Dustin Ray George Dittmar v. George Andrew Karels ( 2016 )


Menu:
  •                             This opinion will be unpublished and
    may not be cited except as provided by
    Minn. Stat. § 480A.08, subd. 3 (2014).
    STATE OF MINNESOTA
    IN COURT OF APPEALS
    A15-2058
    Dustin Ray George Dittmar,
    Appellant,
    vs.
    George Andrew Karels, et al.,
    Respondents.
    Filed December 19, 2016
    Affirmed
    Peterson, Judge
    McLeod County District Court
    File No. 43-CV-14-516
    Christopher L. Goodman, Anderson Helgen Davis & Nissen PA, Minneapolis, Minnesota
    (for appellant)
    Dyan J. Ebert, Michael D. LaFountaine, Rachael R. Presler, Quinlivan & Hughes, P.A., St.
    Cloud, Minnesota (for respondents)
    Considered and decided by Bratvold, Presiding Judge; Peterson, Judge; and Hooten,
    Judge.
    UNPUBLISHED OPINION
    PETERSON, Judge
    In this appeal following a jury verdict in a personal-injury action, appellant/cross-
    respondent challenges the district court’s denial of his motions for attorney fees and expert-
    witness fees and his request to file a motion to amend the complaint. Respondents/cross-
    appellants challenge the district court’s denial of their request for costs and disbursements.
    Because the district court did not abuse its discretion in denying the motions and request
    or in awarding costs and disbursements, we affirm.
    FACTS
    While driving on a county road in Winsted, 19-year-old respondent/cross-appellant
    George Andrew Karels (Karels) rear-ended a Ford F-150 pickup truck driven by
    appellant/cross-respondent Dustin Ray George Dittmar (Dittmar). Karels was driving a
    17,000-pound Peterbilt dump truck with a 1.86-ton load for his family’s scrap-metal
    business, respondent/cross-appellant Karels Brothers and Sons (KBS). Dittmar was
    stopped in his lane waiting to make a left-hand turn, and he sustained or exacerbated neck,
    back, and shoulder injuries.
    Dittmar brought a personal-injury action against Karels and his parents individually,
    and Karels’ parents doing business as KBS (collectively, respondents). In addition to
    claims for negligence and vicarious liability, the complaint alleged that Dittmar was
    entitled to attorney fees, costs, and disbursements under 
    Minn. Stat. § 221.271
     (2014)
    because KBS violated federal motor-carrier safety regulations while transporting property
    in interstate commerce and, under 
    Minn. Stat. § 221.605
     (2014), interstate motor carriers
    must comply with federal motor-carrier safety regulations.
    Before initiating the action, Dittmar sought the services of David Stopper, an expert
    in forensic and collision investigations, traffic safety, and commercial motor-vehicle
    operations and safety regulations. According to Dittmar, he retained Stopper:
    2
    (1) to conduct an inspection of the Peterbilt truck . . ., (2) to
    visit and examine the accident scene, (3) . . . to testify about
    the collision including whether . . . the brakes were engaged on
    Respondents’ vehicle and the speed of the vehicle at impact,
    and (4) to advise [Dittmar’s] counsel and . . . testify about
    federal motor carrier safety regulations and Respondents’
    violations of them.
    Stopper inspected the vehicle and accident scene, but he did not prepare a report, was not
    disclosed as an expert before the expert-witness disclosure deadline, and did not testify at
    trial.
    Respondents made three offers to settle the case before trial. On July 15, 2014, they
    offered $100,000; on April 28, 2015, they offered $165,000; and on May 15, 2015, they
    offered $125,000. Dittmar rejected the offers. On May 13, 2015, respondents’ counsel
    notified the district court that respondents admitted fault in causing the accident.
    Respondents made a motion in limine to exclude evidence of liability, including all
    evidence, testimony, and argument relating to KBS’s history of registering its work
    vehicles or to Karels’s driver’s license, registration, and traffic-citation history.
