Gorobets v. Jaguar Land Rover North America, LLC

IN THE SUPREME COURT OF CALIFORNIA VADIM GOROBETS, Plaintiff and Appellant, v. JAGUAR LAND ROVER NORTH AMERICA, LLC, Defendant and Respondent. S287946 Second Appellate District, Division Two B327745 Los Angeles County Superior Court 19STCV11540 August 6, 2026 Justice Corrigan authored the opinion of the Court, in which Chief Justice Guerrero and Justices Liu, Kruger, Groban, Evans, and Feuer* concurred. * Associate Justice of the Court of Appeal, Second Appellate District, Division Seven, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.  GOROBETS v. JAGUAR LAND ROVER NORTH AMERICA, LLC S287946 Opinion of the Court by Corrigan, J. Generally, the right to recover costs at the conclusion of a civil action belongs to the “prevailing party,” as defined by statute. (Code Civ. Proc., § 1032, subd. (b).)1 To incentivize the early settlements of lawsuits, section 998 modifies this general rule and penalizes a party who rejects an opponent’s valid statutory offer to compromise (998 offer) by shifting the liability for costs when the rejecting party “fails to obtain a more favorable judgment or award” after further litigation. (§ 998, subds. (c)(1), (d), (e).) Under a well-established test developed by our lower courts, a 998 offer is valid for cost-shifting purposes only if its terms are sufficiently certain or specific to permit the offeree and the trial court to assess its value as of the time the offer was made. (Valentino v. Elliott Sav-On Gas, Inc. (1988) 201 Cal.App.3d 692, 698 (Valentino); Fassberg Construction Co. v. Housing Authority of City of Los Angeles (2007) 152 Cal.App.4th 720, 764 (Fassberg).) Section 998 permits a party to make a subsequent offer after a previous one has been rejected. (Martinez v. Brownco Construction Co. (2013) 56 Cal.4th 1014, 1017 (Martinez).) It does not directly address the possibility of presenting two sets 1 See Code of Civil Procedure section 1032, subdivision (a)(4) (defining “ ‘[p]revailing party’ ”). All undesignated statutory references are to the Code of Civil Procedure. 1  GOROBETS v. JAGUAR LAND ROVER NORTH AMERICA, LLC Opinion of the Court by Corrigan, J. of alternative terms in a single offer, as occurred here. The specific question in this case is whether a single 998 offer that presents two independent and alternative sets of terms and grants the offeree the right to accept by choosing between them is categorically nonconforming because an offer structured in that way lacks sufficient certainty. We hold that such a 998 offer can be valid so long as (1) the offer is structured so that it clearly presents the alternatives available to the offeree, and (2) at least one of the two independent sets of terms is sufficiently certain to permit an accurate valuation at the time the offer is made. Once validity is established, the court must determine whether section 998 cost shifting has been triggered by asking whether the party who rejected the 998 offer “fail[ed] to obtain a judgment or award more favorable” than the highest value, valid alternative proposed. (Id., subds. (c)(1), (d), (e).) We reject the Court of Appeal’s analysis and conclusion that alternative-choice offers are inherently uncertain, making them categorically prohibited by section 998. We affirm that portion of the judgment upholding the trial court’s award. I. BACKGROUND A. The Lease Agreement and Lawsuit In October 2015, plaintiff Vadim Gorobets signed a lease agreement with defendant Jaguar Land Rover North America, LLC, for a new 2016 Land Rover LR4 priced at $59,474. The lease provided for 42 monthly payments totaling $32,502.54, with an option to purchase for $37,300.14 at lease end. During the first six months, the vehicle displayed major “defects and nonconformities,” including “steering, suspension, engine, exterior, electrical, structural, transmission, HVAC, interior and brake[] defects.” Despite being given adequate opportunity, 2  GOROBETS v. JAGUAR LAND ROVER NORTH AMERICA, LLC Opinion of the Court by Corrigan, J. defendant’s repair facilities were unable to resolve the issues, and the problems persisted. After defendant failed to replace the vehicle promptly or make restitution in accordance with Song-Beverly Consumer Warranty Act (Civ. Code, § 1790 et seq.; the Act or Song-Beverly Act),2 plaintiff sued for express and implied breach of warranty, and breach of the duty to return the vehicle from service without defects within 30 days.3 Plaintiff sought restitution, incidental and consequential damages, civil penalties, and prejudgment interest, along with attorney fees and costs. B. Proceedings Before the Trial Court On October 15, 2020, defendant made a section 998 offer proposing two alternative sets