In Guerrero v. Rodan Termite Control, Inc. (2008) 163 Cal.App.4th 1435, the plaintiff who purchased a house with dry rot sued the home's seller, the real estate agent, and the home inspection firm. (Guerrero, supra, 163 Cal.App.4th at p. 1438.) Ten months after the suit was filed, the inspection firm served the plaintiff with a section 998 offer to compromise for $5,000. (Guerrero, supra, at p. 1438.) The plaintiff did not accept the offer. (Ibid.) Over two years later, shortly before the start of trial, the plaintiff entered a judicially approved good faith settlement with the real estate agent for $34,000. (Id. at p. 1439.) The case went to trial against the inspection firm and the jury awarded $15,600 to the plaintiff. (Ibid.) The inspection firm then filed a motion under section 877 to offset the settlement amount against the verdict. (Guerrero, supra, at p. 1439.) The trial court granted the motion and reduced the judgment to zero. (Ibid.) The inspection firm moved to tax the costs the plaintiff incurred after its $5,000 offer to compromise was served. (Ibid.) The trial court denied the inspection firm's motion to tax costs. (Ibid.) The appellate court affirmed the denial. (Id. at p. 1446.) In Guerrero, the issue presented on appeal was "whether, for the purpose of allocating costs under section 998, a plaintiff whose judgment is reduced to zero by operation of section 877 can be deemed to have 'obtained a more favorable judgment or award' than a rejected section 998 offer to pay $5,000." (Guerrero, supra, 163 Cal.App.4th at p. 1440.) The appellate court determined the plaintiff had obtained a more favorable judgment, stating: "In determining whether plaintiff obtained a 'more favorable judgment or award' than a section 998 offer, the objective of encouraging settlement requires consideration of the status of the litigation when the section 998 offer was submitted. In the present case, when the inspection firm submitted its $5,000 offer early in the litigation, plaintiff had recovered nothing by way of settlement or otherwise and had a valid claim against the inspection firm that the jury later determined to be worth substantially more than the $5,000 that the inspection firm offered. Plaintiff thus did not reject an offer that the outcome of trial indicates should have been accepted. Even if the inspection firm's offer was not so low as to have been in bad faith, there is still no reason why the inspection firm should be rewarded for having submitted the offer, nor is there any reason to penalize plaintiff for having rejected it. The costs that plaintiff incurred subsequent to rejecting the $5,000 offer were incurred in pursuit of a claim with a value of at least $15,600. Regardless of the offset based on subsequent developments in the litigation, plaintiff was justified in rejecting the offer when he rejected it. "The situation would have been very different if the inspection firm had submitted a section 998 offer for $5,000 after plaintiff had accepted $34,000 in settlement from Help-U-Sell. In that event, plaintiff would have been required to evaluate the likelihood of recovering at least $39,000 from the inspection firm. Had he rejected such an offer at that time, it would be entirely consistent with the objectives of section 998 to shift the burden of subsequently incurred costs to him. However, because there had been no such settlement when the inspection firm made its offer, plaintiff had occasion to evaluate only the prospects of recovering more than $5,000. Since plaintiff did in fact recover more than that amount and obtained a verdict against the inspection firm for more than that amount, there is no reason to give the inspection firm a windfall benefit because other defendants later decided to settle for an amount that offset plaintiff's verdict against it. "Considering the amount of the verdict reduced only by offsets to which it was subject at the time the section 998 offer was outstanding is consistent not only with the purpose but is implicit in the language of section 998." (Guerrero, supra, 163 Cal.App.4th at p. 1441.)