Title: Dunham v. Fullerton

State: wyoming

Issuer: Wyoming Supreme Court

Document:

KARA DUNHAM v. ROBERT FULLERTON, Deceased2011 WY 103Case Number: S-10-0242Decided: 07/06/2011NOTICE: This opinion is subject to formal revision before publication in Pacific Reporter Third. Readers are requested to notify the Clerk of the Supreme Court, Supreme Court Building, Cheyenne, Wyoming 82002, of any typographical or other formal errors so correction may be made before final publication in the permanent volume.
APRIL 
TERM, A.D. 2011

 
 
KARA 
DUNHAM,Appellant (Plaintiff),v.ROBERT FULLERTON, 
Deceased,Appellee (Defendant).

 
 
Appeal 
from the District Court of Natrona County

 
 

Representing 
Appellant:

Todd 
Hambrick, Casper, Wyoming.

 
 

Representing 
Appellee:

James 
D. Bramer, Windsor, Colorado.

 
 
Before 
KITE, C.J., and GOLDEN, HILL, VOIGT, and BURKE, 
JJ.

 
 

HILL, 
Justice.

 
 
[¶1]      Kara Dunham 
challenges the district court's Order of Dismissal and argues that the court erred in 
refusing to enter judgment upon her acceptance of a W.R.C.P. 68 offer of 
settlement.  We 
affirm.

 
 
ISSUE

 
 
[¶2]      Dunham raises 
only one issue before this Court:

 
 

1.            
Did 
the lower court commit plain error in failing to enter Judgment against 
[Fullerton] pursuant to a W.R.C.P. 68 Offer of Settlement and Acceptance of 
Offer of Settlement?

 
 
FACTS

 
 
[¶3]      In May of 2009, 
Kara Dunham filed a lawsuit against Robert Fullerton for injuries stemming from 
an automobile wreck.  Fullerton 
filed his answer to the complaint on July 13, 2009, and passed away on November 
17, 2009.

 
 
[¶4]      Despite 
Fullerton's death, the parties' counsel continued to negotiate a settlement. On 
June 28, 2010, Fullerton's counsel made a Rule 68 offer of settlement of 
$36,000.00 to Dunham.  On July 1, 
2010, Fullerton's counsel filed a motion to dismiss, which alleged a failure to 
substitute party pursuant to W.R.C.P. 25(a)(i).  In response, on July 12, 2010, Dunham 
filed a new civil action, this time against Fullerton's estate, but based upon 
the same accident.1  Also on July 12, 2010, Dunham filed her 
Plaintiff's Notice of Acceptance Pursuant to Rule 68.  In addition to accepting the settlement 
offer, the acceptance also stated:

 
 
By 
accepting the offer in this case against Robert Fullerton, [Dunham] in no way, 
expressly or impliedly, admits that the damages she sustained from the event at 
the center of this lawsuit are limited to the amount offered.  By accepting the offer in THIS case, 
[Dunham] in no way expressly or impliedly or otherwise waives her rights to 
continue pursuing her claims for her injuries, and expressly reserves her right 
to continue pursuing her cause of action against the Estate of Robert 
Fullerton[.]

 
 
Fullerton's 
counsel filed the acceptance along with the offer of settlement.  On August 2, 2010, the district court 
held a hearing on the motion to dismiss, and then entered an Order of Dismissal 
on August 17, 2010.  As part of the 
Order of Dismissal, the court ruled that Dunham's acceptance was invalid because 
she attempted to reserve the right to litigate the "estate case," and said in 
pertinent part:

 
 
7.  On 
June 28, 2010, counsel for the deceased [Fullerton] made an Offer of Settlement 
pursuant to W.R.C.P. 68 in Civil Action No. 90390, the terms of which were 
specifically to allow judgment to be taken by [Dunham], against [Fullerton] in 
the amount of Thirty Six Thousand ($36,000.00) Dollars, inclusive of [Dunham's] 
costs incurred to the date of the offer.  
This offer was filed on July 12, 2010.

8.  That 
[Dunham] timely filed an Acceptance of the Offer, but reserved the right to 
litigate all issues in Civil Action No. 92250 (the "estate 
case").

.

10.  One 
cannot agree to a full settlement and at the same time reserve the right to 
litigate issues that were "settled."

11.  The 
Acceptance of Offer is not an acceptance, and judgment in Civil Action No. 90390 
cannot be entered.

 
 
The 
court dismissed the action, without prejudice, for failure to substitute a party 
in accordance with Rule 25(a)(i).

