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December 23, 2024
Expert Fees Owed Because Plaintiffs Failed to Accept Settlement Offer

Zero Damages Constitutes Prima Facie Evidence That Offer of Settlement was Reasonable
Post 4954

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Wild Chang and Kenneth Lo appealed from a post judgment order denying their motion to strike or tax costs. The trial court awarded costs to defendants Fire Insurance Exchange and Stacy Chern (collectively, insurance defendants) after the trial court granted their motion for terminating sanctions and entered judgment in their favor.

In Wild Chang et al. v. Fire Insurance Exchange et al., B334217, California Court of Appeals (December 19, 2024) an offer of settlement rejected by plaintiffs requires plaintiffs to pay costs and expert witness fees after case dismissed with terminating sanctions.

FACTUAL BACKGROUND

Plaintiffs’ Insurance Claim and Consolidated Actions

An insurance claim plaintiffs submitted for losses caused by a fire in their home in 2014. In 2016, Fire Insurance Exchange offered $19,925.91 in structural repairs, which plaintiffs rejected. In 2017, plaintiffs Chang and Lo sued Farmers Insurance Company, Inc. (Farmers), Fire Insurance Exchange, Stacy Chern Insurance Agency, and Chern.

In May 2019, the insurance defendants made settlement offers of $14,242.56 each to Chang and Lo pursuant to Code of Civil Procedure section 998. The offers each stated: “This offer expires the earlier of 30 days from the date hereof, or at the commencement of trial.”

In January 2021, plaintiffs Chang, Lo, and Chang Jr. sued Farmers, Fire Insurance Exchange, Chern, and defendants’ counsel, Woolls Peer in a second action. The lawsuits were consolidated and the operative third amended complaint deemed filed in July 2021. Farmers demurred to the third amended complaint on numerous grounds, which the trial court sustained, and the California Court of Appeals affirmed on appeal. (Chang v. Farmers Insurance Company, Inc. (June 16, 2023, B321411)

As the matter neared trial, the trial court issued several discovery orders with which Chang and Lo did not comply. In November 2022, the trial court granted a motion for terminating sanctions filed by the insurance defendants (the only remaining defendants) and entered judgment against Chang and Lo on the remaining causes of action (for breach of the covenant of good faith and fair dealing, breach of contract, unfair business practices against Fire Insurance Exchange, and professional negligence against Chern).

The Trial Court’s Award of Costs to the Insurance Defendants

Plaintiffs moved to strike or tax costs on multiple grounds, including that the expert witness fees were not recoverable because the matter was never tried, no invoices were attached, and expert witness fees are generally not recoverable as costs.

The trial court entered an order granting $14,849.75 in costs to the insurance defendants.

DISCUSSION

Section 998 allows for recovery of expert witness costs in certain circumstances when an offer of settlement is not accepted and there is a judgment less than the amount of the offer.

The Costs Award Was Not Erroneous or an Abuse of Discretion – Expert Witness Fees as Costs

The statutory basis for the trial court’s award of expert witness fees was section 998. Once the offeror shows the section 998 offer is valid, the burden shifts to the offeree to show the offer was not made in good faith. An offer is made in good faith if it is realistically reasonable under the circumstances of the particular case – that is, if the offer carries with it some reasonable prospect of acceptance.

Plaintiffs made no argument that the section 998 offers they received were invalid. The insurance defendants obtained a judgment in their favor on all the remaining causes of action brought by Chang and Lo.

An award of zero damages generally constitutes prima facie evidence showing the offer was reasonable and the offeror is eligible for costs as specified in section 998. Plaintiffs do not challenge the reasonableness of the expert witness fees that the insurance defendants sought, or that such fees were all incurred after the expiration of the section 998 offers.

Rather than addressing whether the expert fees were proper under section 998, plaintiffs instead raised a number of other arguments.

Plaintiffs had the burden to establish the insurance defendants’ offer was invalid or not in good faith. Chang and Lo did not make any such showing. Accordingly, the Court of Appeals concluded the criteria for an award of post offer expert witness costs under section 998 were satisfied.

The post judgment order awarding costs was affirmed. Fire Insurance Exchange and Chern are entitled to recover their costs on appeal.

ZALMA OPINION

California’s Section 998 is a tool available to defendants to encourage settlement. The insurers made a viable offer of settlement which the Plaintiffs refused. After the case was dismissed by the court the Defendants were entitled to their costs including expert witness fees incurred after the offer was rejected. To appeal this issue is a clear act of desperation and is contumacious conduct. I doubt, without a writ, that Farmers will be paid the costs ordered.

(c) 2024 Barry Zalma & ClaimSchool, Inc.

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00:09:20
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May 26, 2026
He Who Acts as His Own Lawyer Has an Idiot for a Client

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Post number 5357

Read the full article at https://www.linkedin.com/pulse/he-who-acts-his-own-lawyer-has-idiot-client-barry-zalma-esq-cfe-d4bwc, See the full video at and at and at https://zalma.com/blog.

Karacson’s Arson for Profit Attempt Required Skill & Experience to Succeed

In Steve Ellis Karacson v. David Shaver, Warden, No. 25-1089, United States Court of Appeals, Sixth Circuit (May 20, 2026) Steve Karacson was convicted in Michigan state court of arson and insurance fraud after evidence showed he burned his own insured home. Investigators found multiple points of origin, gasoline odor, and evidence tying him to the scene, including cell-phone location data and a receipt showing he had purchased a gas can and gloves shortly before the fire.

