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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Jackman v. Jewel Lake Villa One (11/02/2007) sp-6186
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, phone (907) 264-0608, fax (907) 264-0878,
e-mail corrections@appellate.courts.state.ak.us.
THE SUPREME COURT OF THE STATE OF ALASKA
| APRIL JACKMAN, | ) |
| ) Supreme Court No. S- 11715 | |
| Appellant, | ) |
| ) Superior Court No. 3AN-03-4415 CI | |
| v. | ) |
| ) | |
| JEWEL LAKE VILLA ONE, a | ) O P I N I O N |
| Limited Partnership; | ) |
| JAMES W. WONG; | ) No. 6186 November 2, 2007 |
| RESOLUTION MANAGEMENT, | ) |
| L.L.C., an Alaska Limited Liability | ) |
| Company, | ) |
| ) | |
| Appellees. | ) |
Appeal from the Superior Court of the State
of Alaska, Third Judicial District,
Anchorage, Peter A. Michalski, Judge.
Appearances: Benjamin I. Whipple, Palmer, for
Appellant. Matthew D. Regan and Erin K.
Egan, Holmes Weddle & Barcott, PC, Anchorage,
for Appellee.
Before: Bryner, Chief Justice, Matthews,
Eastaugh, Fabe, and Carpeneti, Justices.
BRYNER, Chief Justice.
CARPENETI, Justice, concurring.
I. INTRODUCTION
April Jackman fell and injured herself on a staircase
at her apartment complex, the Jewel Lake Villa Apartments. After
Jackman received medical treatments for her injuries, one of
Jewel Lakes insurers paid $3,474 to cover these expenses.
Jackman later sued Jewel Lake for failing to maintain the
staircase. Jewel Lake sent Jackman a $1,400 offer of judgment,
but she failed to accept the offer and her case went to trial.
The jury found that Jackmans damages totaled $7,147.23 and that
Jewel Lake bore fifty-one percent of the fault. Jewel Lake moved
for enhanced attorneys fees under Civil Rule 68 claiming that its
offer of judgment exceeded the jurys verdict. To determine the
value of the verdict in comparison to the pretrial offer, the
superior court first reduced the total amount awarded to reflect
Jewel Lakes fifty-one percent share of the damages; it then
subtracted from this amount the advance medical expenses paid by
Jewel Lakes insurer. This yielded a net final judgment lower
than the pretrial offer, so the court awarded enhanced fees to
Jewel Lake. Jackman appeals this award. We reverse. Jewel
Lakes insurer apparently paid Jackmans expenses unconditionally,
without any indication that it based the payments on Jewel Lakes
potential fault. Because Jewel Lake failed to establish the
payments actual basis, we hold that, for purposes of applying
Rule 68, the payments should have been treated as reducing the
jurys total award of damages, not just the damages reflecting
Jewel Lakes share of the fault. Since this method results in a
judgment more favorable than Jewel Lakes pretrial offer, we
remand for entry of a modified judgment.
II. FACTS AND PROCEEDINGS
The basic facts of this case are undisputed. April
Jackman injured herself when she slipped and fell on an icy
stairway in the Jewel Lake Villa Apartments, the apartment
complex where she resided. Jackmans injuries required medical
treatment; Jewel Lakes insurers paid Jackman a total of $3,474 to
reimburse her expenses. These reimbursements appear to have been
paid unconditionally; nothing in the record suggests that they
were based on Jewel Lakes potential fault for the accident.
Jackman later sued the owners and managers of the Jewel
Lake Villa Apartments (collectively Jewel Lake), alleging that
they negligently caused the accident by failing to keep the
stairway free of snow and ice. Her complaint sought to recover
damages exceeding $75,000 for past and future medical expenses,
lost wages, and diminished earning capacity.
