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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Whittenton v. Peter Pan Seafoods, Inc. (9/22/2017) sp-7203

Whittenton v. Peter Pan Seafoods, Inc. (9/22/2017) sp-7203

          Notice:   This opinion is subject to correction before publication in the P                    ACIFIC  REPORTER.  

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          303 K Street, Anchorage, Alaska 99501, phone (907) 264-0608, fax (907) 264-0878, email  

                                                                                                                    

          corrections@akcourts.us.  



                     THE  SUPREME  COURT  OF  THE  STATE  OF  ALASKA  



BRANDY  WHITTENTON,  CHARLES                                     )  

WHITTENTON,  and  DELILA                                         )     Supreme  Court  No.  S-16285  

WHITTENTON,  a  Minor,                                           )  

                                                                 )     Superior  Court  No.  3VA-14-00054  CI  

                              Appellants,                        )  

                                                                                           

                                                                 )     O P I N I O N  

          v.                                                     )  

                                                                                                                 

                                                                 )     No. 7203 - September 22, 2017  

                                                                 )
  

PETER PAN SEAFOODS, INC.,  

                                                                 )
  

                              Appellee.                          )
  

                                                                 )
  



                                                                                                        

                    Appeal from the Superior Court of the State of Alaska, Third  

                                                                                                     

                    Judicial District, Valdez, Daniel Schally, Judge pro tem.  



                                                                                                          

                    Appearances:               Thomas   R.           Wickwire,          Fairbanks,         for  

                                                                                               

                    Appellants.          William  H.  Ingaldson,  Ingaldson  Fitzgerald,  

                                                      

                    P.C., Anchorage, for Appellee.  



                                                                                                     

                    Before: Stowers, Chief Justice, Winfree, Bolger, and Carney,  

                                                                       

                    Justices.  [Maassen, Justice, not participating.]  



                                       

                    CARNEY, Justice.  



I.        INTRODUCTION  



                                                                                                                                

                    After a mother and daughter were involved in a car accident, they and the  



                                                                                                                        

father sued the employer of the other vehicle's driver.  The employer made  separate  



                                                                                                                              

offers of judgment to the mother and daughter under Alaska Civil Rule 68, which they  



                                                                                                                                

rejected.  At trial all three plaintiffs were awarded damages.  But - with respect to the  


----------------------- Page 2-----------------------

mother - the superior court awarded partial attorney's fees to the employer under                                                                                                                                                                                                                                                                                                                                                             



Rule 68 because the mother's award was less than 95% of the offer made to her.                                                                                                                                                                                                                                                                                                                                           



                                                                        The mother appeals, arguing that the offer of judgment was not a valid                                                                                                                                                                                                                                                                                             



Rule 68 offer and that the superior court wrongly excluded certain costs that, when                                                                                                                                                                                                                                                                                                                                                            



included, would have led to an award of more than 95% of the offer of judgment.                                                                                                                                                                                                                                                                                                                                                                         We  



conclude that the offer of judgment was valid and that the court did not err in excluding                                                                                                                                                                                                                                                                                                                                



costs not covered by Alaska Civil Rule 79 when comparing the offer to the mother's                                                                                                                                                                                                                                                                                                                                            



recovery.  



II.                                 FACTS AND PROCEEDINGS                                                         



                                    A.                                  Facts And Pretrial Proceedings                                                                              



                                                                        In   September   2011,   while   Brandy   and  Charles   Whittenton   and   their  



daughter Delila were on vacation in Valdez, a vehicle driven by a Peter Pan Seafoods                                                                                                                                                                                                                                                                                  



employee backed into their vehicle.                                                                                                                                                              Only Brandy and Delila were in the vehicle at the                                                                                                                                                                                                            



time of the collision.                                                                                            



                                                                        The Whittentons filed suit against Peter Pan in August 2013.                                                                                                                                                                                                                                                                         Brandy and   



Delila sought damages for pain and suffering from injuries incurred in the collision.                                                                                                                                                                                                                                                                                                                                                                                            



Brandy also sought damages for medical expenses and damage to the vehicle, while                                                                                                                                                                                                                                                                                                                                                               



Charles sought damages for loss of consortium.                                                                                                                                                                                                                    

                                                                                                                                                                                                                                                                                                                                                        1  offers of judgment to  

                                                                        In June 2015 Peter Pan made Alaska Civil Rule 68                                                                                                                                                                                                                                                                                                                                            



                                    1                                   Civil Rule 68 provides:                                                   



                                                                                                            (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. . . .
                                                                                                                                                 

                                                                                                                                                                                                                                                                                                                                                                                                         (continued...)  