of settlement terms.4 The first choice was a simple lump-sum payment. Defendant would agree to pay $85,000 for the vehicle’s return with a clear title. The second choice was less straightforward. Defendant agreed to “reimburse” plaintiff for expenses he incurred in several categories that largely track restitution remedies available under the Act. These amounts included “transportation” 2 The Song-Beverly Act imposes an “obligation” on a car manufacturer “to ‘promptly’ repurchase or replace a defective vehicle it is unable to repair.” (Kirzhner v. Mercedes-Benz USA, LLC (2020) 9 Cal.5th 966, 971.) The buyer of the defective vehicle may “elect restitution in lieu of replacement, and in no event shall the buyer be required by the manufacturer to accept a replacement vehicle.” (Civ. Code, § 1793.2, subd. (d)(2).) 3 The complaint also named as defendant Terry York Motor Cars, Ltd., doing business as Land Rover of Encino, (the company where he leased the vehicle and brought it in for repairs), but plaintiff later dismissed the dealership. 4 This was defendant’s second 998 offer. Neither party contends that the first was a valid statutory offer of compromise. 3  GOROBETS v. JAGUAR LAND ROVER NORTH AMERICA, LLC Opinion of the Court by Corrigan, J. charges, “manufacturer-installed options,” “loan interest, rental charges, and any collateral charges such as sales tax, license fees, registration fees, and other official fees.” Although the Act permits the manufacturer to apply a mileage use offset (see Civ. Code, § 1793.2, subd. (d)(2)(C)), defendant offered to waive it. Additionally, defendant agreed to pay any “incidental or consequential damages” to which plaintiff was entitled under Civil Code section 1793.2, as well as any amount owed on a loan or any other amount necessary for the return of the vehicle with a clear title. However, the terms of the second alternative required plaintiff to itemize and provide proof of all claimed reimbursement amounts. If there was a dispute as to plaintiff’s “legal entitlement and/or the amounts recoverable . . . after submission of the itemization and proof of same,” defendant would agree to pay any undisputed amounts. The parties would then “allow the Court to determine” what additional amount was called for by the offer, “either by motion, bench trial, jury trial, expedited jury trial under Rule 3.1545 of the Rules of Court, or by referee under Code of Civil Procedure § 638.” Plaintiff would choose the dispute resolution process and bear “the burden of proof by a preponderance of the evidence for legal entitlement and amount of damages sought.” Both alternatives provided defendant would also waive its own costs and pay either $7,500 for plaintiff’s attorney fees and costs or, at plaintiff’s election, have the reasonable amount for fees and costs be determined by the court pursuant to the Act, with plaintiff designated as the prevailing party. (See Civ. Code, § 1794, subd. (d).) Regardless of the alternative chosen, plaintiff would request dismissal of the entire action with prejudice within five business days after receiving the payments. The last page of the 998 offer included a table listing the terms of each 4  GOROBETS v. JAGUAR LAND ROVER NORTH AMERICA, LLC Opinion of the Court by Corrigan, J. alternative. To accept the offer, plaintiff was required to check a box next to the alternate set of terms selected and sign the form. In the end, plaintiff chose neither alternative and allowed the 998 offer to expire. A jury subsequently awarded plaintiff a net total of $76,155.27 in damages.5 Following entry of judgment, both sides filed to recover costs and to strike or tax those sought by the other party. As the prevailing party, plaintiff sought to recover $76,118.32 in general costs and $543,413.34 in attorney fees as provided by the Act.6 Defendant contended plaintiff was not entitled to postoffer costs because he rejected its valid 998 offer and then failed to achieve a more favorable outcome. 5 Specifically, the jury awarded $69,576.65 for plaintiff’s base payments, $1,947.82 in finance charges, $3,681.12 in taxes and fees, and $4,828 in incidental damages. It reduced the award by $3,878.32 for vehicle usage. The jury did not find defendant willfully violated the Act, so awarded no penalties. 