Dixie D. DIXON, Appellant, v. Joshua Paul BLACKWELL, Appellee.
No. S-14313.
Supreme Court of Alaska.
March 29, 2013.
298 P.3d 185
Jimmy E. White, Hughes Gorski Seedorf Odsen & Tervooren, LLC, Anchorage, for Appellee.
Before: CARPENETI, Chief Justice, FABE, WINFREE, and STOWERS, Justices, and MATTHEWS, Senior Justice.*
OPINION
MATTHEWS, Senior Justice.
I. INTRODUCTION
Dixie Dixon was injured in an automobile accident when a car driven by Joshua Paul Blackwell ran a red light. She sued and received a verdict that was lower than Blackwell‘s
* Sitting by assignment made under article IV, section 11 of the Alaska Constitution and Alaska Administrative Rule 23(a).
II. FACTS AND PROCEEDINGS
A. Facts
Dixon was injured in an accident on February 14, 2006, as a result of being hit by a car driven by Blackwell. Blackwell admitted liability for the accident. Dixon received medical treatment for various ailments for several years after the accident. She ultimately claimed that nearly $200,000 of her medical expenses were related to the accident.
Dixon had auto insurance through State Farm and had other health insurance through Premera Blue Cross Blue Shield of Alaska and Alaska Laborer‘s Trust. Dixon‘s State Farm policy had medical payments coverage of $100,000, under which State Farm paid $29,699.24 of her medical expenses. State Farm decided that her other medical expenses were unrelated to the accident and did not pay them.
Dixon requested arbitration with State Farm, claiming that her other medical expenses were covered. Dixon and two doctors who performed independent medical exams on her were deposed in connection with the arbitration. State Farm also provided automobile liability insurance for Blackwell. State Farm‘s medical payments adjuster on the Dixon policy wrote to State Farm‘s liability adjuster on the Blackwell policy on August 1, 2007, requesting reimbursement of the $29,699.24 paid in medical expenses that State Farm had determined were related to the accident.
B. Proceedings
Dixon filed a complaint against Blackwell on October 9, 2007, and withdrew the request for arbitration with State Farm. The same attorney who represented State Farm in the arbitration represented Blackwell in the superior court.
In his answer to the complaint, Blackwell asserted that Dixon was not entitled to seek medical expenses that had been paid by her insurer to the extent that the insurer had
Defendant Joshua Paul Blackwell, pursuant to Civil Rule 68, hereby offers to allow entry of judgment in favor of Plaintiff Dixie D. Dixon in this action for a total sum of TWENTY EIGHT THOUSAND EIGHT HUNDRED SEVENTY EIGHT DOLLARS AND EIGHTY-THREE CENTS ($28,878.83), plus Civil Rule 79 costs, prejudgment interest as of the date of this offer, and Civil Rule 82(b)(1) attorney fees. In addition, Defendant will assume responsibility for the State Farm Medical Payments lien arising from Ms. Dixon‘s post-accident treatment. Plaintiff will assume responsibility for any and all liens relating to the subject accident other than the aforementioned State Farm Medical Payments lien. This offer of judgment will result in the dismissal of this action with prejudice. This is an offer of compromise only, and is not to be construed as an admission.
Dixon did not accept the offer.
Trial was held in January of 2011. At trial, the jury heard testimony and viewed depositions from numerous physicians. Dr. John Duddy testified that the knee injuries Dixon had sustained in the accident had cleared up as of an MRI taken on July 12, 2006. Dixon presented evidence of medical expenses totaling $196,208.72, including the medical expenses that had been paid by State Farm under her Medical Payments coverage.
In his closing statement, Blackwell‘s attorney stated:
Ms. Dixon had the bruise on her knee and Ms. Dixon had the cervical issue, the minor cervical strain, and the aggravation of her interstitial cystitis and [Blackwell]‘s here to tell you my fault, okay. Do what‘s right with regard to the injuries she sustained in the accident, but that‘s all. Past medical expenses. Here‘s the chart that Mr. Ingaldson showed you. There‘s the first page. It shows that she‘s got almost $200,000 in medical expenses.
