Abel Cuellar v. Megan G. Vettorel
235 Ariz. 399
Ariz. Ct. App.2014Background
- Cuellar sued Vettorel for injuries from a car accident; Vettorel made a Rule 68 offer to allow judgment of $10,000 inclusive of costs and fees, conditioned on satisfaction of any liens that attach by operation of law.
- Cuellar rejected the offer and proceeded to trial; jury found damages of $41,300 but assigned Cuellar 90% fault, producing a judgment for $5,310.90 (including $1,180.90 in costs).
- The trial court concluded Cuellar’s final judgment was not more favorable than Vettorel’s $10,000 offer and awarded Vettorel Rule 68(g) sanctions (double taxable costs plus expert fees) totaling $25,631.06.
- Cuellar appealed, arguing the trial court should have reduced the $10,000 offer by his medical lien (claimed ~$6,936.84 at the time of the offer), making the offer’s “true value” less than his $5,310.90 recovery.
- The court considered whether liens or post-offer subrogation payments must be accounted for in the Rule 68 “apples to apples” comparison between an offer and the judgment finally obtained.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether medical liens should be subtracted from an offer of judgment when comparing to the judgment finally obtained under Rule 68 | Cuellar: the $10,000 offer required satisfaction of medical liens, so its net value (after liens and costs) was less than his trial judgment, so sanctions were improper | Vettorel: Rule 68 comparison uses the specifically stated sum of the offer (including stated costs/fees); liens are third-party obligations not part of the judgment comparison | Held: Court affirmed sanctions — Rule 68 comparison uses the offer’s stated sum and taxable costs/fees; medical liens (third-party obligations) are not subtracted and need not be litigated or resolved to determine whether the final judgment is more favorable |
Key Cases Cited
- Vega v. Sullivan, 199 Ariz. 504 (App. 2001) (rule interpretation and plain-language construction principles)
- Hales v. Humana of Ariz., Inc., 186 Ariz. 375 (App. 1996) (requirement of "apples to apples" comparison under Rule 68)
- Levy v. Alfaro, 215 Ariz. 443 (App. 2007) (Rule 68(g) sanctions are mandatory when offeree fails to obtain better judgment)
- Dearlove v. Campbell, 301 P.3d 1230 (Alaska 2013) (distinguishable Alaska decision applying post-offer subrogation payment in Rule 68 comparison)
- Hall v. Read Dev., Inc., 229 Ariz. 277 (App. 2012) (definition of "judgment finally obtained" as the sum fixed by the court and limits on conditional judgments)