                                                                                                                                                                                                                                 -2-                                                                                                                                                                                                                  7203
  


----------------------- Page 3-----------------------

                                                             2  

Brandy and Delila.                                                 Peter Pan separately offered to pay Brandy $23,500 and Delila                                                                                                                             



$2,000,   both  "inclusive   of   costs,   interest   and   attorney's   fees."     Neither   offer   was  



accepted.   The following month the Whittentons amended their complaint to add a new                                                                                                                                                                              



claim for loss of parental consortium on Delila's behalf.                                                                                                                          



                     B.                   Trial And Post-Trial Proceedings                                        



                                          After   a   trial   in   October   2015   the   jury   awarded   damages   to   all   three  



plaintiffs. Brandy was awarded a total of $15,796.33. The jury awarded Charles $2,000                                                                                                                                                                       



and Delila $4,524.                                           The award to Delila exceeded the offer of judgment made to her.                                                                                                                                                  



                                          Peter Pan then moved to be considered the prevailing party for Rule 68                                                                                                                                                         



purposes   with   respect   to   Brandy's   claims.     It   argued   that   Brandy's   total  recovery,  



including prejudgment interest, costs, and attorney's fees, was $21,434.70 - less than                                                                                                                                                                              



95% of the $23,500 offer of judgment - and that it was therefore entitled to 50% of the                                                                                                                                                                                 



fees and costs it had incurred after the offer was made.                                                                                                                                 The Whittentons opposed,                                   



arguing that the offer was invalid and that they had incurred additional costs prior to the                                                                                                                                                                             



offer that Peter Pan had not included in its calculation. This included costs related to two                                                                                                                                                                          



depositions that did                                              not occur                          as   scheduled.     In   reply Peter                                                              Pan conceded                                    that the   



                     1                    (...continued)  



                                                                                                                                                                                  

                                                               (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 attorney's fees incurred by the offeror  

                                                                                                                                                          

                                          from the date the offer was made . . . .  



                     2                    At oral argument Peter Pan explained that, based on the facts of the case,  

                                                                                                                                                                                                                                                                  

it had assigned little value to Charles's claim.  

                                                                                                                            



                                                                                                                                    -3-                                                                                                                           7203
  


----------------------- Page 4-----------------------

Whittentons were entitled to some additional costs, but not enough to beat the offer of            



judgment.   



                      Thesuperior court              first deniedPeterPan'smotion,                     citing  ProgressiveCorp.   

                                   3  It ruled that because the offer was addressed only to Brandy, it  

v.  Peter ex rel Peter            .                                                                                            



was "invalid as failing to further the goals of [Rule 68] and AS 09.30.065 because it  

                                                                                                                                             



would not have ended the entire litigation between the parties."  Peter Pan moved for  

                                                                                                                                          



reconsideration, arguing that the judge had misinterpreted Progressive 's holding.  The  

                                                                                                                                         



 superior court reconsidered its decision and declaredPeter Pan theprevailing party under  

                                                                                                                                      



Rule 68.  

                



                      The Whittentons filed for reconsideration of the new order, arguing that the  

                                                                                                                                           



Rule 68 comparison could not be made until the clerk ruled on their costs bill and  

                                                                                                                                         



attorney's fees.  The superior court denied the motion and awarded Peter Pan attorney's  

                                                                                                                               



fees and costs. The Whittentons then moved to correct a "clerical mistake," arguing that  

                                                                                                                                          



Peter Pan's motion to be considered the prevailing party had omitted some costs.  The  

                                                                                                      



Whittentons  claimed  that  they  had  incurred  $2,446.13  in  costs  before  the  offer  of  

                                                                                                                                           



judgment - $2,290.02 more than Peter Pan had originally calculated - and that those  

                                                                                                                                       



costs all should be added to Brandy's award for comparison with the offer.  Peter Pan  

                                                                                                                                         



again conceded that two of the additional cost items, totaling $207.50, should have been  

                                                                                                                                        



included, but argued that the others were not recoverable under Alaska Civil Rule 79.  

