SAFEWAY STORES INC v. KELLETT (1988)

The issue in this proceeding is whether Code of Civil Procedure section 1013, subdivision (a) applies to extend the time within which an offer to compromise and settle under Code of Civil Procedure section 998 may be accepted.   We shall conclude that it does not.

Petitioner, Safeway Stores, Inc., seeks a writ of mandate directing respondent superior court to vacate its order setting aside a judgment entered in the underlying action and to order the judgment reinstated.

Real party in interest, Angeline Kellett (plaintiff), commenced the underlying action against petitioner, Safeway Stores, Inc. (Safeway), alleging she sustained injuries in a slip-and-fall accident as a result of Safeway's negligence.   On September 12, 1986, plaintiff's counsel served on Safeway by mail a written offer to settle the case for $10,999.99 and specified the offer would remain open for the “statutory period.”  (Code Civ.Proc., § 998;  all further statutory references to sections of an undesignated code are to the Code of Civil Procedure.)   On October 16, 1986, Safeway personally served on plaintiff's counsel and filed with the court an acceptance of the offer.   The court entered judgment in accordance with the offer the same day.

On November 14, 1986, plaintiff moved to set aside the judgment under section 473 on grounds of mistake of fact and surprise.   In a supporting declaration, plaintiff's counsel averred that on September 24, 1986, Safeway's attorney advised him Safeway would not accept the offer, and thereafter indicated no interest in settlement;  at a settlement conference on October 2, plaintiff's counsel made a “nonconfidential offer” to the settlement judge demanding $25,000, which he assumed the judge had communicated to Safeway's attorney;  plaintiff's counsel withdrew the September 12 offer at the October 2 settlement conference, and in any event, the statutory period in which to accept expired on October 13;  when he received Safeway's acceptance, plaintiff's attorney advised Safeway's counsel it was not timely and filed notice the offer had expired.

In opposition to the motion, Safeway argued that because the September 12 offer was served by mail, the statutory period in which to accept was extended by five days pursuant to section 1013;  therefore, the October 16 acceptance was timely.   Safeway also contended, alternatively, that section 473 did not apply, but even if it did plaintiff's counsel failed to show either mistake of fact or surprise.   Declarations filed in opposition to the motion denied plaintiff's counsel made a $25,000 settlement demand or revoked the September 12 offer, and denied that Safeway had rejected that offer.

Following a hearing, respondent court granted plaintiff's motion and vacated the judgment.   On motion for reconsideration the court adhered to its original ruling and found that plaintiff's section 998 offer had not been revoked, the provisions of section 1013, subdivision (a) apply to a section 998 offer served by mail, and Safeway's acceptance of the offer was timely, but that plaintiff was entitled to relief pursuant to section 473 “․ on the grounds of mistake, inadvertence, surprise or excusable neglect.”

Thereafter, Safeway filed the instant petition for writ of mandate.   We stayed all further proceedings in the trial court pending receipt of opposition and further order of this court.   We also notified the parties we were considering issuance of a peremptory writ in the first instance.   Plaintiff timely filed opposition.

Section 998 provides in part:  “(b) Not less than 10 days prior to commencement of trial, any party may serve an offer in writing upon any other party to the action to allow judgment to be taken in accordance with the terms and conditions stated at that time.  [¶] (1) If the offer is accepted, the offer with proof of acceptance shall be filed and the clerk or the judge shall enter judgment accordingly.  [¶] (2) If the offer is not accepted prior to trial or within 30 days after it is made, whichever occurs first, it shall be deemed withdrawn, and cannot be given in evidence upon the trial.”

The procedure authorized by section 998 is governed by principles of contract law.  (T.M. Cobb Co. v. Superior Court (1984) 36 Cal.3d 273, 280, 204 Cal.Rptr. 143, 682 P.2d 338;  Drouin v. Fleetwood Enterprises (1985) 163 Cal.App.3d 486, 491, 209 Cal.Rptr. 623.)   The trial court ruled there was an offer and a timely acceptance.   In finding acceptance timely, the court applied section 1013, subdivision (a) and determined Safeway had 35 days to respond to the offer because it was served by mail.

