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Section 998 Offers of Compromise, Awards of Prejudgment Interest, and Other Factors to Consider as You Weigh Settling Your California Wrongful Termination Case
When you need to sue as a result of your wrongful termination from your job, there are a lot of things you have to take into consideration. Are you open to settling the case? If you are, what would a fair settlement look like? These and other analyses are places where counsel from a knowledgeable San Mateo wrongful termination lawyer is invaluable. Not only can the right employment law lawyer help you determine the strength of your case, but he/she can also help you assess the value of your case, and whether or not a settlement offer you've received is a fair one.
In California, there are "technical" considerations that may factor into a decision for or against accepting a settlement. A recent wrongful termination case from Napa shows these machinations in action, and the role they play in the process of evaluating a settlement.
S.S. was an accountant for a winery in Napa County who allegedly discovered that the winery was not in compliance with California law regarding use tax payments. She allegedly communicated that to her supervisor and to the winery's top management. In retaliation, the winery fired the accountant, according to the accountant's lawsuit for wrongful termination in violation of public policy.
While the case was pending, the accountant submitted to her employer something California calls a "998 offer," or more fully, an offer to compromise pursuant to Section 998 of the Code of Civil Procedure.
The accountant's offer called for the employer to pay her $499,999. The employer did not accept. After an appeal and a remand, the case returned to Superior Court, after which the employer submitted a 998 offer of settlement that called for the accountant to receive $500,000.
At this point, it is useful to identify some of the financial mechanics involved in 998 offers. Under Section 998, either side may make a qualifying offer of settlement to the other side. The other side has 30 days to accept. If the recipient doesn't accept and instead proceeds to trial, they must win a judgment more favorable than the terms of the settlement offer, or else they may leave owing the other side a substantial sum in fees and costs.
Additionally, this state has another statute that relates to 998 offers: Civil Code Section 3291. That law says that, if a plaintiff makes a valid 998 offer that the defendant doesn't accept and the plaintiff ultimately achieves a more favorable judgment later, the plaintiff is entitled to recover a sum representing prejudgment interest.
This latter law mattered a great deal in S.S.'s case as, during the 30-day window for weighing the employer's settlement offer, the two sides engaged in a back-and-forth regarding whether the accountant's acceptance of a $500,000 offer after the employer rejected her $499,999 offer would trigger a right to prejudgment interest.
The accountant was amenable to the employer's offer, but only if the employer amended it "to allow her to move for prejudgment interest and let the chips fall where they may.” The employer did not accept that request.
Eventually, the accountant filed a "Notice of Conditional Acceptance" of the offer. The court deemed that as a valid acceptance and dismissed the case as settled.
Section 998 Settlement Offers and California Contract Law
The Court of Appeal reversed that ruling and once again revived the case. This part of the case provides some useful insight into how courts will approach any settlement agreement you and the other side work out. As the appeals court explained, settlements made under Section 998 work in ways much like contracts in general. Basic contract law says that, to have a binding contract. there must be mutual agreement to one specific set of terms.
If Party A says, "Here is my offer," and Party B says, "I accept, conditioned on [this,]" then the two sides arguably have an offer and a counteroffer but, as the court ruled, they do not have a binding offer and acceptance.
Whether you're making an offer of settlement, contemplating a settlement offer from the other side, or preparing to have your "day in court," your wrongful termination case deserves advocacy provided by a highly skilled legal team. Look to the experienced San Mateo wrongful termination attorneys at Galine, Frye, Fitting & Frangos, LLP to be the helpful, diligent, and effective legal team you need. Contact us at 650-345-8484 or through our website.
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