California Supreme Court Holds That Two Separate Simultaneous Alternative Choices by an Offeror to an Offeree Under Code of Civil Procedure Section 998 Can Be Valid

The legislative intent of a C.C.P. Section 998 offer (“998 Offer”) is to encourage settlements before trial. If a 998 offer is not accepted by the offeree and the offeror beats the amount at trial, the offeror is entitled to an award of all allowable costs under the section. But what happens if there are two simultaneous options or alternatives in the 998 Offer which provides the offeree with the choice of two alternatives to accept?

This is the issue presented in Gorobets v. Jaguar Land Rover North America, LLC (2026) 2026 Cal. LEXIS 4132. In Gorobets, the defendant was the offeror and made a single 998 Offer that presented the Plaintiff with two independent and alternative sets of terms to accept and granted the Plaintiff the right to accept by choosing between the two alternatives. Defendant’s two alternative terms in summary were as follows: (1) Defendant would agree to pay $85,000 for the return of a vehicle; or alternatively (2) Defendant agreed to reimburse Plaintiff for expenses he incurred in tracking restitution remedies available under a specific statute. There is no dispute that the first alternative is a finite figure of $85,000 that easily could be evaluated to determine post-judgment; however, the second alternative did require calculations to be conducted by the parties in determining the amount post-judgment.

The Court of Appeals in Gorobets ruled that an alternative-choice offer is inherently uncertain and therefore prohibited. The California Supreme Court disagreed.

The California Supreme Court held that two simultaneous alternative C.C.P. Section 988 offers could be valid so long as the offeree has the ability to understand and determine whether to accept the terms of both of the proposed offers. The court reasoned that there is nothing inherently uncertain about asking an offeree to evaluate alternative sets of settlement before deciding whether or not to accept either or neither of them. The Supreme Court also pointed out that in fact the alternative offer is one single offer because the offeree is required to either accept by selecting one of two alternatives or reject both alternatives. The offeree could not accept both alternatives. Thus, this was a single offer and a single offer should not inhibit a trial court from independently analyzing each alternative set of terms that may have been presented.

In light of Gorobets, if a party is presented with a single simultaneous alternative offer by the offeror, the offeree must closely review both alternative options and recognize the risks of both alternatives before deciding whether or not to reject or accept one of the alternatives. In practice we do not anticipate this issue to arise that often in pure tort cases when the primary issue of the case is monetary damages as we would anticipate that it would be difficult to present a plausible alternative scenario in such circumstances.