                                                                                                                                                 



The court ultimately denied the Whittentons' motion except as to the additional $207.50  

                                                                                                                                  



Peter Pan had conceded; Brandy's total damage award remained less than 95% of the  

                                                                                                                                          



offer of judgment.  After subtracting attorney's fees and costs in favor of Peter Pan,  

                                                                                                                              



Brandy's total recovery was $3,374.68.  

                                                                   



                      The Whittentons appeal.  

                                                    



           3  

                                                                        

                       195 P.3d 1083, 1087 (Alaska 2008).  



                                                                     -4-                                                                   7203  


----------------------- Page 5-----------------------

III.           STANDARD OF REVIEW                       



                             "The interpretation of Rule 68 'is a question of law that [we] review[] de                                                             



novo, adopting the rule of law that is "most persuasive in light of precedent, policy, and                                                                                            



                         4  

reason." ' "                 Whether an offer of judgment complies with Rule 68 is also a question of                                                                                    



                                                                  5  

                                                                                                                                                                              

law which we review de novo,  because "[a]n offer of judgment and acceptance thereof  



                              6  

         

is a contract." 



IV.            DISCUSSION  



                             Rule  68  is  intended  "to  encourage  reasonable  settlements  and  avoid  

                                                                                                                                                                     

protracted litigation."7   It allows a party, before trial, to make an offer of judgment to an  

                                                                                                                                                                                        

opposing party "in complete satisfaction of the claim . . . with costs then accrued."8  If  

                                                                                                                          



the offer is not accepted and the judgment finally rendered "is at least 5 percent less  

                                                                                                                                                                   



favorable to the offeree than the offer," the offeree must pay all costs allowed under the  

                                                                                                                                                                                       



Civil Rules and a percentage of "reasonable actual attorney's fees incurred by the offeror  

                                                                                                                                                                               

from the date the offer was made."9  

                                                             



                             The Whittentons argue that Peter Pan's offer of judgment to Brandy did not  

                                                                                                                                                                                       



satisfy the requirements of Rule 68 because it would not have ended the entire litigation.  

                                                                                                                                                                                               



               4             Cook Schuhmann &Groseclose, Inc. v. Brown &Root, Inc.                                                                           , 116 P.3d 592,        



597 (Alaska 2005) (quoting                                    Mackie v. Chizmar                         , 965 P.2d 1202, 1204 (Alaska 1998)).                               



               5             See Marshall v. Peter, 377 P.3d 952, 956 (Alaska 2016) (quoting Tagaban  

                                                                                                                                                                          

v. City of Pelican, 358 P.3d 571, 575 (Alaska 2015)).  

                                                                                                     



               6             Pagenkopf  v.  Chatham  Elec.,  Inc.,  165  P.3d  634,  638  (Alaska  2007)  

                                                                                                                                                                               

(alteration in original) (quoting Jaso v. McCarthy, 923 P.2d 795, 801 (Alaska 1996)).  

                                                                                                                                                                            



               7             Id. at 644 (citing Cook Schuhmann & Groseclose, 116 P.3d at 598).  

                                                                                                                                                                      



               8             Alaska R. Civ. P. 68(a); see also AS 09.30.065(a).  

                                                                                                               



               9             Alaska R. Civ. P. 68(b).  

                                                                     



                                                                                           -5-                                                                                    7203
  


----------------------- Page 6-----------------------

They also argue that even if the offer was valid, Brandy beat the offer because it should                                                                                      



                                                                                                                                                                                   10  

be construed to include all costs incurred, not just costs allowable under Rule 79.                                                                                                     



                                                                                                                     

               A.             Peter Pan's Offer Of Judgment Was Valid.  



                                                                                                                                                                                     

                              In order to trigger Rule 68 penalties, an unaccepted offer of judgment must  



                                                                                                                                                                                      

"include all claims between the parties and be capable of completely resolving the case  



                                                                                              11  

                                                                                                                                                                                            

by way of a final judgment if accepted."                                                             An offer that addresses only some of a  



                                                                                                                                                                                            12  

                                                                                                                                                                                                 

plaintiff's claims would not have that effect and therefore would not satisfy Rule 68. 