After the parties conducted discovery, Jewel Lake made
an offer of judgment to Jackman, proposing to allow entry of
judgment for plaintiff April L. Jackman in this action for ONE
THOUSAND FOUR HUNDRED DOLLARS AND ZERO CENTS ($1,400.00),
inclusive of Rule 82 attorneys fees, allowable costs and pre-
judgment interest. Jackman did not accept the offer, and the
case proceeded to a jury trial.
Before trial Jewel Lake moved to offset the medical
expenses it had already paid from any judgment amount determined
by the jury. Jackman opposed this motion as premature, arguing
that the jury should be allowed to determine the full extent of
her damages and that the medical payments should be deducted from
the judgment based on the jurys verdict. To allow an offset of
judgment now, Jackman contended, would distort in defendants
favor the potential judgment amounts on which the parties have
based offers of judgment. Jewel Lake did not oppose Jackmans
request to postpone the deduction, and the superior court adopted
this approach, ruling that, if the jury reached a verdict for
Jackman, the judgment amount shall be offset by the amount of
prior payment made to the plaintiff by the defendants insurer for
the plaintiffs medical treatment and expenses.
After hearing the evidence at trial, the jury returned
a verdict finding that Jewel Lake and Jackman were both
negligent; the verdict apportioned fifty-one percent of the fault
to Jewel Lake and forty-nine percent to Jackman. The verdict
also found that Jackman had suffered total damages of $7,147.23.
Accordingly, Jewel Lakes liability for its proportionate share of
the fault totaled $3,645.09 fifty-one percent of $7,147.23.
Jewel Lake moved for attorneys fees under Alaska Civil
Rule 68.1 Under this rule, a party whose pretrial offer of
judgment is rejected becomes entitled to claim a specified
percentage of its attorneys fees,2 payable from the time of the
offer, [i]f the judgment finally rendered by the court is at
least 5 percent less favorable to the offeree than the offer.3
Jewel Lake argued that the $3,474 payment for medical expenses
should be set off from the jury verdict against it in order to
arrive at a final judgment for the purposes of Rule 68.
Considering the $3,474 in advance medical payments and the
additional $1,400 cash offer that Jackman would have received if
she had accepted the offer, Jewel Lake contended that the jurys
verdict left her with a recovery that was at least five percent
less favorable than the offer of judgment.
Jackman opposed Jewel Lakes Rule 68 motion. Although
she did not dispute that her judgment would ultimately need to be
reduced to reflect the advance payments she had received for her
medical expenses, Jackman insisted that the court should make
this deduction only after calculating the full amount of her
judgment. In Jackmans view, the medical payments could not
properly be considered in comparing the amount of the offer to
the amount of her award, since the offer had failed to mention
the medical payments: From the plain terms of the defendants
offer it would have been impossible for plaintiff to ascertain
that defendants intended the actual value of their offer to be
$1,400 plus $3,474 more for purposes of a potential Rule 68
motion.
The superior court resolved this dispute in Jewel Lakes
favor. In determining that the judgment was less favorable than
the offer, the court started with the jurys finding of total
damages $7,147.23. Given the jurys fifty-one percent
allocation of fault to Jewel Lake, the court calculated Jewel
Lakes proportionate share of the damages to be $3,645.09. Adding
projected pretrial interest ($10.35) and attorneys fees
($730.09), the court estimated that Jewel Lakes total liability
under the verdict would be $4,380.53. The court next deducted
the full amount of the medical expenses already paid by Jewel
Lakes insurers ($3,474); this resulted in an outstanding
liability of $906.53,4 which the court described as the maximum
amount payable to the plaintiff under the jurys verdict.
