WESTON v KUNTZ
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NO. 81-96 I N THE SUPREME COURT O THE STATE O F M N A A F OTN 1981 T M WESTON, O P l a i n t i f f and Respondent, -VS- ROY KUNTZ, D e f e n d a n t and A p p e l l a n t . Appeal from: D i s t r i c t Court o f t h e Fourth J u d i c i a l D i s t r i c t , I n and f o r t h e County o f M i s s o u l a , The H o n o r a b l e J o h n S. Henson, J u d g e p r e s i d i n g . Counsel o f Record: For A p p e l l a n t ; G a r l h q t o n , Lohn & Robinson, M i s s o u l a , Montana F o r Respondent : S m i t h , Connor & Van V a l k e n b u r g , M i s s o u l a , Yontana S u b m i t t e d on B r i e f s : Decided: Filed: DCT 19 1981' July 24, 1981 OcT 1 9 1981 Mr. J u s t i c e J o h n C . Court. This H a r r i s o n d e l i v e r e d t h e O p i n i o n of appeal arises its contents during a Chevrolet van 1978, appellant's in from damages and place of to the respondent's f i r e January 16, Respondent had business. taken h i s vehicle t o a p p e l l a n t ' s auto repair service outside S t . I g n a t i u s , Montana, f o r r e p a i r on J a n u a r y 1 5 , 1 9 7 8 . After discovery, the claim was f i l e d , and r e s p o n d e n t ment on A p r i l 3 , 1 9 7 9 . both p a r t i e s conducted f i l e d a m o t i o n f o r summary judg- The D i s t r i c t C o u r t h e a r d a r g u m e n t on t h e m o t i o n and on J u l y 2 , 1 9 7 9 , e n t e r e d summary judgment f o r the respondent reserving judgment as to the amount of damages. Following d e t e r m i n a t i o n of the summary liability. judgment, Kuntz appealed the T h i s C o u r t found t h e a t t e m p t e d a p p e a l was p r e m a t u r e b e c a u s e damages had n o t been d e t e r m i n e d and t h e a p p e a l was d i s m i s s e d w i t h o u t p r e j u d i c e . Mont. , 13, appellant Kuntz ( 1 9 8 0 ) , On August 1980, Weston v . 610 P.2d 1 7 2 , 37 S t . R e p . served an 855. offer of judgment on t h e r e s p o n d e n t p u r s u a n t t o R u l e 6 8 , M.R.Civ.P., f o r t h e amount o f $ 2 , 2 0 0 . The o f f e r s p e c i f i e d it was n o t t o b e c o n s t r u e d a s a n a d m i s s i o n t h a t Kuntz was l i a b l e o r that Weston had s u f f e r e d damages a s a r e s u l t o f a n y n e g l i g e n c e o r l i a b i l i t y by Kuntz. On S e p t e m b e r 1 7 , 1 9 8 0 , t h e p a r t i e s s t i p u l a t e d t o a n e x t e n s i o n of t h e o f f e r through October 15, 1980. I n a l e t t e r d a t e d O c t o b e r 2 8 , 1 9 8 0 , Kuntz i n d i c a t e d a w i l l i n g n e s s t o compromise on t h e c l a i m i n a t o t a l amount o f $2,272.16. The l e t t e r n o t e d t h e amount was e s s e n t i a l l y t h e same a s a s e t t l e m e n t o f f e r o f J u n e 2 4 , the f i g u r e was still unacceptable 1 9 8 0 , and s t a t e d i f t o Weston, Kuntz would r e q u e s t t h e c o u r t t o s e t t h e m a t t e r f o r h e a r i n g on damages. On t h a t d a y a l s o Kuntz f i l e d a m o t i o n t o e s t a b l i s h a h e a r i n g date. On O c t o b e r 2 9 , 1 9 8 0 , r e s p o n d e n t s e r v e d a p p e l l a n t w i t h a n a c c e p t a n c e of o f f e r o f judgment f o r $ 2 , 2 7 2 . 1 6 . On O c t o b e r 3 0 , 1 9 8 0 , Kuntz f i l e d a n o t i c e o f e x p i r a t i o n and w i t h d r a w a l o f o f f e r o f judgment s t a t i n g t h e o f f e r w h i c n had b e e n e x t e n d e d t h r o u g h O c t o b e r 15, 1980, had n o t b e e n a c c e p t e d i n i t s amount o f $ 2 , 2 0 0 . Weston 1980. Following judgment, Kuntz moved had for a e n t r y of hearing on judgment the on November motion for entry 3, of t h e D i s t r i c t C o u r t found t h a t on October 28, 1980, served an amended or new offer a c c e p t e d t h a t o f f e r on O c t o b e r 29, 1 9 8 0 . on Weston who K u n t z ' s motion f o r r e c o n s i d e r a t i o n was d e n i e d , and t h i s a p p e a l f o l l o w e d . S e v e r a l i s s u e s a r e b e f o r e t h i s C o u r t on a p p e a l : Did 1. the District Court err in its entry of judgment i n t h e amount o f $ 2 , 2 7 2 . 1 6 ? 2. Does t h e o f f e r o f t r i c t Court render judgment e n t e r e d by t h e D i s - t h e q u e s t i o n of l i a b i l i t y moot, thereby p r e c l u d i n g a p p e a l o f t h e summary j u d g m e n t ? 