Goodstein v. Bank of San Pedro

In Goodstein v. Bank of San Pedro (1994) 27 Cal.App.4th 899, the defendant bank's section 998 offer provided in part: "'In full settlement of this action, Bank hereby offers to pay Goodstein the total sum of $ 150,000 in exchange for each of the following: The entry of a Request for Dismissal with prejudice on behalf of the Plaintiff in favor of Bank; The execution and transmittal of a General Release by Goodstein in favor of Bank; Each party is to bear their own respective costs and attorney's fees.'" (27 Cal.App.4th at p. 905.) Goodstein rejected the offer, but failed to obtain a more favorable judgment. The trial court awarded the bank costs under section 998, including expert witness fees. On appeal, Goodstein challenged the section 998 offer as invalid under Valentino v. Elliott Sav-On Gas, Inc. (1988) because it contained a general release clause. In rejecting the challenge, the court stated that section 998 offers are governed by the legal principles applicable to contracts generally. (Goodstein, at p. 907.) The court pointed out that the general release clause was preceded by the phrase, " 'in full settlement of this action.' " (Ibid.) The court interpreted that to mean the general release was limited to the instant action and did not apply to other litigation contemplated by Goodstein. (Id. at pp. 907-908.)