Can a 998 Offer Be Conditioned on the Defendant's Insurer's Consent?

This recent 2026 case Matthews v. Ryan (cited as 118 Cal.App.5th 155) poses an interesting question about CCP 998 offers and whether an offer that requires a condition to be met is invalid.

Let me zoom out first to lay some foundation.

Picture this: you serve a 998 on a defendant who is defended by an insurance carrier. You add a condition: "This offer is conditional upon defendant's insurance carrier consenting to defendant's acceptance of this offer." Defendant rejects. You go to trial. You beat the 998 by a lot. Now you move for prejudgment interest under California sCivil Code § 3291.

And the trial court says: nope. Your 998 was invalid because it was conditioned on a third party — the insurance carrier — accepting it. So, no prejudgment interest.

Quick fact pattern: husband and wife sue a defendant driver for negligence and loss of consortium after a car crash. Plaintiffs serve a 998 for $749,999.99, with the insurer-consent condition above. Defendant rejects. Trial happens. The jury finds Defendant 100% at fault and awards Mr. Matthews $6,536,330.66 and Mrs. Matthews $343,750. So the verdict is roughly $6.9 million against a 998 of $749,999.99.

A pretty good beat. …or to use baseball terms, that’s a walk-off grand slam.

Plaintiffs move for prejudgment interest. Trial court denies because of the insurer-consent condition. Off to the Court of Appeal.

So the issue: does conditioning a 998 on the defendant's insurance carrier accepting it invalidate the offer?

Here, Defense argued law about 998 offers being unconditional. And the Court cites this: “Decisions by appellate courts have contained language stating for a settlement offer to be valid under section 998, it ‘must be unconditional.’”

But the Court here will disagree: “As we discuss post, this is somewhat an overstatement. We review a ‘challenge to the conditional nature of [an] offer to compromise de novo.’”

So, boiled down, the Court of Appeal agrees with Plaintiff and disagrees with Defendant.

Why? Because that "condition" was already baked into reality whether the plaintiffs wrote it down or not.

Defense argued "a defending insurer cannot be bound to a settlement to which it has not agreed and in which it has not participated."

Ok…but: “[i]mplicit in any settlement offer to a party defended by an insurer, therefore, is a requirement of insurer consent, because without that consent there is no settlement. Plaintiffs’ “condition” was nothing more than an express, and redundant, recognition of that implicit requirement. Put another way, defendant’s insurer’s consent was required whether or not plaintiffs expressly said so in their offer.”

So what about the plaintiffs writing the insurer-consent condition into the 998? The Court calls it "nothing more than an express, and redundant, recognition of that implicit requirement."

Restated: defendant's insurer's consent was required whether or not plaintiffs expressly said so in their offer. So saying it on paper doesn't invalidate the 998.

The defense had a counterargument: an insured can technically accept a settlement without the insurer's consent. The Court's response is practical: "…people buy insurance so they do not have to personally pay a covered liability. The expectation is that the carrier will pay the settlement and plaintiffs make offers based on that expectation."

The defense also tried to analogize this to the line of cases holding that joint 998 offers conditioned on acceptance by multiple parties to the litigation are invalid. The Court rejects the analogy. The insurer isn't a party to the lawsuit, and conditioning on the insurer's consent doesn't create the same uncertainty problem because, again — that consent was already required.

The takeaway:

If you're drafting a 998 against an insured defendant and you write in a condition requiring the insurer to consent, that condition alone may not invalidate the offer.

One important note though: the Court of Appeal did not hold that plaintiffs win prejudgment interest. It only held the 998 wasn't invalid on the insurer-consent ground. The case got remanded because the trial court never reached another, second question — whether the 998 was reasonable and made in good faith. And that issue, the reasonableness analysis, is something to discuss for another day (well, probably next, since my brain is already into this case). So…this blog is to be continued to geek on some more law on CCP 998 offers, as these types of offers are a potentially powerful sword to use in plaintiff personal injury cases.