3. Did t h e D i s t r i c t C o u r t e r r i n g r a n t i n g p l a i n t i f f - r e s p o n d e n t ' s m o t i o n f o r summary j u d g m e n t ? A p p e l l a n t a p p e a l s i n p a r t from t h e D i s t r i c t C o u r t ' s f i n d i n g of a n amended o r new o f f e r o f judgment i n t h e amount o f $2,272.16. of the This Court w i l l o v e r t u r n t h e f i n d i n g s of f a c t District Court s u b s t a n t i a l evidence. only And, if they are not supported t h e e v i d e n c e w i l l be v i e w e d i n t h e l i g h t most f a v o r a b l e t o t h e p r e v a i l i n g p a r t y . v. Baker (1980), Mont. by , 611 P . 2 d 609, Toeckes 611, 37 St.Rep. 948, 950. The original offer of judgment for $2,200 was filed August 13, 1980, and by stipulation of the parties the offer was extended through October 15, 1980. By affidavit, respondent's counsel stated that on or about October 1980, he talked with appellant's counsel. 15, They discussed the fact that appellant's counsel had heard from her client, that her client had come up some, that she was uncertain as to how the total figure compared with the August 13, 1980 offer, but that a letter from appellant's counsel regarding the matter was being forwarded to respondent's counsel. The affidavit further stated that at no tine during the telephone conversation did either counsel mention or discuss that the offer contained in the forthcoming letter was to be made, not as an offer of judgment as had already been made and extended, but only as a stipulation of damages. During the conversation also, according affidavit, respondent's counsel again advised counsel of his opinion that an offer of to the appellant's judgment, if accepted, would render an appeal moot. Appellant's reply memorandum to the motion to enter judgment states there was an oral agreement between parties to keep the offer open beyond October the 15, 1980, until respondent received appellant's final position as to damages. Counsel for both parties argued the motion before the District Court. Appellant claims that an offer of judgment, as a compromise agreement, is contractual and requires a "meeting of the minds" to be binding. Appellant then argues since t h e r e was no "meeting of t h e minds" between the parties, t h e r e c o u l d be no o f f e r o f judgment a s a n t i c i p a t e d by R u l e 6 8 , M.R.Civ.P. But t n e q u e s t i o n of whether is n o t a s c l e a r - c u t t h e minds" offer of judgment had been been left respondent open beyond received as appellant purports. extended v e r b a l l y and by s t i p u l a t i o n . had t h e r e was a " m e e t i n g o f several The times, both Appellant admitted the o f f e r October 1 5 by appellant's agreement final until position. R e s p o n d e n t ' s c o u n s e l s t a t e d t h e r e had b e e n no m e n t i o n i n h i s t e l e p h o n e c o n v e r s a t i o n w i t h a p p e l l a n t ' s c o u n s e l t h a t t h e new f i g u r e was meant t o be o f f e r e d i n a n y f o r m o t h e r t h a n o f f e r o f judgment w i t h which t h e p a r t i e s had b e e n d e a l i n g f o r two weeks. C e r t a i n l y t h e r e i s c o n f l i c t i n g e v i d e n c e which m i g h t indicate there was no "meeting of the minds," but such e v i d e n c e was weighed by t h e D i s t r i c t C o u r t , which d e t e r m i n e d otherwise. W e find the District Court's d e t e r m i n a t i o n is s u p p o r t e d by s u b s t a n t i a l e v i d e n c e and t h e r e f o r e a f f i r m i t s f i n d i n g o f a new o r amended o f f e r o f judgment f o r $ 2 , 2 7 2 . 1 6 . The q u e s t i o n t h e n becomes w h e t h e r of judgment precludes appeal of the t h e e n t r y of o f f e r summary judgment by making t h e q u e s t i o n o f l i a b i l i t y moot. The o f f e r of to Rule 68, judgment was made and e n t e r e d p u r s u a n t M.R.Civ.P. This question has not been con- s i d e r e d i n Montana s o we m u s t l o o k t o t h e f e d e r a l r u l e w h i c h i s n e a r l y i d e n t i c a l t o t h a t i n Montana. The c a s e b e f o r e u s d o e s n o t a p p e a r t o be o n e w h i c h was contemplated by connection with it. the rule or has R u l e 6 8 , M.R.Civ.P., been considered provides: in " O f f e r o f judgment. A t any t i m e more t h a n 1 0 days before the t r i a l begins, a party d e f e n d i n g a g a i n s t a c l a i m may s e r v e upon t h e a d v e r s e p a r t y a n o f f e r t o a l l o w judgment t o b e t a k e n a g a i n s t him f o r t h e money o r property or t o the e f f e c t specified i n h i s o f f e r , with c