FACTS

Karacson initially had appointed counsel, but his relationships with both appointed attorneys ...

00:08:55
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May 11, 2026
Severe Punishment for Failure to Obey Court Orders

Foolish to Repeatedly Disobey Court Orders

All That Remains For Trial Is Plaintiff’s Damages On Each Of These Claims And Establishing Proximate Causation Of Those Damages.

Post number 5348

See the full video at and at and at https://zalma.com/blog plus 5300 posts.

In Linh Wang v. Esurance Insurance Company, No. C24-0447-JCC, United States District Court, W.D. Washington, Seattle (May 1, 2026) John C. Coughenour, United States District Judge, found that throughout this case, culminating with its briefing on Plaintiff’s renewed motion and that Defendant has subjected Plaintiff to unnecessary motion practice for clearly discoverable information and made dubious representations (including to the Court).

FACTUAL BACKGROUND

This case involves an underinsured/uninsured motorist insurance bad faith claim arising from a 2017 motor vehicle collision. The plaintiff, Linh Wang, alleges that Esurance Insurance ...

00:08:27
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May 08, 2026
Ambiguous Contract to Repair not an Assignment

The Right to Negotiate with Insurer is Not an Assignment of Claims

Post number 5347

Read the full article at https://www.linkedin.com/pulse/ambiguous-contract-repair-assignment-barry-zalma-esq-cfe-2xppc, see the full video at https://rumble.com/v79is1s-ambiguous-contract-to-repair-not-an-assignment.html and at and at https://zalma.com/blog plus more than 5300 posts.

Nebraska Requires an Actual Assignment to Allow Contractor to Sue Insurer

In Millard Gutter Company, a corporation doing business as Millard Roofing and Gutter v. Farmers Mutual Insurance Company of Nebraska, also known as Farmers Mutual Insurance, also known as Farmers Mutual, No. A-24-818, Court of Appeals of Nebraska (May 5, 2026) Millard sued Farmers as an assignee of Jane Anzalone who had hired Millard Gutter to repair the roof of her home and agreed to allow Millard Gutter to coordinate with her insurer, Farmers Mutual, concerning reimbursement for repairs authorized under her insurance policy.

FACTUAL BACKGROUND

In ...

00:08:02
July 03, 2026
Buying Insurance After the Accident is Fraud

It is a Crime to Lie to Your Insurer That Accident Happened After Policy Inception

Post number 5386

Posted on July 3, 2026 by Barry Zalma

Conviction for Fraud Affirmed Because Evidence Overwhelming

In State Of Washington v. Saleem Mumin Robinson, No. 87244-3-I, Court of Appeals of Washington, Division 1 (June 29, 2026) Saleem Robinson was involved in an automobile collision on May 18, 2021. The other driver, Mohamed Waggeh, photographed Robinson’s documents and later reported the collision to GEICO, identifying the time as approximately 12:40 p.m.

That same day, at 6:06 p.m., more than five hours after the accident, Robinson purchased Progressive insurance for the vehicle involved in the collision.

The next morning, Robinson called Progressive to report the claim and stated that the accident occurred around 6:15 p.m. Progressive recorded that call without advising Robinson that it was being recorded. Progressive later conducted a special investigative unit investigation the claim because it was submitted shortly ...

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July 02, 2026
Failure to Comply With Policy Conditions Defeats Claim

Deprive Insurer of the Ability to Properly and Timely Investigate Claim & Recover Nothing

Posted on July 2, 2026 by Barry Zalma

Post number 5385

No Contract Claim No Bad Faith Claim

In South Alexander Development I, LLC v.Markel American Insurance Co., Civil Action No. 23-1436-JWD-SDJ, United States District Court, M.D. Louisiana (June 24, 2026) South Alexander Development I, LLC (SADI) owned and operated a solar farm in Springfield, Louisiana that allegedly sustained significant Hurricane Ida damage.

After SADI submitted a claim, MAIC ultimately paid $1,099,614.02 for undisputed physical damage plus the $210,000 income-loss policy limit. SADI later sued for breach of contract and statutory bad faith, contending MAIC failed to fully investigate and adjust the claim; MAIC sought summary judgment, arguing SADI failed to cooperate and withheld material repair-cost information.

LAW:

Louisiana insurance policies are interpreted as contracts according to their plain meaning, and the insured bears the burden ...

post photo preview
July 02, 2026
Failure to Comply With Policy Conditions Defeats Claim

Deprive Insurer of the Ability to Properly and Timely Investigate Claim & Recover Nothing

Posted on July 2, 2026 by Barry Zalma

Post number 5385

No Contract Claim No Bad Faith Claim

In South Alexander Development I, LLC v.Markel American Insurance Co., Civil Action No. 23-1436-JWD-SDJ, United States District Court, M.D. Louisiana (June 24, 2026) South Alexander Development I, LLC (SADI) owned and operated a solar farm in Springfield, Louisiana that allegedly sustained significant Hurricane Ida damage.

After SADI submitted a claim, MAIC ultimately paid $1,099,614.02 for undisputed physical damage plus the $210,000 income-loss policy limit. SADI later sued for breach of contract and statutory bad faith, contending MAIC failed to fully investigate and adjust the claim; MAIC sought summary judgment, arguing SADI failed to cooperate and withheld material repair-cost information.

LAW:

Louisiana insurance policies are interpreted as contracts according to their plain meaning, and the insured bears the burden ...

post photo preview
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