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Greenwald v. Ford Motor Co.5/27/1999
AFFIRMED
Appellant Ford Motor Company (Ford) appeals from the trial court's denial of sanctions under Ariz. R. Civ. P. 68 (Rule 68). We have jurisdiction pursuant to Ariz. Rev. Stat. Ann. (A.R.S.) § 12-2101 (B) and affirm, finding that Ford cannot benefit from the Rule 68 sanctions because its offer did not fully comply with the rule.
FACTUAL AND PROCEDURAL HISTORY
The driver of a 1991 Ford Explorer died as a result of injuries suffered in a single-vehicle accident, which occurred when she lost control of the vehicle after the tread separated from the left rear tire . The personal representative of the estate, Michael Greenwald, brought suit against Ford, among others, representing the interests of the surviving spouse and parents of the driver. The complaint alleged wrongful death and asserted alternate theories of negligence and strict product liability. The damages sought were both compensatory and punitive.
A little over a year after the complaint was filed, Ford made a Rule 68 offer of judgment to Greenwald for $100,001.00 plus costs accrued. Greenwald never accepted the offer. After a three-week trial, the jury rendered a defense verdict. Ford sought $335,237.40 as sanctions pursuant to Rule 68. The trial court denied the sanctions, determining that under applicable case law, Duke v. Cochise County, 189 Ariz. 35, 938 P.2d 84 (App. 1996), the offer of judgment was an unapportioned, lump-sum offer, on which an award of sanctions was not proper. The trial court ordered Ford to submit a revised statement of costs, which it granted in full. Ford timely appealed the final judgment, asserting that the trial court erred in denying it sanctions under Rule 68 on the theory that Ford's offer of judgment was an impermissible unapportioned lump-sum offer.
DISCUSSION
I. Standard of Review
Ford asserts that because Rule 68 sanctions are manda-tory, the trial court's denial of these sanctions was reversible error. Interpretation and application of a court rule is a question of law, which we review de novo. See Wersch v. Radnor/Land-grant-a Phoenix Partnership, 192 Ariz. 99, 100, 961 P.2d 1047, 1048 (App. 1997). To determine a rule's intent, the rule needs to be read as a whole and given "meaningful operation to all of its provisions." Id. (citations omitted).
II. Rule 68 Offers of Judgment
Rule 68 allows a party to make an offer of judgment. A Rule 68 offer, if accepted, will result in a judgment entered according to the offer. See Rule 68(b), (c)(2), and (c)(3). If the offer is not accepted, Rule 68(d) allows the offeror to recover sanctions unless the offeree obtains a judgment equal to, or more favorable than, the Rule 68 offer. However, in order to benefit from Rule 68, the offer must conform to the requirements of the rule. See Crown Properties, Inc. v. Financial Sec. Life Ins. Co., 712 P.2d 504, 510 (Haw. App. 1985) (Hawaii's version of Rule 68 does not limit any party's right to tender a non-Rule 68 offer; however, to benefit from the rule, the offer must satisfy the requirements of the rule); see generally 49 C.J.S. Judgments §§ 188-89, 191 (1997).
The Arizona version of Rule 68 requires certain speci-ficity. First, the offer must contain a specific monetary sum to settle the asserted causes of action. See Rule 68(b). Second, the offer must contain a specific monetary sum for attorneys' fees, if any have been sought in the action. See Rule 68(c)(1). Third, the offer must be specific enough so that it can be determined, at the time of judgment, whether the offer or the judgment favored the offeree. See Rule 68(d) (sanctions required if the judgment "is equal to, o
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