Working Girls Design, Inc. v. Evergreen Enterprises, Inc., No. 3:2014cv00159 - Document 22 (E.D. Va. 2014)

Court Description: MEMORANDUM OPINION. Signed by District Judge James R. Spencer on 07/18/14. (kyou, )

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IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA RICHMOND DIVISION WORKING GIRLS DESIGN, INC, 6 L JUL I 8 2014 u CLERKl U.S. DISTRICT COURT RICHMOND, VA Plaintiff, CivilAction No. 3:i4-CV-i59 EVERGREEN ENTERPRISES, INC., Defendant. MEMORANDUM OPINION This matter comes before the Court on Defendant Evergreen Enterprises, Inc.'s ("Evergreen") Motion to Strike Conditional/Qualified Acceptance of Offer ofJudgment (ECF No. 13). For the reasons below, the Court will GRANT the Motion to Strike. Plaintiff Working Girls Design, Inc's ("Working Girls") Motion for Attorneys' Fees (ECFNo. 11) willbe DENIED AS MOOT. I. BACKGROUND One March 11, 2014, Working Girls filed aneight-count Complaint alleging copyright and trademark infringement, and unfair competition under 15 U.S.C. § 1125(a). Working Girls requested declaratory judgment, a permanent injunction, statutory damages, actual damages, treble damages, statutory attorneys' fees, and further relief as theCourt deems justand proper. On May 29, 2014, Evergreen offered to allow judgment to be taken against it in the amount of$100,000.00 on all claims inclusive ofall claimed amounts excepting only costs now accrued ("Offer"). On June 6, 2014, counsel for the parties conferred as required by Federal Rule of Civil Procedure 26(f). In discussing the potential for settlement, counsel for Evergreen expressed that the amount offered under the Offer was sufficient to cover Plaintiffs damages and its attorneys' fees and otherwise expressed that the Offer amount included attorney's fees. Plaintiffs counsel did notoffer a contrary view oftheOffer. On June 9, 2014, counsel for Plaintiff communicated with Evergreen's counsel requesting a payment of$200,000 plus attorney's fees. 1 j On June n, counsel for Evergreen served an Amended Offer of Judgment upon the Plaintiff, which stated that Evergreen included attorneys' fees in the $100,000 that was offered under the original Offer. The same day Plaintiffs counsel confirmed that Evergreen's counsel had expressed that the Offer amount 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 29th Offer of Judgment." (Decl. of C. Allen, If 6). On June 12, 2014, Working Girls filed a Notice of Acceptance with Offer of Judgment ("Notice"). The same day, Working Girls concurrently filed a Motion forAttorneys' Fees and Costs. II. ANALYSIS Federal Rule ofCivil Procedure 68 states, in relevant part, that At least 14 days before the date setfor trial, a party defending against a claim may serveon an opposing party an offerto allow judgment on specified terms, with the costs then accrued. If, within 14 days after being served, the opposing party serves written notice accepting the offer, either party maythen filethe offerand notice of acceptance, plus proofofservice. Theclerk must then enter judgment Fed. R. Civ. P. 68(a). Essentially, the view is that the party accepting an offer of judgment is considered the "prevailing party" such that an award ofcosts is appropriate under Federal Rule of Civil Procedure 54(d)(1). See Fed. R. Civ. P. 54(d)(1) ("[C]osts--other than attorneys' fees should be allowed to the prevailing party "). In Bosley v. Mineral County Commission, an offeror challenged a district court's assessment of costs pursuant to a Rule 68 Offer. 650 F.3d 408, 409-11 (4th Cir. 2011). The offeror challenged the validity ofan offer for three reasons: "(1) the award ofattorneys' fees and costs was part ofthe substantive relief sought against them by the amended complaint, and the offer ofjudgment unambiguously indicated that itcovered all claims contained in the complaint ((as full and complete satisfaction of [the] claim'); (2) refusal so to interpret the offer ofjudgment will denigrate the aims of Rule 68; and (3) principles of equity." Id. at 412. The Fourth Circuit held that "[ejvidence extrinsic to the offer's terms should not be considered." Id. at 414 (citing Chambers v. Manning, 169 F.R.D. 5, 8 (D. Conn. 1996)) (citing cases); seealsoClark v.Sims, 28 F.3d 420, 424 (4th Cir. 1994) (recognizing that settlement discussions do not constitute an offer of judgment). The Fourth Circuit also stated that ambiguities in an offer are to be resolved against the offeror. Bosley, 650 F.3d at 414. Courts have consistently rejected attempts to qualify or revoke accepted offers. See id. 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. Radecki v. Amoco Oil Co., 858 F.2d397, 402-03 (8th Cir. 1988). Specifically, the offeror will be more certain of potential liability and the Court will not be called on to interpret ambiguous offers. Id.; see also Hefter & Carroll v. Abraham, No. 07 C 4137, 2007 WL 3334349, at *3 (N.D. 111. Nov. 8, 2007) (holding that a plaintiff may clarify the terms of an offer before making a decision without running the risk of prematurely or inadvertently rejecting the offer). Evergreen's Offer proposed a judgment amount of $100,000.00 "excepting only costs accrued." However, this case differs from the facts outlined in Bosley because, prior to Working Girls's acceptance of the Offer, Evergreen notified Working Girls that its intent was to extend an offer of $100,000 inclusive of attorneys' fees. Thus, Working Girls knew that the Offer was ambiguous and/or contrary to the intent of Evergreen and there was no agreement. Therefore, the Noticeof Acceptance (ECF No. 10) will be struck and the case willgo forward. III. CONCLUSION For the above reasons, the Court will GRANT the Motion to Strike. Working Girls's Motion for Attorneys' Fees will be DENIED AS MOOT. Let the Clerk send a copy of this Memorandum Opinion to all counsel of record. An appropriate Order shall issue. /S/ ENTERED this / 0 day ofJuly2014. James R. Spencer Senior U.S. District Judge

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