Comparing this figure to the $1,400 Jackman would have received
under the pretrial offer, the court found her recovery at trial
to be lower than the threshold required to trigger attorneys fees
under Rule 68 a judgment at least five percent less favorable
than the offer.5 For easy reference, we set out the superior
courts calculations below:
Order Regarding Attorney Fees
Verdict = $7147.23
Defendants Liability =
.51
$3645.09
Interest = .05 x 1.21 x [3645.09-
3474 = 171.09]
10.35
Verdict + Prejudgment Interest =
$3650.44
Rule 82 Attorney Fees
.20
$ 730.09
Verdict, interest, attorney fees
$4380.53
Less set off
$3474.00
Maximum amount of payable
to plaintiff per verdict =
$906.53
Rule 68 Offer = $1400.00
.10
$140.00
10% less favorable
$1260.00
5% less favorable
$1330.00
Based on these calculations, the superior court granted
Jewel Lakes motion for attorneys fees and costs under Rule 68.
The court ultimately awarded Jewel Lake $24,746 in attorneys fees
and $1,188.97 in costs. This yielded a final judgment for Jewel
Lake totaling $25,934.97 and a final judgment for Jackman of
$181.44.
Jackman appeals.
III. DISCUSSION
On appeal, Jackman challenges the superior courts
ruling that Jewel Lake was entitled to attorneys fees under Rule
68 because its offer of judgment exceeded Jackmans judgment at
trial. Because Jewel Lakes offer . . . contained no mention of
credit for advance payment of her medical expenses, Jackman
reasons that it was error for the trial court to have essentially
modified the terms of the offer by reducing the judgment by the
amount of advance payments before making the Rule 68 comparison.
Jewel Lake responds that its pretrial offer of judgment
implicitly called for payment in addition to the medical expenses
that had already been reimbursed: The Offer of Judgment itself
already included an offset for the funds advanced. The parties
understood that if Jackman accepted the offer she would receive
$1,400 in new money. Even though the offer failed to specify
that the advance funds would be credited as an offset against any
judgment received by Jackman, Jewel Lake insists that the offset
was proper. While acknowledging that this point has not been
squarely addressed in Alaska, Jewel Lake points to cases from
other jurisdictions that support its proposition.6
These arguments require us to determine the meaning of
Jewel Lakes offer of judgment and the proper method for
calculating the comparative values of the offer and Jackmans
judgment for purposes of applying Rule 68. Questions concerning
an offer of judgments meaning and whether the offer complies with
Rule 68 raise issues of law, which we review independently.7
As indicated above, Jackmans initial premise is that
Jewel Lakes offer of judgment could not reasonably be construed
as a new money offer that is, as an offer of $1,400 in addition
to any advance medical payments Jackman had already received from
Jewel Lakes insurers because the offer failed to mention advance
payments. But this premise fails under Rules v. Sturn.8 There,
the defendant made a lump-sum offer plus interest, costs, and
Rule 82 attorneys fees, but failed to mention advance payments
that had already been made.9 After the plaintiff accepted the
offer and the superior court entered a judgment reflecting the
lump-sum offer, the defendant attempted to reduce the judgment by
subtracting the amount of the previously paid medical expenses.10
We rejected the attempt as improper under Rule 68, holding that
an offer of judgment that remains silent as to prior payments
will ordinarily not be subject to an implied offset.11 In other
words, it must be deemed to be a new-money offer.
In light of Rules, Jewel Lakes offer of judgment must
be viewed as an unambiguous proposal to pay Jackman $1,400 in
addition to any medical payments she might have received from
Jewel Lakes insurers. But while the offers silence concerning
the medical payments creates no ambiguity as to the offers value,
it generates uncertainty as to the proper method for crediting
those payments in applying Rule 68s directive to compare the
offers value against the value of the judgment finally rendered
by the court.12 As Jewel Lake acknowledges, the point has never
been directly resolved in Alaska.
Jackman insists that this uncertainty should be
resolved by ignoring the advance payments completely for purposes
of applying Rule 68. But this approach makes little sense. It
is undisputed that Jackman received the advanced payments from
Jewel Lakes insurer and that those payments compensated her for
injuries included in her pending lawsuit injuries she suffered
when she slipped and fell on the Jewel Lake staircase. Jackman
thus had no right to recover these medical expenses again as part
of the jurys award; nor did she have any legitimate basis for
including those payments in calculating her awards of prejudgment
interest, costs, and attorneys fees. For these reasons, it was
proper to deduct the advance payments from Jackmans award before
comparing her judgment to the pretrial offer for purposes of
determining Jewel Lakes right to attorneys fees under Rule 68.