                                                                                                                                                                                 

The Whittentons argue that Peter Pan's offer to Brandy was invalid because it would  



                                                                                                                                                                            

have resolved only her claims and would not have ended the entire litigation.  



                                                                                                                                                 13  

                                                                                                                                                                     

                              We have held that unapportioned offers are invalid,                                                                     as are apportioned  



                                                                                                                                    14  

                                                                                                                                                                                

                                                                                                                                         But we have also upheld  

offers that are conditioned on joint acceptance by all parties. 



                                                                                                                                                                    

an offer of judgment that made a separate offer to each plaintiff such that one plaintiff  



               10             The Whittentons' Statement of Points on Appeal lists other issues that they                                                                             



do not address in their briefs.                                  These issues are waived.                                Oels v. Anchorage Police Dep't                            

Emps. Ass'n                , 279 P.3d 589, 598 (Alaska 2012) ("[I]ssues not argued                                                                 in opening appellate     

briefs are waived." (quoting                                   Hymes v. DeRamus                            , 222 P.3d 874, 887 (Alaska 2010))).                                                



               11             Windel v. Mat-Su Title Ins. Agency, Inc., 305 P.3d 264, 280 (Alaska 2013)  

                                                                                                                                                                                   

(quoting Progressive Corp. v. Peter ex rel. Peter, 195 P.3d 1083, 1088 (Alaska 2008)).  

                                                                                                                                                                               



               12            Progressive, 195 P.3d at 1088 (holding that an offer of judgment that  

                                                                                                                                                                                      

explicitly excluded one of the plaintiff's claims was not valid for Rule 68 purposes).  

                                                                                                                                                                    



               13             Windel, 305 P.3d at 279 n.39 ("[A]n offer of judgment must not be a joint  

                                                                                                                                                                                     

and un-apportioned offer to multiple offerees." (citing Jaso v. McCarthy, 923 P.2d 795,  

                                                                                                                                                                                      

801 (Alaska 1996))).  

                             



               14            Hayes v. Xerox Corp., 718 P.2d 929, 937-38 (Alaska 1986) (holding that  

                                                                                                                                                                                       

an offer of judgment was not conditional upon joint acceptance and therefore was not  

                                                                                                                                                                              

invalid on those grounds).  

                                     



                                                                                             -6-                                                                                    7203
  


----------------------- Page 7-----------------------

                                                                                                                                                             15  

 could   have   accepted   an   offer   while   the   other  went  to  trial.                                                                                        The   Whittentons  



 acknowledge these cases, but they argue that we have applied Rule 68 to require that an                                                                                                                    



 offer of judgment must be capable of ending the entire litigation between all parties                                                                                                           



involved, not merely between the parties to the offer.                                                                           Because a single offer to multiple                           



parties is barred by our decisions rejecting unapportioned and conditional offers, they                                                                                                                



 argue that Peter Pan was required to make offers to all three plaintiffs.                                                                                                  



                                 The Whittentons base their argument on                                                           Windel v. Mat-Su Title Insurance                        



                                                                                                                                                                                                              16  

Agency , which they say held that Rule 68 has a goal "of completely resolving the case."                                                                                                                            



They argue that if we intended to hold that an offer must entirely resolve the claims of  

                                                                                                                                                                                                             



 only one party to be valid, we would have stated that an offer of judgment must be  

                                                                                                                                                                                                           

                                                                          17   Because we did not, they argue, Windel requires offers  

 capable of resolving the claim.  

                                                                                                                                                                                                    



 of judgment to resolve the entire litigation among all parties. Peter Pan responds that this  

                                                                                                                                                                                                          



reading is prevented by other case law and that it would be unreasonable for Rule 68 to  

                                                                                                                                                                                                             



require offers to each opposing party, regardless of the strength of their respective  

                                                                                                                                                                                        



 claims.  

