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Jaso v. McCarthy (9/20/96), 923 P 2d 795
Notice: This opinion is subject to correction before publication in
the Pacific Reporter. Readers are requested to bring errors to the
attention of the Clerk of the Appellate Courts, 303 K Street,
Anchorage, Alaska, 99501, telephone (907) 264-0607, fax (907) 264-
THE SUPREME COURT OF THE STATE OF ALASKA
DONATO JASO III, a/k/a JASO )
DONATO III, ) Supreme Court No. S-7115
Appellant, ) Superior Court No.
) 4FA-93-25 CI
JAMES A. McCARTHY and )
ESTRELLA A. McCARTHY, ) O P I N I O N
Appellees. ) [No. 4407 - September 20, 1996]
JAMES A. McCARTHY, )
Cross-Appellant, ) Supreme Court No. S-7155
DONATO JASO III, )
Appeal from the Superior Court of the State of
Alaska, Fourth Judicial District, Fairbanks,
Charles R. Pengilly, Judge pro tem.
Appearances: Earl M. Sutherland, Reed
McClure, Seattle, Washington, and Dennis Bump
and John Tiemessen, Hughes, Thorsness, Gantz,
Powell & Brundin, Fairbanks, for
Appellant/Cross-Appellee. Thomas R. Wickwire,
Fairbanks, for Appellee/Cross-Appellant.
Before: Compton, Chief Justice, Rabinowitz,
Matthews, Eastaugh and Fabe, Justices.
A jury awarded James McCarthy damages of $4,000 against
Donato Jaso III. Jaso appeals issues relating to his offer of
judgment and McCarthy's attorney's fees award. McCarthy cross-
appeals rulings relating to evidence of his medical insurance and
Jaso's closing argument. (EN1) We affirm the rulings appealed by
McCarthy and reverse the fees award.
II. FACTS AND PROCEEDINGS
On April 2, 1991, a vehicle driven by Jaso rear-ended
McCarthy's car. The only trial issue was damages, particularly
whether McCarthy's damages resulted from the collision or his pre-
existing condition, and whether his wife, Estrella McCarthy, could
recover for loss of consortium.
McCarthy has suffered from neck injuries and conditions
since childhood. He was in accidents in 1958, 1965, 1984, and 1986
and underwent neck surgeries in 1968, 1970, 1980, 1982, and 1988.
In the 1988 operation, Dr. John Joosse attempted to fuse the C-5/C-
6 and C-4/C-5 vertebrae. In October 1990 McCarthy fell and sought
treatment for resulting neck and shoulder pain. In November 1990
he was diagnosed with pseudarthrosis in the area operated on in
1988. Dr. Joosse described pseudarthrosis as a false joint made up
of scar tissue which moves and irritates the nerves and spinal
cord, "causing a whole host of symptoms."
Allstate Insurance provided medical payments coverage to
McCarthy for his 1986 car accident. On February 7, 1991, Allstate
wrote McCarthy informing him that his medical payments coverage for
the 1986 accident would expire March 10, 1991, five years from the
date of loss.
Following the collision on April 2, 1991, McCarthy was
treated first by Dr. Ralph Marx, and then by Dr. Joosse. In
October 1991 Dr. Joosse again attempted to fuse the C-5/C-6
vertebrae. In a letter to Jaso's insurance company, Dr. Joosse
wrote regarding this operation:
James McCarthy has had increasing symptoms
with regard to his neck since a motor vehicle
accident of 4-2-91. . . . Our impression is
that he has a symptomatic pseudoarthrosis of
C5-6. He has already been seen by a second
opinion orthopedic surgeon who agrees with the
diagnosis and agrees with the recommendation
McCarthy's insurance company, Allstate, covered his
expenses for the 1991 surgery. On November 8, 1991, Allstate
notified Jaso's liability insurer that, to date, it had paid
$4,300.68 for injuries allegedly incurred in the Jaso/McCarthy
collision, and asserted subrogation rights to any settlement
payment between Jaso's insurer and McCarthy.
In December 1992 Jaso informally offered to settle. (EN2)
McCarthy rejected Jaso's offer; he and his wife sued Jaso in April
1993. Jaso made a Civil Rule 68 offer of judgment on July 7, 1994.
(EN3) McCarthy rejected this offer.