The more difficult problem here lies in determining the
correct method for deducting the advance payments from the jury
award in order to compare the award to the pretrial offer. Here,
as illustrated by the superior courts calculations set out in our
statement of facts, the court initially divided the full jury
award, $7,147.23, to derive Jewel Lakes fifty-one percent share
of the damages: $3,645.09. After adjusting for interest, costs,
and attorneys fees, the court subtracted the full amount of the
advance medical payments from Jewel Lakes share of the damages to
arrive at a maximum amount . . . payable of $906.53 under the
verdict. Comparing this estimate of Jackmans maximum final
judgment to Jewel Lakes pretrial offer of $1,400 in new money,
the court concluded that Jackman fared substantially worse by
going to trial, thus entitling Jewel Lake to enhanced attorneys
fees and costs under Rule 68.
The trial courts approach treated the medical expense
payments as pure liability payments payments meant to compensate
Jackman only for Jewel Lakes proportionate share of the fault.
Yet as we noted at the outset of this opinion, the record fails
to disclose the specific basis for the medical payments. Jewel
Lakes insurer appears to have unconditionally reimbursed Jackman
for her medical expenses: there is no indication of any
reservations or restrictions suggesting that the reimbursements
were paid as compensation for Jewel Lakes potential share of the
fault. Absent evidence establishing the actual basis for the
insurers payments, we see no obvious grounds for crediting the
entire amount of the advance payments against the portion of the
jury verdict reflecting Jewel Lakes share of the fault. As the
party asserting a claim for enhanced fees under Rule 68, Jewel
Lake bore the burden of supporting its claim.
Jewel Lake contends that Jackman waived this point by
failing to object to the superior courts specific method of
calculating the offset. We disagree. Jackmans arguments below
called into question the proper method under Rule 68 for
crediting old money payments when a new money offer of judgment
fails to address the subject. As Jewel Lake acknowledges, this
question has never been squarely raised in Alaska and remains
undecided. Because the proper method of calculation under Rule
68 presents an unresolved question of law, the parties opposing
views on the point do not confine our decision. Instead, [o]ur
duty is to adopt the rule of law that is most persuasive in light
of precedent, reason, and policy.13 Accordingly, we reject the
claim of waiver and turn to the question whether the trial court
correctly deducted the entire amount of the advance medical
payments from the portion of damages reflecting Jewel Lakes share
of the total fault.
Jewel Lake proposes two justifications for the superior
courts approach. First, Jewel Lake insists that the superior
court needed to deduct the advance payments from Jewel Lakes
share of the total damages in order to protect Jewel Lake against
paying more than its fair share of the damages as determined by
the jurys allocation of fault. To be sure, Alaska law requires
personal injury damages to be apportioned on the basis of
comparative fault;14 but it hardly follows that an insurers
unconditional and unexplained reimbursements of medical expenses
should routinely be treated as having been paid on account of the
defendants fault. Because it is not self-evident that such
payments will invariably represent future damages awardable in an
action based on fault,15 we see no justification for assuming that
they necessarily reflect the defendants potential share of the
fault. Absent case-specific evidence establishing that the
payment in question was actually based on potential fault, then,
it simply lowers the total damages still to be paid, leaving all
negligent parties responsible for their proportionate share of
the harm.
Second, Jewel Lake suggests that deducting advance
payments from its share of the verdict was necessary to prevent a
double recovery by Jackman. Yet deducting advance payments from
the jurys total award poses a risk of double recovery only if we
assume that those payments were made on the basis of the
defendants potential fault. In any other case, the deduction
prevents the plaintiff from recovering twice by lowering the
defendants share of the award as well as the plaintiffs. Barring
some evidence showing that the advance payments actually
reflected the defendants potential share of the fault, then, the
danger of double recovery does not justify deducting such
payments exclusively from the defendants share of the damages.
