Case Title: Darragh Poultry v. Piney Creek Sales

Citation: 294 Ark. 427, 743 S.W.2d 804

Docket Number: 87-311

State: arkansas

Court: Arkansas Supreme Court

Date: 1988-02-01T00:00:00Z

Document:
743 S.W.2d 804 (1988) 294 Ark. 427 DARRAGH POULTRY & LIVESTOCK EQUIPMENT CO., Appellant, v. PINEY CREEK SALES, INC., Appellee. No. 87-311. Supreme Court of Arkansas. February 1, 1988. John C. Everette, Prairie Grove, for appellant. James K. Young, Russellville, for appellee. DUDLEY, Justice. The appellant and the appellee occupied adjacent spaces in a warehouse in Russellville. After a fire in the warehouse, the appellee sued the appellant and alleged that the fire was the result of the appellant negligently allowing an electric drill to run for an extended period of time. The appellee prayed for damages of $101,000.00. The appellant answered and later filed an offer of judgment in the amount of $9,292.18. See ARCP Rule 68. The appellee did not respond to the offer. The case was tried, and the jury returned a verdict for the appellant. The appellant then filed a motion asking for judgment for all costs incurred after the offer was made. See ARCP Rule 68. The trial court denied the *805 motion, and the appellant contends that, as a matter of law, it is entitled to a judgment for all costs incurred after the offer. We affirm the trial court. ARCP Rule 68 (emphasis added) provides: In a case very similar to the one at bar, the Supreme Court of the United States held that a victorious defendant is not entitled to recover costs incurred after the making of the offer under Fed.R.Civ.P. 68, which is almost identical to ARCP Rule 68. Delta Air Lines, Inc. v. August, 450 U.S. 346, 101 S. Ct. 1146, 67 L. Ed. 2d 287 (1981). We decline to follow the reasoning expressed in Delta. The author of the Note, Delta Air Lines, Inc. v. August: The Agony of Victory and the Thrill of Defeat, 35 Ark.L.Rev. 604 (1982), points out some of the flaws in the Delta Air Lines reasoning. For example, the author contends that the Id. at 625 (footnotes omitted). Additionally, the author points out that the Delta reasoning brings about absurd results: Id. (footnote omitted). Alaska and Nevada have expressed views opposite to those of the United States Supreme Court. In Wright v. Vickaryous, 611 P.2d 20, 23 (Alaska 1980), a case decided prior to Delta, the Supreme Court of Alaska held: In Beattie v. Thomas, 99 Nev. 579, 588, 668 P.2d 268, 274 (1983) (footnote omitted), the Supreme Court of Nevada explicitly rejected Delta: Likewise, we hold that the trial court had the authority to award "the costs incurred after the making of the offer." However, the trial court in this case could award only such costs as are authorized by statute. In Grayson v. Arrington, 225 Ark. 922, 926, 286 S.W.2d 501, 503 (1956), we wrote: In this case the appellant seeks recovery for costs which are not authorized by statute, for example, costs of hotel rooms and meals, and, in doing so, argues that Rule 68 will have no real meaning unless we give the term "costs" a much broader meaning than we have in the past. We decline to overturn our holdings that in law cases courts can award only such costs as are authorized by statute. We also feel that Rule 68 has real meaning. Under Rule 68 a trial judge has no discretion but must order the offeree to pay the authorized costs incurred after the making of a bona fide offer, if the judgment, exclusive of interest, is not more favorable than the offer. On the other hand, if no offer of judgment is made, or if one is made and the judgment exceeds the offer, the costs are paid under ARCP Rule 54(d), which gives the trial judge discretion in the awarding of authorized costs. That rule provides "costs shall be allowed of course to the prevailing party unless the court otherwise directs." Affirmed. HAYS, J., would remand for determination of reasonable "expenses" incurred after offer. NEWBERN, J., concurs. *807 NEWBERN, Justice, concurring. I concur in the holding in this case because the word "costs" has a fixed meaning in Arkansas practice. Grayson v. Arrington, 225 Ark. 922, 926, 286 S.W.2d 501, 503 (1956). This raises some doubt whether, in adopting Ark.R.Civ.P. 68 based on the parallel federal rule, the purpose of which was to encourage the early settlement of cases, we considered the question whether "costs" has the same meaning in the federal practice as in Arkansas practice. We will encourage our Committee on Rules of Pleading, Practice, and Procedure (Civil) to consider and advise us whether a change to the rule, perhaps substituting the word "expenses" for the word "costs," may be advisable.