He then listed a series of medical expenses that occurred between the accident and July 12, 2006, the point when, Dr. Duddy testified, Dixon‘s MRI showed no lingering effects from the accident. Blackwell‘s attorney compared the total of these expenses, $17,955, to the amount Dixon was requesting, nearly $200,000. Dixon claims that in this portion of the closing statement, Blackwell‘s attorney conceded that the $17,955 in expenses were related to the accident. Blackwell claims that this figure was quoted to illustrate the large gap between what Dixon claimed and the maximum of what could have been related to the accident.
The jury returned a verdict for Dixon, awarding $12,710 in past medical expenses and $4,000 in past non-economic loss. Blackwell moved for the entry of a final judgment and asked for attorney‘s fees pursuant to
Dixon appeals, arguing: (1) that the jury‘s verdict was inadequate; (2) that the November 29, 2007 offer was procedurally defective, invalid, and unenforceable; and (3) that she beat the offer.
III. STANDARD OF REVIEW
“An offer of judgment‘s compliance with Rule 68 is a question of law which we review independently.”1 “Calculation of the value of a verdict to determine if it exceeded an offer of judgment presents questions of law, which we review de novo.”2 “The adequacy of evidence supporting [a] jury‘s award is a mixed question of law and fact.”3 In
IV. DISCUSSION
A. The Jury‘s Verdict Was Adequate.
“The question of whether damages are inadequate ... is in the first instance committed to the discretion of the trial judge and should be raised on a motion for a new trial.”5 We reverse the denial of a motion for new trial on verdict inadequacy grounds only when there is no reasonable evidentiary basis for the jury‘s award.6 Where a challenge to the amount of damages has not been raised in the trial court, “we may refuse to review the issue or we may, in our discretion, review the award.”7 If we choose to review, we examine whether “damages awarded appellant were so grossly inadequate as to amount to a miscarriage of justice.”8 Dixon did not challenge the adequacy of the jury‘s verdict or move for a new trial in the superior court.
Dixon argues that Blackwell conceded in his closing argument that at least $17,955 in medical expenses were related to the accident. She contends that this aspect of his closing argument was a binding judicial admission. Because the jury only awarded $12,710 in medical expenses, Dixon argues that the verdict was necessarily inadequate and that a new trial is required.
In Hayes v. Xerox Corporation, we stated: “A judicial admission, to be binding, must be one of fact and not a conclusion of law or an expression of opinion.”9 It must be “clear, deliberate, and unequivocal.”10 In Xerox, in the closing argument, Xerox‘s counsel stated: “I think he‘s been significantly injured. I think he has injury now. I think it may need treatment. We don‘t know for sure.”11 Xerox‘s counsel conceded that lost wages were “reasonably certain to be incurred.”12 Counsel then estimated how much he felt the jury could award on each claim, and came out to a total of $69,000 to $70,000.13 This court held that because Xerox‘s counsel couched his language as estimates and opinions and included the phrase “I think” before his statements, they were not clear, deliberate, and unequivocal statements of fact and were not judicial admissions.14
In this case, Blackwell‘s counsel‘s statement was, in context, not a “clear, deliberate, and unequivocal” statement that could be a judicial admission.15 In his closing, Blackwell‘s attorney argued that one of Dixon‘s doctors noted that any objective evidence of injury was gone six months after the accident. He then added up all of the expenses that occurred within that six-month window, noting that some of them were probably not related to the accident. Finally, Blackwell‘s attorney compared the total of those six months of expenses, $17,955, to the nearly $200,000 that Dixon was asking for. Taken in context, Blackwell‘s closing was not a judicial admission that Dixon had incurred $17,955 of medical expenses related to the accident.
Because there was no judicial admission that Dixon‘s medical expenses caused by the accident exceeded the amount awarded, Dix-
B. The Offer Was Valid
1. The offer was not premature.
Dixon argues that the November 29, 2007 offer was procedurally defective because it was served only two days after an answer to the complaint was filed and before either side had a chance for discovery. She interprets
In Cook we evaluated the following legislative history of
[W]hat we‘re saying is that if this offer is made within a short period of time, from the ability that you would have after a case is filed to get discovery, so you kind of know where you‘re at, if a short period of time after that the offer is made, 60 days after that, and you don‘t accept it, and when you finally go to trial, the offer is within 5 percent of—less than what you would have settled for, you‘ve got to pay all reasonable actual attorney‘s fees and costs, from the time the offer was made ....20
