Offer of Judgment and Recoverable Costs under Mississippi Rule
Under Mississippi procedural rules that apply to civil suits in state court, a party is allowed to serve an adverse one with an "offer to allow judgment to be taken" or what is known as an "offer of judgment." Mississippi Rule of Civil Procedure 68 governs an offer of judgment and provides as follows:
At any time more than fifteen 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, with costs then accrued. If within ten days after the service of the offer the adverse party serves written notice that the offer is accepted, either party may then file the offer and notice of acceptance together with proof of service thereof and thereupon the court shall enter judgment. An offer not accepted shall be deemed withdrawn and evidence thereof is not admissible except in a proceeding to determine costs. If the judgment finally obtained by the offeree is not more favorable than the offer, the offeree must pay the cost incurred after the making of the offer. The fact that an offer is made but not accepted does not preclude a subsequent offer . . . . Miss. R. Civ. P. 68.
In the past, an offer of judgment under Rule 68 provided a procedural mechanism that could sometimes be used to foster settlement. One reason included the fact that under Rule 68, "[i]f the judgment finally obtained by the offeree is not more favorable than the offer, the offeree must pay the cost incurred after the making of the offer." For example, a plaintiff who refused a defendant's offer of judgment but then obtained a jury verdict for less could end up owing the defendant's costs.
The ability of Rule 68 to encourage settlements, however, has been affected as a result of a 2011 opinion from the Mississippi Court of Appeals in the case Hubbard v. Delta Sanitation of Mississippi, 64 So. 3d 547, 559-568 (Miss. Ct. App. 2011). In Hubbard, the court discussed the rule's application in the context of an automobile accident. Finding only costs specifically authorized by statute were recoverable under Rule 68, the court reversed an award of costs to a defendant for expert fees, copying/printing costs, trial exhibits and "blow-ups", and a court reporter's fee for depositions. Id.
Under Mississippi statutory law, one example of costs specifically authorized by statute includes a provision mandating that trial witnesses shall receive $1.50 per day in attendance fees and $.05 per mile to and from the court. Miss. Code Ann. § 25-7-47. In contrast to the award for expert fees and other sums that had been awarded by the trial court, these negligible witness fees were the only costs found by the Hubbard court to have been properly taxed to the plaintiff under Rule 68 in this particular factual context. Hubbard, 64 So. 3d at 565.
The Hubbard decision has affected the ability of Rule 68 to encourage settlement, but it has not made it impossible to still use it as one of several means to attempt to effectuate the effect resolution of some claims in the appropriate circumstances. For example, a number of Mississippi statutes allow for expert-witness fees to be taxed as costs in particular types of lawsuits. E.g., Miss. Code Ann. § 95-5-10(3) (Rev. 2004) (providing that [a]ll reasonable expert witness fees and attorney's fees shall be assessed as court costs in the discretion of the court" in trespass-to-timber suits).
Applying the reasoning from Hubbard, an offer of judgment under Rule 68 could still be used as a potential means of encouraging settlement where a statute specifically authorizes fees and costs in particular.
January, 12 2016
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