Opinion ID: 2510478
Heading Depth: 1
Heading Rank: 6

Heading: Inclusion of prejudgment interest in the judgment when it is compared to an offer of judgment

Text: Under NRS 17.115(4) and NRCP 68(f), when a party makes an offer of judgment, and the offeree rejects the offer and later fails to obtain a judgment more favorable than the offer, then the offeree may pay certain costs and attorney fees to the offeror. In order to determine whether the offeree failed to obtain a more favorable judgment, the court must compare the judgment to the offer of judgment. [16] In a matter of first impression for this court, we hold that pre-offer prejudgment interest must be added to the judgment when comparing it to the offer of judgment, unless the offeror clearly intended to exclude prejudgment interest from its offer. [17] Further, the amount of the pre-offer prejudgment interest that must be added to the judgment includes any interest calculated on pre-offer contractual payments made by the offeror during the pendency of the litigation. Currently, both NRS 17.115(5) and NRCP 68(g) are silent on including prejudgment interest in the comparison. But, in order to achieve a balanced comparison, we conclude that pre-offer prejudgment interest must be added to the actual judgment, if it was intended to be included in the offer of judgment. If the offer of judgment is silent about whether it includes prejudgment interest, or if the intent of the offeror cannot otherwise be clearly determined, it should be presumed that the offer includes prejudgment interest. Under this rule, an offeree given a vague offer of judgment will be able to determine precisely what he or she is forgoing by rejecting the offer. And, an offeror that does not want prejudgment interest to be included in the comparison should explicitly state in the offer of judgment that it does not include prejudgment interest. Here, Rhodes's offer of judgment was silent about whether it included prejudgment interest. However, Rhodes's intent to include prejudgment interest in the offer can be gleaned from its inclusion of pre-offer prejudgment interest in its comparison. Additionally, because pre-offer prejudgment interest should be included on the judgment in the comparison under NRS 17.115(5) and NRCP 68(g) in this case, the prejudgment interest calculated on the two pre-offer payments made before trial must also be included in the comparison to determine whether State Drywall obtained a more favorable judgment than Rhodes's offer of judgment. Because the district court improperly excluded the prejudgment interest on the two contractual pre-offer payments, we conclude that the court's order must be reversed and the case remanded for a new comparison. [18]