-22 weekend. Counsel also amended the complaint to add class action allegations because information provided probable cause to seek class wide relief for Safeway's conduct of deferring vehicle repairs or possibly not performing needed repairs in disregard of the safety of the general public. A motion to compel was also prepared over the weekend by counsel."
Safeway's position was that the matter was settled, and thus nothing of substance occurred on November 23. Lee's position was that there was no acceptance.
Given Lee's position, on December 7 Safeway filed a motion to enforce the settlement. That same day Lee filed his own motion to strike the acceptance. Pursuant to orders shortening time, both motions were set for hearing on December 16, to be heard by an experienced trial judge, the Honorable Harold Kahn. On December 11, Lee filed a Code of Civil Procedure section 170.6 challenge to Judge Kahn, and the motion was assigned to an even more experienced judge, the Honorable Ernest Goldsmith. Judge Goldsmith heard argument on the motions, following which he granted Safeway's motion and denied Lee's.
On February 10, 2016, Judge Goldsmith entered his written order, which provides in pertinent part as follows: "The court finds that defendant did accept the offer on November 20, 2015. Plaintiff's offer does not include a positive requirement or impose an absolute condition of both mail and fax service. . . . The offer is ambiguous regarding whether fax and mailing service is an absolute requirement and that ambiguity is construed against the plaintiff under [Civil Code section] 1654. Service of the acceptance was effectuated on the date of deposit in the mail. See Palo Alto Town & Country Village, Inc. v. BBTC [Company] (1974) 11 Cal.3d 494, 501. Defendant's objection to the offer, which was faxed to plaintiff on November 13, 2015, was not a clear rejection of the offer. Plaintiff's letter dated November 17, 2015, indicates that plaintiff did not interpret the objection as a rejection because plaintiff noted that the offer remained open until November 20, 2015. Plaintiff's amended complaint filed on November 23, 2015 is a nullity because the case settled on November 20, 2015."
On April 20, judgment was entered for Lee pursuant to section 998, for $2,669.69. Lee filed a notice of appeal from the February 10 order and thereafter an amended notice of appeal after the judgment was entered.
DISCUSSION
The Standard of Review
The standard of review is not clear. The parties say they agree that review is de novo, based on the assertion that the issue is the interpretation and application of the requirements of section 998 and whether the offer is ambiguous. But the case cited by Lee, Fassberg Construction Co. v. Housing Authority of City of Los Angeles (2007) 152 Cal.App.4th 720, 765, involved the issue of whether the 998 offer was "sufficiently specific and certain for purposes of 998," which is not the issue here. That said, many cases have held that the application of section 998 to an undisputed set of facts is a question of law subject to de novo review on appeal. (Rouland v. Pacific Specialty Ins. Co. (2013) 220 Cal.App.4th 280, 285-286 and fn. 3;Whatley-Miller v. Cooper (2013) 212 Cal.App.4th 1103, 1113; Barella v. Exchange Bank (2000) 84 Cal.App.4th 793, 797.)
On the other hand, whether a 998 offer was valid or reasonable is reviewed for abuse of discretion. (Calvo Fisher & Jacob LLP v. Lujan (2015) 234 Cal.App.4th 608, 629; Whatley-Miller v. Cooper, supra, 212 Cal.App.4th at p. 1113; Mesa Forest Products, Inc. v. St. Paul Mercury Ins. Co. (1999) 73 Cal.App.4th 324, 329.) But those issues are not involved here either.
The issue here is whether Safeway accepted the 998 offer, review of which may well be under the substantial evidence test. (See Pacific Corporate Group Holdings, LLC v. Keck (2014) 232 Cal.App.4th 294 [employment case].)
But whatever the standard of review, we conclude that Lee's appeal has no merit—that Judge Goldsmith was right.
Section 998"Section 998 reflects this state's policy of encouraging settlements. (Poster v. Southern Cal. Rapid Transit Dist. (1990) 52 Cal.3d 266, 270.) The goal has been to apply this section in a manner which best promotes its purpose. (T.M. Cobb Co. v. Superior Court (1984) 36 Cal.3d 273, 283.) However, the statutory language is silent on a number of issues relevant to the application of the provision. For example, section 998 fails to provide guidance on what conduct constitutes an acceptance . . . . (Poster v. Southern Cal. Rapid Transit Dist., supra, 52 Cal.3d at pp. 270-271.)
