Court Opinion

ID: 3175670
Source: CourtListenerOpinion
Date Created: 2016-02-08 21:33:26.717735+00
Date Added: 2024-06-11T14:49:44.326577
License: Public Domain

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

CHRISTA MCKILLOP, an individual,                  No. 73134-3-1

                     Respondent,                  DIVISION ONE

      v.
                                                  PUBLISHED OPINION
PERSONAL REPRESENTATIVE OF
THE ESTATE OF ROBERT E.
CARPINE, a deceased individual,
                                                                                    i
                     Appellant.                   FILED: February 8, 2016           CD

       Leach, J. — In a damage action where the amount pleaded is $10,000 8?

less, a party seeking relief is considered to be the prevailing party when her

recovery equals or exceeds the amount she offered in settlement. The party

resisting relief prevails ifthe party seeking relief recovers nothing or less than the

resisting party offered in settlement. Here, each party claims to have prevailed,

entitling it to a fee award. We conclude that neither party has shown it prevailed.

       Christa McKillop offered to accept $15,392 to settle her personal injury

claim, segregated $2,400 to general damages, $2,600 to special damages, and

$10,392 to attorney fees and costs.        A jury awarded her $8,500.        Because

McKillop's total settlement offer exceeds the amount the jury awarded, the trial

court erred in awarding her attorney fees.
NO. 73134-3-1/2

        The Estate of Robert E. Carpine (Estate) made a CR 68 offer of $10,000,

more than McKillop's jury award. On appeal, it contends that it prevailed, entitling

it to fees.     Because the Estate made a CR 68 offer of judgment, its offer

necessarily included McKillop's accrued costs.         Because the Estate makes no

claim that its offer exceeded the jury award plus costs accrued at the time of its

offer, the Estate fails to show that it prevailed. Thus, its claim for fees fails.

                                        FACTS

       Christa McKillop sued the Estate for injuries and damages sustained in a

car accident.    McKillop filed a statement of arbitrability.    Before the arbitration

hearing, McKillop served the Estate with a statement of damages, requesting a

total of $10,000. McKillop then made a settlement offer under RCW 4.84.250,

agreeing to accept a total of $15,392, segregated $2,400 to general damages,

$2,600 to special damages, and $10,392 to attorney fees and costs.

       Pursuant to CR 68, the Estate offered to settle for $10,000, "inclusive of all

claims for damages and all costs and attorneys' fees incurred." The parties did

not settle.

       The arbitrator awarded McKillop $5,272.06, comprised of $2,772.06 in

economic damages and $2,500.00 in noneconomic damages.                   The arbitrator

denied both parties' requests for attorney fees.
NO. 73134-3-1/3

         Unsatisfied with her arbitration result, McKillop asked for a trial de novo

under MAR 7.1.

         A superior court jury returned a verdict of $8,500.00, awarding $2,772.06

for economic damages and $5,727.94 for noneconomic damages. McKillop then

requested $94,624.85 in costs and attorney fees under RCW 4.84.250.             She

claimed to be the prevailing party because the jury verdict of $8,500.00 exceeded

the $5,000.00 part of her $15,392.00 settlement offer allocated to her underlying

damage claim.

         The Estate responded with its own motion for attorney fees and costs

under RCW 4.84.290.        The Estate claimed it prevailed because its $10,000

settlement offer exceeded the jury's verdict of $8,500.

         The trial court entered judgment in favor of McKillop in the amount of

$8,500.00 plus attorney fees and costs in the reduced amount of $65,000.00.

The Estate has appealed the trial court's decision on fees and costs. McKillop

has cross appealed the trial court's decision to reduce her requested attorney

fees.1

       1 The Estate moved this court to strike portions of McKillop's reply brief
because it included arguments made in response to the Estate's direct appeal
rather than the Estate's response to McKillop's cross appeal. Because we do not
consider any matters improperly raised by the parties, we deny the motion.
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NO. 73134-3-1/4

                                   ANALYSIS

      Usually, litigants must pay for their own legal expenses.2 However, RCW

4.84.250 through .290 authorizes a trial court to award attorney fees to the

prevailing party in damage actions where, as here, the party seeking relief
requests $10,000 or less.3     The plaintiff is the "prevailing party" when her

recovery, exclusive of costs, "is as much as or more than the amount offered in

settlement by the plaintiff."4 The defendant is considered the "prevailing party"