    The district court agreed with respondents’ position and explained:
    I think the [respondents] have the right and opportunity to
    admit liability really at any stage of the proceedings. I realize
    that there is maybe strategy and tactics sometimes involved in
    these decisions; but if liability is admitted, then I see no
    purpose in taking evidence which would be exclusive only to
    the liability issue, so -- as I indicated in chambers, that would
    not necessarily exclude evidence that had probative value in
    regards to causation of injuries or extent of injuries; and
    whether one particular thing, one piece of evidence should or
    should not go in, I’ll leave up to your determination as far as
    what you wish to offer and what you wish to object to.
    3
    The case went to trial before a jury solely on issues concerning damages. The jury
    returned a verdict in favor of Dittmar and awarded him compensatory damages of
    $81,297.82. Dittmar moved for attorney fees, costs, and disbursements under 
    Minn. Stat. § 221.271
    . Dittmar argued that, as a private carrier operating a commercial vehicle, KBS
    was required under 
    Minn. Stat. § 221.0314
     (2014) to comply with operating requirements
    for private carriers set forth in 
    Minn. Stat. § 221.031
     (2014). Dittmar contended that he
    was entitled to a mandatory award of fees and costs under section 221.271 because Karels
    operated a commercial vehicle when he did not possess a commercial driver’s license and
    failed to exercise reasonable care, which violated duties imposed by sections 221.031 and
    221.0314.
    Following a hearing, the district court denied Dittmar’s motion for attorney fees.
    The district court concluded that an attorney-fee award was not supported by the existing
    factual findings and declined to make findings under Minn. R. Civ. P. 49.01(a) that would
    allow a fee award. With regard to other posttrial motions, the district court denied
    Dittmar’s request to amend the complaint, denied Dittmar’s request for $10,795.58 in
    expert-witness fees for Stopper, awarded Dittmar $2,007.13 for costs and disbursements as
    the prevailing party, and denied respondents’ request for $7,998.92 in costs and
    disbursements, which respondents sought on the basis that the jury’s $81,297.82 damages
    award was less than respondents’ first settlement offer of $100,000.
    Dittmar appealed, challenging the district court’s denials of his motions for attorney
    fees and expert-witness fees, and his request to amend the complaint. Respondents filed a
    4
    notice of related appeal and argue that the district court abused its discretion in denying
    their claim for costs and disbursements.
    DECISION
    I.
    “Attorney fees are available by statute and by court rule.” Peterson v. 2004 Ford
    Crown Victoria, 
    792 N.W.2d 454
    , 461 (Minn. App. 2010). “We generally review a district
    court’s award of costs and disbursements for an abuse of discretion. Whether the district
    court erred in its interpretation of the statute authorizing the award of costs and
    disbursements . . . , however, is a legal question that we review de novo.” Dukowitz v.
    Hannon Sec. Servs., 
    841 N.W.2d 147
    , 155 (Minn. 2014) (citation omitted). Whether the
    district court erred in concluding that the existing factual findings did not support an award
    of attorney fees, costs, and disbursements under 
    Minn. Stat. § 221.271
     is a legal question,
    which we review de novo. See In re Silicon Implant Ins. Coverage Litig., 
    667 N.W.2d 405
    ,
    422 (Minn. 2003) (stating that an award of attorney fees predicated on a specific finding is
    a question of law subject to de novo review).
    Minnesota Statutes chapter 221 regulates motor carriers. The commissioner of
    transportation or any interested person may institute an action or proceeding to enforce any
    provision of chapter 221. 
    Minn. Stat. § 221.261
     (2014). Any person who does an act that
    is unlawful under chapter 221 or who fails to perform any duty prescribed under chapter
    221 “shall be liable in damages to any person injured thereby, and such person, if the person
    recovers, shall be allowed, in addition to damages, reasonable attorneys’ fees, together with
    costs and disbursements.” 
    Minn. Stat. § 221.271
     (2014).