Damages were tried to a jury in December 1994. McCarthy
presented evidence that his medical expenses approximated $31,000.
By special verdict, the jury awarded McCarthy damages of $3,000 for
medical expenses and $1,000 for past non-economic losses. It
awarded nothing to Estrella McCarthy.
Jaso, arguing that his $20,000 offer of judgment was more
favorable to McCarthy than the jury's $4,000 verdict, sought
attorney's fees under Alaska Civil Rule 68. In opposition,
McCarthy claimed he was the prevailing party, moved for attorney's
fees, and submitted a letter from Allstate in which it asserted it
had subrogation rights to $24,620.08 as of July 7, 1994, the date
of Jaso's offer of judgment.
The court held that the verdict exceeded the offer of
judgment and awarded $1,108.61 in attorney's fees to McCarthy.
McCarthy's final judgment, including pre-judgment interest,
attorney's fees, and costs, was $11,598.35.
A. Evidence of McCarthy's Insurance Coverage for His 1986
While cross-examining McCarthy, Jaso's attorney inquired
about correspondence between McCarthy and Allstate in November 1990
and January and February 1991, regarding Allstate's coverage of
medical expenses resulting from McCarthy's 1986 accident. (EN4)
Jaso attempted to show a relationship between the expiration of
McCarthy's insurance coverage and McCarthy's claim that his pain
and injuries were attributable to the April 1991 accident.
McCarthy objected to the admission of evidence showing he had
insurance. The trial court allowed the inquiry on the condition
that Jaso make it clear McCarthy's coverage was for a prior injury.
The court also stated that McCarthy could request a jury
instruction at a later time.
McCarthy argues that it was reversible error to admit
this evidence. He asserts that evidence of insurance coverage for
the 1986 accident, coupled with evidence that McCarthy had retained
the insurance agent mentioned in conjunction with the coverage for
the 1986 accident, allowed the jury to infer that McCarthy was
insured for the medical expenses caused by the 1991 accident.
To prevail on appeal, McCarthy bears the burden of
showing that the admission was erroneous and that it had a
substantial influence on the outcome of the case. See Myers v.
Robertson, 891 P.2d 199, 208 (Alaska 1995) (citing Loof v. Sanders,
686 P.2d 1205, 1209 (Alaska 1984)). Alaska Civil Rule 61 dictates
that an error in the admission of evidence is not grounds for
reversal "unless refusal to take such action appears to the court
inconsistent with substantial justice."(EN5) In Love v. State,
457 P.2d 622 (Alaska 1969), we articulated the harmless error
standard as follows:
The test is not whether, with the erroneous
matter elided from the record, there would be
enough evidence to support a conviction. It
is not for us to speculate on the outcome at a
retrial, absent the erroneous matter. The
pivotal question is what the error might have
meant to the jury. Our function is to
consider not how the error would have affected
us if we had tried the case, but how it may
have affected a jury of reasonable laymen. It
is the impact on their minds which is critical
in determining whether an error impaired or
affected the substantial interest of the
defendant in having a fair trial.
Id. at 630. (EN6)
We do not resolve the question of whether the admission
was erroneous because we hold that even if erroneous, it was
harmless error. In allowing the evidence, the court required Jaso
to make it clear in his questioning that the insurance coverage was
for the earlier accident. McCarthy nonetheless argues that the
jury inferred from this evidence that his accident with Jaso was
covered by insurance and thus discounted its award. This argument
is necessarily speculative and the record, with the putative
erroneous admission elided, contains sufficient evidence to support
the jury's verdict. Therefore, we hold that at most the admission
of evidence of McCarthy's insurance for an earlier accident was
McCarthy also argues that the court committed reversible
error by failing to give a curative instruction. McCarthy asserts
that the court said that it would give an instruction but never
did. The transcript reveals that the trial court overruled
McCarthy's objection and declined to give an immediate instruction
but told McCarthy's counsel that "if we need to address it in the
form of a (indiscernible) instruction, we can do that. But let's
argue about that (indiscernible) after 1:30 today."(EN7)
Alaska Civil Rule 51(a) requires a specific objection if
a party is to claim error for giving or failing to give a jury
instruction. See also Conam Alaska v. Bell Lavalin, Inc., 842 P.2d
148, 153 n.8 (Alaska 1992). The court's knowledge of a party's
position with respect to an instruction is not sufficient; a
specific request or objection is required. State v. Dupere, 709
P.2d 493, 498 n.5 (Alaska 1985), modified on other grounds, 721
P.2d 638 (Alaska 1986). In Dupere, we stated:
The fact that the trial court was aware of the
State's position on the issue does not excuse
the State's failure to object to the
instructions when afforded the opportunity to
do so. "The purpose of this rule [Civil Rule
51(a)] is to enable the trial judge to avoid
error by affording him an opportunity to
correct his charge before it goes to the jury.
