Title: WESTON v KUNTZ
Citation: N/A
Docket Number: 81-096
State: Montana
Issuer: Montana Supreme Court
Date: October 19, 1981

NO. 81-96 I N T H E SUPREME C O U R T O F T H E STATE OF M O N T A N A 1981 T O M WESTON, P l a i n t i f f and Respondent, -VS- ROY KUNTZ, Defendant and Appellant. Appeal from: D i s t r i c t Court of t h e Fourth J u d i c i a l D i s t r i c t , I n and f o r t h e County of Missoula, The Honorable John S. Henson, Judge presiding. Counsel of Record: For Appellant; G a r l h q t o n , Lohn & Robinson, Missoula, Montana For Respondent : Smith, Connor & Van Valkenburg, Missoula, Yontana Submitted on B r i e f s : J u l y 2 4 , 1981 Decided: OcT 1 9 1981 Filed: DCT 19 1981' Mr. J u s t i c e John C. H a r r i s o n d e l i v e r e d t h e Opinion of t h e Court. T h i s a p p e a l a r i s e s from damages t o r e s p o n d e n t ' s C h e v r o l e t van and its c o n t e n t s d u r i n g a f i r e J a n u a r y 1 6 , 1978, i n a p p e l l a n t ' s p l a c e of b u s i n e s s . Respondent had taken h i s v e h i c l e t o a p p e l l a n t ' s a u t o r e p a i r s e r v i c e o u t s i d e S t . I g n a t i u s , Montana, f o r r e p a i r on J a n u a r y 1 5 , 1978. A f t e r t h e c l a i m was f i l e d , both p a r t i e s conducted d i s c o v e r y , and respondent f i l e d a motion f o r summary judg- ment on A p r i l 3 , 1979. The D i s t r i c t Court heard argument on t h e motion and on J u l y 2, 1979, e n t e r e d summary judgment f o r t h e respondent r e s e r v i n g judgment a s t o t h e amount of damages. Following t h e summary judgment, Kuntz appealed t h e d e t e r m i n a t i o n of l i a b i l i t y . T h i s Court found t h e attempted a p p e a l was premature because damages had n o t been determined and t h e a p p e a l was d i s m i s s e d without p r e j u d i c e . Weston v . Kuntz ( 1 9 8 0 ) , Mont. , 610 P.2d 172, 37 St.Rep. 855. On August 1 3 , 1980, a p p e l l a n t s e r v e d an o f f e r of judgment on t h e respondent p u r s u a n t t o Rule 68, M.R.Civ.P., f o r t h e amount of $2,200. The o f f e r s p e c i f i e d it was n o t t o be c o n s t r u e d a s an admission t h a t Kuntz was l i a b l e or t h a t Weston had s u f f e r e d damages a s a r e s u l t of any n e g l i g e n c e o r l i a b i l i t y by Kuntz. On September 1 7 , 1980, t h e p a r t i e s s t i p u l a t e d t o an e x t e n s i o n of t h e o f f e r through October 15, 1980. I n a l e t t e r d a t e d October 28, 1980, Kuntz i n d i c a t e d a w i l l i n g n e s s t o compromise on t h e c l a i m i n a t o t a l amount of $2,272.16. The l e t t e r noted t h e amount was e s s e n t i a l l y t h e same a s a s e t t l e m e n t o f f e r of June 24, 1980, and s t a t e d i f t h e f i g u r e was s t i l l unacceptable t o Weston, Kuntz would r e q u e s t t h e c o u r t t o s e t t h e m a t t e r f o r h e a r i n g on damages. On t h a t day a l s o Kuntz f i l e d a motion t o e s t a b l i s h a h e a r i n g d a t e . On October 29, 1980, respondent s e r v e d a p p e l l a n t w i t h an acceptance of o f f e r of judgment f o r $2,272.16. On October 30, 1980, Kuntz f i l e d a n o t i c e of e x p i r a - t i o n and withdrawal of o f f e r of judgment s t a t i n g t h e o f f e r whicn had been extended through October 15, 1980, had n o t been accepted i n its amount of $2,200. Weston moved f o r e n t r y of judgment on November 3 , 1980. Following a h e a r i n g on t h e motion f o r e n t r y of judgment, t h e D i s t r i c t Court found t h a t on October 28, 1980, Kuntz had served an amended or new o f f e r on Weston who accepted t h a t o f f e r on October 29, 1980. K u n t z ' s motion f o r r e c o n s i d e r a t i o n was d e n i e d , and t h i s appeal followed. S e v e r a l i s s u e s a r e b e f o r e t h i s Court on appeal: 1. Did t h e D i s t r i c t Court e r r i n its e n t r y of judgment i n t h e amount of $2,272.16? 2. Does t h e o f f e r of judgment e n t e r e d by t h e D i s - t r i c t Court render t h e q u e s t i o n of l i a b i l i t y moot, t h e r e b y p r e c l u d i n g a p p e a l of t h e summary judgment? 