### IN THE COU RT OF APPEALS OF TENNES SEE AT NAS HVILLE Ja nuary 8, 200 9 S es sio n
STA TE OF 

### TEN NES SEE EX REL 

### . NANA LANDENBERGER v . PROJE CT RETURN, INC. Appeal f rom the Chancer y Court for Davidson Cou nty No. 04-1552-III Ellen Hobb s Lyle, Chancellor

No. M2007- 02859-COA-R 3-CV - F iled March 11, 2009

I n this action broug h t under Te nnessee ’s Fa lse Claims Act, the trial cour t gr anted the de fenda

nt’s motion to s et aside its offe r of judg ment an d s t ri k e t h e re lator’s notice of ac cepta nce. T he re lator
s u b s e qu e n tl y

a b an d o n e d th e c a s e , an d th e tr ia l c o urt gr an te d th e d e f e n d an t’ s mo ti o nto d is mi s s
. We
a ff ir m th e re su lts re a c he d b y

the tr ia l c ourt

. Tenn. R. App . P . 3 Appeal as of Right; Judgme nt of th e Chancer y Court Affi rm ed
ANDY D. B E NN E TT , J ., delivere d the opinion of the cour t, in which P ATR I C I A J. C O T T RE LL , P.J ., M.S., and R I C HAR D H. D I NK I NS , J ., joined.
Richard J

. Br aun and Patricia Crotwell, Nashville, Tennessee, f or the a ppellant, Nana

L andenbe rg er.
David M. Rich and F rank Thoma s, Nashville, Tenne ssee, f or the a ppellee, Proje ct Return, Inc.
Michae l K. Ba ssham, Nashville, Tenne ssee, f or the a ppellant, State of Te nnessee
. OP IN ION

F AC TS AND P RO CE D U RA L B AC K GR OUND Project Return, Inc. (“ PRI ”) is a non- profit cor poration t h at co ntrac ted with the Tenne ssee Depa rtment of Corre ction (“TD OC”) to provide case manag ement, fa cil i t ati on, and proje ct manag ement ser

vices for the Tenne ssee B ridg es Prog ram, a prog ram de signe d to hel p serious and violent offende rs transition back into society afte r their rele ase from prison. Dr. Nana L andenbe rg er, a psy cholog ist, entered into a c ontrac t with TDOC to pr ovide cur riculum deve lopment and offe nder
a sse ssm e nt f

or the B ri dg e s Pr og ra

m. Dr . L and e nb e rg e r w a s to de ve lop a re e ntr y c ur ri c ulum f or us e with prog ram pa

rticipants, conduc t initi al ri s k /n e e d s a s s e s s me nts f

o r a llp r o gr am par

ticipants, conduct pe ri od ic pr og re ss a sse ssm e nts of pr og ra m pa rt ic ipa nts , c on su lt w ithg ro up faci li tators and c a se mana g e rs to a sse ss p ro g ra m in te rv e ntion s, pr ov ide c on su ltatio n r e g a rd ingpr og ra

m outc omeA n e x re l. su i t “i s t y pi cal l y b r ough t b y t he gove r nment upo n t he appl i cat i on of a pr i vat e par t y ( cal l ed a r el at or ) 1 who i s i nt er es t ed i n t he mat t er
. ” B L ACK ’ S L A W D I C T I ONA R Y 6 2 1 (8 e d

. 20 0 4 ). T he T enness ee F al se Clai m s A ct ref ers th to a p riv a te p e rs o n in iti a ting a n a c tio n a s a q u i t a m p la intiff

. See T enn
. Co de Ann. § 4- 18

- 10 4(c) ( 1). A qui t am p la intiff bri ng s an act i on “f

or t he ki ng as f

or h i msel f

. ” B L ACK ’ S L A W D I C T I ONA R Y 1 2 8 2

. A qui t am act i o n i s “brought und er a s t at u t e t h at a l l ows a pr i v at e per s on t o s u e f or a pe n al t y , pa r t of

w h i ch t h e g ov er n men t or s ome s pec i f i ed pu bl i c i n s t i t u t i on wi l l r ece i ve. ” Id

.

T he reco rd d o es not co nt ai n a rul i ng on t hi s m o t i o n. 2

-2- evaluation, and participate as a member of t he Tennessee Br idge s steeringcommittee. Her contra ct service s were to be completed in a pproxi mately

six teen hour s per month.

I n May 2004, Dr. L andenbe rg er f iled this action as relator on behalf of the State of T ennesse e 1 ag ainst PRI pursuant to the Te nnessee Fa lse Claims Act (“TF CA”), Te nn. Code Ann. § 4-18- 101 et seq. I n acc ordanc e with the TF CA, Dr. L andenbe rg er g ave the Tenne ssee Attorne y Gene ral notice of her claims ag ainst PRI . The Attorney Gene ral elected not to proc eed w ith the relator’ s action but reque sted that all pleading s and orde rs be pr ovided to the Attorney Gene ral’s of

fice

. I n November

2004, PRI moved to dismiss the suit on the basis that the relator failed to plead fra ud with su ff

i ci en t particular ity

as re quired by

Tenn. R. Civ. P. 9.02. The trial court held PRI ’s motion to di smiss in abeyance to allow the re lator to filed an a mended c omplaint. The relator filed
an amen ded com pl a int

on F e br ua ry 1, 20 05 . D r. L and e nb e rg e r a lle g e d th a t PRI su bmi tte d f a lse claims to the State of Te nnessee in v i o l ation of the TF CA by submitt ing invoice s that cer tified compliance with its contra ct wit h TDOC when PRI knew that it had not performed its duties under the contra ct. Dr. L andenbe rg er a lso alleg ed that P R I co n s p i re d with Rae Ann Coug hlin, TDOC’s direc tor of pre rele ase pr og rams, to def raud the State by

secur ing pa

y ment on PRI ’s fa lse claims.

