In Elmi v. Related Mgmt., No. G062788 (Cal. Ct. App. Jan. 8, 2025), the California Court of Appeal clarified the scope of Code of Civil Procedure §998 regarding post-judgment costs and attorney fees. The case arose after the plaintiff, Cesar Elmi, rejected a 998 settlement offer from Related Management Company, LP (Related). The case proceeded to trial and was ultimately resolved for less than Related's offer. Under §998(c)(1), Elmi's award of pre-judgment costs and fees was limited to those incurred before Related's settlement offer. The trial court upheld this limitation, concluding that the offer exceeded the final case resolution amount.
After judgment was entered, Elmi sought an additional $10,861 in attorney's fees and $212.91 in costs related to enforcing the judgment. Although Related did not oppose the motion, the trial court denied it, holding that Elmi was not entitled to any fees or costs incurred after April 28, 2021, when Related served its §998 offer. Elmi appealed, arguing that §998 only applies to pre-judgment costs and fees, not post-judgment enforcement efforts.
On appeal, the court agreed with Elmi and reversed the trial court's decision, holding that post judgment costs are not governed by §998. Additionally, because Related failed to challenge the merits of Elmi's motion in the trial court, it forfeited those arguments on appeal. As a result, the appellate court remanded the case, directing the trial court to reconsider Elmi's motion for post-judgment fees and costs.
Does Section 998 Allow for the Recovery of Post-Judgment Costs?
The appellate court's decision turned on the distinction between pre-judgment and post-judgment costs, as outlined in California Code of Civil Procedure §998 and related statutes. §998 governs only pre-judgment costs, referencing CCP §§ 1031 and 1032, which regulate recoverable litigation expenses before a final judgment is entered. However, the California Supreme Court in Conservatorship of McQueen (2014) 59 Cal.4th 602, ruled post-judgment costs and fees fall under a separate legal framework.
Post-judgment enforcement costs are governed by the Enforcement of Judgments Law, specifically CCP §§685.040-685.095, which entitle judgment creditors to reasonable and necessary enforcement expenses. Notably, attorney fees incurred in enforcing a judgment are recoverable as costs under these provisions, but only if the original judgment included an attorney's fee award under CCP §1033.5(a)(10(A).
Because post-judgment enforcement costs do not fall under §§ 1032 and 1032, they are not subject to the provisions of §998. The appellate court noted that Related did not dispute this legal distinction on appeal. Instead, Related primarily argued that Elmi's post-judgment fees were unnecessary and unreasonable, contending his motion should be denied or reduced. However, since Related failed to raise these arguments in the trial court, they were forfeited on appeal. As a result, the appellate court reversed the trial court's order denying Elmi's motion and remanded the case with instructions to reconsider the fee request on the merits. The trial court must now determine whether and to what extent Elmi is entitled to recover the requested post-judgment fees and costs.
When used appropriately, §998 offers can be a powerful tool to resolve cases and to shift the risk of the cost burdens of going to trial and verdict. This ruling is significant because it is a reminder that §998 limitations do not extend to post-judgment enforcement expenses and provides guidance for litigants navigating cost recovery in California courts.