The dictates of the rule are satisfied only if
the judge is clearly made aware of the alleged
error in or omission from the instructions.
Counsel's objections must be specific enough
to clearly bring into focus the precise nature
of the asserted error."
Id. (alteration in original) (citations omitted) (quoting Saxton v.
Harris, 395 P.2d 71, 73 (Alaska 1964)).
The court told McCarthy's counsel that it would give an
instruction if one was necessary and that it would consider
arguments on the issue at a later point. McCarthy failed to re-
visit the issue, as invited by the court, and did not object to the
court's failure to give an instruction on the issue before the jury
retired to consider the verdict. Therefore, we review this issue
only for plain error. Zok v. State, 903 P.2d 574, 577 (Alaska
1995) (citing Conam Alaska, 842 P.2d at 153). A plain error is an
obvious mistake creating "a high likelihood that the jury will
follow an erroneous theory resulting in a miscarriage of justice."
Conam Alaska, 842 P.2d at 153 (quoting Ollice v. Alyeska Pipeline
Serv. Co., 659 P.2d 1182, 1185 (Alaska 1983)). There is "a heavy
burden on the appellants to prove that an error was highly likely
determinative. We have emphasized that we will not speculate on
whether the error altered the result." Conam, 842 P.2d at 153.
McCarthy argues that the evidence of his insurance
prejudiced the jury, causing it to discount its verdict. (EN8)
McCarthy contends that, given Jaso's liability, the jury's award
can only be explained by concluding that the jury discounted the
damages because it inferred that McCarthy had insurance. This
argument relies on a number of assumptions, particularly, (1) the
jury inferred that McCarthy had insurance for the 1991 accident;
and (2) the jury discounted its award because of that inference.
McCarthy asserts that even if the jury believed Jaso was not
responsible for all the medical costs, "a verdict in the $15,000 to
20,000 range on [the] total evidence of $31,000 seems to be a
logical minimum, i.e., viewing evidence least favorably to
The evidence permitted the jury to conclude that not all
of McCarthy's medical expenses were attributable to the 1991
collision. McCarthy's argument relies on speculation and would
require us to reweigh the evidence. McCarthy has not shown that
the failure to give a curative instruction was plain error because
he has not shown that the failure was highly likely determinative
of the verdict.
The court did not abuse its discretion in allowing the
evidence. We do not consider whether it was error to fail to give
a curative instruction because McCarthy did not request one as
instructed by the court. The court's failure to give an
instruction absent a request was not plain error.
B. Jaso's Closing Argument
McCarthy alleges reversible error with respect to
statements made in closing argument by Jaso's counsel. (EN9)
McCarthy argues that Jaso made a conscious attempt to improperly
influence the jury by exacerbating the prejudicial impact of the
insurance evidence allowed by the court. The court refused to
instruct, as McCarthy requested, that Jaso was covered by insurance
and would not have to personally pay any judgment.
As stated infra, McCarthy has the burden of proving both
error and prejudice. Myers v. Robertson, 891 P.2d 199, 208 (Alaska
1995); Zerbinos v. Lewis, 394 P.2d 886, 889-90 (Alaska 1964). The
putative prejudicial statement was stricken by the court, and
Jaso's counsel rephrased his argument and made it indisputably non-
prejudicial. The court, however, refused to instruct the jury that
Jaso had insurance. Jaso's argument was not so blatant or
inflammatory that, once stricken and rephrased, it would have
influenced a reasonable juror in such a way as to deprive McCarthy
of a fair trial. Further, the "curative"instruction McCarthy
sought regarding Jaso's insurance was not necessary and might have
needlessly prejudiced Jaso. The court did not err in refusing to
give the requested curative instruction.
