Opinion
Case No. 98-4079
July 23, 2002
MEMORANDUM AND ORDER
This case comes before the court on plaintiffs' objection to defendant's bill of costs, and in the alternative, motion to retax costs. (Dk. 58). The court granted summary judgment in favor of the defendant on August 15, 2001, and defendant filed its bill of costs, seeking $2,498.80, on October 12, 2001.
Plaintiffs object to any award of costs to defendant, contending that defendant agreed to waive its costs in exchange for plaintiffs' agreement not to appeal the court's grant of summary judgment. Defendant denies that any agreement to waive costs was entered into.
In the alternative, plaintiffs contend that defendant's costs are excessive and should be reduced.
In support of their relative positions regarding the agreement to waive costs, both parties rely upon copies of cryptic e-mails they previously exchanged. The first, dated Sept. 7, 2001, from counsel for plaintiffs to counsel for defendant, states that plaintiffs are considering an appeal, and offers to settle the case for the "modest amount" of $8,500. (Dk.58, Exh. 1.)
Defendant's counsel e-mailed the following counter-offer to plaintiffs' counsel the following day:
Dillard's is unwilling to pay your clients $8,500, but is willing to pay costs. If that is unacceptable to [plaintiffs], Dillard's will defend the appeal if [plaintiffs] elect to move forward.
Dk. 58, Exh. 2.
No other communications are shown between the parties until Sept. 19, 2001, when counsel for plaintiffs e-mailed the following acceptance of the counter-offer to defendant's counsel:
[Plaintiffs] accept your kind offer to waive Dillard's claim for costs in return for their agreement not to appeal.
Dk. 58, Exh. 3. This communication evidences plaintiffs' understanding of the terms of the counter-offer, and plaintiffs' acceptance of those terms. Coupled with the consideration of foregoing their right to appeal, a binding contract was formed on the date of plaintiffs' acceptance.
Despite the fact that the parties had entered into a binding contract, immediately after receiving plaintiffs' notice of acceptance, counsel for defendant replied: "I'm confused. Your clients rejected Dillard's offer. Dillard's will be filing its bill of costs." Dk. 58, Exh. 4.
Defendant contends that because plaintiffs failed to notify defendant of plaintiffs' acceptance before September 14th, the date plaintiffs' appeal time ran, plaintiffs "rejected" the offer or the offer was "no longer valid" by the time plaintiffs accepted it. Dk. 59, p. 1. Defendant cites to general principles of contract law regarding acceptance of offers, notice of acceptance, and when silence constitutes acceptance, which are not particularly helpful in deciding the present issue.
The basic legal principles of contract formation are well established. "In order to form a binding contract, there must be a meeting of the minds on all essential terms." Albers v. Nelson, 248 Kan. 575, 580 (1991); International Power Machinery, Inc. v. Midwest Energy, Inc. 4 F. Supp.2d 1272, 1274 (D.Kan. 1998). Here, the exchange of e-mail between counsel evidences such a meeting of the minds.
"If an offer prescribes the place, time or manner of acceptance, its terms in this respect must be complied with in order to create a contract." Restatement (Second) of Contracts § 60 (1979); 1 Corbin on Contracts § 3.34, (1993). Swanson v. Public Storage, Inc., 2001 WL 584457, *4 (D.Kan. May 18, 2001). Where, as here, the offer contains no stated time for acceptance, the law implies that plaintiffs have a reasonable time in which to accept or reject the proposal. See Carpenter v. Riley, 234 Kan. 758, 762 (1984).
The plain language of defendant's counter-offer to waive costs is unconditional, and contains no stated time for acceptance. It offers to waive Dillard's claim for costs in return for plaintiffs' agreement not to appeal. Plaintiffs have not appealed. Although defendant was not told of plaintiffs' decision to accept its offer until after plaintiffs' appeal time ran, plaintiffs could have filed a motion to file an appeal out of time, and thus could have appealed even after Sept. 19, 2001, the date plaintiffs notified defendant of their acceptance. No absence of consideration has been shown.
More importantly, defendant's offer did not specify any period of time in which it had to be accepted, or would automatically be withdrawn. Nor must any such time period necessarily be implied. The intervening event of the running of the appeal date without an appeal having been filed did not render plaintiffs' acceptance untimely, but was instead the very event which manifested plaintiffs' acceptance of defendant's offer. See Gunnison v. Evans, 136 Kan. 791 (1933) ("`In the formation of a unilateral contract where the offeror is the party making the promise . . . compliance with the request in the offer fulfills the double function of a manifestation of acceptance and of giving consideration.'); Quilty v. New York Life Ins. Co., 153 Kan. 129 (1941). Although plaintiffs could have notified defendant earlier of their agreement not to appeal, it was not until the appeal date ran without plaintiffs having appealed that plaintiffs could fulfill their agreement and defendant could be certain of plaintiffs' compliance with the terms of the agreement. The court rejects defendant's contention that the running of the appeal date extinguished any consideration for defendant's offer.
The court is aware of the e-mail sent by plaintiffs' counsel to defendant's counsel on September 20, 2001, in which he states that "the events of last week intervened and I only got back to you this week, out of time," (Dk. 59, Exh. A), but does not attribute any legal significance to this statement, and defendant shows none.
The Court has no hesitation in concluding that defendant's counter-offer was not withdrawn, expired, voided, or otherwise rendered invalid before plaintiffs accepted it. Plaintiffs timely accepted defendant's offer to waive its costs in exchange for plaintiffs' agreement not to appeal the court's decision. Defendant is bound by its agreement. Plaintiffs' objection to defendant's bill of costs is thus well founded.
Even had the court not so found, the court would nonetheless have substantially reduced defendant's costs by denying defendant's claims for various forms and copies of depositions and postage expenses, as requested by plaintiffs in their alternative motion to retax costs.
IT IS THEREFORE ORDERED that plaintiff's objection to defendant's bill of costs, and in the alternative, motion to retax costs, (Dk. 58) is granted, and neither party shall recover any costs of this action.