for purposes of RCW 4.84.250 if the plaintiff recovers nothing or a sum not

exceeding that offered by the defendant in settlement.5

      RCW 4.84.250 through .290 encourages out-of-court settlements,

penalizes parties who unjustifiably bring or resist small claims, and enables

      2 Cosmo. Enq'a Grp.. Inc. v. Ondeo Dearemont, Inc., 159 Wn.2d 292, 296,
149 P.3d 666 (2006).
      3 RCW 4.84.250 states,
        [l]n any action for damages where the amount pleaded by the
        prevailing party as hereinafter defined, exclusive of costs is [ten
        thousand dollars] or less, there shall be taxed and allowed to the
        prevailing party as a part of the costs of the action a reasonable
        amount to be fixed by the court as attorneys' fees.
       4 RCW 4.84.260.
       5 RCW 4.84.270 provides,
        The defendant, or party resisting relief, shall be deemed the
        prevailing party within the meaning of RCW 4.84.250, if the
        plaintiff, or party seeking relief in an action for damages where the
        amount pleaded, exclusive of costs, is equal to or less than the
        maximum allowed under RCW 4.84.250, recovers nothing, or if
        the recovery, exclusive of costs, is the same or less than the
        amount offered in settlement by the defendant, or the party
        resisting relief, as set forth in RCW 4.84.280.
                                        -4-
NO. 73134-3-1/5

parties to pursue meritorious small claims without seeing the award swallowed

up by the expense of paying an attorney.6

       McKillop and the Estate each claim to be the prevailing party for the same

reasons each asserted in the trial court.

       McKillop also contends that the Estate cannot challenge her fee recovery

on appeal because it failed to contest her motion for attorney fees below. But the

Estate filed a motion claiming that it prevailed and should be awarded fees. In

the context of this case, only one party could be the prevailing party as defined in

the applicable statutes.      By claiming to be the prevailing party, the Estate

necessarily denied that McKillop was.

       This court reviews de novo a trial court's decision that a statute authorizes

an award of attorney fees.7

Plaintiff McKillop's Offer To Settle

       Pursuant to RCW 4.84.250, McKillop offered to settle her claims for a total

of $15,392.00. Her offer stated,

              Pursuant to RCW 4.84.250, et seq[.], Plaintiff Christa
       McKillop offers to settle her claims against Defendant Personal
       Representative of the Estate of Robert E. Carpine for the following
       amounts:

       1. General Damages (pain, suffering, inconvenience) $2,400.00

       6 Beckmann v. Spokane Transit Auth., 107 Wn.2d 785, 788, 733 P.2d 960
(1987).
       7 Niccum v. Enquist, 175 Wn.2d 441, 446, 286 P.3d 966 (2012).
                                            -5-
NO. 73134-3-1/6

       2. Special Damages (medical expenses and loss of earnings)
                                                                $2,600.00
       3. Attorney's Fees and Costs (as of the date of this notice)
                                                                $10,392.00
                     TOTAL SETTLEMENT OFFER                     $15,392.00

             If the offer is not accepted, Plaintiff will seek an award of
       reasonable attorney's fees and costs pursuant to RCW 4.84.250
       and RCW 4.84.260 if she prevails at the arbitration.

McKillop contends that we should decide if she was the prevailing party by

comparing the amount her offer allocated to general and special damages,

$5,000, with the amount the jury awarded for those claims, $8,500.8 Because

the amount the jury awarded for these claims exceeded the amount McKillop

allocated to them, she claims that she recovered more than she offered in

settlement, entitling her to recover attorney fees.

       But our Supreme Court rejected a similar approach in analogous

circumstances in Niccum v. Enquist.9 There, after obtaining an unfavorable

arbitration award of $24,496, defendant Enquist requested a trial de novo.

Before trial, plaintiff Niccum offered to settle the case for $17,350 "including costs

and statutorv attorney fees."10 This amount replaced the arbitration award for

purposes of applying RCW 7.06.060(1). This statute requires that the superior

      8 In response to questions at oral argument, McKillop stated that had the
Estate tendered $5,000 in response to her total settlement offer, she would not
have accepted that amount as settlement.
       9 175 Wn.2d 441, 286 P.3d 966 (2012).
       10 Niccum. 175 Wn. 2d at 444.
                                         -6-
NO. 73134-3-1/7

court assess costs and reasonable attorney fees against a party who asks for a

trial de novo and does not improve his or her position at trial.

