Attorney Stung By “Offer of Judgment”
Posted: February 15, 2012 Filed under: Uncategorized | Tags: Civil Rules Leave a comment »Even experienced attorneys can be tripped up by some of the more arcane areas of law. Such was the case when the Court of Appeals ordered attorney Amy Hansen to pay an attorneys fees in an employment dispute she had thought she had settled for $7,500.
Paul Lietz, a paralegal and investigator sued his employer Hansen for unpaid wages and claimed attorneys fees under the wage and hour statutes. Hansen submitted an “offer of judgment” offering to allow Lietz to enter a judgment for $7,500 in exchange for dismissing the “claim.” Offers of judgment are allowed by the civil rules and provide that a party can agree that a judgment can be entered against the in the amount set forth on the offer of judgment. If the other side fails to accept the offer of judgment and the eventual judgment in the case is less than the amount offered, then the person making the offer will be considered the “prevailing party, which can shift certain litigation costs back to the party that refused to accept the offer.
In Hansen’s case, Lietz immediately accepted the offer of judgment for $7,500 and presented it to the court asking for an additional $36,000 in attorneys’ fees arguing that because Ms. Hansen’s offer of judgment did not specify that it was in settlement of his attorney’ fees claim, he was entitled to attorneys fees as well as the $7,500 settlement. The trial court was sympathetic to Ms. Hansen’s plight refusing to award fees finding that there was no “meeting of the minds” on the terms of the offer of judgment. The court of appeals reversed, holding that under existing case law the failure to specify that the offer of judgment included attorneys fees required the trial court to award fees under the applicable wage and hour statutes.
Offers of judgment are useful tools in litigation allowing a defendant to shift risk and costs to the a plaintiff who demands an unreasonable sum in settlement. However, as noted above, care must be taken in drafting the document correctly, otherwise it can result in unintended consequences and costs.
Contributed by Geoff Bridgman
Supreme Court Announces Insures Must Pay Pro-rata Share of Attorneys Fees When Offsetting PIP Benefits and Failing to Do So May Result in Liability for Bad Faith
Posted: February 15, 2012 Filed under: Uncategorized Leave a comment »Earlier this week the Washington State Supreme Court held that an insurance carrier that insures both the at fault driver and the injured plaintiff must reduce any offset for PIP payments by a pro-rata share of plaintiff’s attorneys’ fees. Matsyuk et. al. v. State Farm. The result is consistent with a string of other cases beginning with Mahler v. Szucs 135 Wn.2d 398 (1998) and ending with Hamm v State Farm 151 Wn.2d 303 (1998) that have held PIP insures responsible for paying a pro-rata share of attorneys’ fees in a cases involving PIP subrogation or offsets where the insured recovers money from a third party insurance carrier and where insured recover under their own underinsured or uninsured motorist policies. Although the result is not surprising in light of the Mahler line of cases, State Farm had support for its position in the Young v Teti 104 Wn. App. 721 (2001) case. The Supreme Court analyzed Young and overruled it, finding that it was inconsistent with Hamm. In addition, the Court reversed earlier dismissal of bad faith claims against State Farm finding that its refusal to settle the claim unless Ms. Matsyuk settled her PIP claim was sufficient to state a claim for bad faith.
Contributed by Geoff Bridgman
