Civil Procedure: Offer of Judgment--Waiver

Boyle v. Ford Motor Co., 694 Ariz. Adv. Rep 20 (App. Div. II, August 29, 2014) (J. Espinosa)

FAILURE TO TIMELY OBJECT TO TERMS OF OFFER OF JUDGMENT WAIVES RIGHT TO SEEK NEW TRIAL BASED UPON DEFECTS IN OFFER

Defendant/cross-claimant Boyles' Ford truck caught fire parked in the driveway of the house he rented. The fire burned the truck, house, carport and another vehicle. Liberty Mutual Insurance insured the house and brought a subrogation action against Ford and Boyle. Boyle cross-claimed against Ford alleging strict products liability and negligence. Ford served an offer of judgment under Rule 68 of the Arizona Rules of Civil Procedure on Boyle for $22,500 which stated, “an acceptance of this offer .  .  . will represent a settlement of all claims and an agreement to stipulate to the dismissal of all claims against Ford with prejudice.”  No objection was filed to this offer.  Ford prevailed at trial and the court awarded Ford $59,305.17 in Rule 68(g) sanctions.  Boyle filed a motion for new trial, arguing Ford's offer of judgment was defective because rather than offering to “allow judgment to be taken” it offered payment in exchange for a dismissal with prejudice. The trial court denied the motion and judgment was entered. Because Boyle failed to file an objection to the offer of judgment within 10 days as required by Rule 68(d) the trial court was affirmed by the Arizona Court of Appeals.   The court of appeals pointed out that in 2007 the Arizona Supreme Court amended rule 68 adding the requirement that any challenge to the “validity” of an offer of judgment must be made by objection within 10 days of the offer or it would be waived. The express purpose of the amendment as stated in the Note to the amendment was to avoid parties laying in the weeds and springing such objections after trial. The waiver rule is designed to give the offeror notice of any claimed defect and a chance to correct it.  Boyle not only failed to object timely but admitted he had received an offer of judgment from Ford in the pretrial statement, thus contradicting his argument that the offer was fundamentally not an offer of judgment because it failed to offer to allow judgment to be taken