I n Marc h 2005, PRI filed a motion to dismiss on the ground that Dr. L andenbe rg er was not an orig inal source within the meaningof Tenn. Code Ann. § 4-18-104( 3). PRI also filed a r enew ed motion to di smiss t he ame nded complaint for failure to plead fr aud with par ticularity . I n a deta iled order filed on September

1, 2005, the trial cour

t denied PRI ’s first mot i o n t o dismiss based on the orig inal source argument. I n an orde r filed on Septembe r 27, 2005, the trial court de nied PRI ’s other motion to di smiss based upon the alleg ed fa ilure to plead f raud w ith particularity

. On J une 22, 2006, Dr . L andenbe rg er f iled a motion to amend her complaint to remove the conspirac y

alleg ations reg arding Rea Ann Coughlin. PRI there afte r appr oache d Dr. L andenbe rg er 2 about settling the case
. On J u l y 6, 2006, PRI serve d upon Dr. L andenbe rg er a written off

er of judgm en t , pursuant to Tenn. R. Civ. P. 68, in t he amount of $5,000.00. The offe r of judg ment pr ov ide d a s f

oll ow s: 1. Damag es in the amount of Five Thousand a nd 00/100 Dollars ($5,000.00); 2. Al l C ourt

c os ts n owa c c ru e d in

thi s a c tio n, and

no t di sc re tio na

ry c os ts allowed unde r Rule 54 of the Te nnessee Rules of Civil P roce dure.A t t h is p o int, D r. L a n d e n b e rg e r so u g h t a n d r e c e ive d th e tr ia l c o u rt’s p e rm issio n fo r a n inte rlo c u to ry a p p e a l. 3 T h is C o u rt d e n ie d re la to r’s inte rlo c u to ry a p p e a l.

W e wi l l r ef

er t o t he appel l ant as “ t he r el at or” eve n t houg h t he act ual r el at or, D r
. Landen berg er , ha s aban do ned 4 the c a se a n d the a p p e a l i s b e ing p u rs u e d b y he r fo rm e r a tto rn e y. -3- 3. Th e a fo re me nti on e d s e ttl e me nt w ill be ma de pa y a ble in a lum p s um.
On July 17 , 2 00 6, Dr . L and e nb e rg e r s e rv e d n oti c e of a c c e pta nc e of the of fe r o f j ud g me nt.
On July 21 , 2 00 6, PRI

fi le d a mot ion to a me nd its of fe r o f j ud g me nt o r, in t

he a lte rn a tiv e , to set the offer of judgme nt aside and strike t he relator’s notice of ac cepta nce pur suant to Tenn. R. Civ. P. 60. Each attorney

submitt ed an a ffidavit deta iling his ac count of the settlement neg otiations. The trial court g rante d PRI ’s Rule 60 motion, setting aside the offe r of judgme nt a nd striking the notice of ac cepta

nce. 3 The pa rties eng ag ed in discover y
. Dr

. L andenbe rg er f

ailed to appe ar at severa l scheduled depositions. On September 21, 2007, counsel for the relator filed a motion for an order requiringDr. L andenbe rg er to unde rg o psy chiatric evaluation to determine her competenc e to proc eed w ith the action. The trial court or dere d Dr. L andenbe rger t o appear for her de position on October 2, 2007. Dr. L an d e nb e r g e r

a g a in f a il e d to a p p e ar
. H e r

a tt o r n e y a dv is e d th a t D r
. L an d e nb e r g e r

h a d le f t t he country

. On Oc tob e r 4 , 2 00 7, PRI

fi le d a mot ion fo r c on te mpt

and fo r d ism iss a l of

the re lator ’s c a se wi th p re jud ic e . In a

n o rd e r d a te d O c tob e r 10, 20 07 , the tr ia l cou rt or de re d r e lator ’s c ouns e l to state wh e the r c ouns e l in te nd e d to pr os e cut e th e ca se wi tho ut t he re lator ’s te sti mony , a

ny le g a l a uth or ity allowing counsel to pr osecute the case without the participation of the relator, and a n explanation of the e vid e nc e the re lator ’s c ouns e l i nt end ed to pr e se nt. Cou ns e l f or the re lator

fi le d a re sp on se to a dd re ss t he c ourt ’s c on c e rn s. Af

te r a he ari ng on PRI ’s mot ion fo r co nte mpt and mot ion to d ism iss , the trial cour

t concluded that it no longe r had jurisdiction to proce ed with the ca se in the abse nce of the re lator. The c ourt there fore dismiss ed the r elator’ s case with prejudice . The c ourt denied PRI ’s
c la im f or a tto rn e y fe e s and c os ts. Th e re lator

fi le d th is a

pp e a l. 4

I S S UE S ON A PP EA L
The re lator ar g ues (1) that the t rial court err ed in g ranting Rule 60 relief to set aside the of fer of judg ment afte r its unqualified ac cepta nce a nd (2) that the relator’s absence did not deprive the tria l court of subje ct matter jurisdiction. I n addition to ref uting the r elator’ s arguments, PRI asser ts that the tr ia l c ourt

e rr e d in fa ili ngto h old

an e vid e nti ary

he ari ngre g ard inga tto rn e y fe e s and in f a ili ngto awa rd PRIits attorney

fee s and costs, that Dr. L andenbe rg er w as not an orig inal source as re quired by Tenn. Code Ann. § 4- 18 -1 0 4 (3 ), and that the r elator f ailed to plead f

raud w ith sufficient particula rity in her sec ond amende d complaint.-4- S T A N D A RD O F R EVI EW
Our rev i ew of a trial cour t’s decision on a Te nn. R. Civ. P . 60 motion for relief is under an ab u s e of discre tion standard. Henry v. Goins , 1 0 4 S. W. 3 d

4 7 5 , 4 7 9 ( T e n n
. 2 0 0 3 )

. A tr ia l c ourt abuses its discre tion only whe n i t ap p l i es an inc orre ct leg al standar d or whe n it reac hes a de cision ag ainst logic or reasoning that cause s an injustice to the complainingparty

