If you serve a 998 offer on the Plaintiff, say $5,000, and Plaintiff's judgment is reduced to zero after set-off for settlements, is the Defendant entitled to recover the costs permitted by 998 if the judgment against it is reduced to zero after the court deducts from the jury verdict the amount of pre-trial settlements paid by others?

Well, yes and no.

If the Plaintiff's recovery at trial would have netted it more at the time of the 998 offer than the 998 offer itself, 998 does not shift post-998 fees to the Plaintiff.  If the 998 offer was $5,000, the jury verdict is $10,000, and no settlements had been paid to Plaintiff at the time the 998 was served, Plaintiff's failure to accept the 998 does not shift post-998 costs to it.  If, however, the Plaintiff had already received $10,000 in settlement at the time the $5,000 998 was made and the jury renders a $10,000 verdict that is reduced to zero, 998 will shift the post-998 costs to the Plaintiff.

Are we clear?

Crystal.

If not, Guerrero v. Rodan Termite Control sent down today by the First Appellate District is a must-read.