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Phillips v. Warren9/3/2002 f judgment has three options:
1) to specify the amount of the judgment and the amount of costs, 2) to specify the amount of the judgment and leave the amount of costs open to be determined by the court, or 3) to make a lump sum offer which expressly includes both the amount of the judgment and the amount of costs. Aikens v. Ludlum, 113 N.C. App. 823, 825, 440 S.E.2d 319, 321 (1994).
The Aikens Court held that such lump sum offers of judgment as in the third option were permissible under North Carolina's Rule 68, "but it is incumbent on the defendant to make sure that he has used language which conveys that he is making a lump sum offer." Id. at 826, 440 S.E.2d at 321.
Defendant's offers of judgment provided:
NOW COMES Defendant, through counsel, pursuant to Rule 68(a) of the North Carolina Rules of Civil procedure, and hereby offers to allow judgment be entered against him in this matter in the total sum, in the aggregate, including costs now accrued and attorney's fees, of EIGHT THOUSAND AND NO/100 DOLLARS ($8,000.00). This Offer is made for the purposes set out in Rule 68 of the North Carolina Rules of Civil Procedure and for no other purpose. TAKE NOTICE that if this Offer is not accepted within ten (10) days after its filing and service, it shall be deemed withdrawn.
This Court has been presented with an offer of judgment similar to the one made by defendant in the present case. As this Court in Craighead v. Carrols Corp., 115 N.C. App. 381, 444 S.E.2d 651 (1994) stated:
In Harward v. Smith, this Court held that the defendant's offer of judgment was not ambiguous and provided that the lump sum payment covered the plaintiff's damages, attorney's fees, and costs. The defendant's offer of judgment read:
Defendant, pursuant to G.S. § 1A-1, Rule 68, more than ten days before trial, offers to allow judgment to be taken against her in this action in the lump sum amount of $7,001.00 for all damages, attorneys' fees taxable as costs, and the remaining costs accrued at the time this offer is filed. This offer is made for the purposes set out in G.S. § 1A-1, Rule 68(a), and for no other purpose. Harward, 114 N.C. App. at 263-4, 441 S.E.2d at 313.
This Court in Harward concluded that " his language evinces an unmistakable intent that the $7,001.00 lump sum be payment not only for plaintiff's damages, but for her attorney's fees and the costs accrued at the time the Offer of Judgment was filed." Id. at 265, 441 S.E.2d at 314. The Court held that the plaintiff was not entitled to any additional attorney's fees or costs of the action such as prejudgment interest. Id. Craighead, 115 N.C. App. at 383, 444 S.E.2d at 652.
We find the present offer of judgment to be of the sort discussed in Harward. Thus, defendant's offers of judgment were valid lump sum offers under Rule 68.
In Aikens, Harward and Craighead, the plaintiffs had accepted the offer. We now address what effect on prejudgment interest declining a lump sum offer would have.
Defendant contends that its offer of judgment was a valid tender of payment for the full amount plus interest. This being a lump sum offer, it did evince "an unmistakable intent that the . . . lump sum be payment not only for plaintiff's damages, but for her attorney's fees and the costs accrued at the time . . . ," which according to Harward, included prejudgment interest. Id. However, in all the cases that defendant relies on, there was a sum certain involved. Most of these cases were contract cases and interest was based on N.C. Gen. Stat. § 24-5(a), or they dealt with actions other than contract based on N.C. Gen. Stat. § 24-5(b), but only after a
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