IN THE COURT OFAPPEALS OF THE STATE OF WASHINGTON CHRISTA MCKILLOP, an individual, Respondent,

v. PERSONAL REPRESENTATIVE OF THE ESTATE OF ROBERT E. CARPINE, a deceased individual, Appellant. No. 73134-3-1 DIVISION ONE
PUBLISHED OPINION

FILED: February 8, 2016 i CD 

### Leach, J. — In a damage action where the amount pleaded is $10,000 8? 

### less, a party seeking relief is considered to be the prevailing party when her recovery equals or exceeds the amount she offered in settlement. The party resisting relief prevails ifthe partyseeking reliefrecovers nothing or less than the 

### resisting partyoffered in settlement. Here, each party claims to have prevailed, 

### entitling itto a feeaward. We conclude that neither party has shownitprevailed. Christa McKillop offered to accept $15,392 to settle her personal injury 

### claim, segregated $2,400 to general damages, $2,600 to special damages, and $10,392 to attorney fees and costs. A jury awarded her $8,500. Because 

### McKillop's total settlement offer exceeds the amount the jury awarded, the trial courterred inawarding herattorney fees.NO. 73134-3-1/2
The Estate of Robert E. Carpine (Estate) made a CR 68 offer of $10,000,


### more than McKillop's jury award. On appeal, itcontends that itprevailed, entitling it to fees. Because the Estate made a CR 68 offer of judgment, its offer necessarily included McKillop's accrued costs. Because the Estate makes no claim that its offer exceeded thejury award plus costs accrued at the time of its offer, the Estatefails to showthat itprevailed. Thus, its claimforfees fails. FACTS Christa McKillop sued the Estate for injuries and damages sustained in a
car accident. McKillop filed a statement of arbitrability. Before the arbitration 

### hearing, McKillop served the Estate with a statement of damages, requesting a total of $10,000. McKillop then made a settlement offer under RCW 4.84.250, 

### agreeing to accept a total of $15,392, segregated $2,400 to general damages, $2,600to special damages, and $10,392 to attorneyfees and costs. Pursuantto CR 68, the Estate offered to settle for $10,000, "inclusive ofall claims for damages and all costs and attorneys' fees incurred." The parties did
not settle. The arbitrator awarded McKillop $5,272.06, comprised of $2,772.06 in 

### economic damages and $2,500.00 in noneconomic damages. The arbitrator denied both parties' requests for attorneyfees.NO. 73134-3-1/3
Unsatisfied with her arbitration result, McKillop asked for a trial de novo under MAR 7.1. 

### Asuperior court jury returned a verdict of $8,500.00, awarding $2,772.06 foreconomic damages and $5,727.94 for noneconomic damages. McKillop then 

### requested $94,624.85 in costs and attorney fees under RCW 4.84.250. She claimed to be the prevailing party becausethejury verdict of$8,500.00 exceeded the $5,000.00 part of her $15,392.00 settlementoffer allocated to her underlying damage claim. 

### The Estate responded with its own motion for attorney fees and costs under RCW 4.84.290. The Estate claimed it prevailed because its $10,000 

### settlementofferexceeded thejury's verdictof$8,500. 

### The trial court entered judgment in favor of McKillop in the amount of 

### $8,500.00 plus attorney fees and costs in the reduced amount of $65,000.00. The Estate has appealed the trial court's decision on fees and costs. McKillop 

### has cross appealed the trial court's decision to reduce her requested attorney fees.1



### 1 The Estate moved this court to strike portions of McKillop's reply brief 

### because it included arguments made in response to the Estate's direct appeal ratherthan the Estate's response to McKillop's cross appeal. Becausewe do not 

### considerany matters improperly raised by the parties, we denythe motion. -3-NO. 73134-3-1/4

ANALYSIS 

### Usually, litigants must payfortheirown legal expenses.2 However, RCW 4.84.250 through .290 authorizes a trial court to award attorney fees to the 

### prevailing party in damage actions where, as here, the party seeking relief requests $10,000 or less.3 The plaintiff is the "prevailing party" when her 

### recovery, exclusive ofcosts, "is as much as ormore than theamount offered in settlement by the plaintiff."4 Thedefendant isconsidered the "prevailing party" for purposes of RCW 4.84.250 if the plaintiff recovers nothing or a sum not 

### exceedingthatofferedbythe defendantin settlement.5 RCW 4.84.250 through .290 encourages out-of-court settlements, 

### penalizes parties who unjustifiably bring or resist small claims, and enables
2Cosmo. Enq'a Grp.. Inc. v. Ondeo Dearemont, Inc., 159Wn.2d 292, 296, 149 P.3d 666 (2006). 3 RCW 4.84.250 states,