C. Rule 68 Offer of Judgment and Award of Attorney's Fees
1. Standard of review
"An offer of judgment and acceptance thereof is a
contract." Davis v. Chism, 513 P.2d 475, 481 (Alaska 1973). The
interpretation of a contract is a question of law to which we apply
our independent judgment. Alaska Energy Auth. v. Fairmont Ins.
Co., 845 P.2d 420, 421 (Alaska 1993). Additionally, interpretation
of Civil Rule 68 presents a pure question of law which we review de
novo. Toney v. Fairbanks N. Star Borough Sch. Dist., Bd. of Educ.,
881 P.2d 1112, 1114 (Alaska 1994). Under this standard, we adopt
"the rule of law which is most persuasive in light of precedent,
policy and reason." Summers v. Hagen, 852 P.2d 1165, 1169 (Alaska
1993) (citing Guin v. Ha, 591 P.2d 1281, 1284 n.6 (Alaska 1979)).
We will reverse a prevailing party determination only for
an abuse of discretion and will set aside an award of attorney's
fees only if it is manifestly unreasonable. Blumenshine v.
Baptiste, 869 P.2d 470, 474 (Alaska 1994) (citing Buoy v. ERA
Helicopters, Inc., 771 P.2d 439, 448 (Alaska 1989); Myers v. Snow
White Cleaners & Linen Supply, Inc., 770 P.2d 750, 752 (Alaska
2. Grow v. Ruggles
In awarding attorney's fees to McCarthy, the superior
court relied on Grow v. Ruggles, 860 P.2d 1225 (Alaska 1993), to
hold that the judgment based on the jury verdict of $4,000 was more
favorable than Jaso's Civil Rule 68 offer of judgment of $20,000.
(EN10) The superior court interpreted Grow as mandating that an
offer of judgment be "construed in light of any subrogation claim
asserted against it." Because Allstate asserted that its
subrogated interest was $24,620 when Jaso made the offer of
judgment, the superior court concluded that Jaso's offer was
completely offset by the Allstate lien and was "worthless." The
court found that the judgment was more favorable to McCarthy
because it awarded him $1,000 above the medical expenses award.
Therefore, the court held that Jaso was not entitled to attorney's
fees under Rule 68 and that McCarthy was the prevailing party.
For Jaso to be entitled to fees under Rule 68 he must
have made a valid offer of judgment which was more favorable than
the judgment finally rendered. For an offer to be valid, it must
not be conditional or joint. Grow, 860 P.2d at 1227-28. In Grow,
we held that an offer is not conditional although it acknowledges
the existence of a lien and notes that a party is responsible for
any liens that may exist against a settlement. Id. The offer in
Grow stated that the plaintiff "would be responsible for paying any
lien." Id. Jaso's offer stated that McCarthy "would be required
to satisfy all liens . . . ." We see no material distinction
between these offers and therefore hold that Jaso's offer was not
Neither was Jaso's offer joint. It did not require
Allstate to accept its terms. Rather, it "merely summariz[ed]
standard subrogation theory"and did not attempt to "coerce
collection of the subrogation lien on specific terms as a
precondition to settlement of the liability case." Id. McCarthy's
arguments to the contrary are unpersuasive. Consequently, we hold
that Jaso made a valid Rule 68 offer of judgment.
The superior court erred in interpreting Grow and
comparing Jaso's offer with the final judgment. In Grow, this
court held that the defendant was entitled to attorney's fees
pursuant to Rule 68 when his offer of judgment was more favorable
than the judgment finally rendered, even though the offer stated
that the plaintiff would be responsible for paying any liens
against the claims. Id. at 1227-28. (EN11) The jury awarded the
plaintiff $31,777.88 for medical expenses, the exact amount of
medical expenses claimed, and $14,760 in lost past and future
income. Id. at 1226. In finding that the offer of judgment was
more favorable to the plaintiff, we stated that "[t]he bottom line
is that Grow offered Ruggles $35,000 above her medical expenses.