3 . Did t h e D i s t r i c t Court e r r i n g r a n t i n g p l a i n t i f f - r e s p o n d e n t ' s motion f o r summary judgment? A p p e l l a n t a p p e a l s i n p a r t from t h e D i s t r i c t C o u r t ' s f i n d i n g of an amended o r new o f f e r of judgment i n t h e amount o f $2,272.16. T h i s Court w i l l o v e r t u r n t h e f i n d i n g s of f a c t of t h e D i s t r i c t Court o n l y i f t h e y a r e n o t supported by s u b s t a n t i a l evidence. And, t h e evidence w i l l be viewed i n t h e l i g h t most f a v o r a b l e t o t h e p r e v a i l i n g p a r t y . Toeckes v . Baker ( 1 9 8 0 ) , Mont. , 611 P.2d 609, 611, 37 St.Rep. 948, 950. The original offer of judgment for $2,200 was filed August 13, 1980, and by stipulation of the parties the offer was extended through October 15, 1980. By affidavit, respondent's counsel stated that on or about October 15, 1980, he talked with appellant's counsel. They discussed the fact that appellant's counsel had heard from her client, that her client had come up some, that she was uncertain as to how the total figure compared with the August 13, 1980 offer, but that a letter from appellant's counsel regarding the matter was being forwarded to respondent's counsel. The affidavit further stated that at no tine during the tele- phone conversation did either counsel mention or discuss that the offer contained in the forthcoming letter was to be made, not as an offer of judgment as had already been made and extended, but only as a stipulation of damages. During the conversation also, according to the affidavit, respondent's counsel again advised appellant's counsel of his opinion that an offer of judgment, if accepted, would render an appeal moot. Appellant's reply memorandum to the motion to enter judgment states there was an oral agreement between the parties to keep the offer open beyond October 15, 1980, until respondent received appellant's final position as to damages. Counsel for both parties argued the motion before the District Court. Appellant claims that an offer of judgment, as a compromise agreement, is contractual and requires a "meeting of the minds" to be binding. Appellant then argues since t h e r e was no "meeting of t h e minds" between t h e p a r t i e s , t h e r e could be no o f f e r of judgment a s a n t i c i p a t e d by Rule 68, M.R.Civ.P. But t n e q u e s t i o n of whether t h e r e was a "meeting of t h e minds" is n o t a s c l e a r - c u t a s a p p e l l a n t p u r p o r t s . The o f f e r of judgment had been extended s e v e r a l t i m e s , both v e r b a l l y and by s t i p u l a t i o n . A p p e l l a n t admitted t h e o f f e r had been l e f t open beyond October 15 by agreement u n t i l r e s p o n d e n t r e c e i v e d a p p e l l a n t ' s f i n a l p o s i t i o n . Respondent's c o u n s e l s t a t e d t h e r e had been no mention i n h i s t e l e p h o n e c o n v e r s a t i o n w i t h a p p e l l a n t ' s counsel t h a t t h e new f i g u r e was meant t o be o f f e r e d i n any form o t h e r t h a n o f f e r of judgment w i t h which t h e p a r t i e s had been d e a l i n g f o r two weeks. C e r t a i n l y t h e r e is c o n f l i c t i n g evidence which might i n d i c a t e t h e r e was no "meeting of t h e minds," b u t such evidence was weighed by t h e D i s t r i c t Court, which determined o t h e r w i s e . W e f i n d t h e D i s t r i c t C o u r t ' s d e t e r m i n a t i o n is supported by s u b s t a n t i a l evidence and t h e r e f o r e a f f i r m i t s f i n d i n g of a new o r amended o f f e r of judgment f o r $2,272.16. The q u e s t i o n t h e n becomes whether t h e e n t r y of o f f e r of judgment p r e c l u d e s a p p e a l of t h e summary judgment by making t h e q u e s t i o n of l i a b i l i t y moot. The o f f e r of judgment was made and e n t e r e d p u r s u a n t t o Rule 68, M.R.Civ.P. T h i s q u e s t i o n h a s n o t been con- s i d e r e d i n Montana s o we must look t o t h e f e d e r a l r u l e which is n e a r l y i d e n t i c a l t o t h a t i n Montana. The c a s e b e f o r e us does n o t appear t o be one which was contemplated by t h e r u l e o r h a s been c o n s i d e r e d i n c o n n e c t i o n w i t h it. Rule 68, M.R.Civ.P., p r o v i d e s : "Offer of judgment. A t any time more t h a n 10 d a y s b e f o r e t h e t r i a l b e g i n s , a p a r t y defending a g a i n s t a c l a i m may s e r v e upon t h e a d v e r s e p a r t y an o f f e r t o a l l o w judgment t o b e t a k e n a g a i n s t him f o r t h e money o r p r o p e r t y o r t o t h e e f f e c t s p e c i f i e d i n h i s o f f e r , w i t h c o s t s t h e n accrued. I