 
 
[¶5]      This appeal 
followed.

 
 
DISCUSSION

 
 
[¶6]      In her only 
argument, Dunham contends that the district court erred in refusing to enter 
judgment pursuant to the settlement and W.R.C.P. 68.  First, she argues that due to the 
uncertainty of the motion to dismiss, she accepted with reservation of rights 
the offer of settlement.  She 
submits the parties agreed they had a settlement, in that they both filed 
documents indicating the offer was accepted.  Dunham contends that the settlement 
offers made under Rule 68 are interpreted differently than contract offers in 
general, and that she actually accepted Fullerton's offer using his exact 
language.2  Without the language regarding "full 
satisfaction of all claims," Dunham argues that her acceptance with reservations 
only confirmed that she would not waive her right to bring suit in the 
future.  Ultimately, because she 
accepted, Dunham believes that the court, under Rule 68, was required to enter 
judgment in her favor.

 
 
[¶7]      Fullerton 
responds that the court was correct when it refused to enter judgment in 
Dunham's favor under Rule 68 and submits that his offer of settlement was an 
offer to allow a judgment to be entered so that the litigation would be 
completely resolved.  Fullerton 
argues that it was not reasonable for Dunham to interpret the offer to allow a 
separate claim against the estate.  
Furthermore, Fullerton argues that because Dunham's acceptance was not 
unconditional, she did not validly accept the Rule 68 offer of settlement.  The gist of Fullerton's argument is that 
because her acceptance changed the terms of the offer of settlement, Dunham's 
acceptance was not unconditional, and, accordingly, the district court correctly 
ruled that it was invalid because it did not mirror the Rule 68 offer.  Fullerton also contends that Dunham 
ignored the requirements for substituting a party pursuant to Rule 25 and notes 
that the rule states the action "shall" be dismissed if a motion for 
substitution is not made on the record within 90 days of notice of the 
death.  Fullerton argues that the 
action was properly dismissed after no such motion was filed.  Finally, Fullerton contends that the 
action should have been dismissed with prejudice, rather than 
without.

 
 
[¶8]      The purpose of 
Rule 68 is to encourage settlement:

 

At 
any time more than 60 days after service of the complaint and more than 30 days 
before the trial begins, any party may serve upon the adverse party an offer, 
denominated as an offer under this rule, to settle a claim for the money or 
property or to the effect specified in the offer, with costs then accrued. If 
within 10 days after the service of the offer the adverse party serves written 
notice that the offer is accepted, either party may then file the offer and 
notice of acceptance together with proof of service thereof and thereupon the 
court shall enter judgment. An offer not accepted shall be deemed withdrawn and 
evidence thereof is not admissible except in a proceeding to determine costs. If 
the judgment finally obtained by the offeree is not more favorable than the 
offer, the offeree must pay the costs incurred after the making of the offer. As 
used herein, "costs" does not include attorney's fees. The fact that an offer is 
made but not accepted does not preclude a subsequent offer. When the liability 
of one party to another has been determined by verdict or order or 
judgment, but the amount or extent of the liability remains to be determined by 
further proceedings, the party adjudged liable may make an offer of settlement 
under this rule, which shall have the same effect as an offer made before trial 
if it is served within a reasonable time not less than 10 days prior to the 
commencement of hearings to determine the amount or extent of 
liability.

 
 

The 
Real Estate Pros v. Byars, 2004 
WY 58, ¶ 9, 90 P.3d 110, 113 (Wyo. 2004).

 
 
[¶9]      Rule 68 
accomplishes its objective of encouraging settlement by providing an expeditious 
process that forces the parties to weigh the costs and benefits of further 
litigation.

 
 
Any 
party can make a firm, non-negotiable offer of judgment. [Utility Automation 2000, Inc. v. 
Choctawhatchee Electric Coop., Inc., 298 F.3d 1238, 1240 (11th Cir. 2002)].  Unlike traditional 
settlement negotiations in which a plaintiff may seek clarification or make a 
counteroffer, a plaintiff faced with a Rule 68 offer may 
only accept or reject the offer. Id.  An offer under Rule 
68 must be for a definite or ascertainable amount and later proof cannot cure 
any defect in the offer since the party to whom the offer was made must base its 
decision to accept or reject solely on what is contained within that offer. 
 Snodgrass v. Rissler & 
McMurry Co., 903 P.2d 1015, 1018 (Wyo. 1995).  A Rule 68 offer is not simply an offer of 
settlement, but an offer that judgment can be entered on specified terms.  If the offer is accepted, the court 
automatically enters judgment in favor of the offeree; if the offer is refused, 
the case proceeds.  The rule 
encourages plaintiffs to accept reasonable offers through what is referred to as 
"cost-shifting."  It requires a 
party who refuses an offer, and then ultimately recovers less than the offer 
amount, to pay the costs incurred by the offeror from the time the offer was 
made.  The rule specifies that those 
"costs" do not include attorneys' fees.  Through this cost shifting, "the Rule 
prompts both parties to a suit to evaluate the risks and costs of litigation, 
and to balance them against the likelihood of success upon trial on the merits." 
 Util. Automation, 298 F.3d  
at 1240 (citations omitted).