6 Section 1032 provides: “Except as otherwise expressly provided by statute, a prevailing party is entitled as a matter of right to recover costs in any action or proceeding.” (§ 1032, subd. (b).) The “ ‘[p]revailing party’ ” is “the party with a net monetary recovery, a defendant in whose favor a dismissal is entered, a defendant where neither plaintiff nor defendant obtains any relief . . . , a defendant as against those plaintiffs who do not recover any relief against that defendant,” or, in other situations, the party the court determines to be the prevailing party in its discretion. (§ 1032, subd. (a)(4).) Section 1033.5 sets out the items that are “allowable as costs under Section 1032.” (§ 1033.5, subd. (a).) Among those items are attorney fees, when authorized by statute. (§ 1033.5, subd. (a)(10)(B).) The Act authorizes a court to award “attorney’s fees based on actual time expended” to a prevailing buyer in an action which, like this one, is brought under Civil Code section 1794, subdivision (a). (Civ. Code, § 1794, subd. (d).) 5  GOROBETS v. JAGUAR LAND ROVER NORTH AMERICA, LLC Opinion of the Court by Corrigan, J. Defendant sought to recover $14,612.17 of its postoffer costs and limit plaintiff to his pre-offer sums. Plaintiff challenged defendant’s 998 offer as invalid because its terms lacked sufficient specificity to permit accurate valuation. The trial court ruled defendant’s 998 offer was valid because “[a]t the time the offer was made, Plaintiff was provided with a sufficiently specific and unconditional offer of $85,000.00, which he chose not to accept.” In an amended judgment incorporating the general cost and attorney fee awards, the trial court imposed the cost-shifting penalty and limited plaintiff to his pre-offer costs of $5,238.22 and pre-offer attorney fees of $22,492. It awarded defendant its postoffer costs of $14,591.77.7 Plaintiff timely appealed. The Court of Appeal affirmed the trial court’s ultimate awards as explained below. C. Court of Appeal Opinion The Court of Appeal construed defendant’s proposal as constituting two “simultaneous offers.”8 (Gorobets, supra, 105 7 As the Court of Appeal observed, because of a typographical error, the court’s final order awarded plaintiff $45 more than the figure in its cost order. The parties do not challenge this windfall. (Gorobets v. Jaguar Land Rover North America, LLC (2024) 105 Cal.App.5th 913, 924, fn. 6 (Gorobets).) 8 A note as to terminology. As explained in greater detail below, referring to the 998 offer here as two “simultaneous offers” is both inaccurate and potentially confusing. (See post, pp. 12–14, 18–19.) It is better understood as a single offer proposing two distinct sets of alternative terms and permitting the offeree to choose between them. (H.S. Crocker Co. v. McFaddin (1957) 148 Cal.App.2d 639, 645 (H.S. Crocker); see also 1 Witkin, Summary of Cal. Law (11th ed. 2017) Contracts, § 137, p. 177; Rest.2d Contracts, § 30, com. c, p. 85; 1 Williston 6  GOROBETS v. JAGUAR LAND ROVER NORTH AMERICA, LLC Opinion of the Court by Corrigan, J. Cal.App.5th at p. 927.) The court acknowledged that “ ‘[n]othing in the wording of section 998 prevents a [party] from making more than one compromise offer’ to the same opposing party.” (Ibid.) It went on to observe, however, that: “[t]ypically, litigants make multiple offers seriatim — that is, one at a time; when they do, the most recent offer is usually the operative offer that controls for purposes of evaluating whether the subsequent judgment is more or less favorable.” (Ibid.) The majority held that section 998 does not allow a party to make what it characterized as “multiple offers to the same party at the same time.” (Ibid.) Despite its conclusion that the alternative-choice offer here actually constituted two separate offers, the court went on to determine that the second alternative presented in this case was not sufficiently amenable to valuation, thus rendering it “independently” invalid. (Gorobets, supra, 105 Cal.App.5th at p. 936; see id. at pp. 930–934.) It then concluded it was left to consider only the one valid lump sum alternative, which the parties did not dispute was independently capable of fair valuation, and which plaintiff did not exceed at trial. (Id. at pp. 934–935.) As a result, it affirmed the trial court’s order imposing the cost-shifting penalty on plaintiff who rejected on Contracts (4th ed. 2022) § 4:22, pp. 532–539.) Defendant occasionally refers to it as a “multi-option” offer, but this too is potentially confusing because, under contract law, an “option” can denote: “An offer that is included in a formal or informal contract; esp., a contractual obligation to keep an offer open for a specified period, so that the offeror cannot revoke the offer during that period.” (Black’s Law Dict. (12th ed. 2024) p. 1316, col. 2.) Therefore, except when quoting the courts below or the parties, we instead use the shorthand term “alternative-choice offer” or “alternative-choice 998 offer.” 7  GOROBETS v. JAGUAR LAND ROVER NORTH AMERICA, LLC Opinion of the Court by Corrigan, J. defendant’s 998 offer. (Id. at p. 936.) A partial dissent concurred in the holding that a 998 offer is “not ‘sufficiently certain if it consists of two offers made at the same time to the same party and leaves it to the offeree which offer to accept.’ ” (Id. at p. 937 (dis. opn. of Ashmann-Gerst, Acting P. J.).) The dissent would have ended the analysis there and reversed the trial court order awarding postoffer costs to defendant. (Ibid.) It declined to join the majority’s other conclusions. (Ibid.) We affirm the ultimate judgment but disapprove the majority’s analysis and holding that section 998 categorically prohibits making a single offer with two sets of alternatives. II. DISCUSSION The sole question presented here is whether a settlement offer that permits an offeree to choose between two distinct sets of settlement terms as a form of acceptance can qualify as a valid offer for cost-shifting purposes under section 998.9 We hold that such an offer, which meets the statutory provisions and is sufficiently clear to permit valuation, can be valid, so long as it satisfies the requirements set out here. A. The Statutory Language of Section 998 Does Not Prohibit Alternative-choice Offers The right to recover civil litigation costs is governed by statute. (Madrigal v. Hyundai Motor America (2025) 17 Cal.5th 592, 602 (Madrigal).) Generally, section 1032, subdivision (b) 9 Neither side sought review on the other question addressed by the Court of Appeal regarding the validity of the dispute-resolution alternative presented in defendant’s 998 offer. Thus, we assume without deciding that this second settlement alternative is independently invalid under section 998. 8  GOROBETS v. JAGUAR LAND ROVER NORTH AMERICA, LLC Opinion of the Court by Corrigan, J. entitles a “prevailing party” to recover its costs, and section 1033.5 identifies the allowable cost items, including attorney fees that are authorized by statute. (See p. 5, fn. 6, ante.) Section 998 significantly modifies this general rule. As relevant here, section 998 provides that a plaintiff who does not accept a defendant’s valid offer of compromise, then fails to obtain a more favorable judgment or award at the conclusion of the litigation “shall not recover their postoffer costs and shall pay the defendant’s costs from the time of the offer.” (§ 998, subd. (c)(1).) The statute also grants the court discretion to order the plaintiff to pay defendant’s postoffer expert witness fees. (Ibid.) The purpose of this “carrot and stick” approach is to promote early pretrial settlements, “avoid the time delays and economic waste associated with trials[,] and . . . reduce the number of meritless lawsuits.” (Martinez, supra, 56 Cal.4th at p. 1019.) Whether section 998 permits an offer of compromise that proposes a choice between two sets of alternative settlement terms is a question of statutory interpretation, which we review de novo. (Madrigal, supra, 17 Cal.5th at p. 602.) “When interpreting a statute, ‘ “[w]e first examine the statutory language, giving it a plain and commonsense meaning.” [Citation.] We do not consider statutory language in isolation; instead, we examine the entire statute to construe the words in context. [Citation.] If the language is unambiguous, “then the Legislature is presumed to have meant what it said, and the plain meaning of the language governs.” [Citation.] “If the statutory language permits more than one reasonable interpretation, courts may consider other aids, such as the statute’s purpose, legislative history, and public policy.” ’ ” (Ibid.) 9  GOROBETS v. JAGUAR LAND ROVER NORTH AMERICA, LLC Opinion of the Court by Corrigan, J. “Section 998 addresses some, but not all, of the aspects of the offer and acceptance process.” (T. M. Cobb Co. v. Superior Court (1984) 36 Cal.3d 273, 279 (T. M. Cobb Co.).) For instance, the statute provides that a qualifying offer must be in writing and served on the offeree at least 10 days before a trial or arbitration. (§ 998, subd. (b).) It must also include “a statement of the offer, containing the terms and conditions of the judgment or award, and a provision that allows the accepting party to indicate acceptance of the offer by signing a statement that the offer is accepted. Any acceptance of the offer, whether made on the document containing the offer or on a separate document of acceptance, shall be in writing and shall be signed by counsel for the accepting party or, if not represented by counsel, by the accepting party.” (Ibid.) Nothing in this statutory language prohibits a valid offer from proposing two alternative sets of terms, either of which an offeree may choose to accept. Plaintiff nonetheless argues that by phrasing its requirement as “a statement of the offer” (§ 998, subd. (b)) rather than using the plural term “offers,” the Legislature indicated an