Poole v. Miller , 342 N.C. 349 ( 1995 )

Justice Parker

dissenting.

I respectfully dissent from the majority opinion. Rule 68(a) of the North Carolina Rules of Civil Procedure provides: “If the judgment finally obtained by the offeree is not more favorable than the offer, the offeree must pay the costs incurred after the making of the offer.” N.C.G.S. § 1A-1, Rule 68(a) (1990). In this case defendant, more than a year before trial, made an offer of judgment “in the amount of $6,000.00 together with cost accrued.”

While I agree with the majority that “judgment finally obtained” does not mean “the verdict” obtained, the majority’s construction of the Rule, in my view, undermines the intent of the legislature in adopting Rule 68(a). The objective of the Rule is to encourage settlements.

Rule 68(a) of the North Carolina Rules of Civil Procedure in relevant part is almost identical to Rule 68 of the Federal Rules of Civil Procedure. Although this Court is not bound in deciding the proper interpretation of the North Carolina rules by federal court decisions interpreting the federal rules, we may look to federal court decisions for guidance. See Turner v. Duke University, 325 N.C. 152, 164, 381 S.E.2d 706, 713 (1989). In the present case Marryshow v. Flynn, 986 F.2d 689 (4th Cir. 1993) is instructive. In Marryshow the defendants made an offer of judgment “for a total sum, to include all costs now accrued and attorney’s fees, of $20,000.” Id. at 691. Although Marryshow deals with a lump sum offer, this factual difference is immaterial to the methodology, adopted for comparing the judgment finally obtained with the offer of judgment to determine if the judgment finally obtained is more favorable. In Marryshow the court stated:

Rule 68 requires that a comparison be made between an offer of judgment that includes “costs then accrued” and the “judgment finally obtained.” ... To make a proper comparison between the offer of judgment and the judgment obtained when determining, for Rule 68 purposes, which is the more favorable, like “judgments” must be evaluated. Because the offer includes costs then accrued, to determine whether the judgment obtained is “more favorable,” as the rule requires, the judgment must be defined on the same basis — verdict plus costs incurred as of the time of the offer of judgment. The post-offer costs — the very costs at issue by virtue of the rule’s application — should not, however, also be included in the comparison and thereby become the vehicle to defeat the rule’s purpose.

Id. at 692.

Applying this analysis where the offeror has, as defendant did in the present case, made an offer of a sum certain together with costs accrued, the trial court would add the costs accrued at the time of the offer of judgment to the amount of the verdict to determine whether the judgment finally obtained is more favorable than the offer of judgment.

Based on the figures conceded by plaintiff in her brief, this analysis shows the following comparison. The total offer of judgment was $6,000 plus accrued costs consisting of $61.00 filing and service fees, $340.40 attorney’s fees, and $420.03 pre-judgment interest or $6,821.43; after trial the jury verdict was $5,721.73 which added to the costs accrued at the time of the offer, $821.43, is $6,543.16. The final judgment which included both pre-offer and post-offer costs was $9,058.21. As this case illustrates, post-offer costs not infrequently are greater than the costs accrued at the time of the offer of judgment. Hence, using the $9,058.21 figure for comparison with the offer to determine if the judgment finally obtained was more favorable permits post-offer costs to defeat the Rule’s purpose.

The majority appears to read Rule 68(a) to require the judgment finally obtained to be “greater than” the offer of judgment to avoid post-offer costs shifting. The language of the Rule, however, requires the judgment finally obtained to be more favorable than the offer of judgment to avoid post-offer costs shifting. In this case, the judgment finally obtained after trial was not more favorable for plaintiff. The dollar amount of the judgment finally obtained was greater than the offer, but the difference was entirely attributable to post-offer costs.

For the foregoing reasons, I vote to affirm.

Justice Whichard joins in this dissenting opinion.