Dearlove v. Campbell
2013 Alas. LEXIS 71
Alaska2013Background
- Two-car collision led Campbell to sue Dearlove for damages, with Campbell’s insurer paying the initial medical expenses and obtaining a subrogation right against Dearlove.
- Dearlove made an early Rule 68 offer of judgment for $18,000, conditioned on Campbell satisfying the subrogation claim; Campbell did not accept.
- After Dearlove admitted liability, the insurer paid $20,000 directly to Campbell’s insurer, and Dearlove sought to exclude this from Campbell’s damages.
- A second Rule 68 offer of judgment for $5,000 plus interest, fees, and costs was made; Campbell did not accept.
- At trial, Campbell recovered $3,870 in damages; the court analyzed the first offer and ruled the second offer could entitle Dearlove to fees, factoring subrogation and added elements.
- This Court affirmed the first-offer ruling but vacated and remanded regarding the second-offer ruling to determine the precise nature of the subrogation transaction and prevailing party status.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Must subrogation payment be included in Rule 68 analysis? | Dearlove argues exclude subrogation from the analysis. | Dearlove contends only final verdict matters. | Subrogation payment must be included in the first-offer calculation. |
| Was Dearlove the prevailing party on the first offer? | Campbell contends the verdict was more favorable than the first offer when including subrogation. | Dearlove argues the net comparison favored the offer. | Dearlove was not prevailing on the first offer. |
| What is the proper method to evaluate the second offer of judgment? | Consider all add-ons and the actual recovery, including subrogation effects. | Exclude the subrogation impact if settled prior to the second offer. | US remanded to determine the precise nature of the subrogation transaction and correct prevailing party status for the second offer. |
Key Cases Cited
- Jaso v. McCarthy, 923 P.2d 795 (Alaska 1996) (offer of judgment value not necessarily worthless even if small)
- Progressive Corp. v. Peter ex rel. Peter, 195 P.3d 1083 (Alaska 2008) (include voluntary payments in 'judgment finally rendered')
- Ruggles ex rel. Estate of Mayer v. Grow, 984 P.2d 509 (Alaska 1999) (insurer may discount and settle subrogation claim; appraisal for Rule 82/79)
- Mackie v. Chizmar, 965 P.2d 1202 (Alaska 1998) (Rule 68 goals and settlement incentives)
- Sidney v. Allstate Insurance Co., 187 P.3d 443 (Alaska 2008) (common fund concepts in insurer settlements)