    5
    In his complaint, Dittmar sought attorney fees under 
    Minn. Stat. § 221.271
    , alleging
    that “KBS was an interstate motor carrier, as that term is defined in Minnesota Statute
    § 221.012, subd. 20” and, “[u]nder Minnesota Statute § 221.605, interstate motor carriers
    must comply with federal motor carrier safety regulations.” The complaint alleged that
    KBS violated specific federal motor-carrier safety regulations by allowing Karels to
    operate a commercial vehicle without a commercial driver’s license and by operating a
    passenger-carrying vehicle without a valid medical certificate, without proper load
    securement, and with an inoperable required lamp.
    After trial, Dittmar moved for attorney fees under section 221.271, arguing that, as
    a private carrier operating a commercial vehicle, KBS was required to comply with federal
    regulations incorporated in 
    Minn. Stat. § 221.0314
     to the extent required by 
    Minn. Stat. § 221.031
    . Specifically, 
    Minn. Stat. § 221.031
    , subd. 2(b)(1), requires that “private carriers
    engaged in intrastate commerce” comply with federal driver qualifications incorporated in
    
    Minn. Stat. § 221.0314
    , subdivisions 2 to 5, including 
    49 C.F.R. § 391.11
    (a) (2014), which
    requires that the operator of a commercial motor vehicle have a valid commercial motor-
    vehicle operator’s license. Dittmar argued that KBS violated this regulation when it
    allowed Karels to operate the Peterbilt truck without a commercial driver’s license.
    Dittmar also argued that Karels violated 
    Minn. Stat. § 221.0314
     by failing to exercise
    reasonable care when operating a motor vehicle, in violation of 
    49 C.F.R. § 392.2
     (2014)
    and 
    Minn. Stat. § 169.14
    , subd. 1 (2014).
    In denying Dittmar’s motion, the district court first noted that, in his complaint,
    Dittmar alleged that he was entitled to a fee award because respondents violated Minn.
    6
    Stat. § 221.605, which required interstate carriers to comply with federal regulations, but,
    in his posttrial motion, he alleged that he was entitled to a fee award because respondents
    violated 
    Minn. Stat. §§ 221.031
     and 221.0314, which required intrastate carriers to comply
    with federal regulations. The court explained that, because the violations of section
    221.605 that were alleged in the complaint were not brought to the court’s attention either
    before or during trial, the jury was never asked to determine whether section 221.605 was
    violated. The court then concluded that the existing factual findings, whether made by the
    jury or provided by respondents’ admission that they caused the accident, were not
    sufficient for the court to determine that 
    Minn. Stat. §§ 221.031
     and 221.0314 were
    violated.
    Existing findings
    Dittmar argues that, because respondents’ admissions established violations of
    duties imposed by 
    Minn. Stat. §§ 221.031
     and 221.0314, the district court erred in
    concluding that the existing factual findings were not sufficient to award fees under 
    Minn. Stat. § 221.271
    .
    Commercial driver’s license
    Under 
    Minn. Stat. § 221.0314
    , subd. 2, anyone who drives a commercial vehicle
    must comply with 
    49 C.F.R. § 391.11
    (a), (b)(5) (2014), which requires that the driver have
    a valid commercial driver’s license. Dittmar contends that respondents’ admission that
    Karels was driving a commercial vehicle without a commercial driver’s license is sufficient
    to establish a violation of a duty imposed under 
    Minn. Stat. § 221.0314
    , subd. 2. But 
    Minn. Stat. § 221.271
     provides that a person who violates a duty prescribed under chapter 221
    7
    “shall be liable in damages to any person injured thereby.” (Emphasis added.) To obtain
    an attorney-fee award under section 221.271, Dittmar needed to establish both a violation
    of a duty and that he was injured by the violation. The district court did not determine that
    respondents’ admission was insufficient to establish a violation, it determined that, even if
    there was a violation, Dittmar was not entitled to recover attorney fees because “[t]here
    were no admissions, nor any findings of the jury, that the lack of a commercial driver’s
    license caused [Dittmar’s] injuries.”