. Eldridge v. Eldridge , 42 S.W .3d 82, 85 (Tenn. 2001). Under this standard, we are required to uphold the ruling “as longas rea sonable minds could disag ree about its corre ctness.” Cal dwe ll v . H ill , 250 S.W .3d 865, 869 (Tenn. C t . App. 2007). Fur

thermore , “we are not permitted to substit ute our judg ment for that of the trial court.” Id . Thus, under the abuse of discretion st andar d, we give gr eat defer ence to the trial court’ s decision. See G oins , 104 S.W .3d at 479.
Th e tr ial cou rt’ s f

ind ing s o f f

a c t are re vie we d “ de no vo up on the re c or d o f t

he tr ia l c ourt , acc ompanied by

a pre sumption of the co rre ctness of the finding , unless the pre pondera nce of the evidenc e is otherwise .” Te nn. R. App. P. 13(d). Review of a questi o n o f law is also de novo, but with no presumption of corr ectne ss g iven to the trial court’ s conclusions. King v. Pope , 91 S.W .3d 314, 318 (Tenn. 2002)

. AN A LY SIS Proper Plaintiff

PRI argue s th a t th e tr ia l c ourt

e rr e d in fa ili ngto g ra

nt i ts m oti on

to d ism iss the a c tio n b e c a us e Dr . L ang e nb e rg e r i s n ot a pr op e r q ui t am pl a int if

f u nd e r the TF CA

. Th is argume nt is w ith out me ri t.
The Tennessee Gene ral Assembly enac ted the Te nnessee Fa lse Claims Act (“TF CA”), Te nn. Code Ann. § 4-18- 101 et seq. , in 2001. 2001 Tenn

. P u b

. Ac t s ch. 367. The TFCA e stablishes penalties for

filing false claims with state, county , or m unicipal gover nments. Tenn. Code Ann. § 4- 18-103. In addition to authorizi ng the attorne y g ener al and r eporte r and loc al prosec uting a uthorities t o i n v e s t i g a t e an d

p r o s e c u t e a c t i o n s u n d e r

t h e T F C A , t h e a c ta l l o w s a c o m p l a i n tt o b e f

i l e d b y a private pe rson or qui tam plaintiff. Te nn. Code Ann. § 4-18-104. The provisions of the TF CA upon which PRIrelies a

ppear at Tenn. Code Ann. § 4-18-104( d)(3) : (A) No cour

t shall have jurisdiction over a n action under

this chapter based upon the pu bli c dis c los ur e of a lle

ga tio ns or

tra ns ac tio ns in a cr iminal, civil, or administrative hear ing, in a

n investigation, r eport, he aring , or audit conduc ted by or at the r equest of the g e n e r a l a s s e mb ly , c o mp tr o ll e r o f th e tr e a s ur

y , o r g o v e r n in g b o dy

o f a p o litica l subdivision, or by the news media, unless the a ction is broug ht by the attorne y

g ener al and re porter or

the prosec uting attorney of a po l i t ical subdivision or the person bringing the action is an ori ginal source of the information

. (B ) F or purpose s of subdivision (d)(3)( A), “ orig inal source ” me ans an individual, who has direc t and independe nt knowledg e of the information on which the alleg ations are-5-

based, who voluntarily

provided the infor

mation to the state or political subdivision befor e filing an action based on that information, and whose information provided the ba sis or c a ta ly st f or the inv e sti g a tio n, he ari ng , a ud it, or re po rt that led t o th e pu

bli c disclosure a s descr ibed in subdivision (d)(3)(A ). (Emphasis adde d). PRIargues that Dr. L andenbe rg er is not an orig inal source and that the trial cour t there fore lacke d subject m at t er jurisdiction in thi s case . Howeve r, ac cordingto the lang uag e of subsection (A) of Tenn. Code Ann. § 4-18-104( d)(3) , the qui tam pla intiff must be an orig inal source only if the ac tion is “based upon the public disclosure of alleg ations or transa ctions. . . .”
There are as y et no appellate dec isions int erpr eting the TF CA. We theref ore look to dec isions interpre ting the f

eder al Fa lse Claims Act (“F CA”) since the fe dera l act conta ins “orig inal source ” provisions simi lar to those at issue he re. The rele vant provisions of the fe dera l act state: (A) N o court shall have jurisdiction over an a ction under this section base d upon the pu bli c dis c los ur e of a lle

ga tio ns or

tra ns ac tio ns in a cr iminal, civil, or administrative hear ing, in a co n gressional, a dminist rative, or Gover nmental Acc ounting Of

fice
re po rt , h e ari ng , a

ud it, or inv e sti g a ti on , or fr om t

he ne ws me dia , unle ss t

he a c tio n is b ro ug ht by

the Attorney

Gene ral or the person br ingingthe ac tion is an original
source of the infor

mation. (B ) F or pu rp o s es of this para g raph, “ orig inal source ” mea ns an individual who has direc t a nd independe nt know ledg e of the information on which the alleg ati o n s are based a nd has vol untarily provided the information t o the Gover nment befor e filing
an ac tion under this section which is base d on the information. 31 U.S.C. § 3730(e)(4) (empha sis added) . The “ orig inal source ” provisions of the f eder al ac t have been interpre ted to a

pply only when ther e has be en a “ public disclosure.” U.S. ex rel. McKe nzie v. Be llS ou th Telecomm s., Inc. , 123 F .3 d 9 35 , 9 38 (6 Cir . 1 99 7) ; see also U nited States v. A.D. Roe Co., th Inc. , 186 F.3d 717, 722 ( 6 Cir. 1999). I f the infor mation upon which t h e federa l FCA cla ims are th b as ed h as been publicly

disclosed, the re lator or qui tam plaintiff must be a n orig inal source

. See Mc Ke nz ie , 123 F.3d at 939. Conversely , if there has bee n no pub l i c d i s cl o s u re, a qui tam plaintiff need not show that he is an orig inal source

. W ang v. FMC Cor

p. , 975 F.2d 1412, 1416 ( 9 Cir. 1992). th The purpose of § 3730(e )(4) is “to bar pa rasitic lawsuits base d on publicly disclosed information and to preve nt pay

ment to would-be relators who have contributed nothing to the e x posure of fra ud.” U.S. ex rel. Burns v. A.D. Roe Co., Inc. , 919 F.Supp. 255, 257 (W.D. Ky . 1996), vacate d on other grounds , 186 F.3d 717 ( 6 Cir. 1999)

. As one c ourt put it, in a scheme de signe d to encour ag e insiders to blow th the whistle on fra

ud, “ther e is littl e point in rewa rdinga sec ond toot.” W

ang , 975 F.2d at 1419.

