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It’s common for insurance companies to file an “offer to confess judgment” before a personal injury trial begins. For one, there isn’t a risk (I guess if the plaintiff accepts the offer!), and secondly, if the jury returns a verdict at that dollar amount or less, the defendant can recover case costs after the offer was made, and potentially attorney fees.
Section 1101 and Section 1101.1 of Title 12 of the Oklahoma Statutes deal with offers of judgment, but they have some key differences.
Most personal injury offers to confess are made under 1101. Insurance companies choose to do this instead of under 1101.1 because it doesn’t allow the option of the plaintiff’s counteroffer.
Section 1101 applies to actions for the recovery of money only. It allows the defendant to serve an offer of judgment on the plaintiff at any time before trial. Judgment is entered accordingly if the plaintiff accepts the offer within five days. If the plaintiff rejects the offer and fails to obtain a judgment for more than the offer, the plaintiff must pay the defendant’s costs from the time of the offer.
Section 1101.1 is more comprehensive and applies to a broader range of actions, including personal injury, wrongful death, and certain other specified actions. It allows defendants and plaintiffs to make offers and counteroffers of judgment more than ten days before trial.
Key points of Section 1101.1:
- If the plaintiff rejects the defendant’s offer and the judgment is less than the offer, the defendant is entitled to recover reasonable litigation costs and attorney fees from the offer date.
- If the defendant rejects the plaintiff’s counteroffer and the judgment is greater than the counteroffer, the plaintiff is entitled to recover reasonable litigation costs and attorney fees from the date of the counteroffer.
- The provisions apply only where the plaintiff demands more than $100,000 or the defendant offers more than $100,000.
- Evidence of offers and counteroffers is not admissible except in proceedings to enforce a settlement or determine reasonable costs and fees.
What happens if the defendant files multiple offers to confess?
Surprisingly, this was unclear until this year (both statutes have been on the books since 1995).
The Oklahoma Court of Civil Appeals held that offers of judgment made under 12 O.S. § 1101 and 12 O.S. § 1101.1(A) are separate and distinct procedures that can operate independently and coextensively.
TEASDALE v. FOSHEE
2024 OK CIV APP 10
Decided: February 2, 2024
Court: Oklahoma Court of Civil Appeals, Division IV
Appeal From: District Court of Cleveland County, Oklahoma
Facts of the Case
- Teasdale sued Foshee for negligence arising from a boat accident on July 7th, 2016, in which Teasdale was injured.
- On September 6, 2019, Foshee served an offer of judgment under 12 O.S. § 1101.1(A) for $25,000 inclusive of fees and costs.
- Teasdale filed a counteroffer under § 1101.1(A)(2) for $65,000. Foshee did not respond.
- On December 2, 2019, Foshee served a second offer of judgment under 12 O.S. § 1101 for $27,500 inclusive of fees and costs. Teasdale did not respond.
- The jury returned a verdict in favor of Foshee. Foshee then sought his costs under 12 O.S. §§ 929, 942 and attorneys’ fees under § 1101.1(A) from the date of his first offer.
- The district court awarded Foshee his costs but denied attorneys’ fees, finding the last § 1101 offer controlled. Foshee appealed.
Key Issues in the Case
- Whether offers of judgment under 12 O.S. § 1101 and § 1101.1(A) are separate procedures that can operate independently and coextensively.
- Whether Foshee’s last offer under § 1101 extinguished his ability to recover attorneys’ fees under his earlier § 1101.1(A) offer.
Court’s Opinion and Ruling
The Court of Civil Appeals held:
- Sections 1101 and 1101.1(A) provide separate and distinct offer of judgment procedures that can operate independently. A defendant can utilize both statutory mechanisms as deemed appropriate.
- Allowing a defendant to initiate offers under both § 1101 and § 1101.1(A) promotes the underlying purpose of encouraging settlement and reducing protracted litigation. Interpreting the statutes to require a defendant to choose one procedure over the other would undermine this purpose.
- The district court erred in finding Foshee’s last § 1101 offer controlled, precluding him from recovering attorneys’ fees under his earlier § 1101.1(A) offer.
- The order denying Foshee’s attorneys’ fees was vacated and remanded for an order consistent with the opinion. The order on costs was affirmed.
Analysis of the Court’s Opinion
The court focused on the plain language and underlying purposes of the offer of judgment statutes in reaching its decision. It found no inconsistencies in allowing a defendant to utilize the separate procedures under § 1101 and § 1101.1(A) in the same litigation. This makes sense. Nothing in the statute dictates that an offer under one statute cancels out the previous offer under a different statute.
The key distinction noted was that § 1101.1(A) shifts both costs and attorneys’ fees, while § 1101 generally only shifts costs. This difference was central to the case, determining whether Foshee could recover his attorneys’ fees.
The court emphasized that permitting defendants to make offers under both statutes promotes their purpose of encouraging settlement. Requiring defendants to choose between them would discourage using the statutes and exploring settlement. I’d argue that the real-world application of the intention of “encouraging settlement” is more of a cost-savings approach for insurance companies by hedging the case vs. using the statute as a genuine attempt at settlement.