Meleski v. Estate of Hotlen

Amanda Meleski was injured when Albert Hotlen ran a red light and collided with her vehicle. Unfortunately, Hotlen was deceased at the time of the lawsuit, and he had no estate from which she could recover. However, Hotlen had purchased a $100,000 insurance policy from Allstate Insurance Company (Allstate) covering the accident. Meleski brought her action pursuant to Probate Code sections 550 through 555, which allowed her to serve her complaint on Allstate and recover damages from the Allstate policy, but limited her recovery of damages to the policy limits. Meleski attempted to settle the matter before going to trial by making an offer pursuant to section 998 for $99,999. The offer was not accepted, and at trial a jury awarded her $180,613.86. Because the offer was rejected and Meleski was awarded judgment in excess of her offer to compromise, she expected to recover her costs of suit, the postoffer costs of the services of expert witnesses, and other litigation costs. Meleski argued on appeal that she should have been able to recover costs in excess of the policy limits from Allstate, since it was Allstate that had refused to accept a reasonable settlement offer prior to trial. The trial court disagreed, and Meleski filed this appeal, arguing Allstate was a party within the meaning of section 998 for purposes of recovering costs, and that such costs were recoverable from the insurer despite the limitation on the recovery of “damages” found in Probate Code sections 550 through 555. The Court of Appeal agreed and reversed judgment: "Even though the decedent’s estate is the named defendant in actions under Probate Code sections 550 through 555, this is a legal fiction. The insurance company accepts service of process, hires and pays for counsel to defend the action, makes all decisions regarding settlement of the litigation, is responsible for paying the judgment in favor of the plaintiff if such judgment is rendered, and makes the decision whether or not to appeal an adverse judgment. There is no actual person or entity other than the insurance company to do any of this. This is a reality we will not ignore. Moreover, we find it manifestly unfair that section 998 could be employed by Allstate to recover costs from the plaintiff (which costs it would have no obligation to pay to the estate), but Allstate would have no corresponding responsibility to pay costs merely because it is not a named party." View "Meleski v. Estate of Hotlen" on Justia Law