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Andrus v. Lena3/26/1999
No. 5098
Appeal from the Superior Court of the State of Alaska, Third Judicial District, Anchorage, Brian C. Shortell, Judge.
I. INTRODUCTION
Perparim Lena received a $39,000 jury verdict against Amy Andrus for a personal injury claim arising from an automobile collision. The superior court, finding Lena's offer of judgment more favorable to Andrus than the final judgment, awarded Lena an additional five percent interest pursuant to Alaska Civil Rule 68. The court also held that Lena was the prevailing party, awarding him $10,000 in attorney's fees pursuant to Alaska Civil Rule 82(b)(3) and an additional $3,162 in actual paralegal fees. Because the trial court erred in several respects, we vacate these awards and affirm only the ruling that Lena is the prevailing party.
II. FACTS AND PROCEEDINGS
On January 8, 1996, Lena filed a personal injury lawsuit against Andrus. On November 15 Lena served Andrus with an offer of judgment under Civil Rule 68. In it, he offered to settle the case for $38,000 plus costs pursuant to Civil Rule 79, with 10.5% interest from the date of the accident, and attorney's fees calculated pursuant to Civil Rule 82. Andrus rejected the offer.
Prior to trial, Andrus conceded her negligence, leaving only the issues of causation, injury , comparative negligence, and damages for the jury. The jury found that Andrus's negligence was a legal cause of Lena's injuries. It also found that Lena was negligent, but found that his negligence did not cause his injuries. It awarded Lena $39,000 in damages, which included $16,397 in past damages and $22,603 in future damages.
The superior court then entered final judgment against Andrus. It held that Lena's offer of judgment was more favorable to Andrus than the judgment, and applied the penalty provision of Rule 68 by setting both the prejudgment and post-judgment interest on the damage award at 15.5%. It also found that Lena was the prevailing party and awarded him attorney's fees under Rule 82(b)(1); $3,162 for actual paralegal fees; and an enhanced attorney's fee award of $10,000 under Rule 82(b)(3)(F), (G), (J), and (K), emphasizing that Andrus had initially refused to concede liability and had rejected Lena's more favorable offer of judgment.
Andrus appeals the award of Rule 68 interest, attorney's fees, and paralegal fees.
III. DISCUSSION
A. It was Error to Hold that Lena's Rule 68 Offer of Judgment Was More Favorable to Andrus than the Judgment.
Andrus argues that the superior court erred in applying the Rule 68 interest penalty against her. She claims that, with prejudgment interest properly calculated on the full amount of the offer but only on the past damage portion of the judgment, the offer of judgment was not more favorable to her than the final judgment. We agree.
Where the party defending against a claim rejects an offer of judgment more favorable to the offeree than the final judgment, the superior court must increase the prejudgment interest award by five percent. Alaska R. Civ. P. 68(b)(2); AS 09.30.065. To determine whether an offer is more favorable than a judgment, we must add "interest to the date the offer" to the jury award. Farnsworth v. Steiner, 601 P.2d 266, 269 n.4 (Alaska 1979). Since the offer in this case was for a set amount plus prejudgment interest from the date of the accident, we must also add prejudgment interest to the offer to compare the value of the two amounts.
First, we calculate the amount of prejudgment interest on the $39,000 jury award. Lena's argument assumes that we should calculate prejudgment interest on the entire
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