Khoshnevis v. Toyota Motor Sales, U.S.A. CA2/8 ( 2021 )

Filed 4/30/21 Khoshnevis v. Toyota Motor Sales, U.S.A. CA2/8
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION EIGHT
VAHID KHOSHNEVIS, B301461
Plaintiff and Appellant, (Los Angeles County
Super. Ct. No. BC554887)
v.
TOYOTA MOTOR SALES,
U.S.A., INC.,
Defendant and Respondent.
APPEAL from an order of the Superior Court of Los
Angeles County, Mark V. Mooney, Judge. Affirmed.
Rosner, Barry & Babbitt, Hallen D. Rosner, Arlyn L.
Escalante; Strategic Legal Practices and Payam Shahian for
Plaintiff and Appellant.
Horvitz & Levy, John A. Taylor, Jr., Joshua C. McDaniel;
Sutton & Murphy, Thomas M. Murphy and Krisann K. Aquino
for Defendant and Respondent.
______________________
Vahid Khoshnevis appeals the trial court’s order shifting
costs after a jury awarded him less than the amount he would
have received had he accepted a pretrial offer to compromise
pursuant to Code of Civil Procedure section 998.1 Appellant
challenges the court’s cost-shifting order on the ground the offer
to compromise was invalid under section 998. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
Khoshnevis leased a vehicle from Toyota. He had to bring
it in for service six times because the check engine light blinked
continuously. After about a year, he demanded that Toyota
repurchase the vehicle. Toyota declined to do so. In August
2014, Khoshnevis filed a complaint against Toyota alleging
violations of the Song-Beverly Consumer Warranty Act, Civil
Code section 1790 et seq., commonly known as California’s
“lemon law.”
Before trial, Toyota offered to settle the action and served
an offer to compromise pursuant to section 998. Toyota offered to
pay Khoshnevis $20,857.27 in restitution and $10,000 in attorney
fees, and to take the vehicle back. In return, Toyota wanted
Khoshnevis to deliver the car with clear title, file a request for
dismissal of the action, and sign a general release. The offer was
presented on pleading paper under the caption of the lawsuit.
There was no general release attached to the offer. Here are the
exact words of the settlement offer:
1 All undesignated statutory references are to the Code of
Civil Procedure.
2
“Pursuant to California Code of Civil Procedure section
998, Defendant, Toyota Motor Sales, U.S.A., Inc. (hereinafter
‘TMS’), hereby offers to settle/compromise this action with respect
to all claims asserted in the above-captioned action against
Defendant, pursuant to the following terms:
“1. TMS will pay restitution to Plaintiff in the amount of
Twenty Thousand, Eight Hundred Fifty-Seven Dollars and
27/100 ($20,857.27), which is comprised of the following:
Amount paid at lease signing: $ 4,626.79
Monthly Payments (32 mos. x $350.64): $11,220.48
Additional Payment: $ 5,000.00
TOTAL PAYMENT TO PLAINTIFF: $20,857.27
“2. TMS will pay any of Plaintiff’s incidental damages which
are recoverable under Civil Code section 1793.2. The damages
will be subject to proof and supporting documentation.
“3. TMS will pay Ten Thousand Dollars ($10,000.00) for
Plaintiff’s attorneys fees and costs or, in the alternative, TMS
will pay Plaintiff’s reasonably incurred attorneys fees and court
costs to date, to be determined by the court.
“4. TMS will pay off the balance of Plaintiff’s lease according to
proof (payoff statement), in the approximate amount of
$19,500.00.
“5. The foregoing payments by the Defendant are subject to the
following:
“(a) Plaintiff to deliver the subject vehicle (described as a 2013
Toyota Scion, VIN JF1ZNAA1701717023) to Toyota Motor Sales,
U.S.A., Inc. at the time the subject payment is made and at a
time and location to be designated by Defendant. The vehicle
shall be delivered with clear title (except for the known lien
which TMS will pay off).
