Rule v. Tobin
1998 Vt. LEXIS 151, 719 A.2d 869, 168 Vt. 166 (1998)
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Rule of Law:
Under Rule 68, an offer of judgment in a civil rights case that is silent as to costs and attorney's fees is interpreted as an offer for the specified monetary amount plus an additional award of reasonable costs and fees to be determined by the court. Ambiguities in such offers are construed against the drafter.
Facts:
- William and Beverly Rule and Danielle Swain brought a civil rights action against Rutland police officer Gary Tobin and the City of Rutland.
- On April 10, 1997, the defendants' attorney sent the plaintiffs a formal offer of judgment for $4,000.
- The written offer of judgment made no mention of costs or attorney's fees.
- On April 15, 1997, the plaintiffs' attorney sent a written response accepting the $4,000 offer.
- The plaintiffs' acceptance stated the assumption that the offer did not include costs and attorney's fees, and that those would be determined by the court in a later hearing.
- The defendants objected to the acceptance, stating that their intent was for the $4,000 to be a lump-sum payment covering all claims, including fees and costs.
Procedural Posture:
- William and Beverly Rule and Danielle Swain (plaintiffs) sued Officer Gary Tobin and the City of Rutland (defendants) in Rutland Superior Court, the trial court of first instance.
- The case proceeded to a first trial.
- Following the first trial, defendants served plaintiffs with an offer of judgment for $4,000 pursuant to V.R.C.P. 68.
- Plaintiffs served defendants with a written notice of acceptance.
- Defendants objected to the acceptance, and the trial court refused to enforce the settlement agreement.
- The case proceeded to a second jury trial, which resulted in a verdict for the defendants.
- Plaintiffs, as appellants, appealed the trial court's final judgment to the Vermont Supreme Court, arguing the court erred in failing to enforce the settlement.
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Issue:
Does a defendant's offer of judgment under V.R.C.P. 68 that is silent on costs and attorney's fees, when accepted by the plaintiff, create a binding agreement for the offered amount plus costs and attorney's fees to be determined by the court?
Opinions:
Majority - Dooley, J.
Yes. When an offer of judgment under Rule 68 is silent on costs and attorney's fees, an acceptance creates a binding agreement for the stated sum, and the court will subsequently determine and award reasonable costs and fees. The court's reasoning is based on federal precedent, primarily Marek v. Chesny, which held that attorney's fees under 42 U.S.C. § 1988 are considered 'costs' for the purpose of Rule 68. Marek established that if an offer does not explicitly state that costs are included, the court is obligated to award costs in addition to the judgment amount. Therefore, any ambiguity in an offer of judgment is construed against the drafter, and a waiver of attorney fees must be clear and explicit. The plaintiffs' acceptance was not a conditional counteroffer because it merely articulated a condition—the separate recovery of costs and fees—that was already implied in the defendants' offer as a matter of law. Once a valid offer is accepted, Rule 68's language is mandatory, leaving no discretion for the trial court to refuse to enter judgment. Relief from this judgment under V.R.C.P. 60(b) for 'mistake' is not warranted, as this was a unilateral mistake of law by counsel, which does not justify setting aside a binding contract.
Analysis:
This decision solidifies for Vermont practitioners the rule that the drafter of a Rule 68 offer of judgment bears the full responsibility for its clarity, particularly regarding attorney's fees in civil rights cases. It establishes that silence on fees and costs will be resolved in favor of the plaintiff-offeree, reinforcing the principle from Marek v. Chesny. The case serves as a strong precedent limiting a trial court's discretion to invalidate a technically valid and accepted offer, thereby emphasizing the finality and self-executing nature of the Rule 68 settlement process. This holding puts defendants on notice that any failure to explicitly include attorney's fees in a lump-sum offer will result in them having to pay those fees in addition to the offered amount.