 
 

Real 
Estate Pros, ¶ 10, 90 P.3d  at 113 (emphasis 
added).  An unconditional acceptance 
of an offer constitutes a meeting of the minds of the parties and establishes a 
contract.  Givens v. Fowler, 984 P.2d 1092, 1095 (Wyo. 
1999).

 
 
[¶10]   Keeping the above principles in 
mind, we turn to the facts of this case.  
Although Dunham argues that her formal written acceptance of Fullerton's 
Rule 68 Offer of Settlement was an 
unmodified mirror of Fullerton's offer, we disagree.  In review, Dunham's communication of 
acceptance stated as follows:

 
 
Plaintiff, 
Kara Dunham  accepts [Fullerton's] offer to allow judgment to be taken by 
Plaintiff, Kara Dunham, against Defendant Robert Fullerton in the amount of 
Thirty Six Thousand ($36,000.00) Dollars, inclusive of Plaintiff's costs 
incurred to the date of the offer.

 
 

Said 
acceptance is made in light of the uncertainty of the pending W.R.C.P. 25 
motion.  By accepting the offer in 
this case against Robert Fullerton, Plaintiff in no way, expressly or impliedly, 
admits that the damages she sustained from the event at the center of this 
lawsuit are limited to the amount offered.  
By accepting the offer in THIS case, Plaintiff in no way expressly or 
impliedly or otherwise waives her rights to continue pursuing her claims for her 
injuries, and expressly reserves her right to continue pursuing her cause of 
action against the Estate of Robert Fullerton, currently ongoing as set forth in 
Civil Action No. 92250, Seventh Judicial District, State of 
Wyoming.  [Emphasis added.]

 
 
 
 
[¶11]   Taking into account the emphasized 
portion of Dunham's "acceptance," we are struck by its modifications (reflected 
in bold italics above).  These 
modifications change the original offer, which is in direct opposition to the 
language of the rule.  "Unlike 
traditional settlement negotiations in which a plaintiff may seek clarification 
or make a counteroffer, a plaintiff faced with a Rule 68 offer may only accept 
or reject the offer."  Real Estate Pros, ¶ 10, 90 P.3d  at 
113.  See also Charles Alan Wright, Arthur R. Miller 
& Richard L. Marcus, Federal Practice 
and Procedure: Civil 2d § 3005 at 106. (1977 and 2011 supp.) 
(plaintiff's acceptance must be unconditional, and a conditional acceptance will 
not suffice).  The district court 
recognized the legal requirement that a Rule 68 acceptance must mirror the offer.  Here, that was not the case, and we thus 
affirm the court below.3

 
 
[¶12]   With respect to Fullerton's 
argument that the dismissal should have been with prejudice:  He is ill-situated to make such an 
argument, inasmuch as he did not appeal.  
The dismissal without prejudice was proper  it was not an adjudication 
on the merits, and the statute of limitations has not run.

 
 
CONCLUSION

 
 
[¶13]   We conclude that because Dunham's 
acceptance was not unconditional, and that because it did not mirror the offer 
of settlement, she did not validly accept the Rule 68 offer of settlement.  Furthermore, the dismissal without 
prejudice was proper.  The district 
court's order is affirmed.

 
FOOTNOTES

 

   1Dunham has also 
filed a third action in Fullerton's probate, where she filed a petition to 
re-open the estate.  In her brief, 
Dunham asserts that she was not notified of Fullerton's death until after his 
estate had been summarily distributed.

   2Fullerton did 
not include in the language of his offer that it was being made as a full 
satisfaction of all claims.

   3We note here 
that we could also affirm this case under W.R.C.P. 25 (a)(i), which requires 
dismissal of a case when no motion for substitution of parties is made on the 
record within 90 days of the notice of the death.  Any action taken after 90 days is moot, 
which is the case here.