Ba sed upon the l anguag e of Tenn. Code Ann. § 4-18-104(d) (3)( A) a nd the fe dera l FCA and its attendant ca selaw, w e agree with the trial court’ s conclusion that the fe dera l analy sis applies to the TFCA. Thus, ther e is no requir ement that a qui tam plaintiff be an orig inal source if his claims are not based upon a

previous public disclosure

.-6-

PRI does not argue on appe al that Dr. L andenbe rg er’ s alleg ations under the TF CA are based upon a public disclosure . Rather, PRI assumes that the act require s all qui tam claims to be broug ht by an orig inal source and arg ues t hat Dr. L andenbe rg er does not qualify as an orig inal source
. As we have c oncluded that the “ orig inal source ” require ment does not c ome into play unless the claims ar e ba se d up on a pu

bli c dis c los ur e , the tr ia l c ourt pr op e rl y de nie d PRI ’s mot ion to dis mis s b a se d o n it s “orig inal source ” ar g ument.
I n light of our

dispositi on of the other

issues prese nted, we ne ed not addre ss PR I ’s ar g ument re g ard ingthe su ff

ic ie nc y of the fr a ud a lle g a tio ns in Dr

. L and e nb e rg e r’ s se c on d ame nd e d c omp la int

. Rule 60 Motion Perhaps the most difficult i ssue presented by this appeal is Dr. L andenbe rg er’ s argument that the tr ia l c ourt e rr e d in g ra nti ng PRI ’s mot ion

fo r R ule 60 re lie f f

ro m th e a c c e pte d o ff

e r o f j ud g me nt.
We be g in by noting the proce durally unusual way in which this issue comes to us. After Dr. L and e nb e rg e r ac c e pte d PRI ’s of fe r of jud g me nt, PRI fi le d a “Mo tio n to Am e nd I ts O ff e r o f Jud g me nt, or inth e A lt e r

n a ti v e , Se t A s id e th e Pr e v io u s O f f e r o f Ju d g me n t a

n d Str ik e Pl a inti f

f ’ s N o ti c e of Acc eptanc e” c iting Te nn. R. Civ. P. 60. The trial cour t found “that De fenda

nt’s Offe r of Judgment and Relator’ s subsequent ac cepta nce did not constitute a va lid meetin g o f t h e minds, necessitating equitable intervention by this Court under Te nn. R. Civ. P . Rule 60.” The pr ocedur al wrinkle he re arises f rom the fa ct that, when it g rante d PRI ’s motion for Rule 60 relief , the trial cour

t had not y et e nte re d a n a c tua l ju dg me nt fr om wh ic h to gi ve re lie f pur su ant to Te nn . R. Civ. P. 60 . O n a pp e a l, b oth parties have addr essed their arguments to the propriety of the trial c ourt’s ac tions under Tenn. R. Civ. P. 60. Under Te nn. R. Civ. P. 68, if an offer of judgme nt is acc epted, e ither par ty may file the off

er of jud g me nt a

nd no tic e of a c c e pta

nc e wi th t

he c ourt “ and the re up on

jud g me nt sh all

be re ndere d
acc ording ly .” (Empha sis added). Six th Circ uit casela w holds that Rule 68 of the fe dera l rules “lea ves no discretion in the district cour t to do any

thing but ente r judg ment once a n offe r has be en ac cepte d.” Mallory v. Ey rich , 922 F.2d 1273, 1279 ( 6 Cir. 1991). In light of the mandatory languag e of Te nn. th R. Civ. P . 68 and the implicit rec og nition of the trial court and the parties that the entry of judg ment was e ssentially

automatic, we will review the trial court’ s actions under Tenn. R. Civ. P. 60.

B e fo re a dd

re ssi ng th e pro prie ty

of the tr ia l c ourt ’s g ra

nt o f R ule 60 re lie f, we fi nd

it
a pp ro pr iate to d isc us s T e nn . R. Civ . P. 68 of fe rs of jud g me nt. Te nn . R. Civ . P. 68 state s:
At any tim e mor e tha

n 1 0 d ay s b e fo re the tr ia l be g ins , a part y de fe nd inga g a ins t a c la im m ay

se rv e up on

the a dv e rs e pa

rt y an o ff e r t o all ow jud g me nt to be take n a g a ins t the de fe nd ingpa

rt y fo r the mon e y or pr op e rt

y , or the e ff

e c t spe c if ie d in th e of

fe r, wi th
c os ts the n ac c ru e d. L ike wi se a pa rt y pr os e c uti nga

c la im m ay

se rv e up on

the a dv e rs e party an off er to a llow judgment to be taken ag ainst that adver se party for the money or prope rty

or to the eff

ect specifie d in the offe r with costs then ac crue d. I f within 10 da y s a ft e r s e rv ic e of

the of fe r t he a dv e rs e pa

rt y se rv e s w ri tte n n oti c e tha

t th e of fe r i s acc epted, e ither par

ty may file the offer and not ice of acc eptanc e, together with proofF e d . R . C iv. P . 6 8 w a s a d o p te d in 1 9 3 8 to e n c o u ra g e s e ttl e m e n ts. C o m m itt e e N o te to the P re lim ina ry D ra ft 5 of P r op ose d A mendm ent t o Federal Rul es of Ci vi l P r ocedur e 68, 98 F. R

. D

. 33 7, 363 ( 19 83 )

. Fed. R. Ci v. P

. 68, “ whi ch has been am end ed twi ce b ut o nl y in m i no r respects , ha s rarel y be en i nvo ked and has b een co nsi d ered l argel y i nef f ect i ve as a mean s of

ac hi evi ng i t s goal s
. ” I d.