    Admission that respondents caused accident
    
    Minn. Stat. § 221.0314
    , subd. 6, incorporates by reference 
    49 C.F.R. § 392.2
    , which
    provides that “[e]very commercial motor vehicle must be operated in accordance with the
    laws, ordinances, and regulations of the jurisdiction in which it is being operated.” 
    Minn. Stat. § 169.14
    , subd. 1 (2014), provides:
    No person shall drive a vehicle on a highway at a speed
    greater than is reasonable and prudent under the conditions.
    Every driver is responsible for becoming and remaining aware
    of the actual and potential hazards then existing on the highway
    and must use due care in operating a vehicle. In every event
    speed shall be so restricted as may be necessary to avoid
    colliding with any person, vehicle or other conveyance on or
    entering the highway in compliance with legal requirements
    and the duty of all persons to use due care.
    Dittmar argues that, because a failure to use due care is negligence, and a failure to
    use due care violates section 169.14, subdivision 1, respondents’ admission that they were
    negligent established a violation of section 169.14, which, in turn, established violations of
    
    49 C.F.R. § 392.2
     and 
    Minn. Stat. § 221.0314
    , subd. 6. But section 169.14, subdivision 1,
    imposes a duty on a driver to use due care in operating a vehicle, and respondents’
    8
    admission that they caused the accident did not identify a negligent act or establish that
    Karels failed to use due care. We agree with the district court that a general admission of
    negligence does not always mean that section 169.14, subdivision 1, was violated. The
    accident could have been caused by negligence other than Karels driving too fast or failing
    to exercise due care while driving.1
    We also agree with the district court’s additional determination that respondents’
    admission of negligence could not have been a direct admission that they violated 
    Minn. Stat. §§ 221.031
     and 221.0314 because neither of those statutes became relevant to the case
    until after the trial.   Furthermore, as the district court also determined, 
    Minn. Stat. §§ 221.031
     and 221.0314 apply to “private carriers engaged in intrastate commerce.”
    
    Minn. Stat. § 221.031
    , subd. 2(b)(1). Therefore, without a finding that respondents were
    engaged in intrastate commerce, the court could not find that 
    Minn. Stat. §§ 221.031
     and
    221.0314 were violated. Respondents’ admission of negligence was not an admission that
    they were engaged in intrastate commerce.
    Dittmar argues that a finding that respondents were engaged in intrastate commerce
    was not needed because this fact was not disputed.          Dittmar contends that it was
    “undisputed that Respondents registered with the [Federal Motor Carrier Safety
    1
    Dittmar argues that the jury could not have been asked to determine whether violations
    of federal regulations caused the accident because the district court’s ruling on
    respondents’ motion in limine excluded all evidence of liability. But the district court
    explicitly stated that its ruling “would not necessarily exclude evidence that had probative
    value in regards to causation of injuries or extent of injuries.” Dittmar did not offer
    evidence of violations to prove that the violations caused his injuries.
    9
    Administration] as an ‘Intrastate Non-Hazmat Carrier’ 10 years before the accident.” But
    Dittmar does not explain how a registration that occurred ten years before the accident
    established that respondents were engaged in intrastate commerce at the time of the
    accident.
    The district court did not err in concluding that the jury’s findings and respondents’
    admission were not sufficient to establish that respondents violated 
    Minn. Stat. §§ 221.031
    and 221.0314 and that the violation caused Dittmar’s injuries.
    II.
    After ruling that the existing factual findings were insufficient to establish that
    respondents violated 
    Minn. Stat. §§ 221.031
     and 221.0314, the district court considered
    whether it had authority under Minn. R. Civ. P. 49.01(a) to find that a violation occurred.
    That rule states, in part:
    The court shall give to the jury such explanations and
    instructions concerning the matter thus submitted as may be
    necessary to enable the jury to make its findings upon each
    issue. If in so doing the court omits any issue of fact raised by
    the pleadings or by the evidence, each party waives the right to
    a trial by jury of the issue so omitted unless before the jury
    retires the party demands its submission to the jury. As to an
    issue omitted without such demand, the court may make a
    finding; or, if it fails to do so, it shall be deemed to have made
    a finding in accord with the judgment on the special verdict.