"The settlement and compromise process encompassed by section 998 is contractual. Consequently, the courts have referred to general contract principles to interpret the gaps in the statutory language. (T.M. Cobb Co. v. Superior Court, supra, 36 Cal.3d at p. 280.)" (Guzman v. Visalia Community Bank (1999) 71 Cal.App.4th 1370, 1375.)
In Gray v. Stewart (2002) 97 Cal.App.4th 1394, 1397, our colleagues in Division Four added this: "Section 998 governs offers to compromise. It does not require that the acceptance be in writing nor does it specify the manner in which acceptance must be communicated. Since the process of settlement and compromise is contractual, general principles of contract law apply when they do not conflict with the statute or defeat its purpose. (Hofer v. Young (1995) 38 Cal.App.4th 52, 56-57 (Hofer).) Therefore, pursuant to Civil Code section 1582, any reasonable and usual mode of communication may be used to accept a section 998 offer unless a specific mode was prescribed in the offer. (Hofer, supra, 38 Cal.App.4th at pp. 56-57.)
In short, "[s]ection 998 does not specify that the acceptance must contain any specific words or that it be made in a particular manner, other than it be in writing and signed by the appropriate person." (Whatley-Miller v. Cooper, supra, 212 Cal.App.4th at p. 1110.) Or, as the leading practical treatise puts it, acceptance of a 998 offer "may be communicated in any commercially reasonable manner." (Weil & Brown, Civ. Proc. Before Trial (The Rutter Group 2016) § 12:632, p. 12(ll)-39.)
Safeway Accepted the 998 Offer
As noted, Safeway's counsel sent a letter on November 20 indicating Safeway's acceptance of the offer. That acceptance was effective on mailing, under settled law, including, for example, Palo Alto Town & Country Village, Inc. v. BBTC Company, supra, 11 Cal.3d at p. 500, fn. 7, the case cited by Judge Goldsmith: "It is well established that an acceptance of an offer to enter into a bilateral contract is effective and deemed communicated as soon as deposited in the regular course of mail if the offer was made by mail, or if the circumstances are such that an acceptance by mail would be authorized." (See also Civ. Code, § 1583: "Consent is deemed to be fully communicated between the parties as soon as the party accepting a proposal has put his acceptance in the course of transmission to the proposer, in conformity to the last section.")
Lee's brief has only one argument, which argument has four subparts. But only one of the subparts is actually before us, subargument 2, that "Safeway's Purported 'Acceptance' Does Not Comply With The Express Terms Of Lee's Section 998 Offer And Is Therefore Invalid." The argument is brief indeed, barely over two pages, and cites only three cases, none of which apply.
The other three subarguments are: "Contract Law Principles Apply When They Do Not Conflict With Or Defeat The Purpose Of Section 998"; "Safeway's Successful Reliance On In re Crossman In The Trial Court Is Misplaced"; and "Safeway's Other Trial Court Arguments Further Demonstrate That Its Position Is Infirm."
Lee's argument is based solely on this language in his offer: if Safeway accepts the offer, "please have their attorney of record sign below without any changes and return this offer to Albert Lee Attorney at Law via FAX (888-432-1854) and First-Class U.S. Mail at 1640 Stockton Street, Suite 330222, San Francisco, CA 94133-0222." Judge Goldsmith rejected Lee's argument, ruling that Lee's "offer does not include a positive requirement or impose an absolute condition of both mail and fax service. The offer merely suggests a preferred manner of service. The offer is ambiguous regarding whether fax and mailing service is an absolute requirement and that ambiguity is construed against the plaintiff under CC 1654." We agree on both counts.
Pacific Corporate Group Holdings, LLC v. Keck, supra, 232 Cal.App.4th 294 is persuasive. The issue there was whether the parties had entered into an employment contract, in the setting where the employer's offer of employment said that if the terms of the letter met with the prospective employee's approval, "we request that you indicate such approval by returning the enclosed copy of this letter, appropriately signed." The employee did not return the signed letter, but rather an e-mail stating he had signed the agreement.
