Court Rejects ‘Conditional’ Acceptance of Rule 68 Offer

In this copyright suit, defendant said its original Rule 68 offer of judgment for $100,000 included attorney’s fees, and because the lawyers continued to debate whether fees were included, the Richmond U.S. District Court strikes plaintiff’s notice of acceptance of offer and concurrent motion for attorney’s fees and costs.

On May 29, 2014, defendant Evergreen Enterprises offered to allow judgment to be taken against it in the amount of $100,000 on all claims inclusive of all claimed amounts excepting only costs now accrued. On June 6, 2014, counsel for the parties conferred as required by Fed. R. Civ. P. 26(f). In discussing the potential for settlement, counsel for defendant expressed that the amount offered was sufficient to cover plaintiff’s damages and attorney’s fees and otherwise expressed that the offer amount included attorney’s fees. Plaintiff’s counsel did not offer a contrary view of the offer.

On June 9, 2014, plaintiff’s counsel communicated with defense counsel requesting a payment of $200,000 plus attorney’s fees. On June 11, defense counsel served an amended offer of judgment upon plaintiff, which stated that defendant included attorney’s fees in the $100,000 that was offered under the original offer. The same day, plaintiff’s counsel confirmed that defense counsel had expressed that the offer included attorney’s fees. He wrote, “Yes at our meeting you mentioned that you felt attorney’s fees were included in the original offer, which was different from my reading of the May 29^th Offer of Judgment.” On June 12, 2014, plaintiff filed a notice of acceptance of the offer of judgment, and concurrently filed a motion for attorney’s fees and costs.

Courts have consistently rejected attempts to qualify or revoke accepted offers. However, preacceptance clarification of an ambiguous Rule 68 offer is desirable in some cases because it serves the offeror’s and the court’s interests. Specifically, the offeror will be more certain of potential liability and the court will not be called on to interpret ambiguous offers.

Defendant’s offer proposed a judgment amount of $100,000, “excepting only costs accrued.” This case differs from the facts outlined in Bosley v. Mineral County Comm’n, 650 F.3d 408 (4^th Cir. 2011), because, prior to this plaintiff’s acceptance of the offer, defendant notified plaintiff that its intent was to extend an offer of $100,000 inclusive of attorney’s fees. Thus, plaintiff knew that the offer was ambiguous and/or contrary to the intent of defendant and there was no agreement.

Therefore, plaintiff’s notice of acceptance will be struck and the case will go forward. The motion for attorney’s fees is denied as moot.

Working Girls Design Inc. v. Evergreen Enterprises Inc. (Spencer) No. 3:14cv159, July 18, 2014; USDC at Richmond, Va. VLW 014-3-363, 3 pp.