Opinion
Case No. 00-CV-2083
January 8, 2002
ORDER
This case is before the court for ruling on the Offer of Judgment (#95) made by Defendants Jeff Bond and Kip Rutledge, Plaintiff's Notice of Acceptance of Bond and Rutledge Rule 68 Offer of Judgment (#96) and the Objection to Offer of Judgment (#105) filed by the City of Gibson (City). Following this court's careful review of the arguments of the parties, this court agrees with the City's Objection to Offer of Judgment and finds the Offer of Judgment made by Defendants Bond and Rutledge, and Plaintiff's Acceptance of the Offer of Judgment, invalid.
FACTS
This case was set for jury selection and jury trial on December 10, 2001. This court notes that, if the case had gone to trial, the City would have been responsible for any jury award of compensatory damages to Plaintiff based upon 745 Ill. Comp. Stat. 10/9-102 (West 2000). See also Wilson v. City of Chicago, 120 F.3d 681 (7th Cir. 1997). However, based upon the documentation previously submitted to this court, it appears there is limited evidence to support an award of compensatory damages. Based upon the plain language of the statute, the City is only liable for compensatory damages, not punitive damages. This court notes that, based upon the facts of this case, it is certainly very likely that a jury could award punitive damages. If awarded, these damages would be the responsibility of Defendants Bond and Rutledge. Moreover, if Plaintiff was successful in obtaining a jury verdict awarding damages, he would be entitled to attorney fees as the prevailing party in his 42 U.S.C. § 1983 action. The City would have no responsibility for these attorney fees because the Illinois Supreme Court has held that"compensatory damages" under 745 Ill. Comp. Stat. 10/9-102 (West 2000) do not include attorney fees. Yang v. City of Chicago, 745 N.E.2d 541, 546-47 (Ill. 2001). Therefore, payment of Plaintiff's attorney fees would be the responsibility of Defendants Bond and Rutledge.
On December 6, 2001, four days prior to the trial date, Plaintiff filed a Notice of Acceptance of Bond and Rutledge Rule 68 Offer of Judgment (#96). Plaintiff also filed an Offer of Judgment (#95) by Defendants Jeff Bond and Kip Rutledge. The Offer of Judgment stated that judgment may be taken against both Bond and Rutledge "in the amount of $17,500.00 in compensatory damages, zero dollars for punitive damages, zero dollars for Plaintiff's reasonable attorney's fees and zero dollars for costs accrued." In addition, Plaintiff filed a Motion for Summary Judgment on Count III (#97). Plaintiff argued that he had accepted the Offer of Judgment and was entitled to judgment in the total amount of $35,000. He further argued that he was entitled to judgment against the City in the amount of $35,000 based upon 745 Ill. Comp. Stat. 10/9-102 (West 2000). Plaintiff also filed a Brief in Support (#98) and a Statement of Undisputed Facts (#99).
On December 7, 2001, Jack Martin, the City's attorney, faxed a letter to this court objecting to the Offer of Judgment. A telephone status conference was held on December 7. At the hearing, the jury trial date was vacated. However, this court declined to enter judgment based upon Plaintiff's Acceptance of the Offer of Judgment. The City was allowed 14 days to file motions.
On December 21, 2001, the City filed a timely Objection to Offer of Judgment (#105). The City argued that the Offer of Judgment stated that all damages were compensatory damages so that the settlement amount would all be assessed and collected from the City. The City contended that the Offer of Judgment was a collusive attempt to improperly assess the settlement against the City and was a misuse of Rule 68 of the Federal Rules of Civil Procedure and the indemnity statute, 745 Ill. Comp. Stat. 10/9-102 (West 2000). The City asked that this court reject the Offer of Judgment and Acceptance. The City filed a Memorandum of Law (#106) in support of this request.
