1. Costs--settlement offer and verdict identical--costs
allowed--attorney fees
The trial court did not err by awarding attorney fees to
plaintiff under N.C.G.S. § 6-21.1 in an action arising from a car
accident where defendant had twice offered to settle for $5,000,
the jury returned a verdict of $5,000, and the court also awarded
plaintiff $555 in costs. The trial court made findings on the
factors set out in Washington v. Horton, 132 N.C. App. 347, and
the judgment was more favorable than the settlement offer.
2. Costs--settlement offer and verdict identical--costs and
attorney fees allowed--final judgment controlling
The trial court did not err in an action arising from an
automobile accident by taxing plaintiff's costs against defendant
where defendant had twice offered $5,000 to settle, the jury
returned a verdict of $5,000, and the court allowed plaintiff
costs and attorney fees. Due to the granting of costs and
attorney fees, the judgment finally obtained is more favorable
because plaintiff receives the full $5,000 without having to
reimburse court costs or compensate counsel. The verdict by the
jury is not synonymous with the judgment finally obtained.
N.C.G.S. § 1A-1, Rule 68.
3. Costs--settlement offer and verdict identical_plaintiff's
attorney fees and costs allowed_denial of defendant's costs
The trial court did not err in an action arising from an
automobile accident by denying defendant's Rule 68 motion for
costs where defendant had twice offered to settle for $5,000, the
jury returned a verdict for $5,000, and the court allowed
plaintiff attorney fees and costs. The judgment finally obtained
was more favorable than defendant's offer.
Tart, Willis & Fusco by O. Henry Willis, Jr. for plaintiff-
appellee
Walker, Clark, Allen, Herrin & Morano by Donald E. Clark, Jr.
and Gay Parker Stanley for defendant-appellant
THOMAS, Judge.
Defendant appeals from an order entered by the trial court
taxing plaintiff's costs and attorney fees against defendant.
Defendant sets forth two assignments of error. For reasons
discussed herein, we affirm the trial court.
The facts are as follows: On 15 December 1997, plaintiff was
injured in a car accident involving defendant. Before plaintiff
filed suit, defendant offered to settle for $5,000.00. Plaintiff
refused. After the institution of the suit, defendant served
plaintiff with an offer of judgment on 18 December 1999 for
$5,000.00, which plaintiff also refused. The case went to trial on
22 November 1999 and the only matter submitted to the jury was the
issue of damages. The jury returned with a verdict for plaintiff
in the amount of $5,000.00. Plaintiff accepted the verdict and
made a motion for attorney fees, which was denied. In January
2000, defendant made a motion for costs and plaintiff filed motions
for costs and for reconsideration of the motion for attorney fees.
On 31 January 2000, the trial court granted plaintiff's motions
and denied that of defendant. Defendant appeals the grant of
plaintiff's motions for attorney fees and costs and the denial of
her motion for costs.
[1]By defendant's first assignment of error, she argues the
trial court abused its discretion by reconsidering and grantingplaintiff's motion for attorney fees. We disagree.
The North Carolina General Statutes provide:
In any personal injury or property damage
suit, or suit against an insurance company
under a policy issued by the defendant
insurance company and in which the insured or
beneficiary is the plaintiff, upon a finding
by the court that there was an unwarranted
refusal by the defendant insurance company to
pay the claim which constitutes the basis of
such suit, instituted in a court of record,
where the judgment for recovery of damages is
ten thousand dollars ($10,000) or less, the
presiding judge may, in his discretion, allow
a reasonable attorney fee to the duly licensed
attorney representing the litigant obtaining a
judgment for damages in said suit, said
attorney's fee to be taxed as a part of the
court costs.
N.C. Gen. Stat. § 6-21.1 (1999). Under this statute, the trial
judge is given the discretion to award attorney fees to the
prevailing party. See Porterfield v. Goldkuhle, 137 N.C.App. 376,
528 S.E.2d 71 (2000). The trial court's ruling will not be
disturbed on appeal absent a showing of abuse of discretion. West
v. Tilley, 120 N.C.App. 145, 461 S.E.2d 1 (1995). An abuse of
discretion occurs when the trial court's ruling “is so arbitrary
that it could not have been the result of a reasoned decision.”
Chicora Country Club, Inc. v. Town of Erwin, 128 N.C.App. 101, 109,
493 S.E.2d 797, 802 (1997), disc. review denied, 347 N.C. 670, 500
S.E.2d 84 (1998)(citations omitted).
When determining whether to award attorney fees, the trial
court must consider the entire record, including the following
factors: 1) settlement offers made prior to institution of theaction; 2) offers of judgment made pursuant to Rule 68 and whether
the judgment finally obtained was more favorable than such offers;
3) whether defendant unjustly exercised superior bargaining power;
4) in a case of unwarranted refusal by an insurance company, the
context in which the dispute arose; 5) the timing of settlement
offers; and 6) the amounts of settlement offers as compared to jury
verdict. Washington v. Horton, 132 N.C.App. 347, 351-52, 513
S.E.2d 331, 334-35 (1999). We now, in the aggregate, review these
factors.
