Offer To Compromise: “. . .Pretty Soon, You’re Talking Real Money,” Sen. Everett Dirksen.

In an insurance bad faith case with alleged damages in excess of $500,000, the insurance company made an offer to settle for $30,000 pursuant to Code of Civil Procedure section 998. The offer to compromise was not accepted. Later, judgment was entered in favor of the insurance company, which then submitted its memorandum of costs, seeking a total of $86,022.84, $41,317.55 of which was for expert expenses. The trial court determined the offer was made in good faith and denied plaintiff’s motion to tax costs. The appellate court affirmed, stating that “although potential damages were extensive, given the reasonable possibility that liability did not exist, the trial court did not abuse its discretion in determining [the insurance company’s] offer was reasonable.”  (Najah v. Scottsdale Insurance Company (Cal. App. Second Dist., Div. 4; September 30, 2014) 230 Cal.App.4th 125, [178 Cal.Rptr.3d 400].)