### [l]n any action for damages where the amount pleaded by the prevailing party as hereinafter defined, exclusive of costs is [ten thousand dollars] or less, there shall be taxed and allowed to the 

### prevailing party as a part of the costs of the action a reasonable amountto be fixed bythe court as attorneys' fees. 4 RCW 4.84.260. 5RCW4.84.270 provides,



### The defendant, or party resisting relief, shall be deemed the 

### prevailing party within the meaning of RCW 4.84.250, if the 

### plaintiff, orpartyseekingreliefin anactionfordamages where the amount pleaded, exclusive of costs, is equal to or less than the maximum allowed under RCW 4.84.250, recovers nothing, or if 

### the recovery, exclusive of costs, is the same or less than the amount offered in settlement by the defendant, or the party 

### resisting relief,as setforth in RCW4.84.280. -4-NO. 73134-3-1/5 

### parties to pursue meritorious small claims without seeing the award swallowed 

### up by the expense of paying an attorney.6 McKillop and the Estate each claim to be the prevailing party forthe same

reasons each asserted in the trial court. 

### McKillop also contends that the Estate cannot challenge her fee recovery on appeal because it failed to contesthermotion forattorneyfees below. Butthe Estate filed a motion claiming that itprevailed and should be awarded fees. In the contextof this case, only one party could be the prevailing party as defined in 

### the applicable statutes. By claiming to be the prevailing party, the Estate necessarily denied that McKillopwas. This court reviews de novo a trial court's decision that a statute authorizes


### an award ofattorneyfees.7 PlaintiffMcKillop's OfferTo Settle Pursuantto RCW 4.84.250, McKillopoffered to settle herclaims for a total of$15,392.00. Her offer stated, Pursuant to RCW 4.84.250, et seq[.], Plaintiff Christa 

### McKillop offers to settle her claims against Defendant Personal 

### Representative ofthe Estate ofRobert E. Carpine for the following amounts: 

### 1. General Damages (pain, suffering, inconvenience) $2,400.00
6 Beckmann v. Spokane TransitAuth., 107 Wn.2d 785, 788, 733 P.2d 960 (1987).7Niccum v. Enquist, 175 Wn.2d 441, 446, 286 P.3d 966 (2012). -5-NO. 73134-3-1/6


### 2. Special Damages (medical expenses and loss ofearnings) $2,600.00 3. Attorney's Fees and Costs (as ofthe date ofthis notice) $10,392.00 TOTAL SETTLEMENT OFFER $15,392.00 Ifthe offer is not accepted, Plaintiff will seek an award of reasonable attorney's fees and costs pursuant to RCW 4.84.250 and RCW4.84.260 ifshe prevails atthe arbitration. McKillop contends that we should decide if she was the prevailing party by comparing the amount her offer allocated to general and special damages, 

### $5,000, with the amount the jury awarded for those claims, $8,500.8 Because the amount the jury awarded for these claims exceeded the amount McKillop allocated to them, she claims that she recovered more than she offered in settlement, entitling herto recover attorneyfees. But our Supreme Court rejected a similar approach in analogous 

### circumstances in Niccum v. Enquist.9 There, after obtaining an unfavorable arbitration award of $24,496, defendant Enquist requested a trial de novo. Beforetrial, plaintiffNiccum offered to settle the casefor $17,350 "including costs 

### and statutorv attorney fees."10 This amount replaced the arbitration award for purposes of applying RCW 7.06.060(1). This statute requires that the superior



### 8 In response to questions at oral argument, McKillop stated that had the Estate tendered $5,000 in response to her total settlement offer, she would not have accepted that amount as settlement. 

### 9175 Wn.2d441, 286 P.3d 966 (2012). 10 Niccum. 175 Wn. 2d at444. -6-NO. 73134-3-1/7

court assess costs and reasonable attorney fees against a party who asks for a trial de novo and does not improve his orherposition attrial. Enquist rejected Niccum's offer to settle. The jury awarded Niccum 

### $16,650.00 in damages.11 The trial court awarded Niccum statutory costs of $1,016.28.12 Niccum's offer ofcompromise included costs and statutory attorney fees. Therefore, Niccum contended that the trial court had to subtract $1,016.28 in costs from his $17,350.00 offer of settlement and compare the result, 

### $16,333.72, with the jury verdict of $16,650.00 to determine if Enquist had 

### improved his position at trial.13 The trial court agreed and reduced the compromise amount by the costs it awarded. Niccum's recovery at trial 

### exceeded this reduced amount.14 This meantthat Enquist had not improved his position at trial and was liable for attorney fees and costs. The trial court then 

### awarded attorney fees and costs to Niccumunder RCW 7.06.060(1).15 Division Three affirmed.16 Our Supreme Court reversed. Itdescribed the issue before itas whether a trial court should subtract costs from an offer of compromise that states it

11 Niccum, 175 Wn.2d at444. 12 Niccum, 175 Wn.2d at444-45. 13Niccum. 175 Wn.2d at445. 14Niccum. 175 Wn.2d at445. 15Niccum. 175 Wn.2d at445. 