    (Emphasis added.)
    The district court determined that Dittmar’s complaint alleged violations under
    
    Minn. Stat. § 221.605
     and did not allege that Dittmar was entitled to recover attorney fees
    for violations of 
    Minn. Stat. § 169.14
    , 43 C.F.R. 392.2, or 
    Minn. Stat. §§ 221.031
     and
    10
    221.0314.    The court further determined that Dittmar’s complaint did not provide
    respondents with notice that Dittmar would seek attorney fees by the circuitous route set
    forth in his posttrial motion, and the court could not recall any evidence admitted during
    trial regarding whether respondents operated as an intrastate carrier. Based on these
    determinations, the court concluded that it did not have authority to make findings that
    respondents violated 
    Minn. Stat. §§ 221.031
     and 221.0314, and, even if it did have
    authority to make findings, it declined to do so because Dittmar failed to raise these fact
    issues during trial and failed to inquire of the court whether the issues should be submitted
    to the jury or left for the court to determine.
    Dittmar argues that his complaint properly raised a claim for attorney fees under
    section 221.271 that was predicated on respondents’ failure to exercise reasonable care and
    that “[t]he district court erred because it held [his] pleading to a far higher standard than
    what our Rules require.” We disagree.
    “We review de novo whether a complaint sets forth a legally sufficient claim for
    relief. We accept the facts alleged in the complaint as true and construe all reasonable
    inferences in favor of the nonmoving party.” Walsh v. U.S. Bank, N.A, 
    851 N.W.2d 598
    ,
    606 (Minn. 2014) (citation omitted). “Minnesota is a notice-pleading state and does not
    require absolute specificity in pleading, but rather requires only information sufficient to
    fairly notify the opposing party of the claim against it.” 
    Id. at 604-05
     (quotation omitted).
    Dittmar argues that respondents had notice that he was asserting a claim for attorney
    fees under 
    Minn. Stat. § 221.271
     and that they were liable for attorney fees for any violation
    of chapter 221. He further argues that respondents had notice that they were subject to
    11
    federal motor-carrier safety regulations and that federal regulations required them to
    comply with Minnesota Statutes chapter 169. We agree that Dittmar’s complaint provided
    sufficient information to fairly notify respondents that Dittmar was asserting a claim for
    attorney fees under 
    Minn. Stat. § 221.271
    , but we do not agree that respondents had fair
    notice that the factual basis for the claim was that respondents violated 
    Minn. Stat. § 169.14
    , subd. 1.
    In the complaint, Dittmar alleged that KBS was an interstate motor carrier and that,
    under 
    Minn. Stat. § 221.605
    , interstate motor carriers must comply with federal
    regulations. Dittmar did not allege that KBS was an intrastate motor carrier or that
    intrastate motor carriers must comply with federal regulations. Also in the complaint,
    Dittmar alleged that KBS violated several specific federal regulations, but none of the cited
    regulations required KBS to comply with Minnesota Statutes chapter 169.
    To become aware that the complaint was asserting the claim for attorney fees that
    Dittmar asserted in his posttrial motion, respondents would have needed to infer that an
    interstate motor carrier’s obligation to comply with federal regulations under 
    Minn. Stat. § 221.605
     also applied to an intrastate motor carrier under 
    Minn. Stat. §§ 221.031
     and
    221.0314. Then respondents would have needed to infer that a federal regulation that was
    not cited in the complaint as a basis for attorney fees required an intrastate motor carrier to
    comply with the provisions of Minnesota Statutes chapter 169 and that 
    Minn. Stat. § 169.14
    , subd. 1, required Karels to exercise due care when driving for KBS. Finally,
    respondents would have needed to infer that Dittmar’s damages were caused by Karels’s
    failure to exercise due care. Although the circuitous claim for attorney fees asserted in
    12
    Dittmar’s posttrial motion may have been available under 
    Minn. Stat. § 221.271
    , the
    complaint did not provide respondents fair notice of the claim.
    III.