The jury awarded her only $14,760 over medical expenses." Id. at
Grow contains no rule explicitly requiring trial courts
to take into account subrogated interests when comparing the
relative values of a settlement offer and the judgment finally
entered. The superior court interpreted Grow as comparing the net
values of the offer and judgment after subtraction of the lien.
However, Grow did not compare net values after the lien; rather, it
compared the offer and the judgment in terms of medical and non-
medical damages awards and found that once the medical expenses
were deducted from both, the remaining $35,000 of the offer was
more favorable than the $14,760 of the jury award. Id. at 1228.
Under this approach, Jaso's all-inclusive offer of $20,000 was more
favorable than the judgment based on the jury award of $4,000, as
adjusted by the addition of pre-judgment interest, attorney's fees,
and costs pursuant to Farnsworth v. Steiner, 601 P.2d 266, 272 &
n.14 (Alaska 1979), rev'd in part on other grounds, 638 P.2d 181
(Alaska 1981). (EN12) Jaso offered McCarthy $17,000 above the
$3,000 medical expense damages the jury attributed to the accident
as compared to the $1,000 non-medical damages award. Therefore, we
hold that the superior court erred in denying Jaso attorney's fees
under Rule 68, reverse the trial court's attorney's fees award to
McCarthy, and remand for an award of attorney's fees to Jaso.
3. Prevailing party determination with respect to
Because we hold that Jaso was the prevailing party under
Rule 68, we need not address the alternative arguments presented
regarding whether Jaso was the prevailing party with respect to
claims brought by James McCarthy. We do address, however, Jaso's
arguments that the trial court erred in failing to find that he was
the prevailing party against Estrella McCarthy, to whom the jury
awarded no damages.
McCarthy argues that Jaso never affirmatively requested
attorney's fees from Estrella or argued that he was the prevailing
party vis-a-vis her claim; McCarthy asserts that Jaso merely
opposed McCarthy's motion for fees on this ground. Because Jaso
never requested fees from Estrella, McCarthy argues, the issue is
not before this court.
Jaso's attorney's fees motion and supporting memorandum
were non-specific in requesting fees against the plaintiffs. The
memorandum refers to the offer of judgment, which was extended only
to James McCarthy. However, in opposing McCarthy's motion for
fees, Jaso argued that he had completely defeated Estrella's claim
and was therefore entitled to fees as the prevailing party with
respect to her claim. This should have clarified whatever
ambiguity may have existed for the superior court as to the scope
of Jaso's motion for fees. Although the trial court awarded fees
to the plaintiffs in its January 11, 1995 order, the January 13
memorandum opinion does not explicitly address Estrella's claim and
concludes that "Plaintiff James A. McCarthy is . . . 'the
prevailing party' in this litigation." In his statement of points
on appeal, Jaso appealed the superior court's failure to find him
the prevailing party with regard to Estrella. Therefore, this
issue is properly before us.
Having defeated Estrella's damages claim, Jaso must be
considered the prevailing party with respect to her claim. On
remand the superior court must consider this when it calculates
Jaso's attorney's fees award.
We AFFIRM the rulings appealed by McCarthy. We REVERSE
the attorney's fees award and REMAND for an award of attorney's
fees to Jaso.
1. McCarthy did not appeal the denial of his motion for a new
trial; he did not list this issue in his statement of points on
cross-appeal or in his statement of the issues in his briefs to
this court. However, McCarthy articulated the standard of review
for the denial of a motion for a new trial as the applicable
standard in his opening brief of his cross-appeal and requested a
new trial in his prayer for relief. This prayer for relief is made
in context of the errors of law argued by McCarthy. Although Jaso
presents arguments on the denial of the motion for a new trial,
McCarthy has waived this issue by failing to list it or address it
substantively. Therefore, we decline to reach it.
