Opinion ID: 1213853
Heading Depth: 3
Heading Rank: 3

Heading: The Borough's Cross-Appeal

Text: The Borough asks us to characterize Lakeview's nuisance claim as permanent to prevent future Lakeview claims. However, the jury found that there was no nuisance. The Borough is not entitled to a declaration on an issue mooted by the verdict and our affirmance. And to the extent the Borough claims the jury instructions mischaracterized the nuisance claim, the Borough's failure to object also bars appellate review. Alaska R.Civ.P. 51(a).
Lakeview did not accept a Civil Rule 68 offer of judgment made by the Borough; the judgment was not more favorable than the offer. The Borough argues that the trial court erred in concluding that it was unable to consider the unaccepted offer of judgment in awarding attorney's fees against Lakeview pursuant to Civil Rule 82. The trial court found that the Borough was the prevailing party and that the Borough's total fees of $269,969.77 were reasonable. Notwithstanding those findings and the Borough's defense verdict, the court declined to enhance the Borough's attorney's fee award. Rule 68 provides in relevant part: (a) At any time more than 10 days before the trial begins, either the party making a claim or the party defending against a claim may serve upon the adverse party an offer to allow judgment to be entered in complete satisfaction of the claim for the money or property or to the effect specified in the offer, with costs then accrued... . (b) If the judgment finally rendered by the court is not more favorable to the offeree than the offer, the prejudgment interest accrued up to the date of judgment is entered shall be adjusted as follows: (1) if the offeree is the party making the claim, the interest rate will be reduced by the amount specified in AS 09.30.065 and the offeree must pay the costs and attorney's fees incurred after the making of the offer (as would be calculated under Civil Rules 79 and 82 if the offeror were the prevailing party). The offeree may not be awarded costs or attorney's fees incurred after the making of the offer. In briefing this issue, the parties cite various decisions of this court pre-dating amendments to Civil Rule 82. Those amendments became effective July 15, 1993. The trial court's attorney's fees order was dated August 11, 1993. The record does not reveal whether the trial court considered the effect of the 1993 amendments, which allow the trial court to consider various factors to determine whether to vary from awards calculated per the rates set out in Civil Rule 82(b)(1) and (2). See Civil Rule 82(b)(3). [29] Given these amendments, our pre-amendment decisions discussing the impact of a successful Rule 68 offer on attorney's fees awards have limited application. [30] Considering the relationship between Rule 82 as amended in 1993 and Rule 68, we conclude that when a trial court awards fees it may, but need not, take into account the existence of an unaccepted Rule 68 offer if the claimant-offeree fails to better the offer. [31] Because the trial court believed that it was unable to consider the Borough's successful Rule 68 offer, we remand so the trial court can consider whether to increase the attorney's fees award in light of the Borough's successful offer. [32]
After Lakeview sued the Borough, the trial court permitted the Borough to file a third-party complaint against the City notwithstanding Lakeview's argument that any claims Lakeview had against the City expired long ago. The trial court later granted summary judgment to the City, ruling that the Borough's third-party claims were barred by the statute of limitations. The court entered final judgment for the City pursuant to Civil Rule 54(b). [33] The Borough argues that the trial court erred in ordering the Borough to pay part of the City's attorney's fees incurred in defending against the Borough's third-party complaint. [34] It states that [w]hen a third-party defendant successfully defends against a derivative claim, the trial court has the discretion to award attorneys fees in favor of that defendant directly against the principal plaintiff. While no party disagrees with this statement, the City and Lakeview maintain that the trial court was not required to award the City fees against Lakeview, and that the trial court did not abuse its discretion in awarding fees to the City against the Borough. We agree. Even though the Borough's perceived need to file a third-party complaint was fueled by Lakeview's statements regarding damages and by the trial court's rulings regarding the statute of limitations, the City prevailed on the Borough's third-party claims. It was appropriate to award the City fees against the Borough, the party which began the third-party action. Because the primary dispute in this case was between Lakeview and the Borough, not Lakeview and the City, the trial court did not abuse its discretion by imposing the City's award against the Borough and not against Lakeview. Cases such as State ex rel. Palmer Supply Co. v. Walsh, 575 P.2d 1213 (Alaska 1978), relied upon by the Borough, are inapplicable. [35] We find no error.