intent to prohibit alternative-choice offers. As plaintiff readily concedes, however, section 17, subdivision (a) makes clear that “[w]ords used in the code in . . . [t]he singular number includes the plural and the plural number includes the singular.” (See Gorobets, supra, 105 Cal.App.5th at p. 928.) Undeterred, plaintiff claims the statutory language contains other indications that the Legislature intended to bar alternative-choice offers. He points to section 998, subdivision (b)(1), which provides, “If the offer is accepted, the offer with proof of acceptance shall be filed and the clerk or the judge shall enter judgment accordingly.” Plaintiff claims these provisions 10  GOROBETS v. JAGUAR LAND ROVER NORTH AMERICA, LLC Opinion of the Court by Corrigan, J. demonstrate that a 998 offer must be “simple and straightforward enough such that it is a purely ministerial act for a court clerk to enter judgment on it,” but “the inclusion of complex, questionably valid options . . . cannot be simply entered as judgments because they . . . require further litigation to determine their value. [Citation.] In fact, . . . nothing precludes an especially opportunistic litigant from making five, eight, or even ten such options — all of which the offeree and the court will have to evaluate.” Plaintiff’s argument is unpersuasive because it confuses entirely different judicial tasks undertaken at different times and under different circumstances. To begin, we have never held that an offer must be “simple.” If an accepted offer along with proof of acceptance is filed with the court, the judge or clerk “shall enter judgment” “in accordance with the terms and conditions stated.” (§ 998, subd. (b)(1).) That entry of judgment is a straightforward ministerial act. Before entering judgment, the statute does not require, or authorize, the court to adjudicate possible disputes over the terms of the 998 offer. (See Bias v. Wright (2002) 103 Cal.App.4th 811, 819.) If a dispute later arises over the terms of an offer that has been accepted and judgment entered, the court may then be called upon to determine the validity of the settlement contract and interpret its terms. In making that determination, the court construes the parties’ own agreed-upon 11  GOROBETS v. JAGUAR LAND ROVER NORTH AMERICA, LLC Opinion of the Court by Corrigan, J. terms to determine the rights and obligations legally created by the parties’ contract of settlement.10 B. An Offer Requiring a Selection Between Distinct Sets of Terms for Acceptance Is Not Inherently Uncertain nor Does It Defeat the Purpose of Section 998 “When the language of section 998 does not provide a definitive answer for a particular application of its terms, courts may consult and apply general contract law principles. Because the process of settlement and compromise is a contractual one, such principles may, in appropriate circumstances, govern the offer and acceptance process under section 998.” (Martinez, supra, 56 Cal.4th at p. 1020.) General contract principles will be controlling so long as they “neither conflict with the statute nor defeat its purpose.” (T. M. Cobb Co., supra, 36 Cal.3d at p. 280.) When application of a general contract principle would defeat the purpose of the scheme, a rule specifically tailored to 10 For example, in Roden v. Bergen Brunswig Corp. (2003) 107 Cal.App.4th 620, the plaintiff accepted his former employer’s hastily drafted 998 offer and a judgment “encapsulating” its terms was entered. (Id. at p. 623.) Later, a dispute arose between the parties as to the meaning of its terms and plaintiff filed a motion to enforce the judgment. (Id. at p. 624.) Based on its “construction of the contract, and thus its interpretation of the judgment,” the trial court entered an order favorable to plaintiff. (Ibid.) Affirming this postjudgment order, the Court of Appeal confirmed that courts should “apply general contract principles to the interpretation of a section 998 judgment. [Citation.] ‘ “[A] stipulation or consent judgment, being regarded as a contract between the parties, must be construed as any other contract.” ’ ” (Ibid., quoting Lanyi v. Goldblum (1986) 177 Cal.App.3d 181, 184, fn. 3.) 