    Dittmar requested an opportunity to bring a motion to amend the complaint if the
    district court deemed the complaint to be deficient. The district court denied the request as
    untimely, prejudicial, and futile.
    Within 20 days after a responsive pleading is served, a party may amend a
    complaint, but after that time “a party may amend a pleading only by leave of court or by
    written consent of the adverse party; and leave shall be freely given when justice so
    requires.” Minn. R. Civ. P. 15.01. “[A]mendments should be freely granted, except where
    to do so would result in prejudice to the other party.” Fabio v. Bellomo, 
    504 N.W.2d 758
    ,
    761 (Minn. 1993). “Whether a party is prejudiced is a question of fact.” Fedie v. Mid-
    Century Ins. Co., 
    631 N.W.2d 815
    , 820 (Minn. 2001), review denied (Minn. Oct. 16, 2001).
    “The trial court has wide discretion to grant or deny an amendment, and its action will not
    be reversed absent a clear abuse of discretion.” Fabio, 504 N.W.2d at 761.
    The district court did not clearly abuse its discretion when it summarily denied
    Dittmar’s request to file a motion to amend the complaint. Dittmar waited until after trial
    to assert a claim for attorney fees that depended in part on fact issues that were not
    presented to the jury and established at trial. Respondents were not put on notice of the
    circuitous statutory bases for awarding fees, and thus, did not prepare to address this issue
    13
    at trial. Under these circumstances, respondents would be prejudiced if the attorney-fee
    issue was raised by a posttrial amendment to the complaint.2
    IV.
    Dittmar argues that the district court abused its discretion by denying his request for
    $10,795.58 in expert-witness fees for David Stopper’s services. The district court may
    award expert-witness fees that are “just and reasonable” for “any witness [who] is
    summoned or sworn and examined as an expert in any profession or calling.” 
    Minn. Stat. § 357.25
     (2014); see Minn. R. Gen. P. 127 (permitting “reasonable” expert-witness fees,
    with the limitation that “[n]o allowance shall be made for preparation or in conducting of
    experiments outside the courtroom by an expert”); see also Johnson v. S. Minn. Machinery
    Sales, Inc., 460 M.W.2d 68, 73 (Minn. App. 1990) (affirming an award of greater than
    $10,000 in expert-witness fees in a complex case, ruling that the fees awarded were within
    the district court’s discretion), review denied (Minn. Sept. 21, 1989). In Minnesota,
    appellate courts have permitted payments of fees to expert witnesses for trial preparation.
    See Lake Superior Ctr. Auth. v. Hammel, Green & Abrahamson, Inc., 
    715 N.W.2d 458
    ,
    483 (Minn. App. 2006), review denied (Minn. Aug. 23, 2006); Olson v. Alexandria Ind.
    Sch. Dist. No. 206, 
    680 N.W.2d 583
    , 589 (Minn. App. 2004). This court reviews for abuse
    of discretion a district court’s decision to award expert-witness fees. 
    Id.
     “[A] discretionary
    2
    Although Dittmar argues that the district court erred by failing to articulate the prejudice
    to respondents on which the denial of the request to file a motion to amend was based, the
    district court’s order denying the request states that the request was untimely and that
    respondents had no notice of the claim—both of which demonstrate prejudice.
    14
    award of expert witness fees will be disturbed only in cases where abuse of discretion is
    apparent.” Carpenter v. Mattison, 
    300 Minn. 273
    , 281, 
    219 N.W.2d 625
    , 631 (1974).
    In Buscher v. Montag Dev., Inc., 
    770 N.W.2d 199
     (Minn. App. 2009), this court
    affirmed an award of more than $10,000 in expert-witness fees when the district court
    granted summary judgment to a defendant in a tort (mold-infiltration) action that was
    barred by the statute of limitations. 
    770 N.W.2d at 210
    . There, the expert witness “made
    site visits, reviewed documentation, obtained repair estimates, and made a report,” and,
    even though the case was resolved on summary judgment, this court affirmed the district
    court’s fee award, citing the district court’s reasoning that the party who hired the expert
    was “required to do investigative trial preparation in order to make dispositive motions and
    it would be ‘misplaced’ to deny [expert fees] because the matter was resolved by summary
    judgment.” 
