By: Clayton Walker, JD
DEARLOVE
v.
CAMPBELL
May 31, 2013
A driver caused injury to the passenger of another car in a two-car accident. The passenger brought suit for damages, including her insurer’s subrogated claim for medical expenses. State Farm Insured both the driver and passenger. The driver made an early offer of judgment, which the passenger did not accept. State Farm then made a direct payment to itself reducing the amount from the passenger’s potential recovery. The driver then made a second offer of judgment, which the passenger did not accept. After trial both parties claimed prevailing party status; the driver sought attorney’s fees under Alaska Civil Rule 68.
The superior court ruled that the Driver’s first offer of judgment did earnRule 68 fees, but the second offer did. Both parties appealed, arguing the superior court improperly considered the State Farm Insurance’s payment in its Rule 68 rulings. The Alaska Supreme Court concluded that the trial court must take into account State Farm’s payment to itself had when evaluating the offers of judgment.
The Supreme Court found the record unclear on the nature of State Farm’s. The Alaska Supreme Court vacated the decision that the second offer of judgment entitled the driver to Rule 68 fees and remanded for further proceedings on this issue. Hopefully a closer look at the effect of State Farm’s treatment of its insureds results in a fair outcome for their policy holders.