Poster v. Southern California Rapid Transit District

Gregory Poster (plaintiff), a bus passenger, sued the Southern California Rapid Transit District and one of its bus drivers (SCRTD) (defendants) for injuries Poster received when he was attacked by other bus passengers, thrown from, and run over by the bus. Under California Code of Civil Procedure § 998 and § 3291, Poster served SCRTD with an offer to compromise. The offer was served by mail. SCRTD received the offer and engaged in further settlement negotiations with Poster and made a counteroffer that Poster refused to accept. More than 30 days from the date the offer was originally sent, SCRTD’s notice of acceptance of the offer instructing the clerk to enter judgment was mailed to Poster. However, Poster refused to honor the settlement agreement. SCRTD motioned to enforce the settlement. The trial court found that the offer was properly accepted, that the discussions between the parties constituted settlement negotiations, and ordered judgment for Poster in the offered amount. Poster appealed and argued that Poster’s offer to compromise was automatically revoked by SCRTD’s counteroffer. The court of appeal held that offers to compromise are not automatically revoked by an offeree’s counteroffer, but that the acceptance was not timely and that § 1013, which generally extends the time to respond by five days when service is made by mail, did not apply to § 998 offers. SCRTD appealed.