Cue v. Carthage College

Decision Date01 September 1993
Docket NumberNo. 93-0557,93-0557
Citation179 Wis.2d 175,507 N.W.2d 109
Parties, 86 Ed. Law Rep. 979 Brandon C. CUE, Plaintiff-Appellant, Dreyer HMO and Guarantee Trust Life Insurance Company, Plaintiffs, v. CARTHAGE COLLEGE, Preferred Risk Mutual Insurance Company, a foreign insurance corporation, Jack Synold and Peter Baranek, Defendants-Respondents.
CourtWisconsin Court of Appeals


BROWN, Judge.

This is a negligence action brought by Brandon C. Cue against Carthage College, its football coach, the assistant football coach, the team trainer and the college's insurer, Preferred Risk Mutual Insurance Company. Preferred Risk had policy limits of $1,000,000. The policy covered all of the defendants in this action.

Here, Cue simultaneously sent separate $100,000 offers to settle; one to an insurance company and one to the multiple defendants. Both offers were refused, and the verdict exceeded $100,000. We hold that because no reasonable defendant would know whether Cue's offer to settle was for $100,000 or $200,000, Cue was not entitled to double costs and preverdict interest.

Cue submitted two offers of settlement on the same day, both for $100,000, and both were sent to the same defense counsel. One of the offers was directed to Preferred Risk and the other to the insureds. Neither offer was accepted.

The case went to a jury, and a verdict was returned for $125,000 for pain and suffering and $18,587.39 for past medical bills. Additionally, Cue was entitled to $714.75 on a subrogated claim. The jury assessed 75% negligence to the defendants and 25% to Cue. The total sum due to Cue was $100,369.23.

Cue moved for preverdict interest and double costs pursuant to sec. 807.01(3) and (4), Stats. These statutes provide, in part, that if the plaintiff tenders a written settlement offer at least twenty days before trial, the offer is not accepted, and the plaintiff recovers a judgment greater than the offer, the plaintiff is entitled to preverdict interest of 12% from the date of the offer until paid, plus double costs. The trial court denied the motion and Cue appeals.

Cue's argument that he is entitled to preverdict interest and double costs initially rests upon his reading of Testa v. Farmer's Ins. Exchange, 164 Wis.2d 296, 474 N.W.2d 776 (Ct.App.1991). Testa involved a suit against multiple defendants, including an insurer. The plaintiff submitted an offer to settle addressed to all of the defendants, which was refused. When the verdict exceeded the offer and the plaintiff asked the court to invoke the sanctions of sec. 807.01, Stats., the insurer balked. The insurer argued that one offer of settlement to multiple defendants was ineffective to invoke the statute's provisions. See Testa, 164 Wis.2d at 300, 474 N.W.2d at 778. This court rejected that argument, reasoning that since the insurer was the liability carrier whose policy covered all the other defendants, it was the sole defendant with the right and ability to settle the case. Therefore, the insurer was the "offeree" that the law dictates must be able to fully and fairly evaluate an offer of settlement with respect to its potential liability. Id. at 303, 474 N.W.2d at 779.

Cue argues that this case is analogous to Testa. Cue observes that, as was the case in Testa, Preferred Risk's policy covered all the other defendants. Also, as in Testa, the limits of liability are far in excess of the amount of his offer. Citing Testa, Cue concludes that Preferred Risk was the "only party that had a real interest with respect to the settlement offer" and was the offeree to whom the plaintiff's offer had to be addressed. See id.

Whether Cue's analysis is correct requires us to apply the facts of this case to sec. 807.01, Stats. The application of facts to the law is a question of law to which we owe no deference to the trial court. Gonzalez v. Teskey, 160 Wis.2d 1, 7-8, 465 N.W.2d 525, 528 (Ct.App.1990).

We disagree that this is a Testa case. Testa involved a single offer addressed to all of the defendants where only one defendant had the right to settle the case so long as it was under the policy limits. This case involves two separate offers, each for $100,000. Preferred Risk was not named on one of the offers and was the sole recipient of the other offer. The immediate problem here is that no one could know for sure if the offer to settle was for $100,000 or $200,000.

We read sec. 807.01, Stats., to require that if an offer to settle the case is made, it must state with clarity the sum it will take to settle the case. The point of an offer to settle is to avoid litigation so that a party might make its peace with certainty. The confusion inherent in the dual offers to settle in this case alone dooms Cue's claim.

Cue's multiple offers also left Preferred Risk in a situation where it did not have absolute certainty that by accepting its offer of settlement, it had performed its duty to its insureds. The settlement offer to Preferred Risk did not propose to release the insureds. We agree with Preferred Risk that it could simply not determine from the face of the offer whether Cue intended to pursue his claims against the insureds if...

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4 cases
  • Stan's Lumber, Inc. v. Fleming
    • United States
    • Wisconsin Court of Appeals
    • August 30, 1995
    ...her exposure. See Testa v. Farmers Ins. Exch., 164 Wis.2d 296, 301, 474 N.W.2d 776, 778 (Ct.App.1991); Cue v. Carthage College, 179 Wis.2d 175, 179-80, 507 N.W.2d 109, 111 (Ct.App.1993). In this case, the offer of settlement "offers to settle the above entitled action for the sum of Thirty ......
  • American Motorists Ins. Co. v. R & S Meats, Inc.
    • United States
    • Wisconsin Court of Appeals
    • December 14, 1994
    ...of 12% per year on the amount recovered from the date of the entry thereof until paid."10 By dicta in Cue v. Carthage College, 179 Wis.2d 175, 177, 507 N.W.2d 109, 110 (Ct.App.1993), we offered a similar interpretation of § 807.01(3), (4), STATS.:[Section 807.01(3), (4), STATS.] provide[s],......
  • Hughes v. Chrysler Motors Corp.
    • United States
    • Wisconsin Court of Appeals
    • February 10, 1994 compromise his claim for $49,088.50. We reject the alternative offer argument. Chrysler also contends that Cue v. Carthage College, 179 Wis.2d 175, 507 N.W.2d 109 (Ct.App.1993), supports its "alternative offer" argument. In Cue, 179 Wis.2d at 179, 507 N.W.2d at 111, we determined that tw......
  • Prosser v. Leuck
    • United States
    • Wisconsin Court of Appeals
    • December 16, 1997
    ...liability, or only Cedarburg, thus leaving the insurance company open to a possible bad faith claim. See Cue v. Carthage College, 179 Wis.2d 175, 179, 507 N.W.2d 109, 111 (Ct.App.1993). Prosser points out that the offer was addressed only to Cedarburg, and contends it was clear his offer wa......

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