                     



                                 In Windel we stated that "an offer of judgment must encompass every claim  

                                                                                                                                                                                                     



in the litigation," emphasizing "the requirement that 'an offer of judgment include all  

                                                                                                                                                                                                           



 claims between the parties and be capable of completely resolving the case by way of a  

                                                                                                                                                                                                               

 final judgment if accepted.' "18                                                  Windel involved an easement dispute in which the  

                                                                                                                                                                                                          



                 15             Id.  



                 16              Windel,  305  P.3d  at  280  (quoting  Progressive,   195  P.3d  at   1088).  



                 17              See   id.   ("[A]n   offer   of  judgment   [must]   include   all   claims   between   the  



parties a   nd  be  capable  of  completely resolving  the  case  by  way  of  a  final j  udgment  if  

accepted."  (emphasis  added)  (quoting  Progressive,   195  P.3d  at   1088)).  



                 18             Id. at 279-80 (quoting Progressive, 195 P.3d at 1088).  

                                                                                                                                                     



                                                                                                      -7-                                                                                             7203
  


----------------------- Page 8-----------------------

                                                                                                                                     19  

 defendant landowner made an offer of judgment to the plaintiff landowners.                                                               The issue   



before us was whether the offer encompassed additional claims later asserted by both                                                               



             20  

                                                                                                                                                  

parties.           We reiterated only the well-established rule that an offer of judgment must  



                                                                                                21  

                                                                                                                                            

                                                                                                     We did not address a situation  

 encompass all claims between the parties to the offer. 



                                                                                                                                                    

 such as this one:   an offeror defendant who was faced with multiple plaintiffs and  



                                                                                            

potential offerees, each of whom brought separate claims.  



                                                                                                                                                     

                        We  agree  with  Peter  Pan's  interpretation.                                     Other  cases  undercut  the  



                                                                                                                                         

Whittentons' reading of  Windel and Rule 68.  In Hayes v. Xerox Corp. the defendant  



                                                                             22  

                                                                                                                                           

made an offer of judgment to two plaintiffs.                                      The offer was addressed to both plaintiffs  



                                                                                                                                              

in one document, but it explicitly offered to allow entry of judgment in a separate amount  



                                                23  

                                                                                                                                                   

to each individual plaintiff.                       The superior court concluded that this was not a joint offer  



                                                                                                                              24  

                                                                                                                                           

                                                                                                                                   We affirmed,  

 and awarded attorney's fees and costs to the defendant under Rule 68. 



            19          Id.  at  267-68.  



            20          Id.  at  280.  



            21          Id. ;  see,  e.g.,  Progressive,   195  P.3d  at   1087-88  (holding  that an offer  of  



judgment  was  not  valid  under Rule 68  because  it  explicitly  excluded  one  of  the  causes  

                   

 of  action  between   the   two   parties   and   therefore   "would   not   have   ended   the   entire  

litigation between [them]");                       Pagenkopf v. Chatham Elec., Inc.                             , 165 P.3d 634, 636-37,         

 640 (Alaska 2007) (indicating that, in a case involving a third-party complaint by the  

                                                                                                                                                      

 defendant, an offer of judgment was not ambiguous under Rule 68 because it identified  

                                                                                                                                          

the parties involved and "clearly indicated all claims between the parties would be  

                                                                                                                                                      

resolved if the offer were accepted" (quoting John's Heating Serv. v. Lamb, 46 P.3d  

                                                                                                                                                   

 1024, 1042 n.85 (Alaska 2002))).  

                                               



            22          718 P.2d 929, 931 (Alaska 1986).  

                                                                          



            23          Id. at 936.  

                                   



            24          Id. at 936-37.  

                                   



                                                                           -8-                                                                    7203
  


----------------------- Page 9-----------------------

                                                                                                                                             25  

holding that the offer was not joint because it did not require both parties to accept it.                                                        



                                                                                                                                      

The offer was valid for Rule 68 purposes precisely because one plaintiff could accept  



                                                        26  

                                                 

while the other continued to trial. 



                                                                 

                      Because the language in  Windel could be interpreted to diverge from our  



                                                                                                                                             

holding in Hayes, we now clarify what will trigger Rule 68's penalty.   An offer of  



                                                                                                                                   

judgment to one of several opposing parties that would end the entire litigation between  



                                                                                                             

the parties to the offer triggers Rule 68 cost penalties against the offeree, regardless of  



                                                                                                                  27  

                                                                                                           

whether other plaintiffs have outstanding claims that may go to trial. 