U n l i k e i t s f

ede r al c ou n t er par t , T en n
. R. Ci v
. P. 68 w as a m end ed t o a l l ow t h e pl ai n t i f f t o ma k e an of

f er of 6 ju d g m e n t. T e n n . R . C iv. P . 6 8 c m t. 2

. -7- of ser vice ther eof, w ith the court and the reupon judg ment s h all be re ndere d
acc ording ly . An offe r not acc epted shall be deeme d withdrawn a nd evidenc e ther eof is n ot admissi ble e xce pt i n a pr oc e e din g to d e te rm ine c os ts. I f t he jud g me nt f

ina lly ob ta ine d b y

the of fe re e is n ot mor e fa

vo ra ble tha n th e of fe r, the of fe re e sh a ll p ay

a ll cost s a c c r u in g a f te r th e ma

k in g o f th e o f

f e r
. T h e f a c t th a t an o f

f e r is made but not
acc epted doe s not preclude a subseque nt offer

. The rule was copied from Fe d. R. Civ. P . 68 when Te nnessee orig inally adopted the T ennesse e Rules 5 of Civ il Pr oc e dure . T e nn . R. Civ . P. 68 c mt. 1. I t w a s h op e d th a t “ the pr oc e dure pr ov ide d fo r b y thi s Rule may fac ilitate the settlement of ca ses in ma ny instances.” Id

.; se e als o F

ra nc ois v . W

ill is , 205 6 S.W .3d 915, 917 (Tenn. Ct. App. 2006) ( “The purpose of the rule is to promote settlements.” )

I t has bee n said that, “[i] f there is a ny occa sion in civil litig ation which calls for caution and
car e by counsel, it is the draf

ting of a Rule 68 offer.” Sampson v. Embassy Suites, Inc. , No. CI V. A. 95-7794, 1998 WL726649, *1 (E.D. Pa. Oc t. 16, 1998). Discuss i n g Fe d. R. Civ. P . 68, one commentator observe d: “ Be cause the rule is c ursory in f orm and does not a lert the parties to its many
nu anc e s, de fe nd ants of

te n a re un c e rt a in o r m isguid e d a bo ut h ow to dr a ft a Rul e 68 of fe r. De fe nd ants often e nd up draf

ting of fer s that car

ry unintended conse quences.” Da nielle M. Shelton, Rewriting Rule 68: Re alizing t he Be nefits of the Fe deral Settleme nt Rule by Inje cting Certainty into Offers of Judgme nt , 91 M I NN

. L. R EV

. 865, 867-68 (2007) . One suc h conseque nce is c ollatera l liti g ation about the offe r. Id. at 868.
There has bee n litigation in Tenne ssee c oncer ning what is included in a Rule 68 off er of judgme nt. Most if not all of that lit igation has addre ssed what is inc luded in “costs” a ssessed by the rule. “ Costs” envisioned by Tenn. R. Civ. P. 68 are the c osts authorized by statute as asse ssed by

the trial court. Person v. Fle tcher , 582 S.W .2d 765, 767 (Tenn. Ct. App. 1979). T he costs mandated by Rul e 68 “ are on ly tho se that ar e re fe rr e d to in Te nn . R. Civ . P. 54 .0 4( 1) and no t th e dis c re tio na

ry c os ts ref err ed to in 54.04(2).” Burton v. Fine , No. E2003-01572- COA-R3-CV, 2004 WL1541 3 41, *8 (T e nn . Ct . App . July

9, 20 04 ); see also Jordan v. CSX Transp., Inc. , No. M1999-01415-COA- R3-CV, 20 01 WL37 85 55 , * 8 ( Te nn . Ct . App . Apr . 1 7, 20 01 ). Rul e 68 c os ts do not inc lud e de po sit ion c os ts, court re porter f

ees, e x pert witness fe es, or pr ejudg ment interest. Fran c ois , 205 S.W .3d at 917; Burton , 2 00 4 WL

15 41 34 1, a t *8 ; Jordan , 2001 WL 378555, at *8.T h is c o u rt h a s h e ld tha t a n a g re e m e n t to p a y c o sts d o e s n o t i n c lud e a tto rn e y fee s. C ra ck er B a rrel O l d C o u n t ry 7 St or e, I nc. v

. Epper s on , No. M 20 06

- 02 42 4- COA- R3- CV, 20 08 W L 59 61 74 , * 3 ( T e n n
. Ct

. App

. M a r
. 4, 20 08 ) ( pe r m. a p p . gr a n te d S e p t. 2 4 , 2 0 0 8 ).

S o m e fed e ra l statu te s, su c h a s m a n y c ivil rig h ts a n d c o p yrig h t la w s, inc lud e a tto rn e y fee s a s c o sts. See She l t o n, 8 91 M IN N

. L. R EV

. a t 8 9 7

.