Section 1013, subdivision (a) provides in part:  “In case of service by mail, the notice or other paper must be deposited in a post office [etc.]․  The service is complete at the time of the deposit, but any prescribed period of notice and any right or duty to do any act or make any response within any prescribed period or on a date certain after the service of such document served by mail shall be extended five days if the place of address is within the State of California, 10 days if the place of address is outside the State of California but within the United States, and 20 days if the place of address is outside the United States․”

Section 1013 appears in Part II, title 14, chapter 5 of the Code of Civil Procedure which relates to notices, filing and service of papers.   The purpose of section 1013 is to provide for the uncertainties of mail delivery by according recipients of mailed notices or papers a longer time within which to respond.  (Highland Plastics, Inc. v. Enders (1980) 109 Cal.App.3d Supp. 1, 9, 167 Cal.Rptr. 353.)   That purpose is most clearly served by application to motions and other similar proceedings.  (California Accounts, Inc. v. Superior Court (1975) 50 Cal.App.3d 483, 487, 123 Cal.Rptr. 304.) ¹

However, decisional law has more broadly interpreted section 1013 to apply to responses to notices and papers other than notices of motion and supporting documents.  (See, e.g., Shearer v. Superior Court (1977) 70 Cal.App.3d 424, 138 Cal.Rptr. 824 [petition for writ of mandamus];  Industrial Indem. Co. v. Ind. Acc. Com. (1961) 57 Cal.2d 123, 17 Cal.Rptr. 821, 367 P.2d 413 [recommendation of submission of case absent objection];  and Pesce v. Dept. Alcoholic Bev. Control (1958) 51 Cal.2d 310, 333 P.2d 15 [notice of decision of administrative agency].)  On the other hand, it has been held that precomplaint government tort claims are not subject to the extension provisions of section 1013.  (Smith v. City and County of San Francisco (1977) 68 Cal.App.3d 227, 137 Cal.Rptr. 146;  Thierfeldt v. Marin Hosp. Dist. (1973) 35 Cal.App.3d 186, 110 Cal.Rptr. 791.)

Case authority has not resolved the question whether section 1013 extends the period in which to accept a section 998 settlement offer served by mail.   The issue was tendered in T.M. Cobb Co. v. Superior Court, supra, but was not decided because the court found the offer had been revoked.  (36 Cal.3d at p. 276, fn. 3, 204 Cal.Rptr. 143, 682 P.2d 338.)

Section 998 requires that an offer be accepted prior to the commencement of trial or within 30 days after it is made, whichever occurs first, or it is deemed withdrawn.   The time within which an offer is open to acceptance will vary from one case to another.   An offeree may have from 10 to 30 days from the time the offer is made to accept, depending upon when in relation to commencement of trial the offer is made.

“[T]he clear purpose of section 998 ․ is to encourage the settlement of law suits prior to trial.”  (T.M. Cobb, supra, at p. 280, 204 Cal.Rptr. 143, 682 P.2d 338.)   In keeping with that purpose, section 998 mandates acceptance at the latest “prior to trial.”   The periods of extension prescribed by section 1013 could not operate to enlarge the time within which to accept an offer made less than 30 days before trial without extending that time beyond the commencement of trial contrary to the express language and in derogation of the purpose of section 998.   Obviously the Legislature could not have intended that result.

We recognize that under the facts here there was sufficient time remaining before trial, even after the passage of 30 days from the making of the offer, to accomodate any of the periods of extension provided by section 1013 when service is by mail.   Nevertheless, it would be anomalous were section 1013 to extend the longest period provided by section 998 within which to accept an offer when it has absolutely no effect whatever on shorter periods of between 10 and 30 days.

We conclude that the application of section 1013, subdivision (a) to extend the period in which to accept a section 998 offer served by mail is inconsistent with and would frustrate the purposes and objectives of the latter section.  (T.M. Cobb, supra.)

Safeway's purported acceptance 34 days after plaintiff made her offer to settle for $10,999.99 was too late, the offer being deemed withdrawn 30 days after it was made.   Although respondent superior court concluded acceptance was timely pursuant to section 1013, it nonetheless vacated the judgment entered pursuant to Safeway's acceptance on other grounds.²  Under the rule that a decision of a trial court must be upheld if legally correct, regardless of its stated reason, we will not disturb the court's order setting aside the judgment.  (D'Amico v. Board of Medical Examiners (1974) 11 Cal.3d 1, 18–19, 112 Cal.Rptr. 786, 520 P.2d 10.)

The stay of the proceedings is vacated and the petition for writ of mandate is denied.

FOOTNOTES

1.   Some statutes expressly exclude the operation of section 1013.  (See, e.g., § 594, subd. (b) [service of notice of trial in unlawful detainer action];  § 1005 [service of notice of motion];  former § 2037.1 [service of demand to exchange lists of expert witnesses].)  Section 1013, subdivision (a) itself contains three specific exceptions.

2.   At the hearing on the motion to vacate, plaintiff's counsel represented that he thought the September 12 offer had expired on the 30th day thereafter, and he would have withdrawn it had he known it remained open pursuant to section 1013 for five more days.   The trial court granted plaintiff's motion pursuant to section 473 to vacate the judgment, expressly finding that the failure of plaintiff's counsel to apprehend that section 1013 does extend time to accept a section 998 offer constituted excusable neglect and inadvertence.

PUGLIA, Presiding Justice.

CARR and SIMS, JJ., concur.