    Id. at 209-10
    .
    This case is distinguishable from Buscher because Stopper was never disclosed as
    an expert, was not “summoned or sworn and examined,” was revealed only in a posttrial
    motion, and only a small portion of his services related to his knowledge of federal motor-
    carrier safety regulations. In addition, the district court apparently believed that Dittmar’s
    case preparation was excessive, because, in denying fees for Stopper, the district court
    noted that the applicable insurance-policy limit was “only” $100,000 and suggested that
    some of Stopper’s services, such as “electronic and laser-guided” accident reconstruction,
    were unnecessary in a two-car accident. The district court also rejected the claim that
    Dittmar failed to disclose Stopper as a witness due to respondents’ concession of liability,
    noting that the liability admission occurred on May 11, 2015, but Dittmar’s expert
    15
    witnesses were disclosed more than a month earlier, on April 3, 2015, and did not include
    Stopper. The district court’s decision to deny Stopper’s fees was not an abuse of discretion.
    V.
    In their related appeal, respondents argue that the district court abused its discretion
    by denying their request for $7,998.92 in costs and disbursements.              Generally, the
    prevailing party is entitled to costs and reasonable disbursements.            Quade & Sons
    Refrigeration, Inc. v. Minnesota Mining & Mfg. Co., 
    510 N.W.2d 256
    , 260 (Minn. App.
    1994), review denied (Minn. Mar. 15, 1994); see 
    Minn. Stat. § 549.04
     (2014) (stating that
    “[i]n every action in a district court, the prevailing party . . . shall be allowed reasonable
    disbursements paid or incurred”). As the prevailing party, Dittmar was entitled to costs
    and reasonable disbursements.
    But Minn. R. Civ. P. 68.03 may alter the recovery of costs and disbursements when
    there has been a pretrial settlement offer. Minn. R. Civ. P. 68.03(b) provides:
    An unaccepted offer affects the parties’ obligations and
    entitlements regarding costs and disbursements as follows:
    (1)    If the offeror is a defendant, and the defendant-
    offeror prevails or the relief awarded to the plaintiff-offeree is
    less favorable than the offer, the plaintiff-offeree must pay the
    defendant-offeror’s costs and disbursements incurred in the
    defense of the action after service of the offer, and the plaintiff-
    offeree shall not recover its costs and disbursements incurred
    after service of the offer, provided that applicable attorney fees
    available to the plaintiff-offeree shall not be affected by this
    provision.
    ...
    (3)   If the court determines that the obligations
    imposed under this rule as a result of a party’s failure to accept
    16
    an offer would impose undue hardship or otherwise be
    inequitable, the court may reduce the amount of the obligations
    to eliminate the undue hardship or inequity.
    Respondents made a pretrial settlement offer of $100,000, and the verdict returned
    by the jury was $81,297.82.       The district court refused to apply rule 68 to award
    respondents costs and disbursements, reasoning that “[b]ecause awarding costs and
    disbursements to [respondents] would place undue hardship on [Dittmar] or otherwise be
    inequitable, [respondents] are not entitled to reasonable costs and disbursements.” In the
    memorandum attached to its order, the district court explained:
    [Dittmar] states he currently lives with his father and lacks his
    own primary residence; he recently obtained temporary full
    physical custody of his two children; the mother of his children
    currently has limited involvement in their caregiving and is
    unlikely to provide financial support in the foreseeable future;
    and a substantial portion of his award will be used to reimburse
    his subrogated insurers and pay his counsel’s contingent fees
    and costs. The Court finds [Dittmar’s] argument persuasive
    and concludes that requiring [Dittmar] to pay [respondents’]
    costs would impose undue hardship or otherwise be
    inequitable. Accordingly, [respondents’] request for costs and
    disbursements is denied.
    The district court properly applied the rule and its decision was within its discretion.
    Affirmed.
    17