f w i t h i n 10 days a f t e r t h e s e r v i c e of t h e o f f e r t h e a d v e r s e p a r t y s e r v e s w r i t t e n n o t i c e t h a t t h e o f f e r is a c c e p t e d , e i t h e r p a r t y may t h e n f i l e t h e o f f e r and n o t i c e of acceptance t o g e t h e r w i t h proof of s e r v i c e t h e r e o f and thereupon judgment s h a l l be e n t e r e d . An o f f e r n o t ac- cepted s h a l l be deemed withdrawn and evidence t h e r e o f is n o t a d m i s s i b l e e x c e p t i n a pro- ceeding t o determine c o s t s . I f t h e judgment f i n a l l y o b t a i n e d by t h e o f f e r e e is n o t more f a v o r a b l e t h a n t h e o f f e r , t h e o f f e r e e must pay t h e c o s t s i n c u r r e d a f t e r t h e making of t h e o f f e r . The f a c t t h a t an o f f e r is made b u t n o t accepted does n o t p r e c l u d e a subse- q u e n t o f f e r . When t h e l i a b i l i t y of one p a r t y t o another h a s been determined by v e r d i c t o r o r d e r o r judgment, b u t t h e amount o r e x t e n t o f t h e l i a b i l i t y remains t o be determined by f u r t h e r p r o c e e d i n g s , t h e p a r t y a d j u d g e d l i a b l e may make an o f f e r of judgment, which s h a l l have t h e same e f f e c t a s an o f f e r made b e f o r e t r i a l i f it is served w i t h i n a rea- s o n a b l e time n o t l e s s t h a n 10 d a y s p r i o r t o t h e commencement of h e a r i n g s t o d e t e r m i n e t h e amount or e x t e n t of l i a b i l i t y . " The b a s i c purpose of Rule 68 is t o encourage s e t t l e - ment and a v o i d p r o t r a c t e d l i t i g a t i o n . Greenwood v . Stevenson ( 1 9 8 0 ) , 88 F.R.D. 225; S t a f f e n d v. Lake C e n t r a l A i r l i n e s , I n c . ( 1 9 6 9 ) , 47 F.R.D. 218; 7 Moore's F e d e r a l P r a c t i c e 1168.02. The r u l e a l s o a t t e m p t s t o a l l e v i a t e t h e burden of s u b s e q u e n t l y accrued c o s t s t o t h e d e f e n d a n t by p l a c i n g them on a p l a i n t i f f who r e f u s e s t o a c c e p t a good f a i t h o f f e r and s u b s e q u e n t l y r e c e i v e s a judgment which is n o t g r e a t e r t h a n t h e o f f e r . Greenwood, 88 F.R.D. a t 228. Here it is t h e p a r t y who made t h e o f f e r of judgment who seeks f u r t h e r l i t i g a t i o n . Throughout t h e n e g o t i a t i o n s and o f f e r s r e g a r d i n g damages, a p p e l l a n t maintained h i s s o l e purpose was t o p u t t h e c a s e i n t o proper p o s t u r e f o r a p p e a l . The bulk of t h e l e g a l work r e q u i r e d of t h e p a r t i e s t o a p p e a l had, because of the previous appeal, been done before the offer. The additional costs of trial if the matter were to be remanded, however, would be significant. It is apparent from the record that throughout these proceedings both parties were aware of appellant's intent to pursue appeal and respondent's position that acceptance of an offer would make the appeal improper. Nevertheless, an offer of judgment was made and accepted. Although this fact situation was not contemplated by the comments accompanying Rule 68 or considered by the cases construing it, the underlying philosophy of Rule 68 remains. It would be inconsistent to allow a procedure designed to facilitate settlement and avoid litigation costs to be used to challenge liability and, thereby, extend litigation. The Ninth Circuit considered a similar concept, although based on different facts, in Cruz v. Pacific American Insurance Corp. (9th Cir. 1964), 337 F.2d 746. There, an offer of judgment was made and accepted which specified a matter of a 12% penalty was to be decided by the court. The appellee later argued the court could not award the 12% damages without first having a trial on the issue of liability. The court held that such a trial was foreclosed by the offer and acceptance. "There could never be a valid offer in compromise and a valid acceptance if there had to be a subsequent determination of liability . . ." Cruz, 3 3 7 F.2d at 7 5 0 . Rule 68 specifies that an offer of judgment made after a finding of liability but before determination of damages shall have the same effect as an offer made before trial. That effect, if the offer is accepted, is to render the issue of liability moot. We therefore find the appeal of the summary judgment before us inappropriate. Affirmed. We concur: 3 4 9 , w d Chief Justice