Hall v. Read Development (CA1 4/12/12)

This case holds incidentally that a subsequent house purchaser can’t rescind but its real interest concerns how to factor in attorneys fees in deciding who is the successful party under 12-341.01.

Hall was unhappy with her house and sued its builder, Read. The jury awarded her $30,000. This was less than Read had offered in settlement and so it argued that under 12-341.01A Hall was not the “successful party” for purposes of awarding fees. But the trial court awarded fees anyway, on the theory that the amount Hall’s fee request (about $300,000) exceeded Read’s offer. Read appealed.

The statute says that the offeror is the successful party if the “judgment finally obtained” is less than the offer. Since the “judgment finally obtained” can include fees the question becomes whether the amount of the fees to be included should be considered in deciding whether they should be included. The Court of Appeals says “yes,” and affirms. It says that “judgment finally obtained” is clear language. Then, in backhanded acknowledgment that context just might have something to do with it, the court says that, anyway, the statute doesn’t specifically prohibit choosing the successful party the same way – or in some sort of overlapping way – in a case where there’s been a settlement offer as in a case where there hasn’t. The court also says that it is “harmonizing” the statute with Rule 68, which makes specific provision for the fee question. “Harmonizing” a statute with a rule – even if the two said roughly the same thing – raises interesting constitutional questions that, if they occurred to the court, are deftly hidden.

We may be having an off day; we’ve read the twenty pages the court takes to reach this conclusion more than once and still can’t figure out how a law that the person who wins gets fees can logically mean, or was intended to mean, that the person who gets fees wins.

(link to opinion)