## Facts

- Gregory Poster was attacked by other passengers while riding a Southern California Rapid Transit District bus and suffered serious injuries after being thrown from and run over by the bus.
- Poster sued the transit district and the bus driver for personal injuries.
- Poster served a statutory offer to compromise under California Code of Civil Procedure § 998 by mail for $150,000, stating it could be accepted within 30 days (or before trial).
- Defendants made counteroffers during negotiations and later communicated acceptance of the original $150,000 offer.
- Poster refused to honor the settlement, asserting that the counteroffer revoked his § 998 offer and that defendants’ acceptance was untimely.
- The trial court enforced the settlement and entered judgment for Poster in the amount of $150,000.
- The Court of Appeal agreed that a counteroffer does not automatically revoke a § 998 offer but held the acceptance untimely because the mailing extension statute did not apply.

## Issues

1. Whether an offeree’s counteroffer precludes later acceptance of a statutory offer to compromise under California Code of Civil Procedure § 998.
2. Whether California Code of Civil Procedure § 1013(a) extends by five days the time to accept a § 998 offer when the offer is served by mail.

## Decision

- The California Supreme Court reversed the Court of Appeal and reinstated the trial court’s judgment enforcing the settlement.
- The court held that a counteroffer made during negotiations does not automatically revoke a § 998 offer; the offer remains open for the statutory (or stated) acceptance period unless withdrawn or otherwise terminated under the statute.
- The court held that § 1013(a) applies to § 998 offers served by mail and extends the acceptance period by five days.
- Applying the five-day extension, defendants’ acceptance was timely and effective, making the § 998 settlement enforceable.

## Legal Principles

- A § 998 offer is a statutory settlement device designed to encourage compromise; it is not governed in full by common-law rules treating counteroffers as rejections that terminate the original offer.
- An offeree’s counteroffer during settlement discussions does not, by itself, revoke or terminate the offeror’s outstanding § 998 offer.
- Section 1013(a) is a generally applicable procedural statute that extends prescribed response periods when service is by mail, absent clear legislative displacement.
- When a § 998 offer is served by mail, the time to accept under § 998 is extended by five days under § 1013(a).

## Conclusion

The court enforced the $150,000 § 998 settlement, holding that counteroffers do not extinguish an outstanding § 998 offer and that the five-day mailing extension in § 1013(a) applies to the statutory acceptance period when the offer is served by mail.


Poster v. S. Cal. Rapid Transit Dist., 52 Cal. 3d 266 (Cal. 1990)