Opinion ID: 2544453
Heading Depth: 2
Heading Rank: 1

Heading: WRC's Offer of Judgment and Post-Trial Motion for Costs

Text: On April 29, 1997, subsequent to the summary judgment proceedings but before trial, WRC tendered an offer of judgment to the Association in the amount of $45,000, inclusive of all costs incurred to date, for all damages, past, present, and future, including all repair and maintenance costs[.] WRC stated that its offer was tendered pursuant to HRCP Rule 68, discussed infra. WRC further indicated that this offer of judgment is made to resolve the lawsuit without any admission by [WRC] that the Order Granting [The Association's] Motion for Partial Summary Judgment with Respect to [WRC] ... is correct, appropriate, or binding upon [WRC]. The Association did not accept WRC's offer. As a result of the trial, WRC was ordered to pay the Association 71.758% of the $23,195.36, or $16,664.53, in costs that the Association had incurred for the repair of the south drainage system. On December 30, 1997, WRC filed a post-trial motion for costs pursuant to HRCP Rule 68. WRC contended that, because the Association had rejected its April 29, 1997 HRCP Rule 68 offer of judgment for $45,000 and had only recovered $16,664.53 as a result of the court's judgment, the Association was liable for WRC's subsequent costs and attorneys' fees totaling $147,776.90. The trial court denied WRC's motion, ruling that WRC's earlier offer of judgment was not a valid HRCP Rule 68 offer because it did not dispose of all of the Association's claims.
The trial court's rulings concerning the award of attorneys' fees and costs are generally reviewed under the abuse of discretion standard. See Schefke v. Reliable Collection Agency, Ltd., 96 Hawai`i 408, 456, 32 P.3d 52, 100 (2001); Molinar, 95 Hawai`i at 335, 22 P.3d at 982.
WRC argues that the trial court erred in denying its motion for costs pursuant to HRCP Rule 68, which requires that the plaintiff pay the defendant's costs that accrue subsequent to a valid HRCP Rule 68 offer of judgment if the judgment finally obtained by the plaintiff is less than the offer. According to WRC, it offered the Association $45,000 prior to trial and the ultimate judgment against itself in favor of The Association was only $16,644.53. Therefore, WRC asserts that it is entitled to costs and attorneys' fees incurred subsequent to its offer of judgment. HRCP Rule 68 states in pertinent part: At any time more than 10 days before the trial begins, a party defending against a claim may serve upon the adverse party an offer to allow judgment to be taken against him [or her] for the money or property or to the effect specified in [the] offer, with costs then accrued. If within 10 days after the service of the offer the adverse party serves written notice that the offer is accepted, either party may then file the offer and notice of acceptance together with proof of service and thereupon the clerk shall enter judgment. An offer not accepted shall be deemed withdrawn and evidence thereof is not admissible except in a proceeding to determine costs. If the judgment finally obtained by the offeree is not more favorable than the offer, the offeree must pay the costs incurred after the making of the offer. (Emphasis added). In Crown Properties, Inc. v. Financial Sec. Life Ins. Co., 6 Haw. App. 105, 712 P.2d 504 (1985), the Intermediate Court of Appeals (ICA) stated: To qualify as a [HRCP] Rule 68 offer, the offer must be such that a judgment in the words of the offer will fully and completely decide the claim or claims toward which the offer is directed. It also must comply with [HRCP] Rule 68's express requirements. Thus, it can be made only by a party defending a claim and can relate only to a claim or claims which the offeror is defending against. [HRCP Rule 68] does not limit any party's right to tender a non-[HRCP] Rule 68 offer of partial or complete judgment or compromise. However, an offer that does not satisfy the requirements of [HRCP] Rule 68 does not entitle the offeror to the special benefits of [HRCP] Rule 68. Id. at 113, 712 P.2d at 510 (citations omitted). In Crown Properties, the defendant in a dispute involving a commercial sublease offered a sum of money to resolve the issue of past-due rent owed, but the offer did not address the plaintiff sublessor's claims seeking a declaratory judgment terminating the sublease and a writ of possession. Id. at 107, 110, 113-14, 712 P.2d at 506, 508, 510. The ICA held that the offer was too insufficient and incomplete to qualify as a HRCP Rule 68 offer of judgment. Id. at 113, 712 P.2d at 510. In this case, WRC tendered an offer of judgment to the Association in the amount of $45,000. WRC's offer excluded the Association's claim for declaratory judgment seeking to establish ownership of the drainpipes, reserving to WRC the right to further challenge the trial court's order granting the Association's motion for partial summary judgment on the issue of who owned the drain pipes. By its own terms, WRC's offer was not a valid HRCP Rule 68 offer because it did not fully and completely resolve the Association's claims. [13] Therefore, the trial court did not err in denying WRC's motion for costs.