                       TheWhittentons attempttodistinguish Hayes based on the high cost oftrial  

                                                                                                                                          



on Delila's and Charles's loss of consortium claims. They argue that even if Brandy had  

                                                                                                                                           



accepted the offer, "no trial time or expense would have been saved" because they still  

                                                                                                                                          



would have had to prove her injuries, which underlay Delila's and Charles's claims.  

                                                                                                                                                  



They argue that this situation rendered Peter Pan's offer a coercive attempt to force  

                                                                                                                                        



Delila and Charles to abandon their claims and point to our disapproval of potentially  

                                                                                                                               



                                                                                 28  

abusive offer of judgment tactics in Progressive.     

                                                             



                      But our concern in Progressive about the possibility of abuse was based in  

                                                                                                                                             



large part on the risk of plaintiffs potentially having to pay very high Rule 68 fee awards  

                                                                                                                                     

if the offeror's legal argument in that case were adopted.29  There the defendant insurance  

                                                                                                                                 



           25         Id.  at  938.  



           26         See  id.  at  937-38.  



           27         See  Windel  v.  Mat-Su  Title  Ins.  Agency,  Inc.,  305  P.3d  264,  279-80  (Alaska  



2013);  Hayes,  718  P.2d  at  937-38.   



           28          195  P.3d   1083,   1091-92  (Alaska  2008).  



           29         See  id.  



                                                                      -9-                                                              7203
  


----------------------- Page 10-----------------------

                                                                                             30  

company  made   two   offers   of   judgment   to   the   plaintiff.                               Then   after   five   years  of  



                                                                                                                   31  

litigation it made a large payment under the disputed insurance policy.                                                         

                                                                                                                        The insurer  



                                                                                                                               

argued that the payment should not be considered part of the plaintiff's recovery because  

                                                                                                 32  We held that, under the  

                                                                                                                                       

                                                                                  

it was a "voluntary" payment rather than part of a judgment. 



circumstances, it was not erroneous for the superior court to consider the payment as part  

                                                                                                                                      



of the plaintiff's recovery, in part because of the risk that such payments could be used  

                                                                                                                                    



to abuse Rule 68 and trigger "ruinous penalt[ies]" like the fee award exceeding $622,000  

                                                                                                                                             

requested there.33  

                               



                     But the situation described by the Whittentons here is inherently limited to  

                                                                                                                                         



relatively small potential losses:  It relates only to small claims that would not be cost- 

                                                                                                                                    



effective to litigate separately.   And their argument that Peter Pan's offer to Brandy  

                                                                                                                               



would have coerced them into abandoning Delila's and Charles's claims is undercut by  

                                                                                                                                        



Peter Pan's $2,000 offer of judgment to Delila, served on the same date as the offer to  

             34   The Whittentons have not persuaded us of a need to amend our interpretation  

Brandy.                                                                                                               



of Rule 68 based on a risk of coercion under such circumstances.  

                                                                                  



           30        Id.  at   1086.  



           31        Id.  



           32        Id.  at   1091.  



           33        Id.  at   1090-92.  



           34        The  offer  was  much  better  than  the  $524  Delila  eventually  recovered  on  the  



general  damages claim  it  was  based  on;  her  overall recovery  exceeded  the offer  based  

only   on   the   $4,000   she   received   for   loss   of  parental   consortium, but that claim   was  

brought  after  the  offer  was  made.   



                                                                  -10-                                                             7203
  


----------------------- Page 11-----------------------

              B.           Brandy Did Not Beat The Offer Of Judgment.                                   



                           To determine whether an offeree beat an offer of judgment, courts are                                                                        



directed to begin with the jury award and add prejudgment interest and costs incurred                                                                         



                                                              35                                                                                                           36  

prior to the offer of judgment.                                    This sum is compared with the offer of judgment.                                                             



Where, as here, there is one defendant, the offeree must pay the offeror's fees and costs  

                                                                                                                                                                     

if the judgment "is at least 5 percent less favorable to the offeree than the offer."37  

                                                                                                                                                     



                           Peter Pan's offer of judgment to Brandy was for $23,500, including costs,  

                                                                                                                                                                    



interest,  and  attorney's  fees;  95%  of  that  is  $22,325.                                                         The  jury  awarded  Brandy  

                                                                                                                                                               



$15,796.33, which increased to at most $21,926.21 when prejudgment interest and costs  

                                                                                                                                                                     



were included.  The Whittentons argue that the court wrongly excluded some costs and  

                                                                                                                                                                       



that Brandy beat the offer of judgment when those costs are included.  