### 16 Niccum v. Enquist. 152Wn. App. 496, 501-02, 215 P.3d 987 (2009). -7-NO. 73134-3-1/8


### includes them before comparing thatoffer with a jury's award.17 It heldthatcosts should not be subtracted before the court makes the comparison. Instead, the trial court should compare the total amount of the offer of compromise with the jury award. The Supreme Court noted that Niccum was not entitled to costs at the 

### time of his offer, only upon entry of judgment.18 It further noted the absence of any statutory authority for segregating an offer of compromise into separate 

### amounts corresponding to damages and costs.19 Inthe absence of this statutory authority, a court may not reduce an offer of compromise by costs purportedly included and then rely on the reduced amount as a basis for awarding fees and 

### costs againstthe party who rejected the offer.20 Despitethe segregation, the trial court had to treatthe offerofcompromise as a lump sum offer. Similarly, McKillop has not identified any statutory authority for segregating her settlement offer into separate amounts corresponding to damages and costs. She had no entitlementto costs atthe time ofheroffer. As in Niccum. inthe absence ofthis statutory authority and entitlement to costs, the 

### trial court had "no basis for giving effect to the inclusion ofcosts inthe offer."21

17Niccum. 175 Wn.2d at446. 18Niccum. 175 Wn.2d at449. 19Niccum. 175 Wn.2d at450. 20Niccum. 175 Wn.2d at451. 21 Niccum. 175Wn.2dat451. -8-NO. 73134-3-1/9 

### McKillop offered to settle for $15,392. The trial court had no basis for reducing this amount before comparing it to thejury award. Because the settlement offer exceeded the jury verdict, McKillop is not entitled to fees under RCW 4.84.260. The trial courterred inawarding thosefees. The Estate's CR 68 Offer ofJudgment The Estate made a CR 68 offer of judgment for $10,000, including attorney fees and costs. The Estate contends that it is entitled to attorney fees because McKillop recovered less than $10,000. McKillop responds that a CR 68 offer of judgment cannot be made in an offer of compromise to settle an arbitration case.22 Because of our resolution of the Estate's claim, we do not decide this issue or ifan offer called a CR 68 "Offer ofJudgment" qualifies as a settlement offer under RCW 4.84.250. CR 68 provides inpertinentpart: At any time more than 10 days before the trial begins, a party defending against a claim may serve upon the adverse party an offerto allowjudgmentto be taken against [him] with costs then accrued.
... If[the offer is not accepted and] the judgment finally obtained by the offeree is not more favorable than the offer, the offeree mustpaythe costs incurred afterthe making ofthe offer.



### 22 See Tippie v. Delisle. 55 Wn. App. 417, 420-21, 777 P.2d 1080 (1999), where the court held that a party who rejects a CR 68 offer and then obtains less than the offer at trial cannot be considered a prevailing party under RCW 4.84.030. -9-NO. 73134-3-1/10 (Emphasis added.) Thus, the Estate's CR 68 offer ofjudgment included costs 

### accrued by McKillop at the time ofthe offer. Unlike RCW 4.84.250, the text of the rule provides a basis for a trial courtto add accrued costs to a jury award for purposes ofcomparing the offerofjudgmentwith thejudgmentfinally obtained. RCW 4.84.250 defines reasonable attorney fees recoverable under it as costs. The Estate makes no claim that its offer is more favorable than the sum of 

### McKillop's jury award and costs, including reasonable attorney fees, accrued at the time of its offer. As a result, the Estate's claim for attorney fees and costs fails. Because McKillop is not the prevailing party, her cross appeal requesting 

### additional attorney fees necessarily fails. Both parties request attorney fees on appeal under RCW 4.84.250. Because neither party prevails, neither is entitled to attorneyfees or costs on appeal.Conclusion Because the total amount of McKillop's segregated settlement offer 

### exceeds the amount the jury awarded, the trial court erred in awarding her 

### attorney fees. We reverse the trial court's award of attorney fees to McKillop. Because the Estate does not show thatthe value of its offerofjudgment

-10-NO. 73134-3-1/11


### exceeded the sum of McKillop's jury award and accrued cost, we deny its claim for attorneyfees.

WE CONCUR: 

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