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“(b) The transmittal of all documentation supporting Plaintiff’s
damages, including loan payments and registration.
“(c) The entry of a Request for Dismissal with prejudice on
behalf of Plaintiff in favor of Defendant Toyota Motor Sales,
U.S.A., Inc.
“(d) The execution and transmittal of a general release by
Plaintiff in favor of Defendant Toyota Motor Sales, U.S.A., Inc.
“(e) To the extent not specifically provided herein, all parties
shall bear their own attorneys fees and costs.”
Appellant rejected the offer to compromise and the action
was tried before a jury. The jury returned a verdict in favor of
Khoshnevis for breach of the vehicle’s implied warranty of
merchantability. The verdict was in the sum of $17,259.19 which
amounted to the down payment and monthly lease payments
Khoshnevis had tendered on the vehicle. The damages found by
the jury were less than what Khoshnevis had been offered
pretrial by Toyota.
After trial, each party moved to recover attorney fees and
costs from the other side. The trial court granted Toyota’s
motion to recover postoffer costs from Khoshnevis. The court
found the section 998 offer a valid basis to shift Toyota’s postoffer
costs to Khoshnevis because he had failed to recover more from
the jury than he had been offered in settlement by Toyota.
Khoshnevis timely appealed the order.
DISCUSSION
Appellant contends the section 998 offer to compromise was
not valid because it included a vague general release that was not
attached to the offer itself. We are not persuaded.
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A. We Review the Validity of an Offer to Compromise De
Novo.
A challenge to the validity of an offer to compromise where
the facts are undisputed presents a question of law to be
considered de novo. (Barella v. Exchange Bank (2000)
84 Cal.App.4th 793, 797 (Barella).)
B. The Condition that Appellant Sign a General Release Did
Not Invalidate the Offer to Compromise.
Section 998 provides an exception to the ordinary rule that
the prevailing party in a civil lawsuit is entitled to recover its
costs. Instead, when a prevailing party refuses to settle pretrial
and then fails to beat the settlement offer at trial, the prevailing
party may not recover its own postoffer costs and, in addition,
must pay its opponent’s postoffer costs. (Ignacio v. Caracciolo
(2016) 2 Cal.App.5th 81, 86 (Ignacio); § 998, subd. (c)(1).)
The offering party has the burden of demonstrating that
the offer is valid under section 998. The corollary to this rule is
that a section 998 offer must be strictly construed in favor of the
party sought to be subjected to its operation. (Barella, supra,
84 Cal.App.4th at p. 799.)
Because the trial court has to determine whether the value
of the offer exceeds the trial verdict, a valid section 998 offer
must be sufficiently certain to be capable of valuation.
(MacQuiddy v. Mercedes-Benz USA, LLC (2015) 233 Cal.App.4th
1036, 1050.) Thus, in cases where the offer includes a
nonmonetary component, the offer must be evaluated in light of
all the terms and conditions attached to that offer and not simply
the monetary amount of the offer. Section 998 does not authorize
cost-shifting every time the monetary value of the damage award
is less than the monetary term of the defendant’s statutory offer.
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(Valentino v. Elliott Sav-On Gas, Inc. (1988) 201 Cal.App.3d
692, 697 (Valentino).) If the offer is not amenable to valuation,
then the offer to compromise is not valid and cannot be used to
shift costs onto the otherwise prevailing party.
The execution of a release as a condition invalidating an
offer to compromise has been litigated in several contexts over
the years. Depending on what is being released, the trial court
may not be able to obtain enough information to attach a value to
the overall offer and then compare it to the trial verdict for
purposes of cost shifting. In different contexts, courts have
decided different things. For example, some courts have decided
that certain conditions attached to offers to compromise are too
difficult, as a matter of law, to value and therefore those
conditions invalidate an offer. (See., e.g., Barella, supra,
84 Cal.App.4th at p. 803 [“We conclude that the task of valuing a
confidentiality clause attached to a settlement offer in a
defamation action is too subjective and, therefore, cannot be
done.”].) Where an offer requires a party to forego other causes of
action not included in the complaint, the condition introduces an
“imponderable” which makes it impractical, if not impossible, to
accurately and fairly ascertain whether the jury verdict or the
offer is more favorable. (Valentino, supra, 201 Cal.App.3d at p.