In short, both of Jewel Lakes proposed justifications
mistakenly assume that an insurers unconditional advance payments
of medical expenses must necessarily be payments based on fault.
Here, the trial court record shows only that, before litigation
commenced, one of Jewel Lakes insurers unconditionally paid for
medical expenses incurred by Jackson as a result of her accident.
In this situation, without additional information establishing
the actual basis for the insurers advance payments, the record
provides no solid ground for assuming that the payments covered
only those limited portions of Jackmans expenses reflecting Jewel
Lakes potential share of fault for her accident; nor does the
record provide a sound reason to fear that either double recovery
or double payment would result if the payments were credited as
the record suggests they should be against the total damages
Jackson sustained.
For these reasons, we hold that when a defendant
seeking Rule 68 fees claims an offset for medical expenses paid
to the plaintiff without reservation or restriction before suit
was filed, the advance payments must be deducted from the total
award of damages to establish the final judgments comparative
value unless the defendant shows that the payments actually
compensated the plaintiff for liability based on the defendants
fault.16
Applying this method here results in a judgment for
Jackman that exceeds Jewel Lakes $1,400 offer of judgment.17
Accordingly, we vacate the judgment, reverse its order awarding
Rule 68 fees to Jewel Lake, and remand the case for entry of a
modified judgment consistent with this opinion.
IV. CONCLUSION
We VACATE the final judgment, REVERSE the award of
attorneys fees and costs to Jewel Lake, and REMAND for entry of
judgment in Jackmans favor.
CARPENETI, Justice, concurring.
I agree with the result of todays opinion, but I
disagree with its reasoning. For that reason, I write separately
to explain how I would resolve this case.
Todays result reversal of the award of attorneys fees
and costs to Jewel Lake and entry of judgment in favor of Jackman
is correct because Jewel Lakes offer of judgment did not clearly
specify how the previous medical payments made on behalf of Jewel
Lake should be treated for Rule 68 purposes. This ambiguity,
under our law, is charged against Jewel Lake, the offeror.
Accordingly, the medical payments should not be offset for Rule
68 purposes. Without offset, Jewel Lakes offer of judgment was
plainly inferior to the jury verdict, and thus Jewel Lake is not
the prevailing party under Rule 68.
The key point in this analysis is that Jewel Lakes
failure to specify whether the earlier payments were part of its
offer of judgment redounds to Jewel Lakes detriment. In Rules v.
Sturn1 we held that an ambiguous offer is strictly construed
against the offering party.2 In upholding the trial courts
decision to disallow offset of earlier payments from the Rule 68
offer of judgment, we noted that the [offeror]s offer of judgment
mentions nothing about advance payments made or about offsetting
them against any part of the offer, and that the offer does not
otherwise indicate an intent by the offerors to offset payments
already made.3 Accordingly, we upheld the trial courts refusal
to offset. We have also held, in Thomann v. Fouse,4 that a
plaintiff is not required to gamble on the meaning of an
ambiguous settlement offer.5 Thomann is significant for purposes
of this case, for there the defendants offer specifically
notified the plaintiff that it consisted of new money the kind
of specificity lacking in Jewel Lakes offer but it added that
this new money was offered in addition to the medical payments
which have been assumed by Defendant Fouses insurance carrier for
resolution in a subsequent arbitration.6 We held that the
underlined language rendered the offer too indefinite: the
presence of this detail invited confusion and could reasonably
have led [plaintiff] to wonder what effect the subsequent
arbitration might have had on her medical claim.7 Because the
offers ambiguity created uncertainty for the plaintiff, we held
that it failed to meet the requirements of Rule 68 and could not
support an award of costs and attorneys fees in favor of [the
offeror].8
Jewel Lakes offer of judgment was far more uncertain
than Fouses offer. It made no mention of the earlier payments.
