Metzler v. BCI Coca-Cola Bottling Co. of Los Angeles, Inc.

FILED BY CLERK
IN THE COURT OF APPEALS MAY 11 2012
STATE OF ARIZONA
DIVISION TWO COURT OF APPEALS
DIVISION TWO
MARISOL METZLER, )
) 2 CA-CV 2011-0133
Plaintiff/Appellant, ) DEPARTMENT A
)
v. ) OPINION
)
BCI COCA-COLA BOTTLING )
COMPANY OF LOS ANGELES, INC., )
a foreign corporation doing business in )
Arizona, )
)
Defendant/Appellee. )
)
APPEAL FROM THE SUPERIOR COURT OF PIMA COUNTY
Cause No. C20072433
Honorable Scott Rash, Judge
VACATED AND REMANDED
Hollingsworth Kelly
By Louis Hollingsworth, Michael F. Kelly, Tucson
and John F. Kelly Attorneys for Plaintiff/Appellant
Renaud Cook Drury Mesaros, PA
By Tamara N. Cook, John A. Klecan, Phoenix
and Kevin R. Myer Attorneys for Defendant/Appellee
B R A M M E R, Judge.
¶1 Appellant Marisol Metzler appeals from the trial court’s ruling granting
appellee BCI Coca-Cola Bottling Company of Los Angeles, Inc.’s (BCI) motion for
judgment on mandate. She contends the court erred by granting prejudgment interest
from the date of the offer of judgment only to the date of the initial judgment, which had
been vacated by the grant of BCI’s motion for a new trial, instead of to the date of the
judgment on mandate following this court’s reversal of the trial court’s grant of a new
trial. For the reasons that follow, we vacate the judgment and remand.
Procedural Background
¶2 On September 2, 2009, the trial court entered judgment for Metzler in the
amount of $1,855,398.86 after a jury found BCI liable for Metzler’s injuries sustained in
a fall at a grocery store. BCI had rejected Metzler’s May 10, 2007 offer of judgment for
$150,000 and the court sanctioned BCI under Rule 68, Ariz. R. Civ. P., awarding
prejudgment interest from the May 10 offer of judgment through the September 2 entry
of the judgment after verdict.
¶3 On December 8, 2009, the trial court granted BCI’s motion for a new trial
on liability but denied a new trial on damages. BCI appealed the denial of a new trial on
damages, and Metzler cross-appealed the grant of a new trial on liability. This court
issued a memorandum decision reversing the grant of a new trial on liability, affirming
the denial of a new trial on damages, and remanding the matter to the trial court for entry
of final judgment. Metzler v. BCI Coca-Cola Bottling Co., No. 2 CA-CV 2010-0023,
¶ 16 (memorandum decision filed Mar. 16, 2011).
¶4 In April 2011, BCI tendered, and Metzler accepted, payment of the
damages awarded, Rule 68 sanctions from the date of the offer of judgment to
September 2, 2009, post-judgment interest from September 3, 2009 through December 8,
2
2009, and costs on appeal. BCI filed a motion for judgment on mandate, arguing
prejudgment interest terminated on September 2. Metzler responded, arguing
prejudgment interest instead should accrue from the date of the offer of judgment until
the trial court entered the final judgment on mandate. On June 30, 2011, the court
entered judgment on mandate, ruling that Rule 68 prejudgment interest terminated on
September 2. Metzler’s motion for reconsideration was denied, and this appeal followed.
Discussion
¶5 Metzler contends the trial court erred by calculating prejudgment interest
pursuant to Rule 68, Ariz. R. Civ. P., from the date of the offer of judgment to the date
the initial judgment was entered rather than to the later date when the final judgment on
mandate was entered. We review the interpretation of court rules de novo. Warner v.
Sw. Desert Images, LLC, 218 Ariz. 121, ¶ 49, 180 P.3d 986, 1001 (App. 2008). “The
primary goal of construing a court rule ‘is to discern and give effect’ to the intent of the
rule,” beginning with the language of the rule. Id., quoting Bridgestone/Firestone N. Am.