12  GOROBETS v. JAGUAR LAND ROVER NORTH AMERICA, LLC Opinion of the Court by Corrigan, J. the section 998 context may be necessary. For example, T. M. Cobb Co. applied general contract principles to hold that 998 offers are revokable at any time before acceptance or expiration, because that interpretation increases the chances for settlement. (See also Palmer v. Schindler Elevator Corp. (2003) 108 Cal.App.4th 154 [applying the general rule in another section 998 context].) By contrast, Poster v. Southern Cal. Rapid Transit Dist. (1990) 52 Cal.3d 266, 272 declined to apply a general contract principle that would inhibit settlement negotiations. (See also One Star, Inc. v. STAAR Surgical Co. (2009) 179 Cal.App.4th 1082 [adopting a specific 998 rule to encourage offers and increase chances of settlement].) Although the application of general contract principles will not always suffice in the section 998 context, a well- established principle is serviceable here to achieve the Legislature’s aim. An “offer may contain a choice of terms from which the offeree is given the right to make a selection in his acceptance,” and the “acceptance of one alternate proposition constitutes a binding contract.” (H.S. Crocker, supra, 148 Cal.App.2d at p. 645; see also Rest.2d Contracts, § 30, com. c, p. 85; 1 Williston on Contracts, supra, § 4:22, pp. 532–539.) The 998 offer at issue neatly fits this description. Plaintiff had the choice between two self-contained, mutually exclusive sets of contractual terms: a lump sum payment or a more complex alternative that required proof of particularized damages claimed and a framework for resolution of any disagreements over the adequacy of proof. As presented, if plaintiff wished to accept either alternative, counsel was to check a box next to the set of terms accepted and sign the offer. The offer did not give plaintiff the right to mix and match terms to create a new set of his preferred alternatives. On these facts, his statutorily 13  GOROBETS v. JAGUAR LAND ROVER NORTH AMERICA, LLC Opinion of the Court by Corrigan, J. compliant acceptance of either set of the terms presented would have formed an enforceable contract between the parties and been filed with the court for entry of judgment as the statute provides. Echoing the Court of Appeal’s analysis, plaintiff contends that a specific rule is needed in these types of section 998 cases. He insists that a 998 offer containing alternative sets of terms presented for acceptance is inherently uncertain and precludes accurate valuation either by the offeree when considering it or by the trial court when later comparing the value of a rejected offer to the ultimate judgment or award. He repeats the claims that alternative-choice 998 offers will discourage settlement, invite gamesmanship, and impose burdens on the trial courts. His arguments are unpersuasive. 1. The Court of Appeal’s Uncertainty Analysis Section 998, subdivision (c) effectuates the policy of encouraging settlement by creating a strong financial incentive for parties to make reasonable settlement offers and a strong financial disincentive for them to reject such offers. (Bank of San Pedro v. Superior Court (1992) 3 Cal.4th 797, 804.) This incentive structure only works, however, if an offer’s worth can be reasonably calculated when it is being considered by the offeree, as well as in hindsight when the trial court compares the value of a rejected offer and the ultimate judgment or award. Our lower courts have developed a two-part test to determine if an offer’s terms are sufficiently certain for such purposes (see Fassberg, supra, 152 Cal.App.4th at p. 764; see also Valentino, 14  GOROBETS v. JAGUAR LAND ROVER NORTH AMERICA, LLC Opinion of the Court by Corrigan, J. supra, 201 Cal.App.3d at pp. 700–701), a test we adopt as our own.11 A 998 offer’s terms must be sufficiently certain in two ways to trigger cost shifting. First, the terms must enable the offeree to meaningfully “evaluate it and make a reasoned decision whether to accept it, or reject it and bear the risk he may have to shoulder his opponent’s litigation costs and expenses.” (Berg v. Darden (2004) 120 Cal.App.4th 721, 727 (Berg).) Without the ability to judge the concrete value of an offer, the offeree cannot make a practical decision whether to accept it. Second, the terms presented must allow a court to subsequently determine whether the secured judgment or 11 Lower courts have also held that a valid 998 offer must be unconditional. (Barella v. Exchange Bank (2000) 84 Cal.App.4th 793, 799.) Additionally, it has been held that a rejecting offeree may avoid cost-shifting penalties if it can show the offer was not made in good faith, because it had no reasonable prospect of acceptance. (Licudine v. Cedars-Sinai Medical Center (2019) 30 Cal.App.5th 918, 924.) Licudine explained that there are two aspects of the good faith inquiry. First, whether the offer “was . . . within the ‘range of reasonably possible results’ at trial, considering all of the information the offeror knew or reasonably should have known.” (Id. at pp. 924– 925.) Second, whether the offeror knew “that the offeree had sufficient information, based on what the offeree knew or reasonably should have known, to assess whether the ‘offer [was] a reasonable one,’ such that the offeree had a ‘fair opportunity to intelligently evaluate the offer.’ ” (Id. at p. 925.) These two considerations allow the court to assess whether the offer was reasonable and thus validly made. (Id. at pp. 924– 925.) Plaintiff has not alleged the offer at issue was conditional or made in bad faith, so we have no occasion to consider the soundness or test the application of these doctrines here. 15  GOROBETS v. JAGUAR LAND ROVER NORTH AMERICA, LLC Opinion of the Court by Corrigan, J. award is more favorable than the offer. The availability of the cost-shifting penalty depends on whether the offeree failed to exceed the terms it rejected. (Fassberg, supra, 152 Cal.App.4th at p. 764.) Thus, in deciding whether to impose the penalty, the court must be able to place a fair value on the rejected offer. If a settlement offer “contains terms that make it ‘exceedingly difficult or impossible to determine the value of the offer[,] . . . a court should not undertake extraordinary efforts to attempt to determine whether the judgment is more favorable to the plaintiff. Instead, the court should conclude that the offer is not sufficiently specific or certain to determine its value and deny cost shifting under . . . section 998.’ ” (Khosravan v. Chevron Corp. (2021) 66 Cal.App.5th 288, 295.) Further, under both prongs of the certainty inquiry, the valuation of the offer is measured as of the time it was made “and without the benefit of hindsight.” (Valentino, supra, 201 Cal.App.3d at p. 698.) On a motion to strike or tax costs, the burden is on the offeror to prove the offer’s terms were sufficiently certain or specific. (Khosravan, at p. 294.) There is nothing inherently uncertain about asking an offeree to evaluate alternative sets of settlement terms before deciding whether to accept either or neither of them. The Court of Appeal agreed that an alternative-choice offer may clear this first uncertainty hurdle. (Gorobets, supra, 105 Cal.App.5th at p. 928.) However, according to the Court of Appeal, the trial court’s postjudgment task of comparing the value of alternative- choice offers against a secured judgment is not so easy. For that reason, it interpreted section 998 to bar alternative-choice offers categorically, even though the statute is silent on the subject. To explain its conclusion, the court posed the following hypothetical. 16  GOROBETS v. JAGUAR LAND ROVER NORTH AMERICA, LLC Opinion of the Court by Corrigan, J. The court assumed a situation in which “an offeror makes two simultaneous offers to settle a case — one to pay a lump sum of $100,000 and another to pay a lump sum of $200,000.” (Gorobets, supra, 105 Cal.App.5th at p. 928.) If the “simultaneous offers” were rejected and “the jury returns a verdict for the offeree of $150,000,” the court asked rhetorically: “how is the court to assess whether the offeror did better or worse than the verdict?” (Id. at p. 929.) The court expounded: “The verdict is between the $100,000 and $200,000 offers, and is accordingly worse for the offeror than one offer but better than the other. Because the offers were made at the same time, a court cannot rely on the timing of the offers to dictate which is the operative one.” (Ibid.) Thus, the court concluded alternative-choice offers, while “not practically unprecedented,” are “legally ineffective [for cost-shifting purposes] under section 998.” (Id. at p. 930.) The hypothetical is problematic in several ways and appears to have skewed the Court of Appeal’s analysis. First, it is difficult to imagine that, all things being equal, an offeree would select a $100,000 offer over a $200,000 one. To be serviceable, the hypothetical would have to also assume that the offer contained additional terms in one or both of the alternatives to distinguish between them. We will not speculate or opine on whether and how such an additional, unarticulated level of complexity might render one or both of the proposed alternatives insufficiently specific. Here, we encounter a single offer by a defendant that proposed a settlement based on plaintiff’s choice between two distinct alternatives. Another difficulty with the court’s hypothetical is that it considers whether the achieved result was better or worse “for 17  GOROBETS v. JAGUAR LAND ROVER NORTH AMERICA, LLC Opinion of the Court by Corrigan, J. the offeror.” (Gorobets, supra, 105 Cal.App.5th at p. 929.) This approach rhetorically demands an answer to the wrong question. In order to allow cost shifting in a case like this one, the court must consider whether the judgment or award secured was less favorable than the offer that was rejected or allowed to lapse. (§ 998, subds. (c)(1), (d).) If the result ultimately secured by a rejecting