                                                                                                                                               



                           Rule  68(a)  requires  a  valid  offer  of  judgment  to  include  "costs  then  

                                                                                                                                                                     



accrued."  Unlike Rule 68(b), it does not explicitly state that these costs are the costs  

                                                                                                                                                                    



allowable under the Civil Rules.  But we have held that an earlier version of Rule 68(a),  

                                                                                                                                                                   

containing nearly identical language about the content of the offer,38  required "costs  

                                                                                                                                                                  



allowable under Rule 79" to be awarded when an offer of judgment did not include  

                                                                                                                                                                

them.39   This interpretation is consistent with the meaning of costs in Rule 68(b), and the  

                                                                                                                                                                         



             35            Andrus  v.  Lena,  975 P.2d 54, 57  n.3  (Alaska   1999)  (citing  Farnsworth  v.  



Steiner,  601  P.2d  266,  269  n.4  (Alaska   1979);  Alaska  R.  Civ.  P.  82(b)(1)).  



             36            Id.  (citing  Farnsworth,  601  P.2d  at  269  n.4;  Alaska  R.  Civ.  P.  82(b)(1)).  



             37            Alaska  R.  Civ.  P.  68(b).  



             38            LaPerriere  v.  Shrum,  721  P.2d  630,  632  n.2  (Alaska   1986)  (requiring  the  



offer  to  be  "for  the  money  or  property  or  to  the  effect  specified  in  [the]  offer,  with  costs  

then  accrued"  (quoting  former  Alaska  R.  Civ.  P.  68(a))).  



             39            Id. at 635.  

                                       



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----------------------- Page 12-----------------------

Whittentons do not argue that we should change or expand our interpretation of what                                                                                                                                                        



costs must be included in a valid offer of judgment under Rule 68(a). They instead argue                                                                                                                                                 



that, whatever Rule 68 might require, Peter Pan's offer included all costs, not only Rule                                                                                                                                                  



                         40  

79 costs.                       

                                       Because "[a]n offer of judgment and acceptance thereof is a contract,"41 the  

                                                                                                                                                                                                                                                 



terms of the offer of judgment control what the offer includes. Even when an offer is not  

                                                                                                                                                                                                                                                



accepted, we examine it as we would a contract, looking at the text of the agreement and  

                                                                                                                                                                                                                                               



any extrinsic evidence of the parties' intent at the time of the offer to determine its  

                                                                                                                                                                                                                                                 

meaning.42                           The offer's terms must be viewed "as a reasonable offeree would have  

                                                                                                                                                                                                                                          

understood them at the time the offer was made."43                                                                                                  The question is therefore whether a  

                                                                                                                                                                                                                                                      



reasonable offeree would have understood Peter Pan's reference to "costs" to mean "all  

                                                                                                                                                                                                                                               



costs" or "costs allowable under Rule 79."  

                                                                                                                             



                   40                  The Whittentons also argue that the court erred in excluding the costs of                                                                                                                                   



attempting to depose two Peter Pan seasonal employees. Because they make no attempt                                                                                                                                                 

to argue that these costs, or any of the other costs excluded from the calculations relied                                                                                                                                              

on by the superior court, were allowable under Rule 79 and therefore proper to be                                                                                                                                                                

considered, this argument is abandoned.                                                                              Oels v. Anchorage Police Dep't Emps. Ass'n                                                                                        ,  

279 P.3d 589, 598 (Alaska 2012) ("On appeal . . . , the '[f]ailure to argue a point of law                                                                                                                                                     

constitutes   abandonment.'   "   (alteration   in  original)   (quoting   Smallwood   v.   Cent.  

Peninsula Gen. Hosp., Inc.                                                     , 227 P.3d 457, 460 (Alaska 2010))).                                              



                   41                 Pagenkopf  v.  Chatham  Elec.,  Inc.,  165  P.3d  634,  638  (Alaska  2007)  

                                                                                                                                                                                                                                       

(alteration in original) (quoting Jaso v. McCarthy, 923 P.2d 795, 801 (Alaska 1996)).  