W h ile a d o p ting the ru le o f c o n stru ing a n y a m b igu ity a g a ins t th e o ff e ro r, the c o u rt in Nor dby v. Anchor H ock i ng 9 Pack agi ng Co. , 1 9 9 F .3 d 3 9 0 , 3 9 2 (7 C ir. 1 9 9 9 ), fo u n d no a m b igu ity in th e lan g u a g e o f t h e o ff e r e v e n tho u g h it d id th

no t m en t i o n a t t o rne y f

ee s. -8- Under Rule 68, the term “c osts” does not co v er at torney fee s absent a statute including
a tto rn e y fe e s a s p art

of c os ts. See P erson , 582 S.W .2d at 766-67. In situations where attorney fee s 7
are not defined a s costs by statute, uncer

tainty arises a s to whether attorney fee s are part of the offe r 8 of judg ment. Nothing in Te nn. R. Civ. P . 68 or F ed. R. Civ. P. 68 requires inclusion of attorne y fee s in the offe r. Nothing preve nts the ir inclusion e ither. In the ideal of fer of judg ment scena

rio, the off

er e xpre ssl y a dd

re sse s att or

ne y fe e s. Un fo rt

un a te ly , as i n th e matte r b e fo re us , th e of fe r o f j ud g me nt i s often silent on the issue of attorney fee s.
There are at least two differ ent appr oache s used by fede ral c ourts when f

ace d with an offe r of judg ment that i s silent as to attorney fee s when such f

ees a re not include d in the underlying statute’s def

inition of costs. Severa l circuits have adopted the r ule that any

ambig uity

in an offe r of judgme nt is to be construed ag ainst the draf ter. See, e .g., Sea Coast Foods, Inc. v. Lu-Mar Lobster and Shrimp, Inc. , 260 F.3d 1054, 1059 (9 Cir. 2001); Nusom v. Comh W oodburn, Inc. , 122 F.3d 830, th 83 4 ( 9 Cir . 1 99 7) ; W

ebb v. J ames , 1 47 F .3 d 6 17 , 6 23 (7 Cir . 1 99 8) ; Util. Automation 2000, Inc. v. th th Choctawhatchee Ele c. Coop., Inc. , 2 98 F .3 d 1 23 8, 12 43 (1 1 Cir . 2 00 2) . T he ratio na le be hin d th is th rule is that “it is incumbent on the defe ndant making a Rule 68 offe r to state cle arly that attorney

fee s are inc lud e d a s p art

of the tot a l sum f

or wh ic h ju dg me nt may be e nte re d if the de fe nd ant w ish e s to avoid exposure t o attorney fee s in addition to t he sum offe red plus costs.” Nusom , 122 F.3d at 834. Under Rule 68, the judgme nt is “to t he effec t specifie d in the offer,” so the def endant should bea

r the “brunt of unc erta inty .” Id. I t ha s b e e n s tate d th a t, “ [b]e c a us e Ru le 68 puts p la int if

fs a t th e ir pe ri l whether they acc ept the off

er, the defe ndant must make cle ar whether or not the offe r is inclusive of fee s when the unde rlying statute provides fe es for t h e p re vailing pa rty .” W ebb , 147 F.3d at 623. Courts adopting this appr oach have emphasized that “the plaintiff should not be left in the positi on of guessing what a c ourt will later hold the off er means.” Id. The re sult in m ost of these c ases is that the of fe re e is p e rm itt e d to re c ov e r atto rn e y fe e s a bo ve and be y on d th e of

fe r o f j ud g me nt. 9

I n another

g roup of c ases, c ourts fac ed with a n offe r of judg ment that is silent as to attorney fee s have a

pproac hed the offe r o f j udg ment in the context of contrac tual principles and ha ve considere d extrinsi c evidence of the par ties’ intent. See R adeck

i v. Amoc o Oil Co. , 858 F.2d 397, 400 (8 Cir . 1 98 8) ; Basha v. Mitsubishi Motor Credit of Am., Inc

. , 3 3 6 F

. 3 d

4 5 1 , 4 5 4 ( 5 C i r
. 2 0 0 3 )

. In th th Radec ki , defe ndant sent plaintiff a n offe r t h at wa s s i lent as to attorney fee s; the next day , the defe ndant sent a c larifica tion of the offe r spec ifying that attorney fe es were included in the of fer

. Radec ki , 85 8 F .2 d a t 39 9. Th e pla int if f a c c e pte d the ini tia l of

fe r a nd so ug ht t o r e c ov e r atto rn e y fe e s.-9-

Id. The court observe d: “Rule 68 does not require a laundry list of t he elements of re lief included wi thi n a n o ff e r o r s pe c if

ic me nti on

of a tto rn e y fe e s, and it ru ns c ounte r to the purp os e of Rul e 68 to assume that for

ms of relief

not mentio n ed are not intended to be included w ithin the sum offere d. Rule 68 is designe d to encour ag e complete settlement, not simply to resolve the issues of liability and
reme dies.” Id. a t 40 1. Sin c e the of fe r wa s sile nt as to attor

ne y fe e s, the c ourt de c ide d to “r e so rt to fac tors outside the words themselve s.” Id. a t 40 0. F ind ing that the se ttl e me nt n e g oti a tio n amou nts included attorney fee s, the s econd offer was a clar ification (not a modi fication) of the initial offe r, the wordingof the initial offe r indicate d a lump sum settlement, and t h e o ffe r excee ded the damag es c la ime d b y

pla int if f, the c ourt

fo un d th a t th e de fe nd ant i nte nd e d th e of fe r t o incl ud e a tto rn e y

fe e s. Id. at 401-02. T h e co u rt next determined that the purpor ted ac cepta

nce w as base d upon the offe r excluding attorne y

fee s. Id. at 403. There fore , the court conclude d that there was no mutual asse nt and no a gre em en t. Id. I n Basha , th e c ourt c on c lud e d th a t, a lth ou g h th e of fe r “ do e s n ot e xpre ssl y addre ss attorney ’s fe es, we ag ree with the district court that the circumstances surrounding the offe r, if not the text itself, strong ly support the view that the parties intended to se ttle a ll c laims, including those for attorney ’s fe es.” Basha , 336 F.3d at 453-54.
Whil e a c kn o w l e d g i n g t h a t b o t h a p p r o a c h e s t o th i s i s s u e h av e th e i r s tr e n g th s , th i s c o urt is inclined to follow the view that an off er that is sil ent as to attorne y fee s is inherently