As to factor one, the trial judge found that defendant's
insurance carrier, Allstate Insurance Company, mailed a check for
$5,000 to plaintiff prior to the institution of the lawsuit in
finding of fact two. This offer was rejected. As to factor two,
the trial judge found in finding of fact three that after suit had
been filed, counsel for defendant served an offer of judgment on
plaintiff's counsel for the same amount. This offer was also
rejected by plaintiff. The trial judge further found in findings
of fact three and four that plaintiff had incurred costs of $555
and that plaintiff and his counsel had a contingency agreement. In
finding of fact twelve, the trial judge found that the offer of
judgment tendered by defendant to plaintiff on 18 December 1998 was
less than the judgment finally obtained by the plaintiff, which
also satisfies factor six. As to factor three, the trial judge, in
finding of fact thirteen, found that defendant incurred deposition
costs of $295.98, but did not mention that defendant may haveunjustly exercised superior bargaining power. As to factor four,
there was no unwarranted refusal by the insurance company. This
finding is not necessary since the suit was not on an insurance
policy. Crisp v. Cobb, 75 N.C.App. 652, 331 S.E.2d 255 (1985).
Finally, as to factor five, the trial court found, in findings of
fact two and three, that the settlement offers were made both prior
to the institution of the lawsuit, and after in the amount of
$5,000.00.
Because detailed findings are not required for each factor,
these excerpts are adequate findings of fact based on the whole
record. The timing and amount of the settlement offers and the
amount of the jury verdict are the most crucial factors in the case
at bar. See Culler v. Hardy, 137 N.C.App. 155, 526 S.E.2d 698
(2000).
As aforementioned, defendant twice offered to settle the
lawsuit for $5,000. Twice, plaintiff rejected the offer.
Defendant argues that the judgment offered was not more favorable
than the judgment finally obtained because the jury awarded
plaintiff $5,000. However, plaintiff was also awarded $555 in
costs and, additionally, attorney fees were taxed as part of the
costs of the action, pursuant to section 6-21.1. Nonetheless, even
without attaching the attorney fees, the judgment is still
$5,555.00 and therefore, more favorable than the offer of
$5,000.00. We therefore hold the trial court did not err in
awarding attorney fees to plaintiff. [2]By defendant's second assignment of error, she argues the
trial court erred in taxing costs against her and denying her
motion for costs because the offer of judgment equaled the jury's
verdict. We disagree. Offers of judgment are governed by the
Rules of Civil Procedure as follows:
At any time more than 10 days before the trial
begins, a party defending against a claim may
serve upon the adverse party an offer to allow
judgment to be taken against him for the money
or property or to the effect specified in his
offer . . . . If the judgment finally obtained
by the offeree is not more favorable than the
offer, the offeree must pay the costs incurred
after the making of the offer.
N.C. Gen. Stat. § 1A-1, Rule 68 (1999). The N.C. Supreme Court
recently held that “costs incurred after the offer of judgment but
prior to the entry of judgment should be included in calculating
the 'judgment finally obtained[.]'” Roberts v. Swain, 353 N.C. 246,
250-51, 538 S.E.2d 566, 569 (2000). We note that “costs” include
reasonable attorney fees. N.C. Gen. Stat. § 6-21 (1999).
Defendant argues the judgment finally obtained does not
include the costs because the record reflects a recovery of $5,000
in the Order and Judgment. The attorney fees were awarded as part
of the costs in a post-trial hearing. The N.C. Supreme Court has
defined “judgment” as “'[t]he final decision of the court resolving
the dispute and determining the rights and obligations of the
parties,' and '[t]he law's last word in a judicial controversy.”
Poole v. Miller, 342 N.C. 349, 352, 464 S.E.2d 409, 411 (1995),
reh'g denied, 342 N.C. 666, 467 S.E.2d 722 (1996) (quoting Black'sLaw Dictionary 841-42 (6th ed. 1990). The Poole Cou
rt also stated
that the judgment finally obtained is not merely the jury's
verdict. Only a court can render a judgment, not a jury. Id. In
the instant case, the post-trial order dated 31 January 2000 is the
final decision resolving the dispute and determining the
obligations of defendant to plaintiff. That order contains the
$5,000 jury verdict, the court costs of $555 and attorney fees of
$3,937.50.
Defendant argues the judgment finally obtained by plaintiff is
more favorable than the offer only because of the addition of
attorney fees and court costs. It is correct that the amount of
the verdict and offer were in equal amounts. However, due to the
granting of costs and attorney fees, the judgment finally obtained
is more favorable because plaintiff receives the full $5,000.00
without having to reimburse court costs or compensate counsel. The
verdict by the jury is not synonymous with the judgment finally
obtained. We therefore hold the trial court did not err in taxing
plaintiff's costs against defendant.
[3]Finally, defendant argues the trial court erred in denying
her Rule 68 motion for costs. We disagree. To recover costs under
Rule 68, the amount of the offer of judgment must exceed
plaintiff's total recovery. Poole v. Miller, 342 N.C. 349,
353-355, 464 S.E.2d 409, 411-412 (1995), reh'g denied, 342 N.C.
666, 467 S.E.2d 722 (1996). Specifically, under Rule 68, “[i]f the
judgment finally obtained by the offeree is not more favorable thanthe offer, the offeree must pay the costs incurred after the making
of the offer.” N.C. Gen. Stat. § 1A-1, Rule 68(a). We have held
that the judgment finally obtained was more favorable than
defendant's offer. Thus, defendant cannot have costs paid on her
behalf.
The trial court did not err in its analysis and conclusion
that the judgment finally obtained was greater than defendant's
offer of judgment. Likewise, the trial court did not err in
denying defendant's motion for costs.
We, accordingly, reject defendant's assignments of error and
affirm the trial court.
AFFIRMED.
Judges MARTIN and TIMMONS-GOODSON concur.
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