Orosco v. Maricopa County Special Health Care Dist., 757 Ariz. Adv. Rep. 11 (App. Div. I, February 2, 2017) (J. Johnsen)

SANCTIONS FOR ACQUIRING JUDGMENT IN EXCESS OF OFFER OF JUDGMENT ARE CALCULATED FROM FIRST OF TWO OFFERS AND COSTS OF SERVICE BY PRIVATE PROCESS SERVER ARE TAXABLE

Plaintiffs sued the defendant for medical malpractice and made an offer of judgment of $3,950,000 on December 13, 2013. On September 27, 2014, they served another offer of judgment for $3,949,999. Subsequently the jury rendered a verdict of $4.25 million and found defendant 99% at fault. The trial court calculated sanctions from the first offer of judgment including interest, $147,441.33 in expert witness fees and double the taxable costs. In so doing the trial court rejected the defense argument that the second offer of judgment nullified the first. The Arizona Court of Appeals affirmed in part and vacated and remanded in part.

Rule 68 of the Arizona Rules of Civil Procedures provides that when a party makes an offer of judgment and later  obtains a judgment in excess of the offer, the offeror is properly awarded, interest on unliquidated claims, expert witness fees and double the taxable costs from the date of the offer. The rule is silent on the effect of making more than one offer of judgment.

In affirming the trial court the  court of appeals noted that the purpose of rule  68 is to "promote settlement and to avoid protracted litigation. Permitting an offeror to make additional offers of judgment encourages the parties to continue to evaluate their cases as the litigation proceeds and thereby generally fosters settlement.” Accordingly, sanctions are appropriately calculated from the first offer of judgment.

Finally, while  A.R.S. section 12-332 (A)(1) does not specifically provide that costs of service of process are taxable, it does provide that fees of “officers and witnesses” are taxable costs. A.R.S. section12-3301(A) expressly states a private process server is an officer of the court. Accordingly, a private process server's fees for servicing a notice of claim and subpoenas are all taxable costs.