Bishop v. Washburn, No. 18-1-10 Rdcv (Teachout, J., Jan. 17, 2012)

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                                                      STATE OF VERMONT

SUPERIOR COURT                                                                                               CIVIL DIVISION
Rutland Unit                                                                                           Docket No. 18-1-10 Rdcv


Griffin Bishop, et al.,
       Plaintiffs

v.

Ronald Washburn, et al.,
      Defendants

                                              DECISION
                   Defendants’ Motion for Relief From Judgment, filed August 8, 2011

        This case arose out of the personal injuries suffered by Plaintiffs when a deck collapsed
at Defendants’ property. On July 18, 2011, shortly before the scheduled trial in this matter,
Defendants filed Offers of Judgment with the court pursuant to V.R.C.P. 68. Plaintiff April
Bishop filed a Notice of Acceptance on July 28, 2011, and Plaintiff Griffin Bishop filed a Notice
of Acceptance on August 1, 2011. Accordingly, this court entered judgment in favor of each
plaintiff on August 8, 2011.

        Defendants now move for relief from these judgments, pursuant to V.R.C.P. 60(b). They
assert that the Offers of Judgment were no longer valid at the time Plaintiffs purported to accept
them. Defendants are represented by Andrew C. Boxer, Esq. Plaintiffs are represented by Joel P.
Iannuzzi, Esq.

        Under Rule 68, a defendant may serve on a plaintiff an offer of judgment. Unless the
court otherwise specifies, a plaintiff has ten days to serve written notice and accept the offer.
V.R.C.P. 68. Upon receipt of notice and proof of service, the clerk shall enter judgment. Id.
V.R.C.P. 68 is nearly identical to F.R.C.P. 68 and thus Vermont courts look to federal case law
interpreting the rule as authoritative sources. Rule v. Tobin, 168 Vt. 166, 169 (1998).

        The dispute here is whether Plaintiffs rejected and therefore nullified Defendants’ offers
of judgment, before purporting to accept them. Defendants argue that by continuing to engage in
settlement negotiations once they received the offers of judgments, Plaintiffs rejected
Defendants’ offer and created their own counteroffer that extinguished Defendants’ original
offers of judgments. Plaintiffs argue that they had ten days under the rule to accept the offers of
judgment and note that during the course of settlement negotiations they reserved their right to
respond to the offers of judgment.

        In general, courts apply principles of contract law in construing disputes that arise over
offers of judgment. Rule, 168 Vt. at 169. It is a well-settled tenet of contract law that in order for
a binding contract to be formed the acceptance must not vary the terms of an offer. Ackerman v.
Carpenter, 113 Vt. 77, 81 (1943). This principle applies with equal force in cases under Rule 68.
See 12 Wright, Miller, Kane & Marcus, Federal Practice and Procedure: Civil 2d § 3005
(“Plaintiff's acceptance [of an offer of judgment] must be unconditional, and a conditional
acceptance will not suffice.”) These pronouncements, however, do not answer the specific
question in this case because the acceptance of the offers of judgment here did not alter their
terms. Rather, Plaintiffs, within the ten-day statutory period, served and filed acceptances that
matched the terms of the offer. The issue here is if Plaintiffs’ ongoing settlement discussions
extinguished the original offers of judgment before the ten-day period provided for by Rule 68
expired.

        The majority of courts that have addressed this issue, under provisions analogous to
V.R.C.P. 68, have concluded that a counteroffer does not terminate the original offer of
judgment. See, e.g., Shelton v. Sloan, 977 P.2d 1012 (N.M. Ct. App. 1999); Butler v. Smithfield
Foods, Inc., 179 F.R.D. 173 (E.D.N.C. 1998); Dussault v. Seattle Pub. Sch., 850 P.2d 581
(Wash. Ct. App. 1993). These courts put forward a variety of sound rationales as to why a
plaintiff’s counteroffer should not terminate a defendant’s original offer of judgment.

        First, the language of Rule 68 supports Plaintiffs’ interpretation. Rule 68 states, “If within
ten days after the service of the offer … the adverse party serves written notice that the offer is
accepted, either party may then file the offer and notice of acceptance together with proof of
service thereof and thereupon the clerk shall enter judgment.” V.R.C.P. 68 (emphasis added).
The language of the rule explicitly gives Plaintiffs ten days to accept an offer of judgment and
requires the clerk to enter the judgment if given notice of its timely acceptance. This language
indicates that an offer of judgment is to remain open for the full ten-day period.

        Second, it is well-established that a defendant does not have the power to revoke an offer
of judgment made under Rule 68 until the ten-day period has expired. See, e.g., Richardson v.
Nat’l R.R. Passenger Corp., 49 F.3d 760, 769 (D.C. Cir. 1995). Although this limitation does not
squarely answer the question presented here, it does offer guidance. If Defendant cannot
deliberately withdraw the offer during the ten-day period, it would make little sense that
Plaintiffs could accidentally extinguish it even while purporting to reserve their right to accept it.
Instead, these holdings support the interpretation that the language of Rule 68 requires an offer of
judgment to remain open for the full ten-day period.

         Third, allowing Plaintiffs to make counteroffers without terminating the original offer of
judgment supports Rule 68’s rationale of encouraging settlements. As courts widely
acknowledge, the fee-shifting provision of Rule 68 puts a good deal of pressure on Plaintiffs to
make an accurate calculation as to the value of their claim. See, e.g., Richardson, 49 F.3d at 769;
Shelton, 977 P.2d at 1017. As a tradeoff to this pressure to settle, Plaintiffs should be entitled to
the full ten-day period to make this often difficult decision. See Shelton, 977 P.2d at 1017
(“Given the consequences when the plaintiff errs in rejecting what turns out to be a good offer, it
seems appropriate to permit the plaintiff the full ten days to investigate the case, including
exploring alternative settlement possibilities.”).

       Finally, this conclusion comports with principles of contract law. An offer of judgment
under Rule 68 can be thought of as an irrevocable option. Under traditional contract law, a



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counteroffer does not terminate an offer if the initial offer was itself irrevocable; therefore,
because an offer of judgment under Rule 68 is not revocable within the ten-day period, a
counteroffer to an offer of judgment does not extinguish the original offer. Butler v. Smithfield
Foods, Inc., 179 F.R.D. 173, 175 (E.D.N.C. 1998). This conclusion applies with even more
force here where Plaintiffs, though engaging in continuing settlement negotiations, explicitly
reserved their rights to act on the offer of judgment.

       For all of these reasons, the Court concludes that Defendants’ offers of judgment
remained valid offers at the time Plaintiffs accepted them. Because Plaintiffs accepted the offers
of judgment within the ten-day period, the Court properly entered judgment in this case.
Defendants’ argument that judgment must be set aside does not withstand analytic scrutiny.




                                               ORDER

       Defendants’ Motion for Relief From Judgment is denied.


       Dated this 17th day of January, 2012.


                                                                 ________________________
                                                                    Hon. Mary Miles Teachout
                                                                    Superior Court Judge




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