       Enquist rejected Niccum's offer to settle.       The jury awarded Niccum

$16,650.00 in damages.11        The trial court awarded Niccum statutory costs of

$1,016.28.12 Niccum's offer of compromise included costs and statutory attorney

fees. Therefore, Niccum contended that the trial court had to subtract $1,016.28

in costs from his $17,350.00 offer of settlement and compare the result,

$16,333.72, with the jury verdict of $16,650.00 to determine if Enquist had

improved his position at trial.13        The trial court agreed and reduced the

compromise amount by the costs it awarded.              Niccum's recovery at trial

exceeded this reduced amount.14 This meant that Enquist had not improved his

position at trial and was liable for attorney fees and costs. The trial court then

awarded attorney fees and costs to Niccum under RCW 7.06.060(1 ).15 Division

Three affirmed.16

       Our Supreme Court reversed. It described the issue before it as whether

a trial court should subtract costs from an offer of compromise that states it

       11 Niccum,   175 Wn.2d   at   444.
       12 Niccum,   175 Wn.2d   at   444-45.
       13 Niccum.   175 Wn.2d   at   445.
       14 Niccum.   175 Wn.2d   at   445.
       15 Niccum.   175 Wn.2d   at   445.
       16 Niccum v. Enquist. 152 Wn. App. 496, 501-02, 215 P.3d 987 (2009).
                                           -7-
NO. 73134-3-1/8

includes them before comparing that offer with a jury's award.17 It held that costs

should not be subtracted before the court makes the comparison. Instead, the

trial court should compare the total amount of the offer of compromise with the

jury award.

       The Supreme Court noted that Niccum was not entitled to costs at the

time of his offer, only upon entry of judgment.18 It further noted the absence of

any statutory authority for segregating an offer of compromise into separate

amounts corresponding to damages and costs.19 In the absence of this statutory

authority, a court may not reduce an offer of compromise by costs purportedly

included and then rely on the reduced amount as a basis for awarding fees and

costs against the party who rejected the offer.20 Despite the segregation, the trial

court had to treat the offer of compromise as a lump sum offer.

       Similarly,   McKillop   has   not   identified   any   statutory   authority for

segregating her settlement offer into separate amounts corresponding to

damages and costs. She had no entitlement to costs at the time of her offer. As

in Niccum. in the absence of this statutory authority and entitlement to costs, the

trial court had "no basis for giving effect to the inclusion of costs in the offer."21

       17 Niccum.   175 Wn.2d at 446.
       18 Niccum.   175 Wn.2d at 449.
       19 Niccum.   175 Wn.2d at 450.
       20 Niccum.   175 Wn.2d at 451.
       21 Niccum.   175Wn.2dat451.
                                           -8-
NO. 73134-3-1/9

McKillop offered to settle for $15,392. The trial court had no basis for reducing

this amount before comparing it to the jury award. Because the settlement offer

exceeded the jury verdict, McKillop is not entitled to fees under RCW 4.84.260.

The trial court erred in awarding those fees.

The Estate's CR 68 Offer of Judgment

       The Estate made a CR 68 offer of judgment for $10,000, including

attorney fees and costs. The Estate contends that it is entitled to attorney fees

because McKillop recovered less than $10,000. McKillop responds that a CR 68

offer of judgment cannot be made in an offer of compromise to settle an

arbitration case.22   Because of our resolution of the Estate's claim, we do not

decide this issue or if an offer called a CR 68 "Offer of Judgment" qualifies as a

settlement offer under RCW 4.84.250.

       CR 68 provides 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] with costs then
       accrued. ... If [the offer is not accepted and] 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.

      22 See Tippie v. Delisle. 55 Wn. App. 417, 420-21, 777 P.2d 1080 (1999),
where the court held that a party who rejects a CR 68 offer and then obtains less
than the offer at trial cannot be considered a prevailing party under RCW
4.84.030.
                                           -9-
NO. 73134-3-1/10

(Emphasis added.) Thus, the Estate's CR 68 offer of judgment included costs

accrued by McKillop at the time of the offer. Unlike RCW 4.84.250, the text of

the rule provides a basis for a trial court to add accrued costs to a jury award for

purposes of comparing the offer of judgment with the judgment finally obtained.

         RCW 4.84.250 defines reasonable attorney fees recoverable under it as

costs. The Estate makes no claim that its offer is more favorable than the sum of

McKillop's jury award and costs, including reasonable attorney fees, accrued at

the time of its offer. As a result, the Estate's claim for attorney fees and costs

fails.

         Because McKillop is not the prevailing party, her cross appeal requesting

additional attorney fees necessarily fails. Both parties request attorney fees on

appeal under RCW 4.84.250. Because neither party prevails, neither is entitled

to attorney fees or costs on appeal.

                                       Conclusion

         Because the total amount of McKillop's segregated settlement offer

exceeds the amount the jury awarded, the trial court erred in awarding her

attorney fees. We reverse the trial court's award of attorney fees to McKillop.

Because the Estate does not show that the value of its offer of judgment

                                          -10-
NO. 73134-3-1/11

exceeded the sum of McKillop's jury award and accrued cost, we deny its claim

for attorney fees.

WE CONCUR:

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                                     -11-