o s t s then accrued. I f w i t h i n 10 days a f t e r t h e s e r v i c e of t h e o f f e r t h e adverse party serves written notice t h a t the o f f e r i s a c c e p t e d , e i t h e r p a r t y may t h e n f i l e t h e o f f e r and n o t i c e o f a c c e p t a n c e t o g e t h e r w i t h p r o o f o f s e r v i c e t h e r e o f and t h e r e u p o n judgment s h a l l be e n t e r e d . An o f f e r n o t a c c e p t e d s h a l l be deemed w i t h d r a w n and e v i d e n c e t h e r e o f is n o t a d m i s s i b l e e x c e p t i n a proceeding t o determine c o s t s . I f t h e judgment f i n a l l y o b t a i n e d by t h e o f f e r e e i s n o t more f a v o r a b l e t h a n t h e o f f e r , t h e o f f e r e e must p a y t h e c o s t s i n c u r r e d a f t e r t h e making o f the offer. The f a c t t h a t a n o f f e r i s made b u t n o t accepted does n o t preclude a subseq u e n t o f f e r . When t h e l i a b i l i t y o f o n e p a r t y t o a n o t h e r h a s b e e n d e t e r m i n e d by v e r d i c t o r o r d e r o r j u d g m e n t , b u t t h e amount o r e x t e n t o f t h e l i a b i l i t y r e m a i n s t o be d e t e r m i n e d by f u r t h e r proceedings, t h e p a r t y adjudged l i a b l e may make a n o f f e r o f j u d g m e n t , which s h a l l h a v e t h e same e f f e c t a s a n o f f e r made b e f o r e t r i a l i f it is served w i t h i n a reas o n a b l e t i m e n o t l e s s t h a n 10 d a y s p r i o r t o t h e commencement o f h e a r i n g s t o d e t e r m i n e t h e amount o r e x t e n t o f l i a b i l i t y . " The b a s i c p u r p o s e o f R u l e 68 i s t o e n c o u r a g e s e t t l e ment and avoid protracted litigation. S t e v e n s o n ( 1 9 8 0 ) , 88 F.R.D. Airlines, Inc. (1969), P r a c t i c e 1168.02. burden placing of 47 F.R.D. accrued them o n a p l a i n t i f f and S t a f f e n d v. 225; 218; 7 v. Lake C e n t r a l Moore's Federal The r u l e a l s o a t t e m p t s t o a l l e v i a t e t h e subsequently faith offer Greenwood costs who to refuses the defendant t o accept s u b s e q u e n t l y r e c e i v e s a judgment not greater than the o f f e r . Greenwood, 88 F.R.D. by a good which is a t 228. Here i t i s t h e p a r t y who made t h e o f f e r o f j u d g m e n t who seeks f u r t h e r litigation. and o f f e r s r e g a r d i n g damages, Throughout the negotiations appellant maintained h i s s o l e p u r p o s e was t o p u t t h e c a s e i n t o p r o p e r p o s t u r e f o r a p p e a l . The b u l k o f t h e l e g a l work r e q u i r e d o f t h e p a r t i e s t o a p p e a l had, because of the previous appeal, been done before the offer. The additional costs of trial if the matter were to be remanded, however, would be significant. It is apparent from the record that throughout these proceedings both parties were aware of appellant's intent to pursue appeal and respondent's position that acceptance of an offer would make the appeal improper. Nevertheless, an offer of judgment was made and accepted. Although this fact situation was not contemplated by the comments accompanying Rule 68 or considered by the cases construing it, the underlying philosophy of Rule 68 remains. It would be inconsistent to allow a procedure designed to facilitate settlement and avoid litigation costs to be used to challenge liability and, thereby, extend litigation. The Ninth Circuit considered a similar concept, although based on different American Insurance Corp. facts, (9th Cir. in Cruz v. 1964), 3 3 7 Pacific F.2d 746. There, an offer of judgment was made and accepted which specified a matter of a 12% penalty was to be decided by the court. The appellee later argued the court could not award the 12% damages without first having a trial on the issue of liability. The court held that such a trial was foreclosed by the offer and acceptance. "There could never be a valid offer in compromise and a valid acceptance if there had to be a subsequent determination of liability . . ." Cruz, 3 3 7 F.2d at 7 5 0 . Rule 68 specifies that an offer of judgment made after a finding of liability but before determination of damages shall have the same effect as an offer made before trial. That effect, if the offer is accepted, is to render the issue of liability moot. We therefore find the appeal of the summary judgment before us inappropriate. Affirmed. We concur: 3 49 Chief Justice , w d
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