FILcD COURT OF APPEALS OiV

5TAT£ OF WASHINGTON 20I3OCT -7 m 9= U7

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON SUNNY GAUTAM and SUMAN GAUTAM, husband and wife and their marital community, Respondents,

v. DONALD HICKS and JANE DOE HICKS, husband and wife and their marital community, Appellants. J No. 69406-5-1 DIVISION ONE

PUBLISHED OPINION FILED: October 7, 2013

Becker, J. — A party who appeals the award in a mandatory arbitration 

### and fails to improve his position on trial de novo must pay the attorney fees incurred by the nonappealing party. An offer ofcompromise by the 

### nonappealing party will replace the amount ofthe arbitrator's award forthe 

### purpose of determining whetherthe appealing party has improved his position. Here, the plaintiffs—ahusband with a claim forpersonal injuries and a wifewith a claim for loss ofconsortium—offered to settle both claims for $32,000, a total 

### amount not delineated by claim. The jury awarded $30,000 to the husband and 

### nothing to the wife. Because the defendant improved his positionrelative to the offer, he should not have been ordered to pay the husband's attorney fees. The
award is reversed.No. 69406-5-1/2 Sunny Gautam and Donald Hicks were involved in an automobile accident

on August 25, 2010. Sunny Gautam and his wife, Suman Gautam, sued Hicks and his marital community. Sunny Gautam claimed damages for personal injury. Suman Gautam's claim was for loss of consortium. The matterwas transferred to mandatory arbitration. The arbitrator addressed each claim separately. For Sunny's personal injuries, the arbitrator awarded $28,136. For Suman's loss of consortium claim, the arbitrator awarded 

### $3,000. In total, the arbitrator awarded $31,136. Hicks filed a timely requestfor trial de novo. "Up to thirty days prior to the actual date of a trial de novo, a nonappealing party may serve upon the appealing party a written offer ofcompromise." RCW 7.06.050(1 )(a). The Gautams made an offer of compromise pursuant to RCW 7.06.050 to settle all claims for $32,000: YOU AND EACH OF YOU ARE HEREBY NOTIFIED that pursuant to RCW 7.06.050, Plaintiff SUNNY GAUTAM and SUMAN GAUTAM hereby make an Offer of Compromise in the sum of Thirty Two Thousand Dollars ($32,000.00) for fulland final settlement of all claims in this action. This amount is inclusive of costs and statutory attorney fees. Hicks rejected the offer, and the case proceeded to trial de novo. 

### The jury found Hicks liable forthe accident and awarded Sunny $30,000 in damages. Thejury awarded nothing for Suman's loss ofconsortium claim. In total, thejury awarded $30,000. Thejury's award to Sunny ($30,000) was greaterthan the arbitrator's award to Sunny ($28,136). However, thejury's total award for both claims ($30,000) was less than what the Gautams offered to 

### acceptto compromise both claims ($32,000).No. 69406-5-1/3 

### A trial court must assess attorney fees and costs against a party who demands trial de novo and then fails to improve his position: 

### The superior court shall assess costs and reasonable attorneys' 

### fees against a party who appeals the award and fails to improve his or her position on the trial de novo. RCW 7.06.060(1); MAR7.3. 

### Ifthe nonappealing party makes an offer ofcompromise that is not 

### accepted, the amount of the offer ofcompromise replaces the arbitration award

as the measure of improvement: 

### In any case in which an offer ofcompromise is not accepted by the 

### appealing partywithin ten calendardays after service thereof, for purposes ofMAR 7.3, the amount of the offer ofcompromise shall replace the amount of the arbitrator's award for determining whetherthe party appealing the arbitrator's award has failed to improve that party's position on the trialde novo. RCW 7.06.050(1 )(b) (emphasis added). 

### The Gautams claimed that the court was obliged to assess fees and costs 

### againstHicks becausethejury verdict of$30,000 did notimprove Hicks' position with respect to Sunny. They requested that fees and costs be assessed against Hicks inthe total amount of$85,727 (lodestar amount of$42,636 and a multiplier 

### of 2) for hours spenton Sunny's claim. They requested no fees and costs related to Suman's claim. 

### Thetrial court agreed that Sunnywas entitled to an award of attorneyfees 

### and costs againstHicks. Thetotal amountawarded was $49,947.40, calculated with a multiplier of 1.5. 

### Hicks appeals. He contends thetrial court erroneously concluded that he failed to improve his position.No. 69406-5-1/4 Our review is de novo because the result turns on interpretation ofthe 

### mandatory arbitration statutes. Basin Paving Co. v. Contractors Bonding &Ins. Co., 123 Wn. App. 410, 414, 98 P.3d 109 (2004). The trial court concluded that "plaintiff is not entitled to fees and costs 

