Opinion ID: 792485
Heading Depth: 3
Heading Rank: 3

Heading: Substantial Offers to Settle

Text: 45 The district court's findings as to whether Svec made a substantial offer to settle are perplexing. On remand, the district court correctly characterized Moriarty II as holding the December 30, 1997 offer by Svec to be substantial. See Moriarty v. Svec II, 233 F.3d 955, 967 (7th Cir.2001) ([A]n offer is substantial if, as in this case, the offered amount appears to be roughly equal to or more than the total damages recovered by the prevailing party.). Svec's substantial offer to settle on December 30, 1997, does not preclude the possibility that other substantial offers were made, nor does it preclude that attorneys' fees may be collected after that point. The law of this case, however, bars any claim that the December 30, 1997 offer was not substantial. 4 46 In Moriarty II, this Court stated that [s]ubstantial settlement offers should be considered by the district court as a factor in determining an award of reasonable attorney's fees. Id. The district court appears to have interpreted this language to mandate the termination of fees following a substantial settlement offer. Nevertheless, the district court did not abuse its discretion by cutting off the recovery of attorneys' fees after Svec made a substantial settlement offer. This Court cannot, however, affirm the district court's determination that the relevant substantial offer in this case was made on December 30, 1997. 47 In its Memorandum and Order of October 8, 2002, the district court found that Svec's December 30, 1997 offer was substantial and that an earlier offer on November 14, 1997, for a slightly larger sum of money, was also substantial. Based upon this determination, the district court found that a reasonable attorney's fee for the period after November 14, 1997, would be zero percent of the load star [sic] amount for the period, and that is what the court will award. Memorandum and Order, October 8, 2002, at 6. This determination was logical and well founded. If an offer of $43,000 is a substantial offer, a previous offer for a larger amount must also be substantial. We affirm the district court's finding that both offers were substantial. 5 48 The district court, however, made further findings that complicated this issue. While continuing to hold that there were two substantial offers of settlement made in late 1997, the district court stated: 49 The court believes that it was somewhat inconsistent, though, in holding that the Seventh Circuit's determination that the 12/30/1997 offer was substantial foreclosed plaintiff's argument that there was no substantial offer of settlement, but then using the 11/14/1997 date to cut off attorneys [sic] fees and costs. The court is, therefore, amending its prior orders to allow attorneys [sic] fees and costs plaintiff incurred prior to 12/30/1997. 50 We fail to see the inconsistency found by the district court. If the December 30 offer was substantial and an offer for a greater sum was previously made, that offer is also substantial. It is inconsistent to find, as the district court did, that although a substantial offer was made on November 14, attorneys' fees should be recovered until a second substantial offer was made. 51 If the district court chooses to use a substantial offer as a cut-off point for the award of attorneys' fees, such a decision is within its discretion given the facts of this case. However, the district court must offer an explanation as to why it chooses to use one substantial offer as a cut-off, but not another. As such, we remand to the district court with instructions to make one of three possible findings on this issue. The district court may find: (1) the November 14, 1997 offer was substantial and is therefore the appropriate cut-off point for attorneys' fees; (2) that despite the fact that both offers were substantial, the December 30, 1997 offer was a more appropriate cut-off (this conclusion would require further explanation); or (3) now that the district court is freed from the misapprehension that no fees may be collected after a substantial offer is made, it may find that although a substantial offer is an important factor in determining attorneys' fees, other factors lead it to conclude that Svec is liable for some portion of attorneys' fees incurred after a substantial offer was made. 52 Once the district court has made findings regarding proportionality, the proper hourly rate, and the issue of substantial offers, the district court should enter a new award of attorneys' fees against Svec, to replace the current award of $41,045.13. 53