Tire, L.L.C. v. A.P.S. Rent-A-Car & Leasing, Inc., 207 Ariz. 502, ¶ 15, 88 P.3d 572, 576
(App. 2004). The language of the rule itself is the “best and most reliable indicator” of
intent. Vega v. Sullivan, 199 Ariz. 504, ¶ 9, 19 P.3d 645, 648 (App. 2001).
¶6 Rule 68(g) states in relevant part:1
1
Rule 68 was amended after Metzler made her offer of judgment. Ariz. Sup. Ct.
Order No. R-06-0010 (Sept. 5, 2007). The current version of the rule applies to all
actions or proceedings pending when the rule takes effect unless infeasible or if to do so
“would work injustice.” Ariz. R. Civ. P. 81; see also Drozda v. McComas, 181 Ariz. 82,
86, 887 P.2d 612, 616 (App. 1994) (amended rule has retroactive application to pending
3
If the offeree rejects an offer and does not later obtain a more
favorable judgment . . . , the offeree must pay, as a sanction,
reasonable expert witness fees and double the taxable costs,
as defined in A.R.S. § 12-332, incurred by the offeror after
making the offer and prejudgment interest on unliquidated
claims to accrue from the date of the offer.
Both parties agree our decision depends on the interpretation of “judgment” in
Rule 68(g). Metzler asserts the judgment on mandate was “the only judgment,” and BCI
contends “judgment” should be interpreted as “the judgment immediately following trial,
not a judgment eventually obtained following an appeal.”2 “Judgment” “‘is commonly
understood to mean the act of a court which fixes clearly the rights and liabilities of the
respective parties to litigation and determines the controversy at hand.’” Berry v. 352 E.
Va., L.L.C., 228 Ariz. 9, ¶ 28, 261 P.3d 784, 789 (App. 2011), quoting Wolf Corp. v.
Louis, 11 Ariz. App. 352, 355, 464 P.2d 672, 675 (1970).
¶7 Although Rule 68 clearly establishes a starting point for the accrual of
sanctions—the date the offer of judgment is made—it does not provide an explicit
endpoint. However, it refers to “a more favorable judgment” as the event creating the
right to sanctions. Additionally, the term “prejudgment” in “prejudgment interest”
necessarily implies a period ending at judgment. See Ariz. R. Civ. P. 68(g). And the
action unless not feasible or would work injustice). Neither party here contends
application of the amended rule would work an injustice.
2
BCI’s argument is based, in part, on its contention that Rule 68’s focus is on the
result at trial. However, whether Rule 68 sanctions apply depends on the court’s
judgment, not on the jury’s verdict. See Berry v. 352 E. Va., L.L.C., 228 Ariz. 9, ¶ 28,
261 P.3d 784, 789 (App. 2011). BCI also fails to explain how “the judgment
immediately following trial” should be interpreted when more than one trial may occur.
4
taxable costs referred to in Rule 68 are required to be included in the judgment. A.R.S.
§ 12-347. Therefore, we must determine which judgment is to be used when calculating
Rule 68 sanctions.
¶8 We conclude the September 2, 2009 judgment is not the relevant judgment
for purposes of Rule 68(g). That judgment was vacated by the trial court’s December 8,
2009 grant of BCI’s motion for a new trial on the issue of liability. See Ariz. R. Civ. P.
59(a) (court may vacate judgment and grant new trial on motion of aggrieved party); see
also Nielson v. Patterson, 204 Ariz. 530, ¶ 1, 65 P.3d 911, 911 (2003) (order granting
new trial vacates original entry of judgment). “A vacated judgment lacks force or effect
and places parties in the position they occupied before entry of judgment.” Nielson, 204
Ariz. 530, ¶ 12, 65 P.3d at 914. The order in which the court granted BCI a new trial did
not merely suspend the September 2 judgment; it vacated it.3 See id. Because the
September 2 judgment “lack[ed] force or effect,” see id., it did not “fix[] clearly the rights
and liabilities of the respective parties to litigation and determine[] the controversy at
hand.” Berry, 228 Ariz. 9, ¶ 28, 261 P.3d at 789, quoting Wolf Corp., 11 Ariz. App. at
355, 464 P.2d at 675. Consequently, the parties then were placed in the same positions
they had occupied before the entry of that judgment—without a judgment for the
comparative purposes of Rule 68(g). See Nielson, 204 Ariz. 530, ¶ 12, 65 P.3d at 914.
