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Whittenton v. Peter Pan Seafoods, Inc.

Supreme Court of Alaska

September 22, 2017


         Appeal from the Superior Court No. 3VA-14-00054 CI of the State of Alaska, Third Judicial District, Valdez, Daniel Schally, Judge pro tern.

          Thomas R. Wickwire, Fairbanks, for Appellants.

          William H. Ingaldson, Ingaldson Fitzgerald, P.C., Anchorage, for Appellee.

          Before: Stowers, Chief Justice, Winfree, Bolger, and Carney, Justices. [Maassen, Justice, not participating.]


          CARNEY, Justice.


         After a mother and daughter were involved in a car accident, they and the father sued the employer of the other vehicle's driver. The employer made separate offers of judgment to the mother and daughter under Alaska Civil Rule 68, which they rejected. At trial all three plaintiffs were awarded damages. But - with respect to the mother - the superior court awarded partial attorney's fees to the employer under Rule 68 because the mother's award was less than 95% of the offer made to her.

         The mother appeals, arguing that the offer of judgment was not a valid Rule 68 offer and that the superior court wrongly excluded certain costs that, when included, would have led to an award of more than 95% of the offer of judgment. We conclude that the offer of judgment was valid and that the court did not err in excluding costs not covered by Alaska Civil Rule 79 when comparing the offer to the mother's recovery.


         A. Facts And Pretrial Proceedings

         In September 2011, while Brandy and Charles Whittenton and their daughter Delila were on vacation in Valdez, a vehicle driven by a Peter Pan Seafoods employee backed into their vehicle. Only Brandy and Delila were in the vehicle at the time of the collision.

         The Whittentons filed suit against Peter Pan in August 2013. Brandy and Delila sought damages for pain and suffering from injuries incurred in the collision. Brandy also sought damages for medical expenses and damage to the vehicle, while Charles sought damages for loss of consortium.

         In June 2015 Peter Pan made Alaska Civil Rule 68[1] offers of judgment to Brandy and Delila.[2] Peter Pan separately offered to pay Brandy $23,500 and Delila $2,000, both "inclusive of costs, interest and attorney's fees." Neither offer was accepted. The following month the Whittentons amended their complaint to add a new claim for loss of parental consortium on Delila's behalf.

         B. Trial And Post-Trial Proceedings

         After a trial in October 2015 the jury awarded damages to all three plaintiffs. Brandy was awarded a total of $ 15,796.33. The jury awarded Charles $2,000 and Delila $4,524. The award to Delila exceeded the offer of judgment made to her.

         Peter Pan then moved to be considered the prevailing party for Rule 68 purposes with respect to Brandy's claims. It argued that Brandy's total recovery, including prejudgment interest, costs, and attorney's fees, was $21,434.70 - less than 95% of the $23,500 offer of judgment - and that it was therefore entitled to 50% of the fees and costs it had incurred after the offer was made. The Whittentons opposed, arguing that the offer was invalid and that they had incurred additional costs prior to the offer that Peter Pan had not included in its calculation. This included costs related to two depositions that did not occur as scheduled. In reply Peter Pan conceded that the Whittentons were entitled to some additional costs, but not enough to beat the offer of judgment.

         The superior court first denied Peter Pan's motion, citing Progressive Corp. v. Peter ex rel Peter.[3] It ruled that because the offer was addressed only to Brandy, it was "invalid as failing to further the goals of [Rule 68] and AS 09.30.065 because it would not have ended the entire litigation between the parties." Peter Pan moved for reconsideration, arguing that the judge had misinterpreted Progressive's holding. The superior court reconsidered its decision and declared Peter Pan the prevailing party under Rule 68.

         The Whittentons filed for reconsideration of the new order, arguing that the Rule 68 comparison could not be made until the clerk ruled on their costs bill and attorney's fees. The superior court denied the motion and awarded Peter Pan attorney's fees and costs. The Whittentons then moved to correct a "clerical mistake," arguing that Peter Pan's motion to be considered the prevailing party had omitted some costs. The Whittentons claimed that they had incurred $2,446.13 in costs before the offer of judgment - $2,290.02 more than Peter Pan had originally calculated - and that those costs all should be added to Brandy's award for comparison with the offer. Peter Pan again conceded that two of the additional cost items, totaling $207.50, should have been included, but argued that the others were not recoverable under Alaska Civil Rule 79. The court ultimately denied the Whittentons' motion except as to the additional $207.50 Peter Pan had conceded; Brandy's total damage award remained less than 95% of the offer of judgment. After subtracting attorney's fees and costs in favor of Peter Pan, Brandy's total recovery was $3,374.68.

         The Whittentons appeal.


         "The interpretation of Rule 68 'is a question of law that [we] review[] de novo, adopting the rule of law that is "most persuasive in light of precedent, policy, and reason." ' "[4] Whether an offer of judgment complies with Rule 68 is also a question of law which we review de novo,[5] because "[a]n offer of judgment and acceptance thereof is a contract."[6]


         Rule 68 is intended "to encourage reasonable settlements and avoid protracted litigation."[7] It allows a party, before trial, to make an offer of judgment to an opposing party "in complete satisfaction of the claim .. . with costs then accrued."[8] If the offer is not accepted and the judgment finally rendered "is at least 5 percent less favorable to the offeree than the offer," the offeree must pay all costs allowed under the Civil Rules and a percentage of "reasonable actual attorney's fees incurred by the offeror from the date the offer was made."[9]

         The Whittentons argue that Peter Pan's offer of judgment to Brandy did not satisfy the requirements of Rule 68 because it would not have ended the entire litigation. They also argue that even if the offer was valid, Brandy beat the offer because it should be construed to include all costs incurred, not just costs allowable under Rule 79.[10]

         A. Peter Pan's Offer Of Judgment Was Valid.

         In order to trigger Rule 68 penalties, an unaccepted offer of judgment must "include all claims between the parties and be capable of completely resolving the case by way of a final judgment if accepted."[11] An offer that addresses only some of a plaintiffs claims would not have that effect and therefore would not satisfy Rule 68.[12]The Whittentons argue that Peter Pan's offer to Brandy was invalid because it would have resolved only her claims and would not have ended the entire litigation.

         We have held that unapportioned offers are invalid,[13] as are apportioned offers that are conditioned on joint acceptance by all parties.[14] But we have also upheld an offer of judgment that made a separate offer to each plaintiff such that one plaintiff could have accepted an offer while the other went to trial.[15] The Whittentons acknowledge these cases, but they argue that we have applied Rule 68 to require that an offer of judgment must be capable of ending the entire litigation between all parties involved, not merely between the parties to the offer. Because a single offer to multiple parties is barred by our decisions rejecting unapportioned and conditional offers, they argue that Peter Pan was required to make offers to all three plaintiffs.

         The Whittentons base their argument on Windel v. Mat-Su Title Insurance Agency, which they say held that Rule 68 has a goal "of completely resolving the case."[16]They argue that if we intended to hold that an offer must entirely resolve the claims of only one party to be valid, we would have stated that an offer of judgment must be capable of resolving the claim[17] Because we did not, they argue, Windel requires offers of judgment to resolve the entire litigation among all parties. Peter Pan responds that this reading is prevented by other case law and ...

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