Settlement Offer as a Defendant
When facing a lawsuit as a defendant, you may want to consider settling the case. Settling means you and the plaintiff come to an agreement you can both live with, so going to court is no longer necessary.
In deciding if settlement is right for you, consider the possible outcomes if you go to court—you either win or you lose. How confident are you that you will win? Going to court may mean that you need to time off work and take the time to prepare your presentation to the judge. Settling allows you to avoid the work and time requirements that come with going to court.
Start by looking at the facts of your case with an open mind. Put facts in a “positive” and a “negative” column (for example: did you miss a payment? That’s a fact for the negative column. What about the Plaintiff moving and not sending you a forwarding address for a check? That’s a positive column fact). Look at both columns and decided if what's in your “negative” column makes settling the case seem like a good idea for you.
For example, if you know you owe the plaintiff some money—and you just disagree on how much exactly you owe —consider making an offer to settle the case with the other side. You can offer to pay all at once (called a lump sum) to avoid the hassle of going to court, or offer to pay in smaller monthly payments over time (this is called an installment payment).
Making Your Settlement Offer
When you’re ready to make a settlement offer, send it in writing. To do this, write a letter to the Plaintiff explaining what specific terms you’ll agree to such as:
Pay a certain amount in a lump sum.
Offer to pay a set amount monthly for a specific period of time.
Exchange an item of value for the money owed.
Next, include the following details in your letter so it is clear.
Details of the case: names of the parties involves and the case number assigned by the court.
Agreement details: schedule of how you are going to pay with the specific dollar amounts.
Example: Defendant agrees to pay $200 monthly, payable in two installments on the 1st and the 15th of each month. Payments will begin on January 1, 2023 and end on December 31, 2024.
Enforcement details: Consider adding in a plan for the plaintiff’s options if you miss a payment.
Example: Should the defendant fail to make a timely payment, the balance will become due and accrue 10% interest.
At the bottom of the offer, leave a space for the plaintiff to sign if they agree to the terms of your offer.
Lastly, make sure you date and sign the offer, then have it mailed or hand-delivered to the Plaintiff. You can find the Plaintiff's address in the court forms served to you.
After Sending Your Settlement Offer
After you have made your offer, you must wait for the Plaintiff’s response. If the Plaintiff never responds to the offer, it is considered withdrawn and you must show up in court.
The Plaintiffs usually cannot use your settlement offer against you in court—like telling the judge you would have taken less so they should not award as much in damages. Settlement offers are often considered inadmissible evidence.
If the Plaintiff Accepts Your Settlement Offer
If the offer is accepted, then the Plaintiff will need to file a dismissal with the court to dismiss the case. You have now entered a new agreement with the plaintiff with the payment terms as specified on the settlement offer.
In California, the case dismissal can only be filed by the plaintiff. This is done by completing and filing two forms, Request for Dismissal (CIV-110) and Notice of Entry of Dismissal and Proof of Service (CIV-120). The CIV-110 form will ask the Plaintiff if they want to dismiss the case with prejudice or without prejudice.
With Prejudice: dismissed with prejudice means it cannot be filed again. This is a good option when the plaintiff has received payment in full.
Without Prejudice: dismissed without prejudice means it can be refiled in court if there is a problem. For example, maybe a plaintiff enters into a payment plan with a defendant so they decide to dismiss the case. If the defendant defaults on his or her payment plan, the plaintiff can return to court.
Once the forms are completed, they are next filed at the courthouse and the original case will be dismissed.
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