Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-3_08-cv-08142/USCOURTS-azd-3_08-cv-08142-0/pdf.json

Nature of Suit Code: 480
Nature of Suit: Consumer Credit
Cause of Action: 15:1692 Fair Debt Collection Act

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Ushondra Tillman, 

Plaintiff, 

vs.

Calvary Portfolio Services, LLC,

Defendant. 

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No. CV-08-8142-PCT-DGC

ORDER

Plaintiff has filed a motion to strike Defendant’s offer of judgment. Dkt. #8. The

court will deny the motion without prejudice.

I. Background.

Plaintiff commenced this action to recover for alleged violations of the Fair Debt

Collection Practices Act, 15 U.S.C. § 1692 et seq., and invasion of privacy. Dkt. #1.

Defendant served an offer of judgment on Plaintiff on January 14, 2009, which included a

provision for “costs and attorney’s fees now accrued.” Dkt. ##8 at 1; 10 at 1, 4. Between

January 15 and January 30, counsel exchanged correspondence and had telephone

conversations regarding the fee provision. Dkt. ##8 at 3; 10 at 3. Plaintiff’s counsel sought

clarification about “whether the Offer of Judgement was or was not intended to foreclose

[Plaintiff] from seeking attorney’s fees in connection with any fee application.” Dkt. #8 at

3. Defendant’s counsel refused to clarify the provision because “Defendant’s Offer contains

clear and unambiguous language” and “Defendant is not Plaintiff’s attorney and cannot

legally advise Plaintiff or Plaintiff’s counsel as to the operative effect of language in a

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document.” Dkt. #10 at 3-4. Plaintiff moved to strike the offer of judgment on January 30,

arguing that the ambiguity of the fee provision, and Defendant’s refusal to clarify it,

prevented Plaintiff from making an informed decision about the offer. Dkt. #8 at 1.

II. Discussion.

“[A] party defending against a claim may serve on an opposing party an offer to allow

judgment on specified terms, with the costs then accrued. If, within 10 days after being

served, the opposing party [accepts], either party may then file the offer and notice of

acceptance[.]” Fed. R. Civ. P. 68(a). “An unaccepted offer is considered withdrawn, but it

does not preclude a later offer. Evidence of an unaccepted offer is not admissible except in

a proceeding to determine costs.” Fed. R. Civ. P. 68(b). Failure to accept an offer of

judgment may have adverse consequences: “if a plaintiff rejects a defendant’s offer of

judgment, and the judgment finally obtained by plaintiff is not more favorable than the offer,

the plaintiff must pay the costs incurred subsequent to the offer.” U.S. v. Trident Seafoods

Corp., 92 F.3d 855, 859 (9th Cir. 1996) (citation omitted); see Fed. R. Civ. P. 68(d). If a

Plaintiff is not served with a valid offer of judgment under Rule 68, however, “he cannot be

deprived of his costs.” See Berkla v. Corel Corp., 302 F.3d 909, 922 (9th Cir. 2002) (holding

that a $400,000 settlement offer was not a valid offer of judgment under Rule 68, and

therefore plaintiff’s failure to accept it did not preclude him from seeking costs after winning

a lesser judgment).

Local Rule of Civil Procedure 7.2 provides that “[u]nless made at trial, a motion to

strike may be filed only if it is authorized by statute or rule . . . or if it seeks to strike a part

of a filing or submission on the ground that it is prohibited (or not authorized) by a statute,

rule, or court order.” Under the Federal Rules of Civil Procedure, a district court “may strike

from a pleading an insufficient defense or any redundant, immaterial, impertinent, or

scandalous matter,” but an offer of judgment is not a “pleading.” Fed. R. Civ. P. 12(f); see

Fed. R. Civ. P. 7(a); Burns v. Lawther, 53 F.3d 1237, 1241 (11th Cir. 1995) (“Rule 7

explicitly excludes everything else from its definition of pleadings.”). Ordinarily, a court

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cannot consider the fairness or validity of an offer of judgment until it is filed and judgment

is entered. See, e.g., McDowall v. Cogan, 216 F.R.D. 46, 52 (E.D.N.Y. 2003) (“[T]here is

nothing to strike here, as an offer of judgment is not filed with the court until accepted or

until offered by a . . . party to prove costs.”); Bechtol v. Marsh & McLennan Companies,

Inc., No. C-07-1246, 2008 WL 2074046, *2 (W.D. Wash. May 14, 2008) (declining to

“determine the fairness of the offer of judgment” where the defendant’s offer had not been

filed, and where no judgment had been entered).

Plaintiff argues that the motion to strike Defendant’s offer is appropriate “to further

the purposes of Rule 68 and to protect the ability of parties to make reasonable decisions,”

citing Boorstein v. New York, 107 F.R.D. 31, 34 (D.C.N.Y. 1985). Dkt. #11 at 2. In

Boorstein, the court denied an offeree’s motion to strike a defendant’s offer of judgment

containing an ambiguous provision for “costs.” See 107 F.R.D. at 35. The court did not hold

that a motion to strike an ambiguous offer prior to filing the offer or a judgment was proper

under the Federal Rules of Procedure. See id. Nevertheless, in declining to impose Rule 11

sanctions for the motion to strike, the court stated that the motion had a basis in fact due to

the ambiguity of the “costs” provision, and a basis in law because the dispute “present[ed],

at a minimum, a good faith argument for the extension or modification of existing law.” Id.

at 35. The court did not cite any authority indicating that a motion to strike an offer of

judgment was “procedurally permissible” under the Rules. See id. at 35.

Despite the court’s decision not to impose sanctions in Boorstein, there are clear

authorities controlling motions to strike in this jurisdiction. As Defendant correctly notes,

a motion to strike is a procedural device that is only appropriate for use against a “pleading.”

Fed. R. Civ. P. 7(a); Fed R. Civ. P. 12(f); Dkt. #10 at 2. Additionally, this Court only

considers motions to strike which are “authorized by statute or rule,” and which seek “to

strike a part of a filing or submission.” LRCiv 7.2 (emphasis added). Plaintiff does not cite

a statute or rule that supports her motion to strike. See Dkt. #8 at 1-4. Further, Defendant

has not filed its offer of judgment. Even if the offer was filed, the issue of its fairness and

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validity will only ripen after an entry of judgment less favorable than Defendant’s offer. See

McDowall, 216 F.R.D. at 52; cf. Berkla, 302 F.3d at 922; Trident Seafoods, 92 F.3d at 859.

The issue may not ripen at all if Defendant renews its offer and Plaintiff accepts it, or if

Defendant does not dispute costs in post-judgment proceedings by filing its offer of

judgment. See Fed. R. Civ. P. 68(b) (“Evidence of an unaccepted offer is not admissible

except in a proceeding to determine costs.”). The Court therefore concludes that Plaintiff’s

motion to strike Defendant’s offer of judgment is procedurally improper.

IT IS ORDERED that Plaintiff’s motion to strike (Dkt. #8) is denied.

DATED this 27th day of February, 2009.

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