We held that while this history indicates that offers were allowable after
We have held that some
The language of
2. Blackwell‘s offer allowed for entry of judgment and was not contingent.
Dixon argues that because Blackwell‘s offer would have resulted in the dismissal of her case with prejudice, the offer was not a valid
We also held an offer invalid under
The November 29, 2007 offer stated, in relevant part: “Defendant Joshua Paul Blackwell, pursuant to Civil Rule 68, hereby offers to allow entry of judgment in favor of Plaintiff Dixie D. Dixon in this action for a total sum of [$28,878.83].... This offer of judgment will result in the dismissal of this action with prejudice.” This offer explicitly called for the entry of judgment. Unlike the offer in ASRC, the offer was not contingent on the dismissal of the action with prejudice and was not construed by the trial court or the offeror as a mere offer to pay in return for dismissal of the suit with prejudice. We read the statement “[t]his offer of judgment will result in the dismissal of this action with prejudice” as an inartful statement of consequences rather than of a contingency. The language merely meant that entry of judgment would terminate all of Dixon‘s claims against Blackwell.
Because the offer allowed for entry of judgment and was not contingent, the language in the offer regarding dismissal
3. The offer did not require Dixon to assume improper obligations.
Dixon claims that the offer sought to impose burdens on her that were beyond the scope of the pleadings. She argues that the offer improperly required her to potentially face at least $75,000 in claims from her other insurers. She also argues that the offer would require her to waive over $70,000 in State Farm Medical Payments coverage.
The November 29, 2007 offer specified: “Defendant will assume responsibility for the State Farm Medical Payments lien arising from Ms. Dixon‘s post accident treatment. Plaintiff will assume responsibility for any and all liens relating to the subject accident other than the aforementioned State Farm Medical Payments lien.”
Dixon‘s non-State Farm medical insurers might have asserted that they were owed reimbursement out of the cash portion of Blackwell‘s offer. However, unless the insurers had specifically instructed Dixon not to seek to recover medical expenses that they had paid36 or unless they were parties to the suit against Blackwell and instructed her not to settle, Dixon would not have been put in a position in which she would have had to reach into her own pocket and pay back medical expenses to her insurers. Dixon does not claim that either of these conditions was met.
It was not improper for the offer to emphasize that it would only satisfy the State Farm Medical Payments lien, and that Dixon would be responsible for other liens. If the offer had referred to claims, rather than liens, a different case would be presented. Arguably “claims” language would have made Dixon the indemnitor of Blackwell and State Farm as to any amounts asserted by her other medical insurers in excess of the amount of the offer of judgment. But stating that Dixon would be responsible for “liens” simply underscored what the law already provided. Dixon could be responsible for payment of her medical providers’ liens out of the proceeds she received from the offer of judgment less prorated costs and fees.37
As to Dixon‘s argument that the offer if accepted would have resulted in a waiver on her part of her remaining $70,000 in medical payments coverage from State Farm, we see no impropriety. Immediately after bringing suit against Blackwell, Dixon withdrew her arbitration request for the remaining $70,000. This withdrawal either waived her remaining medical payments claim in itself or it made the question of whether she was owed an additional amount on her medical payments coverage dependent on the outcome of the litigation. Either way, the acceptance of the offer would not have required Dixon to give up a benefit that was extraneous to the litigation.
4. The offer was not made in bad faith.
Dixon also argues that the offer was not made in good faith because “the offer implied that Dixon‘s lawsuit encompassed State Farm‘s subrogated claim.” She argues that because State Farm had instructed Dixon not to pursue reimbursement for the $29,699.24 that State Farm had paid in her suit against Blackwell, and since State Farm‘s reimbursement claim as medical payments insurer for Dixon had already been presented to State Farm in its capacity as Blackwell‘s liability insurer, the implication in the offer that the lawsuit encompassed the subrogated claim was necessarily false. It follows, Dixon argues, that the offer was “deceptive on its face” and should for this reason be deemed invalid for the purpose of triggering enhanced fees.