offeree does not exceed the value of the offer, the court may impose cost shifting. The Court of Appeal’s analysis was also flawed to the extent it characterized Jaguar’s proposal as “two simultaneous offers.” (Gorobets, supra, 105 Cal.App.5th at p. 927, italics added.) Viewing it in this way led the Court of Appeal to conclude that simultaneous 998 offers are categorically too uncertain because, when “offers [are] made at the same time, a court cannot rely on the timing of the offers to dictate which is the operative one.” (Id. at p. 929.) We reject the characterization of Jaguar’s proposal as presenting “two simultaneous offers” because it implies Gorobets could have accepted both sets of terms if he wished, which was clearly not the case. The offer expressly required a choice between the alternatives as the only permissible form of acceptance. (See Civ. Code, § 1582 [“If a proposal prescribes any conditions concerning the communication of its acceptance, the proposer is not bound unless they are conformed to . . .”].) As explained above, we hold that, consistent with general contract principles, an offer that permits an offeree to accept by selecting between two discrete alternatives is best understood as a single offer for section 998 purposes. Viewing it as a single offer, however, should not inhibit a trial court from independently analyzing each alternative set of terms even though they are presented 18  GOROBETS v. JAGUAR LAND ROVER NORTH AMERICA, LLC Opinion of the Court by Corrigan, J. concurrently.12 In ruling on a contested section 998 motion involving an alternative-choice offer, the court’s first step is to determine whether the alternative-choice 998 offer is clearly presented and calls for the offeree to select between expressly delineated alternative choices. In other words, the offer must be structured to present an unambiguous choice between the alternative sets of terms. Under general contract principles, a proposal that sets out an extensive menu of terms among which an offeree may pick and choose, or that requires an offeree to supply a term not specified in the offer may provide the basis for an enforceable contract if the terms are made definite through an acceptance. (See, e.g., Keller v. Ybarru (1853) 3 Cal. 147; Hylton Flour Mills v. Bowen (1933) 128 Cal.App. 711, 714.) “In such cases the offer does not fail for indefiniteness, but no contract is made by an attempted acceptance which does not supply the term as indicated. [Citation.] The offer assents in advance to the term chosen or filled in by the offeree.” (Rest.2d Contracts, § 30(1), com. c, p. 85; see also, 1 Williston on Contracts, supra, § 4:22, pp. 532–539.) This general approach permits parties to continue to negotiate until they have arrived at an ultimate, and mutually acceptable, resolution. The section 998 context is 12 Indeed, the Court of Appeal adequately demonstrated the feasibility of this approach when, after holding “simultaneous offers” are categorically invalid under section 998 (Gorobets, supra, 105 Cal.App.5th at p. 928, fn. 9; see id. at pp. 927–928), the court individually analyzed the alternatives, concluding the lump sum alternative was sufficiently certain while the more complex dispute resolution alternative was not (id. at pp. 931, 934). 19  GOROBETS v. JAGUAR LAND ROVER NORTH AMERICA, LLC Opinion of the Court by Corrigan, J. somewhat different, however, because it involves a specific kind of offer. A valid 998 offer must be definite and specific before it may meet the statutory requirements for cost shifting. A 998 offer may very well fail for cost-shifting purposes due to its lack of specificity from the trial court’s perspective. A court that later considers whether a rejected offer was exceeded must be able to identify precisely what terms were rejected, not left to contemplate how an offer might have ultimately been construed, depending on an offeree’s theoretical choice among an array of available possibilities. In relying on a rejected or lapsed 998 offer to justify cost shifting, the court looks to whether a definitive and enforceable offer was made, by whom, when, and whether a rejecting party later failed to secure a more favorable outcome. It is the offeror’s burden to demonstrate the validity of the offer under section 998. An offer may be held sufficiently certain if it clearly delineates the specific terms attributable to each choice; the proposed choices are mutually exclusive, so that only one choice can be selected; and the offer clearly communicates how the offeree’s acceptance is to be conveyed. If structural validity of the offer as a whole is established, the court will then separately consider whether each alternative presented is sufficiently cer