Short v. Petty – 7/27/2006

August 4, 2006

Arizona Court of Appeals Division One Clarifies Apportionment Requirements of Ariz. R. Civ. P. 68.

In this suit arising out of an auto accident, Defendant had made a Rule 68 offer of judgment for 100,000. Plaintiffs, husband, and wife, rejected it and proceeded to trial on claims for loss of consortium, and injury as well as loss of consortium, respectively. The jury returned a verdict for Plaintiffs covering their “full damages” in the amount of $20,000. Defendants moved for Rule 68 sanctions which the Superior Court denied on the basis that the offer has been defective because it did not apportion damages between claims of the husband and those of the wife.

Reversing and remanding, Division One affirmed that although the general rule set forth in Duke v. Cochise County, 189 Ariz. 35 (App. 1996), requiring apportionment of offers of judgment to trigger Rule 68 sanctions still applies, exceptions exist beyond the one noted in Sheppard v. Crow-Barker-Paul No. 1 Ltd. P’ship, 192 Ariz. 539, 549 (App 1998).

Writing for a unanimous panel, Judge Barker noted that trial judges considering a Rule 68 motion must consider the facts and circumstances of the case to determine “whether a joint, unapportioned offer” when compared with the judgment finally obtained, “provided the offerees with the ability to make a meaningful choice between accepting or rejecting the offer and going forward with the litigation.” The Court held that because the judgment obtained by Short was unapportioned, as was the initial offer, and because the plaintiffs shared counsel and a unity of interest, the parties were able to make such a choice and thus the Rule 68 offer was valid.

The Court remanded for further proceedings.