Troy Kevin Spears
Machado & Cousins
1500 J Street, Second Floor
Modesto, CA 95354

Dear Mr. Spears:

Thanks for your letter of August 13, 1998, inquiring about legislative intent regarding Senate Bill 73, Chapter 892 of the Statutes of 1997. As you know, I was the author of SB 73, an omnibus civil procedure measure which amended Section 998 of the Code of Civil Procedure.

Prior to introducing SB 73, I authored legislation pertaining to this subject which was enacted in 1994 (Chapter 332, SB 1324). My 1994 bill abrogated the decision in Encinitas Plaza v. Knight (1989) 209 Cal.App.3d 996, which held that attorney's fees allowed under contract were "damages" rather than "costs" and, therefore, could be added to the amount of the judgment in determining whether the plaintiff received a more favorable judgment than the 998 offer. SB 1324 provided that a plaintiff in a cause of action not based on tort shall not be deemed to have obtained a more favorable judgment unless the judgment, exclusive of attorney's fees and costs, exceeds the offer.

The intent of my SB 73 amendments to §998 was to clarify ambiguities which resulted from the 1994 legislation and to treat plaintiffs and defendants equally. The bill, accordingly, amended §998 in several respects. Firstly, it excluded post-offer costs (including attorney's fees when authorized by contract or statute) in determining whether a plaintiff obtained a more favorable judgment. Secondly, it clarified that a plaintiff who fails to obtain a more favorable judgment shall not recover post-offer costs. Thirdly, it repealed the provision giving the court discretion to require a plaintiff, who fails to obtain a more favorable judgment, to pay defendant's costs from the date of filing. Fourthly, it applied §998 to all binding arbitration.

You requested an explanation of my intent with respect to amendments to subdivision (d) regarding the costs of services of expert witnesses. The May 1, 1997, amendments to SB 73 deleted language referring to such costs necessary in either or both the preparation or trial of the case. The amended language provided for awarding costs necessary in the preparation for trial or arbitration. The change was intended simply to extend the existing provision to include costs incurred for an arbitration. It was not my intent to limit trial costs to those related to preparation for a trial, or to preclude the award of costs for actual trial appearances of experts.

The legislative record is clear on this point! I enclose a copy of my letter to the Governor requesting his approval of SB 73 and copies of the official analyses of the measure when it was considered in committee and by the full Senate and Assembly. None of those documents refer to the issue you raise; neither does the digest of the measure prepared by the Legislative Counsel.

Finally, I enclose a copy of the chart I prepared at the time to compare the differences between the proposals in SB 73 and then current law. Under "Current Law," and entry reads: "Court may require defendant to pay a reasonable sum to cover costs of the service of expert witnesses." The corresponding explanation under "SB 73" reads: "Same."

I believe the foregoing explanation of the legislative intent and history regarding the change should be dispositive of your question. If you need additional information, please advise me accordingly.

Sincerely yours,
QUENTIN L. KOPP

Enclosures