BIAS V. WRIGHT Coverage Analysis

                             California Court of Appeal, Fourth  District, Division 1 

Oral acceptance of a section 998 offer is valid if it is undisputed and 
written proof of the acceptance follows. However, oral acceptance will not be valid if it adds or modifies the terms of the original 998 offer. 

                    PRACTICE POINTER: 
Statutory offers to compromise are powerful tools in resolving litigated 
matters.  This case reminds us of the procedural issues associated with the 
acceptance of the statutory offer.  Parties making a settlement offer prior 
to trial pursuant to section 998 may specify the method of acceptance 
required. Absent a specific method of acceptance, oral acceptance is valid 
as long as it is unequivocal and unqualified. However, oral acceptance 
which adds or modifies a term in the settlement offer will not be 
considered a valid acceptance of a 998 offer and the court will not be 
permitted to enter judgment under these circumstances. 

On November 28, 2000, Plaintiff Bias served a section 998 offer on 
Defendant Wright, offering to settle Plaintiff’s claim for the sum of 
$15,000.00. There was no reference to costs made in the settlement offer. 
In addition, the offer did not require a specific method in which the 
acceptance had to be communicated. The parties agreed that the deadline for
acceptance of the offer was January 4, 2001. 

On January 4, 2001, counsel for Wright, Bryson, instructed his secretary to 
call Bias’ counsel, Sheaks, to accept the offer. Bryson’s secretary did so 
and was asked to send a written confirmation of the acceptance. A notice of 
acceptance was sent on Wright’s behalf, stating that Bias’ offer was 
accepted and that “each party bear their own respective costs.” 

On January 5, 2001, Sheaks informed Bryson that Wright’s acceptance was not 
valid due to the fact that an additional term regarding costs had been 
added. Subsequently, the notice of acceptance and the section 998 offer 
were filed with the court. However, judgment was not entered. 

On April 24, 2001, Wright moved to enforce the settlement agreement and 
requested that the court enter judgment pursuant to the terms of the 
purported settlement. In support of its motion, Wright included the 
declarations of Bryson and Bryson’s secretary regarding the oral acceptance 
of the offer on January 4, 2001. Bias opposed Wright’s motion, stating that 
her intention was to recover costs along with the $15,000.00 settlement and
that the oral communication of January 4, 2001 was an unqualified 
acceptance. The trial court entered judgment in favor of Bias in the sum of 
$15,000.00 plus recoverable costs, holding that Wright’s supporting 
declarations were proof of acceptance of Bias’ offer.  The Court of Appeal 

Section 998 expressly requires settlement offers made pursuant to this 
section to be in writing. However, section 998 does not have a parallel 
provision requiring acceptances to be in writing. The only requirement is 
that proof of acceptance must be filed with the court. Therefore, parties 
making a section 998 offer are free to specify the method in which 
acceptance must be communicated. Section 998 offers and acceptances are 
governed by general contract principles. When no method of communication is 
specified, oral acceptance is valid as long as it is unequivocal and 
written proof of the acceptance is subsequently filed with the court. 

However, oral communication which modifies or adds the terms of the 
settlement offer is not considered a valid acceptance. Instead, this is a 

Under section 998, a court’s duty to enter judgment is merely ministerial. 
Therefore, a court may only conduct this ministerial act when acceptance is 
absolute and unequivocal. When a court is faced with a dispute regarding 
terms of a settlement offer, the court is forced to adjudicate the disputed 
facts. Such adjudication is not permitted under section 998. 

In the instant case, Bias’ offer did not specify the manner in which 
acceptance was to be communicated. Therefore, Wright was free to accept the 
offer in any manner that comported with general contract principles. 
Wright’s purported acceptance of Bias’ offer which added a term regarding 
costs was a counteroffer rather than an acceptance. Faced with this dispute 
regarding the terms of the settlement agreement, the trial court was not 
permitted to adjudicate the dispute under section 998. Therefore, the Court 
of Appeal held that the trial court erred by considering the contradictory 
evidence regarding the terms of the settlement and entering judgment.