ambig uous and that it is a pp rop ri ate fo r a

c ourt to c on sid e r e xtri ns ic e vid e nc e re g ard ingthe int e nt o f t he pa rt ie s. Under Tenne ssee law , a settlement a g ree ment i s a contract betwe en the pa rties to the litigation, subject to the rules of contra ct interpre tation. See Swe eten v . Trade Envelope s, Inc. , 938 S.W .2d 383, 38 5 ( Te nn . 1 99 6) ; Envtl. Abateme nt, Inc. v. Astrum R.E. Corp. , 27 S.W .3d 530, 539 (Tenn. Ct. App. 20 00 ). A c on tr a c t’ s la

ngua g e “ is a

mbi g uo us wh e n it s me anin g is un c e rt a in and wh e n it c an b e fa ir ly construed in mor e t h an o n e way .” Gredig v. Tenn. Farm ers Mut. Ins. Co. , 891 S.W .2d 909, 912 (T e nn . Ct . App . 1 99 4) . Wh e n a c on tr a c tua l pr ov isi on is am biguo us , a cou

rt is pe rm itt e d to look

to extrinsi c evide nce to de termine the pa rties’ intent. Allstate I

ns. Co. v. W

atson , 195 S.W .3d 609, 612 (T e nn . 2 00 6) ; S. Ry

. Em

plo y e es Cr e dit

Un ion v . Th or

nb ur g , 680 S.W .2d 791, 792 (Tenn. Ct. App. 1984). In the pre sent ca se, PRI ’s offe r of judg ment made no mention of attorney fee s. We find the of fe r am biguo us in that it is unc le ar wh e the r t he of fe r i nc lud e s atto rn e y

fe e s o r n ot. In li g ht o f t

his ambig uity , it was permissible for the trial court to consider extrinsi c evide nce in the f orm of attorne y aff idavits.
We reviewthe trial cour

t’s action in g ranting Rule 60 relief from the Rule 68 judg ment under the abuse of discre tion standard. Goins , 104 S.W .3d at 479. Tenn. R. Civ. P. 60.02(1) allows a trial
c ourt to grant re lie f f

ro m a jud g me nt b a se d u

po n “ mis take , in a dv e rt e nc e , s ur pr ise or e xcu sa ble neg lect.” T he trial c ourt con s i d er ed t h e af fidavits of the attorney s reg ardingthe settlement
ne g oti a tio ns . PRI ’s a tto rn e y ’s a ff ida vit inc lud e s th e fo llo wi ngstate me nts : Duringthat conver sation [on J une 28, 2006] Imade it clea r that De fenda

nt intended the offe r to be a ll-inclusive to avoid further costs of litigat i o n
. . . . Inadver tently , I failed to include text in the offe r indicating that it wa s inclusive of attorney s fee s... . Duringthat conver sation [on J uly 10, 2006], I repe atedly informed Plaintiff’s attorney that the Off

er w as all-inclusive. . . . Plaintiff’s c ounsel ac knowledg ed and unde rstood-10-

the intended ter

ms of Def

endant’ s Offe r of Judgment. . . . At that time [ on J uly 19, 2006, afte r PRIhad re ceive d the notice of acc eptanc e], Plaintiff’s counsel mused that the No tic e of

Ac c e pta nc e mus t ha

ve c ome a s a sur

pr ise and that he no w i nte nd e d to pursue pay

ment of hi s attorney ’s fees under the False C laims Act. He a cknowledg ed during that conver sation that Iand Projec t Return, Inc. inten ded for the Off er of Judg me nt t o b e a ll- inc lus ive a s a nu isa nc e -v a lue se ttl e me nt.
I n his affidavit, Dr. L andenbe rg er’ s attorney denied that ther e wa s any discussion about attorney fee s during the conve rsation on J uly 10, 2006. He state d that, in the attorney s’ conve rsation on J uly 19, 2006, PRI ’s attorne y

“expressed that he was shocked and did not anticipate a petition for attorne y ’s fe e s. ” Th e tr ia l c ourt

c on c lud e d th a t th e of

fe r o f j ud g me nt a

nd a c c e pta nc e “ did no t c on sti tut e a

va lid meetingof the minds, nece ssitating equitable intervention by this Court” under Rule 60. The relator arg ues t hat t he trial court e rre d by awa rding Rule 60 relief

based upon a

mistake of law–PRI ’s purporte d ignor ance of the leg al conse quence s that could flow from the acc eptanc e of its offer of

judgme nt. I t i s i n d ee d “w el l settled that ig noranc e of a n attorney

with respec t to the
a pp lic a ble law o r r

ule s is no t th e ty

pe of mis take that invo ke s th e re lie f p ro vid e d f or un de r R ule 60.02(1).” Holiday v. S h o n ey ’s S

. , Inc. , 42 S.W .3d 90, 94 (Tenn. Ct. App. 2001). We have conclude d, howeve r, that the attorney aff idavits pr ovided ample basis for the trial cour t to find that the fa ilure to mention attorney fee s in the offe r of judg ment was an inadver tent omission on t he par

t of PRI ’s attorne y , not a mi stake of law. We cannot conclude that the t rial court applied “a n incorre ct leg al standar d or has rea ched a decision which is ag ainst logic or re asoning that cause d an injustice to the party

complaining .” Eldridge , 42 S.W .3d 82 at 85. We a ffirm the trial cour t’s ruling on the Tenn. R. Civ. P. 60 m otion.