It did not state that it was in addition to payments already made
on its behalf. Jewel Lake acknowledges that no writing clarified
whether the earlier payments would be credited to any judgment
obtained by Jackman. Indeed, Jewel Lake did not claim any offset
until it moved for offset of the judgment over five months after
making the offer of judgment to Jackman. Thus, Jackman had no
indication of Jewel Lakes intentions regarding offset at the time
of the offer.9 It is not even clear that Jackmans attorney was
aware of all the payments or their total amount at the time of
the making of the Rule 68 offer. Because Jewel Lake created
ambiguity in its offer to Jackman, we construe that ambiguity
against Jewel Lake. Thus, the settlement offer must be read in
favor of Jackman for the purposes of Rule 68 calculations.
Instead of this straightforward approach to resolving
this case, todays opinion is based on the questionable hypothesis
that Jewel Lakes insurer apparently paid Jackmans expenses
unconditionally, without any indication that it based the
payments on Jewel Lakes potential fault.10 I respectfully
suggest that this approach defies both common sense and the
common law.
It defies common sense because there is no reason to
think that the defendants insurer was making payments to the
injured plaintiff for any reason other than to cover its insureds
potential fault. (The court certainly provides no hint of any
other reason for such a phenomenon.) Indeed, it admits as much,
when it states: It is undisputed that Jackman received the
advanced payments from Jewel Lakes insurer and that those
payments compensated her for injuries included in her pending
lawsuit injuries she suffered when she slipped and fell on the
Jewel Lake staircase.11
And the opinion is a stark departure from the common
law which credits defendants fully for payments made by
themselves or their insurance companies regardless of whether the
payments were medical payments or payments based on predicted
liability. Todays opinion distinguishes between pure liability
payments and unconditional[] reimburse[ment] for . . . medical
expenses made by Jewel Lakes insurer.12 The court suggests that
absent evidence establishing the actual basis for the insurers
payments there are no obvious grounds for crediting the entire
amount of the advance payments against Jewel Lakes share of the
fault. This approach is at odds with the common law.
The Commentary to the Restatement (Second) of Torts
explains:
Payments by or for defendant. If a tort
defendant makes a payment toward his tort
liability, it of course has the effect of
reducing that liability. This is also true of
payments made under an insurance policy that
is maintained by the defendant, whether made
under a liability provision or without regard
to liability, as under a medical-payments
clause. This is true also of a payment by
another tortfeasor of an amount for which he
is liable jointly with the defendant or even
by one who is not actually liable to the
plaintiff if he is seeking to extinguish or
reduce the obligation. (See 885).[13]
While the Restatement does not mention payments by the defendant
(or by another on his or her behalf) in the specific context of
comparative liability, there is no reason that offset should not
apply in a comparative negligence situation, given the
Restatements equal treatment of payments whether made under a
liability policy or under a medical-payments clause. Therefore,
just as payments made under a liability policy would be credited
fully to a defendant, payments under a medical-payments clause
should be as well.
The two cases relied on by the court, Norman v.
Farrow14 and Hickenbottom v. Schmidt,15 are inapposite. They
involved personal injury protection (PIP) benefits which were not
paid from the pockets of (or on behalf of) the defendant
tortfeasors.16 They were therefore collateral source payments
rather than prior payments by (or on behalf of) the defendant.
Furthermore, statutes in both Florida (Farrow) and Colorado
(Hickenbottom) established that the payments could not be
recovered by plaintiffs in litigation, and thus must be offset.17
There is no similar statute here.