2. A letter from Jaso's attorney stated:
I have been authorized to offer the all
inclusive sum of $20,000 in settlement. This
is inclusive of interest, costs and attorney's
fees and is made with the expectation and
understanding that your client would satisfy
any and all medical or other liens or
3. The formal offer of judgment stated:
Defendant Donato Jaso, by and through counsel
of record, and pursuant to Rule 68, hereby
makes an offer of judgment to Plaintiff James
McCarthy in the all-inclusive amount of
$20,000. This sum includes interest, costs
and attorney's fees. If you accept this
offer, the maximum amount you will receive is
$20,000 and from that amount you will be
required to satisfy all liens, subrogated
interests, and other claims of any kind or
nature arising out of the April 02, 1991,
automobile accident which forms the subject
matter of your lawsuit.
4. On November 30, 1990, after Dr. Joosse diagnosed
pseudarthrosis, McCarthy wrote the Allstate representative handling
his claim for the 1986 accident:
Connie, I am having problems and went to [the]
doctor to check up and found that the neck is
opening up where it was operated on.
On January 29, 1991, McCarthy wrote on a bill he was submitting to
This checkup shows that my condition is
getting much worse and again I refuse to let
them operate because they cannot assure me
that it will help or improve my condition a
As noted above, in February 1991 Allstate informed McCarthy that
his medical payments coverage for the 1986 accident would expire on
March 10, 1991.
5. Alaska Civil Rule 61 states in full:
No error in either the admission or the
exclusion of evidence and no error or defect
in any ruling or order or in anything done or
omitted by the court or by any of the parties
is ground for granting a new trial or for
setting aside a verdict or for vacating,
modifying or otherwise disturbing a judgment
or order, unless refusal to take such action
appears to the court inconsistent with
substantial justice. The court at every stage
of the proceeding must disregard any error or
defect in the proceeding which does not affect
the substantial rights of the parties.
6. In Poulin v. Zartman, 542 P.2d 251 (Alaska 1975), we
held that because the civil and criminal rules for harmless error
are sufficiently similar, "case law in the criminal area is
applicable and instructive"on the issue of civil harmless error.
542 P.2d at 261. Poulin recognized Love v. State, 457 P.2d 622
(Alaska 1969), as providing the definitive law on harmless error.
Poulin, 542 P.2d at 261.
7. The judge later reiterated, "[i]f we need to formulate some
sort of an instruction to address the insurance problem, we can do
that. But we don't need to worry about that, now."
8. McCarthy's arguments that the jury was prejudiced are founded
upon the theory that the trial court erroneously admitted evidence
of his insurance. McCarthy does not raise an independent ground
alleging passion or prejudice. Because we find that the admission
of the insurance evidence, if erroneous, was harmless error, we
reject McCarthy's prejudice arguments.
9. In his closing arguments, Jaso's attorney stated that no one
disputed that McCarthy had definite and long-standing health
problems "but, to saddle [Jaso] with that is the point of this
case." This statement was cut short by McCarthy's objection, was
subsequently stricken by the court and rephrased in the following
To say that my client -- I used "to saddle"--
that my client was -- is the cause of all
these problems, I think is not only contrary
to the evidence, it's contrary to your common
10. Alaska Civil Rule 68, in pertinent part, states:
(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 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 Rule 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.
(2) if the offeree is the party
defending against the claim, the interest rate
will be increased by the amount specified in
11. Allstate Insurance, which covered both the plaintiff and
defendant in Grow, asserted a subrogation lien against the
defendant's liability policy for payments made to cover the
plaintiff's medical expenses. Grow, 860 P.2d at 1226. The
defendant made an offer of judgment for $66,526.70, referencing the
lien of $31,526.70 and asserting that the plaintiff would be
responsible for paying any liens out of the offered amount. Id. at
1227. The offer concluded that "[a]ccordingly, the net amount of
this offer is $35,000." Id.
12. Under Farnsworth v. Steiner, 601 P.2d 266, 272 & n.14 (Alaska
1979), rev'd in part on other grounds, 638 P.2d 181 (Alaska 1981),
the proper calculation to determine the comparability of an offer
of judgment and a verdict includes adjustment of the verdict by the
addition of prejudgment interest earned from the date of the
accident until the date of the offer and attorney's fees and costs
incurred for that period. The total judgment of $11,598.35 awarded
by the trial court included prejudgment interest, attorney's fees
and costs from the date of the accident to the date of the
judgment. Therefore, Jaso's offer of $20,000 necessarily exceeded
the verdict as adjusted under Farnsworth.