The employer sued on a promissory note, and the employee cross-complained for unpaid bonus and severance payments he claimed were due under the letter agreement. The jury found for the employee and awarded him $220,547. The Court of Appeal affirmed, holding that the jury could have reasonably found that return of the letter was merely an acceptable form of assent, rather than mandatory. (Pacific Corporate Group Holdings, LLC v. Keck, supra, 232 Cal.App.4th at p. 312.) This is the applicable discussion: "The 2006 Agreement provides in relevant part, 'If this letter meets with your approval, we request that you indicate such approval by returning the enclosed copy of this letter, appropriately signed.' [¶] The jury could have reasonably found that Keck's return of the signed letter would be an acceptable form of evincing his assent to the agreement, but that the provision did not mandate that such return was the only possible form of acceptance. In Devencenzi, the acceptance provision at issue stated, ' "If this is agreeable to you please sign the two copies. Keep one for your files and return the other copy to me as soon as possible." ' (Devencenzi [v. Donkonics (1959) 170 Cal.App.2d 513, 515].) The Devencenzi court concluded that this language did not 'impose . . . an absolute condition as to the manner of acceptance, but only suggested a method which would be satisfactory to [plaintiffs].' (Id. at p. 518.) Similarly, the 2006 Agreement 'request[ed]' that Keck indicate his acceptance by returning the letter signed; it did not state that Keck's return of the signed letter was the only possible manner by which he could indicate his assent to the agreement. (See ibid. [concluding similar acceptance provision in contract did not mandate that contract could be accepted only by returning signed agreement].)" (Pacific Corporate Group Holdings, LLC v. Keck, supra, 232 Cal.App.4th at p. 312.)
Estate of Crossman (1964) 231 Cal.App.2d 370 is also instructive. There, the executrices gave appellant Mills a written option to purchase land, in an instrument that specified "Any notice" by either party must be in writing, "either delivered personally or sent by prepaid registered mail," and that notice by registered mail would be deemed consummated 24 hours after deposit. Mills telephoned notice of exercise of the option on October 26, and sent a letter by ordinary mail that same day. The option expired October 27, and the letter was not actually received until October 29. The parties initially treated the acceptance as adequate, but Mills later contended the acceptance was ineffective. The executrices obtained an order of confirmation.
Mills appealed, contending there was no contract, as registered mail was a condition to valid acceptance. The Court of Appeal rejected the contention, noting that the language did not create a condition but merely suggested a permissible method. As the court put it, quoting a leading commentator: "Distinction must be made between an offer which makes a 'positive requirement' (Rest., Contracts, § 61, com. a) or imposes 'an absolute condition' (1 Williston, Contracts, § 76) of a specified manner of acceptance, on the one hand, and on the other an offer which 'merely suggests a permitted . . . manner' (Rest., Contracts, § 61; see also 1 Williston, Contracts, p. 250). In the latter case, another method of acceptance is not precluded. 'If a proposal prescribes any conditions concerning the communication of its acceptance, the proposer is not bound unless they are conformed to; but in other cases any reasonable and usual mode may be adopted' (Civ. Code, § 1582). 'Care must be taken in the interpretation of offers' to determine this question, and 'it is frequently necessary to look beyond the literal meaning of the language used.' (1 Williston, Contracts, p. 250.)" (Estate of Crossman, supra, 231 Cal.App.2d at pp. 372-373.)
The language on which Lee relies is not a "positive requirement" or "absolute condition" concerning fax transmission acceptance. To the contrary, it says "please," the exact language in Devencenzi, the case relied on in Keck. Such language contemplates that acceptance could be made by a means other than fax and mailing the signed offer. Put otherwise, the language of the offer indicates that faxing and mailing are a suggested mode of acceptance, not mandated.
As to the "fax," we note that on November 12, while Lee's 998 offer was outstanding, Lee advised Safeway's lawyers that fax service was unacceptable: we have "no agreement to accept fax service." --------
At best, Lee's letter as to what was required was ambiguous, as Judge Goldsmith concluded. That ambiguity is to be interpreted against Lee, under settled law. Thus, Civil Code section 1654: "In cases of uncertainty not removed by the preceding rules, the language of a contract should be interpreted most strongly against the party who caused the uncertainty to exist." And case law: "One who prepares a contract can by exactness of expression more readily prevent mistakes in meaning than one with whom he is dealing. Doubts arising from ambiguity of language are therefore resolved in favor of the latter." (Hunt v. United Bank & Trust Co. (1930) 210 Cal. 108, 116.)
DISPOSITION
The judgment is affirmed. Defendants shall recover their costs on appeal.
/s/_________
Richman, J.
We concur:
/s/_________
Kline, P.J.
/s/_________
Miller, J.