Finally, the courts approach creates the risk of
consequences that would ill serve the administration of justice
in Alaska. We have long held that the purpose of Civil Rule 68
is to encourage early settlement of disputes.18 Early medical
payments for injured plaintiffs would certainly assist early
settlement of disputes. But even a hypothetically purely
generous insurer of a potential defendant may become involved in
litigation, and will want to receive full credit for payments
made in respect of its insureds potential liability. Giving the
payor less than full credit for unconditional payments, as the
court does today, may put such a burden on the insurer to
specify that each payment is in respect of its insureds potential
liability as to discourage early payment.
In the final analysis, perhaps the only practical
difference between the courts approach and mine is in the number
of clarifying qualifications the defendant, its insurer, or its
counsel, must make. Under the courts approach, each pre-
settlement or pretrial payment must be accompanied by notice that
it was based on [defendant]s potential fault for the accident,19
or some such qualification. Under my approach, only one
notification in the Rule 68 offer would be necessary. Perhaps
this difference is insignificant. But given Alaskas preference
for early payment and early settlement, it seems preferable to
keep the burden on the maker of a Rule 68 settlement offer to
speak clearly rather than placing it on the maker of multiple
ameliorative payments.
Jewel Lake had the obligation to say exactly what its
Rule 68 offer included. It did not do so. Because its offer was
ambiguous, and because Jewel Lake under our case law must bear
the burden of its offers ambiguity, I believe that the superior
courts order on attorneys fees should be reversed. I therefore
concur in todays result. But I would not reach that result on
the legal fiction that the payments to Jackman were made for
anything other than to cover Jewel Lakes potential fault.
Thus, I concur with the holding but not the reasoning
of todays opinion.
_______________________________
1 Alaska Rule of Civil Procedure 68 provides in part:
(b) If the judgment finally rendered by the
court is at least 5 percent less favorable to
the offeree than the offer, or, if there are
multiple defendants, at least 10 percent less
favorable to the offeree than the offer, the
offeree, whether the party making the claim
or defending against the claim, shall pay all
costs as allowed under the Civil Rules and
shall pay reasonable actual attorneys fees
incurred by the offeror from the date the
offer was made . . . .
2 Under Alaska Rule of Civil Procedure 68(b)(1)-(3), the
amount of allowable fees varies depending on the timing of the
offer. The variations are irrelevant here.
3 When a case involves multiple defendants, Rule 68(b)
requires the rejecting offeree to fare worse than the offer by at
least ten percent. Alaska R. Civ. P. 68(b). Here, although
Jackmans action named multiple individuals and business entities
as defendants, the parties agreed to treat all the defendants as
a single entity, so the rules five percent threshold applies.
4 This amount appears in the original superior court
order and reflects a five-dollar mistake: the correct sum of the
projected pretrial interest and Jewel Lakes share of damages is
$3,655.44. Because this mistake had no effect on the superior
courts decision and is immaterial here as well, we retain the
uncorrected sum in this illustration.
5 Alaska R. Civ. P. 68(b).
6 Specifically, Jewel Lake cites Russell v. Ashe Brick
Co., 230 S.E.2d 814, 815 (S.C. 1976) for the proposition that
[t]he nonexistence of a receipt delineating the obvious desire to
credit the payment against any future liability secured on the
same claim is without legal significance.
7 Jaso v. McCarthy, 923 P.2d 795, 801 (Alaska 1996).
8 Rules v. Sturn, 661 P.2d 615 (Alaska 1983).
9 Id. at 616.
10 Id.
11 Id. at 617-18.
12 See Alaska R. Civ. P. 68(b).
13 Guin v. Ha, 591 P.2d 1281, 1284 n.6 (Alaska 1979).
14 AS 09.17.060 (In an action based on fault seeking to
recover damages for injury or death to a person or harm to
property, contributory fault chargeable to the claimant
diminishes proportionately the amount awarded as compensatory
damages for the injury attributable to the claimants contributory
fault, but does not bar recovery.).
15 See id.
16 We note by analogy that this approach is similar to
methods adopted in other jurisdictions for offsetting funds paid
under statutorily required no-fault medical payments policies.