Procee ding w ithout a Qui Tam Plaintiff
The trial c ourt dismissed this case on PRI ’s motion based upon Dr. L an d en berg er’ s a ban do nme nt o f t

he c a se . T he re lator ’s a tto rn e y argue s th a t th e c a se sh ou ld h ave be e n a llo we d to continue. We disag ree
. An ac tion may

be broug ht under the Tennessee Fa lse Claims Act by the attorne y

g ener al and repor ter, a local prose cuting authority , or a qui tam plaintiff. Te nn. Code Ann. § 4-18- 104. When
a q u i tam plaintiff initiates such an ac tion, the qui tam plaintiff is required to g ive notice to the attorney g ener al and r eporte r or loca l prosecutingauthority . Tenn. Code An n
. § 4-18-104( c). The attorney g ener al or loca l prosecutor then has 60 day s in which to decide whether it wishes to intervene in the action. Id. I n this case, the a ttorney g ener al elec ted not to intervene . In that situation, “the qui tam plaintiff shall have the same r ight to conduc t the action as the at t o rn ey g ener al and r eporte r or prosec uting a

uthority would have ha d if it had chosen to pr ocee d under subse ction (c) .” Tenn. Code Ann. § 4-18-104( f)( 1).
As the re lator empha siz es, an a ction under the TFCA is broug ht for the primary benef it of the state, and the state is the rea l party in interest. Se e Un ite d S

tates v . H e alt h P os sib ili tie

s, P. S. C. , 207F o r th e re a so n s d isc u sse d a b o v e re g a rd ing th e o rig ina l so u rc e p ro v isio n s, w e d isa g re e w ith the trial c o u rt’s 10 rel i ance o n T enn. C o d e A nn. § 4

- 1 8

- 1 0 4 (d)(3).
-11- F.3d 335, 341 ( 6 Cir. 2000). I n the event a TFCA action is succe ssful, a portion of the proce eds of th th e s u it g o to th e s tate , an d

a p o rti o n to th e qu i t am p la inti f f

. T e n n
. Co d e A n n
. § 4

- 1 8

- 1 0 4 ( f )

. We know of no a

uthority , howeve r, that would allow a qui t am p l aint iff’s attorney to proce ed with a TFCA suit in the absenc e of the qui tam plaintiff or the interve ntion of the attorney g ener al or loca l prosec utor. This would amount to a lawsuit without a plaintiff. Even if the case is being prosec uted for the be nefit of the state, there must be a par ty prese nt to rep re s en t t h e state–e ither a qui tam plaintiff or the state itself as re prese nted by the attorne y

g ener al o r local prose cutor. Since the
a tto rn e y g e ne ra l c ho se no t to int e rv e ne in thi s c a se , th e wi thd ra wa l of Dr . L and e nb e rg e r l e ft

no pa rt y to prosecute the ca se. Pursuant to Tenn. Code A nn. § 4-18-104( c)( 1), an a ction broug ht by a qui tam pla int if f “ may be di smi sse d o nly

wi th t he wr itt e n c on se nt o f t

he c ourt , ta

kin g int o a c c ount t

he be st interests of the pa

rties involved and the public purposes behind this c hapter .” In light of the absenc e of a qui tam plaintiff or

the state a s a par

ty , the trial cour

t acted pr operly

in dismi ssing the a ction. 10 Attorney Fe es
PRI argues that the trial court err ed in not holding a n evidentiar

y hear ing on the issue of attorney fee s and in failingto awar d it attorney fee s.
T en n
. C o d e Ann. § 4-18-104( g )(9) addre sses the awa rd of attorney fee s to a defe ndant in a TFCA a ction:

I f the state, a political subdivision, or the qui tam pla intiff proce eds with the ac tion, the c ourt may

aw ar d to th e d e f

e n d an t i ts r e a s o n a

b le a tt o r n e y ’ s f e e s an d expenses ag ainst the other party that proce eded w ith the action if the de fenda nt preva ils in t he acti o n an d the cour

t finds that the claim was c lear ly frivolous, clea

rly vexatious, or br ou g ht s ole ly

fo r p ur po se s o f h ara ssm e nt. ( E mp h a s i s a d d e d )

. B e c a

u s e t h e s t a tu t o r

y l an g u a g e m ak e s th e aw ar d o f a t t o r n e y f e e s d i s c r e t i o n ar

y, we revie w the trial court’s decision under the defe rential a buse of discr etion standard. Sta te e xre l. Carney v. Crosby , 255 S.W .3d 593, 602 (Tenn. Ct. App. 2008).

I n d e nyingPRI ’s re qu e st f or a tto rn e y fe e s, the tr ia l c ourt

ma de the fo llo wi ngfi nd ing s:
The re sults of discovery

conducte d by the pl aintiff .

. . are that documents that we re specific ally the responsibility of the de fenda

nt to ge nerate under

its contract with the State , s uc h a s r isk

a sse ssm e nts , n e e ds a sse ssm e nts , r e e ntr y pla ns , w e re no t pr e se nt i n the file or w ere g ener ated by the o ff en d ers themselves. Depositions of forme r employ ees of the defendant also revea led that the def endant’ s case manag ement wa s gros s l y i n co mp et en t

. T h e r ec o rdes t ab l i s h es th at th er e i s s u ff i ci en tev i d en t iary

support fo r t h e a l l eg ations of the complaint such that the defe ndant is una ble to make a-12-

probable cause showing that the plaintiff cle arly broug ht the lawsuit for vex ation or ha ra ssm e nt, or

that th e laws uit

is c le arl y fr ivo lou s.
Al t h o u g hth e t r i a l c o u rtm a d e ane xp r e s s f i n d i n g th a tth e c l a i mw a s n o tc l e ar l y fr ivo lou s, ve xati ou s, or

br ou g ht s ole ly

fo r p ur po se s o f h ara ssm e nt, PRI argue s th a t th e tr ial cou rt erred in
makin g su c h a fi nd ing wi tho ut ho ldi ng a se pa ra te he ari ng . T he statut or

y langua g e do e s n ot c on ta in such a r equire ment. Moreove r, the re cord doe s not contain a tra nscript of the r eleva

nt hear ing a

nd does not otherwise ref

lect that PRIreque sted an a dditional hearing o r t h e opportunity to put on evidenc e at the time of

the trial cour

t’s ruling . We find n o ab u s e o f discretion in the trial c ourt’s denial of attorney

fee s to PR I

. Th e jud g me nt o f t

he tr ia l c ourt

is af fi rm e d. Cos ts of

a pp e a l are a sse sse d e qu a lly a g a ins t bo th parties.

___________________________________ ANDY D . BEN

NETT, JUDGE