Dixon correctly suggests that State Farm had the right to instruct Dixon not to pursue State Farm‘s Medical Payments claim against Blackwell, and that once such instructions were given Dixon lacked authority to pursue that claim.38 But we fail to see how the offer of judgment was in any sense deceptive when it stated that the defendant would assume responsibility for the State Farm Medical Payments lien. This statement simply clarified that the intent of the offer was that it would be a “new money offer” in the sense that there would be no offset for the State Farm Medical Payments lien.39 As such, the questioned language of the offer was neither deceptive nor made in bad faith.40
Because the offer was not premature, called for the entry of judgment, imposed no improper obligations on Dixon, and was not made in bad faith, the offer was valid.41
Dixon claims that the jury‘s verdict was actually more than the offer when the “liens” that she would have had to assume responsibility for, totaling at least $75,000, are taken into account. She also claims that accepting the offer would have amounted to waiving her remaining $70,000 State Farm Medical Payments coverage. Since the offer was for $28,878.83, she argues, the net amount of the offer was actually negative ($28,878.83-$70,000-$75,000). Because the jury gave her a positive amount, she argues that the verdict beat this negative offer.
Dixon‘s method of accounting is logically untenable. Dixon did not have to assume responsibility for $75,000 in liens of other medical providers. As explained above, the liens of medical providers were liens only against her recovery less prorated costs and fees. Further, the value of her waiver of the remaining $70,000 in medical payments coverage was not $70,000. As the jury determined, she had no additional claim against that coverage. Thus there is no basis to subtract either of the claimed amounts from the amount of the offer of judgment.
V. CONCLUSION
Because the jury‘s verdict was not inadequate, the offer Blackwell made was a valid
WINFREE, Justice, concurring.
I respectfully disagree with the court‘s conclusion that Joshua Blackwell‘s
It is clear from the record that Dixon did not argue to the superior court that Blackwell‘s offer of judgment was an offer to pay rather than an offer to allow entry of judgment.1 The “indefinite and conditional” argument Dixon raised to the superior court related to statements in the offer of judgment about resolution of potential liens on Dixon‘s recovery. The first time Dixon argued that Blackwell‘s offer of judgment was ambiguous regarding an entry of judgment or payment and dismissal was in her opening appellate brief. Dixon therefore did not preserve this issue for appeal,2 and that should be enough to resolve this issue, as the court expressly states.3
But because the court nonetheless addresses the merits of the issue, I will set out the nature of my disagreement. An offer of judgment that includes language for the entry of judgment in exchange for dismissal is, as noted in ASRC Energy Services & Power Communications, LLC v. Golden Valley Electric Ass‘n, ambiguous at best and an offer to pay at worst, and therefore unenforceable.4 In my view we should draw a bright-line rule on this point. Moreover, contrary to the court‘s discussion today, Blackwell‘s superior court briefing and the superior court‘s order both support the conclusion that Blackwell‘s offer actually was an offer to pay, not an offer to allow entry of judgment. When arguing whether the offer of judgment language about liens was vague, indefinite, or conditional, Blackwell stated:
[Blackwell] offered to pay Ms. Dixon $28,878.83, plus
Rule 79 costs, prejudgment interest,Rule 82 attorney fees, and to assume responsibility for the State Farm Medical Payments lien, the amount of which has been disclosed and discussed at length in the medical payments arbitration process over the prior year. That was the offer, plain and simple.
The superior court‘s order awarding
Mindful of the case law cited by the parties, the court finds the offer of judgment sufficiently clear and enforceable without conditions. State Farm was going to pay to Ms. Dixon, on behalf of ... Mr. Blackwell, the sum of $28,878.83, plus
ARCP 82 attorneys fees, plus interest, plus allowable costs, and State Farm would additionally eat its own med pay lien....
It is apparent that both Blackwell and the superior court considered Blackwell‘s
Notes
When an insurer pays expenses on behalf of an insured it is subrogated to the insured‘s claim. The insurer effectively receives an assignment of its expenditure by operation of law and contract. If the insurer does not object, the insured may include the subrogated claim in its claim against a third-party tortfeasor. Any proceeds recovered must be paid to the insurer, less pro rata costs and fees incurred by the insured in prosecuting and collecting the claim. But the subrogated claim belongs to the insurer. The insurer may pursue a direct action against the tortfeasor, discount and settle its claim, or determine that the claim should not be pursued.... When [the insurer] instructed [the insured] not to pursue its subrogation claim, [the insured] lacked authority to pursue it. [The defendant tortfeasor] was entitled to raise this lack of authority, for it represented a legitimate partial defense to [the insured‘s] claim.
Id.