This case discusses the relationship between Rule 68 (offer of judgment) and Rule 77f (appeal from arbitration – the 23% rule) in a case where the numbers were just right to tangle them.

Plaintiff sued for personal injury (car accident). Defendant made an offer of judgment. At arbitration Plaintiff beat it. Defendant appealed. The jury award was below the OJ, so the court awarded Defendant some costs (Rule 68g), but was not more that 23% greater than the arbitration award, so the court ordered her to pay fees (Rule 77f).

Defendant argued that the court should have applied Rule 68 first, deducting those costs from the amount of the verdict before comparing it to the arbitration award. Had it done so, she would have done more than 23% better and wouldn’t have had to pay fees.

The court looks to the language of Rule 68:”the determination . . . shall be made by reference to the judgment ultimately entered, whether on the award . . . or after an appeal of the award pursuant to Rule 77. This language, says the court, “provides that the court shall determine whether to impose a sanction under Rule 68(g) only after first complying with Rule 77.“ But the language doesn’t’ say anything about what the court does, it just says that there can be an appeal. So the court also cites Hales (App. 1996), a Rule 68 case that talks about making “apples to apples” comparisons by including costs in both the OJ and the judgment. The court apparently realizes that this doesn’t hit the nail on the head either, though, by roping in an Oregon appellate case for the proposition that “the amount of any sanction awarded . . . is not to be regarded as part of the judgment.”

The court chides Defendant for not citing any authority for her position. That’s a bit much. If there were decent authority on the point outside the rules themselves (Hales is tangential at best) then the court wouldn’t have had to reach to Oregon for some. If there were already authority, this opinion wouldn’t be publishable.

(link to opinion)