Offer of Judgment
Rule 68 of the Idaho Rules of Civil Procedure provides a defendant in litigation a power tool to combat a plaintiff’s demands contained in a complaint. These “Offers of Judgment” can only be made by a defending party against a claim. An offer of judgment is defined generally as ‘a settlement offer by one party to allow a specified judgment to be taken against the party.’ Black’s Law Dictionary 1111 (8th ed.2004). The United States Supreme Court held “the plain language of Rule 68 confines its effect [to cases] in which the plaintiff has obtained a judgment for an amount less favorable than the defendant’s settlement offer.” Delta Air Lines, Inc. v. August, 450 U.S. 346, 351, 101 S.Ct. 1146, 1149. Thus, Rule 68 is a rule of procedure that places a special burden on prevailing plaintiffs to whom a settlement offer is made to show that they are entitled to costs. Zenner v. Holcomb, 147 Idaho 444, 450, 210 P.3d 552 (2009).
Rule 68 provides:
Making an Offer; Judgment on an Accepted Offer.
At least 14 days before the date set for trial, a party defending against a claim may serve on an opposing party, but not file in court, an offer to allow judgment on specified terms, which offer is deemed to include all costs and fees accrued. If, within 14 days after being served, the opposing party serves written notice accepting the offer, either party may then file the offer and notice of acceptance, plus proof of service. The clerk must then enter judgment in the amount of the offer without costs.
Paying Costs After an Unaccepted Offer.
Claims for Monetary Damages. In cases involving claims for monetary damages, any costs under Rule 54(d)(1) awarded against the offeree must be based upon a comparison of the offer and the “adjusted award.”
The adjusted award is defined as:
- the verdict in addition to,
- the offeree’s costs under Rule 54(d)(1) incurred before service of the offer of judgment and,
- any attorney fees under Rule 54(e)(1) incurred before service of the offer of judgment.
Adjusted Award Less than Offer. If the adjusted award obtained by the offeree is less than the offer, then:
- the offeree must pay those costs of the offeror as allowed under Rule 54(d)(1), incurred after the making of the offer;
- the offeror must pay those costs of the offeree, as allowed under Rule 54(d)(1), incurred before the making of the offer; and
- the offeror is not liable for costs and attorney fees of the offeree awardable under Rules 54(d)(1) and 54(e)(1) incurred after the making of the offer.
Adjusted Award More than Offer. If the adjusted award obtained by the offeree is more than the offer, the offeror must pay those costs, as allowed under Rule 54(d)(1), incurred by the offeree both before and after the making of the offer.
Rule 68 also provides for an offer on claims for non-monetary relief. See I.R.C.P. 68(d)(2). Making an offer of judgment is the defending party’s option, which may be employed to help bring that overzealous plaintiff back to reality. If you are a defending party to litigation, an offer of judgment may aid you in your defense and provide additional strategy and tactics to your case. The time an offer of judgment is made could be severely detrimental to a plaintiff’s ability to recover costs.