699.) A condition that compels a party to release parties not
involved in the litigation is invalid. (McKenzie v. Ford Motor Co.
(2015) 238 Cal.App.4th 695, 706.) A condition that requires a
party to waive “known and unknown” claims, otherwise known as
a section 1542 waiver, also invalidates a section 998 offer as a
matter of law. (Ignacio, supra, 2 Cal.App.5th at p. 89.) All this is
to say that the trial court must be able to review the offer and
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assign a value to it without having to engage in “wild speculation
bordering on psychic prediction.” (Valentino, at p. 699.)
We conclude the offer to compromise extended by Toyota to
appellant is capable of valuation and therefore valid. Indeed, it is
materially identical to the offer found valid in Goodstein v. Bank
of San Pedro (1994) 27 Cal.App.4th 899 (Goodstein). There, the
offer proposed a “full settlement of this action” with a monetary
payment and the execution of a “general release” by Goodstein in
favor of the bank. The release was not attached to the offer.
Like Khoshnevis, Goodstein argued the offer was not valid
because a general release typically includes known and unknown
claims, making the offer incapable of valuation. This argument,
however, was rejected because the offer stated in “clear and
unambiguous language” that the terms and conditions applied
only “ ‘in full settlement of this action.’ ” (Goodstein, supra, 27
Cal.App.4th at p. 907.) Based on that language, the court found
no significance in the description of the release as “general” and
concluded the release was limited only to the claims pertinent to
the underlying action that was the subject of the settlement. The
offer was found valid. (Id. at p. 908).
Toyota’s offer in this action also described the release as
“general.” But, as our division has already found, “The rule to be
taken from Goodstein is not that a ‘general release’ does not
invalidate a section 998 offer; the rule is that a release of
unknown claims arising only from the claim underlying the
litigation itself does not invalidate the offer.” (Ignacio, supra,
2 Cal.App.5th at p. 89.) Here, the preamble to Toyota’s offer
clearly and unambiguously stated Toyota “hereby offers to
settle/compromise this action with respect to all claims asserted
in the above-caption action against Defendant . . . .” We find this
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language specifically limits the proposed general release to only
those claims already the subject of the litigation being settled.
Given that express limitation, we hold the offer is susceptible to
valuation and is therefore a valid basis to shift costs under
section 998.
Appellant argues Toyota’s “general release” would have
included a section 1542 waiver of known and unknown claims
and was therefore invalid. We reject appellant’s speculation as it
contradicts the unambiguous preamble of the offer and has no
other basis in fact. We also reject appellant’s argument that
failing to attach the actual release to the offer to compromise
invalidated the offer. We have found no authority mandating
that a release itself be presented with the offer and we hold it is
unnecessary to do so where the offer otherwise appropriately
limits the breadth of the release.
C. We Decline to Consider Issues Appellant Has Raised But
Not Argued or Supported With Authority.
In one paragraph in his Opening Brief, appellant has listed
five other issues which he contends invalidate the offer to
compromise. Appellant neither argues nor explains these issues.
Neither does he provide legal authority specific to each individual
issue. Accordingly, we decline to consider these issues. (Badie v.
Bank of America (1998) 67 Cal.App.4th 779, 784–785 [when an
appellant asserts a point but fails to support it with reasoned
argument and citations to authority, we treat the point as
waived.].)
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DISPOSITION
The order is affirmed. Respondent shall recover its costs on
appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
STRATTON, J.
We concur:
BIGELOW, P. J.
WILEY, J.
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