See Norman v. Farrow, 880 So. 2d 557, 559-61 (Fla. 2004)
(requiring offset for no-fault benefits before reduction by the
percentage of the plaintiffs fault because plaintiff barred by
statute from recovering damages in personal injury accident for
expenses payable under no-fault policy); Hickenbottom v. Schmidt,
626 P.2d 726, 727 (Colo. App. 1981) (deducting payable personal
injury protection benefits from total damages award before
reducing judgment by percentage of plaintiffs comparative
negligence).
17 A rough estimate of the comparative values (without
allowing for pretrial interest, attorneys fees or costs on the
judgment finally rendered for Jackman) is as follows:
Corrected Calculation
Total Damages Found by Jury
$7147.23
Reduction by Amount of Advance Medical Payments
$3474.00
Subtotal
$3673.23
Reduction of Total Unpaid Damages To Reflect Jewel Lakes 51% of
Fault
x .51
Estimated Value of Total Judgment for Jackman (not including her
prejudgment interest or costs & fees
$1873.34
Subtract Value of Jewel Lakes Offer of Judgment
$1400
Comparative Value of Judgment Over Offer
+ $473.34
1 661 P.2d 615 (Alaska 1983).
2 Id. at 617.
3 Id.
4 93 P.3d 1048 (Alaska 2004).
5 Id. at 1051 ([W]e do not think it fair to expect
[offeree] to gamble on this assumption [that pending arbitration
was irrelevant to the claim].).
6 Id. at 1049 (emphasis in original).
7 Id. at 1051.
8 Id. at 1052.
9 Indeed, this is the precise objection that Jackman made
before the superior court to Jewel Lakes motion for attorneys
fees under Rule 68:
[Defendants] offer made no mention that from this
stated amount of $1,400 the value of their prior
medical payments should be added for purposes of a Rule
68 calculation. From the plain terms of defendants
offer it would have been impossible for plaintiff to
ascertain that defendants intended the actual value of
their offer to be $1,400 plus $3,474.00 more for
purposes of a potential Rule 68 motion.
10 Opinion 2 (These reimbursements appear to have been
paid unconditionally; nothing in the record suggests that they
were based on Jewel Lakes potential fault for the accident.); see
also id. at 10 (the record fails to disclose the specific basis
for the medical payments).
11 Opinion 9.
12 Opinion 10.
13 Restatement (Second) of Torts 920A cmt. a (1979)
(emphasis added). Note that while AS 09.17.070 abrogated the
common law rule with respect to offsets from collateral sources
which are discussed in this section of the Restatement, nothing
in the Alaska statutes appears to have upset the common law rule
regarding payments from non-collateral sources such as are at
issue here.
14 880 So. 2d 557 (Fla. 2004).
15 626 P.2d 726 (Colo. App. 1981).
16 The language of both Farrow and Hickenbottom makes this
clear. In Farrow the court cited the statute directing how
recovery for tort claims is impacted by an insured plaintiffs
receipt of PIP benefits and stated, [the statute] dictates that
an insured plaintiff has no right to recover damages paid or
payable by PIP benefits. 880 So. 2d at 559-60. In Hickenbottom
the court similarly noted that the Colorado statute provides that
an injured party is precluded from recovering damages from a
tortfeasor which are recoverable as direct benefits under [the
PIP statute]. 626 P.2d at 727. Furthermore, the use of the
descriptors insured plaintiff in Farrow and direct benefits in
Hickenbottom is additional evidence that the courts in those
cases were considering payments from a source tied to the
plaintiff and wholly collateral to the defendant tortfeasor.
17 Farrow, 880 So. 2d at 558; Hickenbottom, 626 P.2d at
727.
18 See Miklautsch v. Dominick, 452 P.2d 438, 441 (Alaska
1969); accord Continental Ins. Co. v. U.S. Fid. & Guar. Co., 552
P.2d 1122, 1125-26 (Alaska 1976).
19 Opinion 2.
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