### based on its offer ofcompromise. Itwas not specific as to claims or costs." 

### Instead oflooking at the offer of compromise, the court compared the jury award 

### for Sunny's claim ($30,000) to the arbitrator's award for his claim($28,136): Byfailing to return a juryverdictin its favorgreaterthan Plaintiff's Arbitration Award and offer ofcompromiso ($28,146.10), Defendant 

### failed to improve its position on Sunny Gautam's claim only. Pursuant to MAR 7.3 and RCW 7.06.060, Plaintiff is therefore 

### entitled to his reasonable attorney's fees and costs on Sunny 

### Gautam's claim only. Defendant prevailed on Suman Gautam's claim. She is not entitled to fees and costs.

.. . Plaintiff is not entitled to fees and costs based on its offer 

### ofcompromise. Itwas not specific as to claims or costs. Conclusion of Law 1, Clerk's Papers at 152 (strikethrough by trial judge). This was error. The statute requires the court to look to the offer of 

### compromise to determine whether the appealing party has failed to 

### improve his or herposition ontrial de novo. RCW 7.06.050(1 )(b), .060(1). The Gautams do not cite authority, and we have found none, that permits 

### a court to disregard an offer of compromise on the basis that it is not 

### "specific as toclaims orcosts." TheGautams could have made an offerof compromisethatspecifically delineated one amountfor Sunny'spersonal 

### injury claim and anotherfor Suman's loss ofconsortium claim, buttheydid not do so. Theyoffered to settle"all claims" for the single sum of$32,000.No. 69406-5-1/5 To justify the trial court's use ofthe arbitrator's award as a basis of comparison, the Gautams describe their offer of compromise as if ithad been broken down between Sunny and Suman: Plaintiff attempted to reduce the Arbitration Award to an Offer of Compromise to provide Defendant with another opportunity to resolve this matter without a trial, though there was a difference of $11.10 between the two. The Offer of Compromise breakdown is: > $28,147.10 for Sunny Gautam's claim ($11.10 increase from Arb. Award); > $3,000 for Suman Gautam's loss ofconsortium claim; and > $852.90 for statutory fees and costs; > For a total of $32,000.00. 

### They made the sameargumentto thetrial court.1 Theirreply briefbelow acknowledged that their offer ofcompromise did not give "an exact breakdown of the claims," but they asserted itwas "obvious" that they had simply reduced the arbitration award to an offer of compromise. The assertion that the offer ofcompromise was broken down inthe same 

### manner as the arbitration award is simply inaccurate. The arbitrator's award had 

### twocomponents: one for Sunny and one for his wife. The offer of compromise

was global. 

### Byoffering Hicks $32,000 total, the Gautams left Hicks no choice but to 

### accept or reject the sum of $32,000 for both claims. Hicks pointed this out to the trial court in his opposition to the award offees: 

### Plaintiffs' decision to not segregate the claims inthe offer should 

### not, inretrospect, be the basis upon which to determine whether Defendant improved his position. When weighing whether or not to 

### accept an Offerof Compromise, Defendant has to analyze whether he can betterthe global settlement proposal setforth by the Plaintiff, in this case, $32,000. Plaintiffs did not submit two 

### separate offers (as was their rightto do so) i.e. one forSuman 1("Plaintiffintended to reducetheArbitration Award to an OfferofCompromise.") 5No. 69406-5-1/6 

### Gautam and one for Sunny Gautam. Ifthis was done, Defendant could accurately gauge his risk ofexposure on each claim 

### individually and make an informed decision as to whetherto accept Plaintiffs' proposal. We agree with Hicks' reasoning. The Gautams were in control ofthe 

### treatment of their claims. They could have made a separate offer ofcompromise


### as to each claim. Ifthey had, the court could have compared thejury verdict on each claim to the offer of compromise on each claim. Instead, the Gautams presented Hicks with a single settlement offerto settle both claims. Because husband and wife joined together to make a single offer, Hicks was entitled to respond as ifthey were a single party. The statute requires the court to determine whetherthe appealing party failed to improve his position. RCW 7.06.050. The rule "was meant to be understood by ordinary people who, ifasked whether their position had been improved following a trial de novo, would certainly answer 'no' in the face of a superior courtjudgment against them for more than the arbitrator awarded." Cormar. Ltd. v. Sauro. 60 Wn. App. 622, 623, 806 P.2d 253, review denied, 117 Wn.2d 1004 (1991). Here, the appealing party was Hicks. Ifasked whether his position improved after trial de novo, he would certainly answer "yes." If Hicks had 

### accepted the offer ofcompromise, he would have had to pay the Gautams $32,000. Byappealing and going through a trial de novo, he reduced his liability to $30,000. Because Hicks improved his position relative to the offer of 

### compromise, there was no basis for an award ofattorney fees and costs under RCW 7.06.060.No. 69406-5-1/7 

### The award ofattorney fees and costs is reversed. 

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WE CONCUR: 

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