California Code of Civil Procedure §998 (CCP § 998) allows plaintiffs and defendants to make formal settlement proposals before trial. If a party rejects a valid offer and fails to obtain a better result at trial, certain litigation costs may shift. But does a §998 offer have to present only one way to settle for those consequences to apply?
In Gorobets v. Jaguar Land Rover North America, LLC (2026), the California Supreme Court addressed that question directly. The court held that a §998 offer is not automatically invalid because it gives the receiving party more than one way to settle.
Although Gorobets involved a lemon law dispute, the ruling has broader implications for California civil litigation, including how personal injury lawyers evaluate and structure §998 offers.
Why Section 998 Offers Matter in Civil Litigation
What makes a CCP §998 offer different from an ordinary settlement proposal is what can happen after it is rejected. If a plaintiff turns down a defendant’s valid offer and later fails to obtain a more favorable judgment or award, two important cost consequences may follow:
- The plaintiff cannot recover certain litigation costs incurred after the offer was made.
- The plaintiff must pay certain costs the defendant incurred after making the offer and may also have to pay reasonable expert witness costs if the court awards them.
Because personal injury trials can involve substantial expert witness fees and other litigation costs, a §998 offer requires careful evaluation before it is rejected and the case proceeds to trial.
The Settlement Offer at the Center of Gorobets
The underlying case began as a lemon law dispute involving an allegedly defective vehicle. While the case was pending, the defendant auto manufacturer made a §998 settlement offer giving the plaintiff two distinct choices:
- Option 1: Accept a lump-sum payment of $85,000 and return the vehicle with clear title.
- Option 2: Receive reimbursement for specified amounts recoverable under the lemon law, with the court resolving disputes over the plaintiff’s entitlement to or amount of those items.
Both options included terms addressing attorney fees and costs. The plaintiff did not accept either option before the §998 offer expired.
The Trial Verdict and the Section 998 Dispute
The jury ultimately awarded the plaintiff approximately $76,155—less than the $85,000 lump-sum option offered before trial.
The defendant argued that §998’s cost-shifting rules therefore applied. The plaintiff disagreed, arguing that the offer was invalid because it presented two settlement options at the same time.
The trial court found the offer valid and applied §998’s cost consequences. The dispute eventually reached the California Supreme Court.
Does Giving Two Settlement Choices Invalidate a Section 998 Offer?
The California Supreme Court unanimously held that presenting two settlement choices does not, by itself, invalidate a §998 offer.
Applying general contract principles, the court explained that a single offer can give the receiving party a choice between alternative sets of settlement terms. Accepting one of those alternatives can form an enforceable agreement.
When Is a Multi-Option Section 998 Offer Valid?
The Supreme Court outlined a clear two-step framework for trial courts to evaluate alternative-choice §998 offers:
- Clear Structure: The offer must clearly identify the different settlement choices and explain how the receiving party can accept one. The party cannot combine terms from different options.
- Fair Valuation: At least one option must be clear enough for a court to determine what it was worth when the offer was made.
If multiple alternatives can be fairly valued, the court compares the judgment or award with the highest-valued valid alternative. If the rejecting party does not obtain a more favorable result, §998’s cost-shifting provisions may apply.
What Personal Injury Lawyers Can Learn From Gorobets
Although Gorobets involved a vehicle warranty claim, §998 also plays an important role in California personal injury litigation. Here are the key takeaways for personal injury trial teams:
Do Not Dismiss a §998 Offer Because It Presents Multiple Options
A §998 offer is not invalid simply because it provides more than one way to settle. After Gorobets, the presence of alternative settlement choices alone is not enough to defeat the offer.
Analyze the Value and Certainty of Each Option
A complicated or difficult-to-value alternative does not necessarily defeat the entire offer. If another option is sufficiently clear and capable of valuation, it may still support the cost consequences under §998. Each option therefore requires its own valuation and risk analysis.
Build §998 Exposure Into the Trial-Risk Analysis
If a plaintiff rejects a defendant’s valid §998 offer and ultimately fails to obtain a more favorable judgment or award, the resulting cost consequences can significantly change the financial outcome of the case. Post-offer costs and potentially expert witness fees can substantially reduce the plaintiff’s recovery.
Consider Alternative Options When Drafting a §998 Offer
Gorobets also confirms that personal injury lawyers may consider alternative settlement options when structuring §998 offers. An offer can present more than one way to settle, provided the choices are clearly structured and at least one alternative is sufficiently certain to be fairly valued.
The decision also reinforces why careful drafting matters. Beyond the alternative-choice issue addressed in Gorobets, other terms can also affect the validity or enforceability of a § 998 offer. For example, attorneys should carefully consider any language addressing insurance company consent in a § 998 offer.
The Key Takeaway for Personal Injury Lawyers
Gorobets v. Jaguar Land Rover North America, LLC confirms that under California law, presenting alternative settlement choices does not, by itself, invalidate a § 998 offer.
For personal injury lawyers, the practical lesson works both ways. Multi-option offers require careful analysis when received and careful drafting when made because the structure, certainty, and value of each option can ultimately affect the financial consequences of proceeding to trial.