On January 3, 2002, Defendant Bond filed a Response to Objection to Offer of Judgment (#108). Defendant Bond argued that the offer of $35,000 in compensatory damages to settle the case was reasonable based upon the settlement conference held on November 30, 2001, and based upon the fact that this court had not ruled on Plaintiff's Motion to Reconsider its earlier ruling that Dr. Black would not be allowed to testify on behalf of Plaintiff. Defendant Bond argued that Bond and Rutledge "negotiated a settlement with the assistance of Rule 68 in their own independent best interests in an adversarial position to [Plaintiff]." This court notes that it did enter an Order (#94) on December 6, 2001, which denied Plaintiff's Motion to Reconsider. This ruling merely reaffirmed this court's earlier ruling that Dr. Black would not be allowed to testify.
On January 4, 2002, Plaintiff filed his Response to the City's Objections to Offer of Judgment (#109). Plaintiff argued that the City's cited case law does not support the proposition that this court has discretion to stop the judgment from being entered against Defendants Bond and Rutledge. Plaintiff also objected to the City's charge of collusion and contended that there is no evidence to support the City's allusions to the possible existence of side agreements between Plaintiff and Defendants Bond and Rutledge.
ANALYSIS
This court concludes that Defendant Bond and Plaintiff have missed the point. The amount of the Offer of Judgment is not really the issue, nor is the issue whether or not there are any side agreements. The problem with the Offer of Judgment, and Plaintiff's Acceptance of the Offer, is that the two Defendants making the offer have no intention of paying any portion of it. Plaintiff is seeking judgment against the City, who made no offer of judgment, for the full amount of the Offer of Judgment made by the other two defendants.
Generally, traditional contract principles govern whether an offer is proper under Rule 68. Tocwish v. Jablon, 183 F.R.D. 239, 240 (N.D.Ill. 1998), citing Webb v. Jones, 147 F.3d 617, 620 (7th Cir. 1998); see also Lang v. Gates, 36 F.3d 73, 75 (9th Cir. 1994), cert. denied, 513 U.S. 1017 (1994). A district court has the authority to declare a Rule 68 offer of judgment invalid. See Tocwish, 183 F.R.D. at 242; cf. Webb, 147 F.3d at 621 (where a valid offer of judgment and acceptance are made, district court has no discretion as to whether to enter judgment upon the filing of the accepted offer).
This court concludes that there are two reasons to find invalid the Offer of Judgment and Acceptance made in this case. First of all, the Rule 68 Offer of Judgment was clearly not timely. Rule 68 provides that the offer must be made more than 10 days prior to trial. Fed R. Civ. P. 68. More importantly, this court concludes that an offer of judgment which is structured so that another Defendant, not a party to the offer of judgment, must pay the judgment is not a valid offer and cannot be accepted by this court. This court believes that this conclusion is supported by traditional contract principles. This court notes that the Seventh Circuit viewed with some suspicion a consent decree whereby a sheriff agreed to settle a claim for $500,000, the ceiling of the applicable indemnification statute requiring indemnification by the county, without any involvement by the county in the settlement. See Carver v. Condie, 169 F.3d 469, 473-74 (7th Cir. 1999). Accordingly, this court agrees with the City's Objection to Offer of Judgment (#105) and declares the Offer of Judgment, and Plaintiff's Acceptance, invalid. Therefore, Plaintiff's Motion for Summary Judgment on Count III (#97), which is based upon his acceptance of the offer of judgment, is now MOOT. In addition, the City's Motion for Limited Discovery (#104) before responding to the Motion for Summary Judgment is also MOOT.
The case must now be set for trial. The parties are ordered to personally appear at the final pretrial conference which is set for February 8, 2002, at 10:00 a.m. The jury trial is set for the week of February 19, 2002, with jury selection to commence at 9:30 a.m. on Tuesday, February 19, 2002.
IT IS THEREFORE ORDERED THAT:
(1) The Offer of Judgment (#95) and Plaintiff's Acceptance of the Offer (#96) are hereby declared invalid.
(2) Plaintiff's Motion for Summary Judgment on Count III (#97) is MOOT.
(3) The City of Gibson's Motion for Limited Discovery (#104) is MOOT.
(4) This case is set for a final pretrial conference on February 8, 2002, at 10:00 a.m. Jury trial is set for February 19, 2002, at 9:30 a.m.