3
The trial court stated that BCI had appealed from the September 2 judgment,
implying the judgment then still was valid. However, BCI had not appealed properly
from that judgment, but rather from the court’s order granting it a new trial on damages.
We had jurisdiction over that appeal because a party may appeal from the grant or denial
of a motion for a new trial. A.R.S. § 12-2101(A)(5)(a).
5
¶9 This interpretation is consistent with the settlement-promoting purpose of
Rule 68.4 See Warner, 218 Ariz. 121, ¶ 52, 180 P.3d at 1002; see also McEvoy v.
Aerotek, Inc., 201 Ariz. 300, ¶ 22, 34 P.3d 979, 984 (App. 2001) (court rules must be
construed in light of purpose). Protracted litigation, including the possibility of a new
trial or reversal on appeal, is an inherent risk a party takes when rejecting a Rule 68 offer
of judgment.5 See Drozda v. McComas, 181 Ariz. 82, 86, 887 P.2d 612, 616 (App. 1994)
(decision whether to accept offer involves risk-benefit calculation). The possibility of
sanctions throughout extended litigation only increases the incentive to settle early. See
Levy v. Alfaro, 215 Ariz. 443, ¶ 12, 160 P.3d 1201, 1203 (App. 2007) (purpose of
Rule 68 to avoid protracted litigation).
¶10 Therefore, the trial court erred in determining Rule 68 prejudgment interest
terminated with entry of the September 2 judgment. Our case law is clear—that
4
The trial court relied on Warner, 218 Ariz. 121, ¶ 53, 180 P.3d at 1002, to
conclude the purposes of Rule 68 are not served after the initial judgment, when “the
offeree no longer has the ability to avoid the sanction.” However, in Warner the offeree
never had been able to accept the offer, id. ¶¶ 53-54 (when lien prevents party from
accepting offer of judgment, Rule 68 sanctions may not be entered against it), and the
court distinguished that a party should not be able to avoid Rule 68 sanctions where it
“was not actually denied a meaningful choice between accepting the offer or proceeding
with the action,” id. ¶ 54.
5
BCI relies on Conant v. Whitney, 190 Ariz. 290, 294, 947 P.2d 864, 868 (App.
1997), to argue that “a party has the right to defend an appeal without the threat of
additional sanctions.” It emphasizes the court’s statement that “a post-judgment appellee
. . . is entitled to rely on a presumption that the appealed-from judgment is correct.” Id.
That policy led the court to conclude Rule 68 “does not allow a party to file an offer of
judgment while a case is on appeal from a final judgment.” Id. But the court explicitly
distinguished that case from those involving the pendency of a new trial. Id. Conant
provides no support to BCI’s argument because the September 2 judgment was vacated.
6
judgment had no “force or effect” following the court’s grant of a new trial. See Nielson,
204 Ariz. 530, ¶ 12, 65 P.3d at 914. Consequently, here, the judgment on mandate was
the only judgment “later obtain[ed]” for purposes of determining prejudgment interest
pursuant to Rule 68(g). Of course, we vacate that judgment here. Accordingly, the
judgment entered by the court on remand will be the judgment determining prejudgment
interest.
Disposition
¶11 For the foregoing reasons, the judgment against BCI and in favor of
Metzler is vacated, and we remand to the trial court for redetermination and the entry of
judgment consistent with this opinion.
/s/ J. William Brammer, Jr.
J. WILLIAM BRAMMER, JR., Judge
CONCURRING:
/s/ Joseph W. Howard
JOSEPH W. HOWARD, Chief Judge
/s/ Philip G. Espinosa
PHILIP G. ESPINOSA, Judge
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