                                                                                                                                                                                                                                  



                   42                  See Hayes v. Xerox Corp., 718 P.2d 929, 937 (Alaska 1986) (citing Norton  

                                                                                                                                                                                                                                     

v. Herron, 677 P.2d 877, 880 (Alaska 1984)) (applying this method to unaccepted offers  

                                                                                                                                                                                                                                         

of judgment).  

        



                   43                  Thomann v. Fouse, 93 P.3d1048,1050 (Alaska2004) (citing Bayly, Martin  

                                                                                                                                                                                                                                      

 & Fay, Inc., of Alaska v. Arctic Auto Rental, Inc., 517 P.2d 1406, 1407 (Alaska 1974);  

                                                                                                                                                                                                                                      

Hayes, 718 P.2d at 937).  

                                                        



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----------------------- Page 13-----------------------

                                               The Whittentons do not rely on the contract interpretation approach we                                                                                                                                                                              



have established for determining the meaning of a Rule 68 offer of judgment.  Instead  



they argue that "[i]t would be straining reason to expect Brandy to have understood" the                                                                                                                                                                                                           



reference   to   costs   to   mean   only   costs   allowable   under   Rule   79.     This   would   be  



unreasonable, they argue, because in order to evaluate the offer she would have to "try                                                                                                                                                                                                         



to predict how the Clerk . . . would rule on discretionary items" when applying Rule 79.                                                                                                                                                                                                                         



But the entire exercise of evaluating an offer of judgment involves predicting uncertain                                                                                                                                                                                     



futureoutcomes;theuncertainty                                                                                  around thecourtclerk's decisions on discretionary                                                                                                                            costs  



is no greater than the uncertainty around the amount the jury will award.  When faced                                                                                                                                                  



with an offer of judgment, every offeree must weigh the probability of recovering a                                                                                                                                                                                                                      

greater amount against her own tolerance for risk.                                                                                                                             44  



                                               There  is  no  reason  to  believe  that  a  reasonable  offeree  would  have  

                                                                                                                                                                                                                                                                                           



understood the offer to include all costs.  This was a civil case, where cost awards are  

                                                                                                                                                                                                                                                                                                   

                                                                                                                 45         The term "costs" in the offer of judgment context  

generally governed by Rule 79.                                                                                                                                                                                                                                                     

                                                                                                     

                                                                                                                                                                                                                                          46        The Whittentons  

generally refers to allowable costs under the applicable Civil Rules.                                                                                                                                                                                              

                                                                                                                                                                                                                    



presented no extrinsic evidence to show that the parties intended to depart from this  

                                                                                                                                                                                                                                                                                                



                       44                      This type of uncertainty, which is inherent in the process, is different from                                                                                                                                                                 



the ambiguity prohibited in the offer of judgment.                                                                                                                            See Pagenkopf                                         , 165 P.3d at 638 ("In                                      

applying Rule 68, we have consistently emphasized that an enforceable offer must be                                                                                                                                                                                                                  

unambiguous . . . ."). Brandy's gain under Peter Pan's offer is not ambiguous; if Brandy                                                                                                                                                                                            

had accepted it, she would have received $23,500.                                                                                                                                  



                       45                      Alaska R. Civ. P. 79 (outlining how a prevailing party is generally entitled  

                                                                                                                                                                                                                                                                                    

to recover certain costs).  

                                                               



                       46                        Rule 68(b) requires offerees to pay "all costs as allowed under the Civil  

                                                                                                                                                                                                                                                                                            

Rules."  See LaPerriere v. Shrum, 721 P.2d 630, 635 (Alaska 1986) (holding that "costs  

                                                                                                                                                                                                                                                                                         

allowable under Rule 79" must be awarded in addition to an unconditional offer that did  

                                                                                                                                                                                                                                                                                                   

not include costs).  

                                                                  



                                                                                                                                                -13-                                                                                                                                         7203
  


----------------------- Page 14-----------------------

meaning; they focus only on the absence of an explicit reference to Rule 79. Under these                                                                                                                                                                                



circumstances, a reasonable offeree would not have interpreted the offer to include costs                                                                                                                                                                               



beyond those allowed under Rule 79.                                                                                       The offer therefore included only Rule 79 costs.                                                                                           



V.                    CONCLUSION  



                                           The judgment of the superior court is AFFIRMED.  

                                                                                                                                                                      



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