Niccum v. Enquist, 83983–2.

• Citation: 175 Wash.2d 441,286 P.3d 966
• Decision Date: 20 September 2012
• Docket Number: No. 83983–2.,83983–2.
• Court: United States State Supreme Court of Washington
• Parties: Jeffery W. NICCUM, a married man, Respondent, v. Ryan L. ENQUIST, individually and the marital community composed of he and his wife, if any, Petitioner.

175 Wash.2d 441

286 P.3d 966

Jeffery W. NICCUM, a married man, Respondent,

v.Ryan L. ENQUIST, individually and the marital community composed of he and his wife, if any, Petitioner.

No. 83983–2.

Supreme Court of Washington,

En Banc.

Argued Feb. 15, 2011.

Decided Sept. 20, 2012.

Marilee C. Erickson, Michael Neil Budelsky, Reed McClure, Seattle, WA, David Lawrence Force, Carlson McMahon & Sealby PLLC, Wenatchee, WA, for Petitioner.

Jerry T. Dyreson, Attorney at Law, Spokane, WA, for Respondent.

ALEXANDER, J. ^*

[175 Wash.2d 443]¶ 1 We granted Ryan Enquist's petition to review a decision of the Court of Appeals in which that court affirmed the trial court's award of costs and reasonable attorney's fees to Jeffery Niccum at a trial de novo following mandatory arbitration. The Court of Appeals held that the trial court properly subtracted statutory costs and attorney fees from Niccum's offer of compromise before determining that Enquist failed to improve his position for purposes of MAR 7.3. We reverse the Court of Appeals.

I

¶ 2 On July 4, 2004, Ryan Enquist drove through a red light at the intersection of North Wall Street and West Francis Avenue in the city of Spokane and collided with Jeffery Niccum's vehicle. Niccum thereafter filed a complaint against Enquist in Spokane County Superior Court. In his suit, he sought special damages for economic loss and medical expenses, general damages for pain, suffering, and emotional distress, costs and statutory attorney fees, and “[s]uch other relief as the Court may deem just and equitable.” Clerk's Papers (CP) at 2. The suit proceeded to mandatory arbitration. SeeRCW 7.06.020. The arbitrator awarded Niccum a total of $24,496.00, consisting of $6,896.00 for medical expenses, $7,600.00 for lost wages, and $10,000.00 for pain and suffering. Enquist filed a timely request for trial de novo.

¶ 3 Before trial, Niccum presented Enquist with two offers of compromise. The first offer was as follows: “COMES NOW Plaintiff, by and through his attorney JERRY T. DYRESON, and pursuant to RCW 7.06.050 does hereby offer to compromise his claim in the amount of $22,000.00. Such compromise is intended to replace the arbitrator's award of $24,496.00 with an award of $22,000.00.” CP at 11. Enquist did not accept the offer and so, on July 8, 2008, Niccum made a second offer of compromise. It stated:

COMES NOW Plaintiff, by and through his attorney, JERRY T. DYRESON, and pursuant to RCW 7.06.050 does hereby offer to compromise his claim in the amount of $17,350.00. Such compromise is intended to replace the arbitrator's award of $24,496.00 and replace the previous offer of compromise, with an award of $17,350.00 including costs and statutory attorney fees.

CP at 12 (emphasis added). Enquist rejected this offer as well.

¶ 4 The matter thus proceeded to a trial de novo in Spokane County Superior Court. On August 14, 2008, the jury returned a verdict for Niccum in the amount of $16,650.00, consisting of $6,650.00 for past medical expenses and $10,000.00 for noneconomic damages. Niccum then moved for $15,640.00 in reasonable attorney's fees, $1,016.28 in costs, and $1,461.00 in expert witness expenses pursuant to RCW 7.06.060 and MAR 7.3. In support of his motion, Niccum argued that Enquist had failed to improve his position on trial de novo in relation to Niccum's second offer of compromise. Specifically, Niccum asserted that because the second offer included costs and statutory attorney fees, the trial court had to subtract $1,016.28 ¹ in costs and fees from the $17,350.00 offer in order to determine the portion of that offer devoted to damages, resulting in a net amount less than the $16,650.00 in damages awarded by the jury.²

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¶ 5 The trial court agreed with Niccum and, consequently, awarded him $15,640.00 in “[r]easonable [a]ttorney [f]ees incurred after arbitration date,” $1,016.28 in costs, and $1,461.00 in expert witness expenses. CP at 40. Enquist appealed, but the Court of Appeals affirmed. Niccum v. Enquist, 152 Wash.App. 496, 215 P.3d 987 (2009).³ Enquist then petitioned this court for review, and we granted his petition. Niccum v. Enquist, 168 Wash.2d 1022, 228 P.3d 18 (2010).

II

¶ 6 In Washington, “ ‘[a]ttorney fees may be recovered only when authorized by statute, a recognized ground of equity, or agreement of the parties.’ ” Wiley v. Rehak, 143 Wash.2d 339, 348, 20 P.3d 404 (2001) (alteration in original) (quoting Perkins Coie v. Williams, 84 Wash.App. 733, 742–43, 929 P.2d 1215 (1997)). Here, the trial court awarded Niccum reasonable attorney's fees pursuant to MAR 7.3 and RCW 7.06.060. The application of a court rule is a question of law subject to de novo review. Whether a statute authorizes an award of attorney fees is likewise a question of law reviewed de novo. McGuire v. Bates, 169 Wash.2d 185, 189, 234 P.3d 205 (2010).

III

¶ 7 The question before us is whether it is proper to subtract costs from an offer of compromise that purports to include them before comparing that offer to the jury's award for purposes of MAR 7.3. MAR 7.3 directs courts to “assess costs and reasonable attorney fees against a party who appeals the award and fails to improve the party's position on the trial de novo.” ⁴RCW 7.06.050(1)(b) provides that “for purposes of MAR 7.3, the amount of the offer of compromise shall replace the amount of the arbitrator's award for determining whether the party appealing the arbitrator's award has failed to improve that party's position on the trial de novo.”

¶ 8 Enquist contends that the full “amount” of Niccum's $17,350.00 offer of compromise replaced “the amount of the arbitrator's award,” with the result that the $16,650.00 verdict represented a $700.00 improvement to Enquist's position. Niccum responds that since his second offer of compromise ostensibly included costs, those costs must be subtracted from the $17,350.00 offer before that offer can be compared to the jury's verdict. He urges us to subtract $1,016.28 in costs from the $17,350.00 offer, leaving just $16,333.72, $316.28 less than the jury's award, and on that basis to award him costs and attorney's fees in addition to the $16,650.00 in damages.

¶ 9 The Court of Appeals agreed with Niccum. After quoting RCW 7.06.050(1)(b) and MAR 7.3, it observed that a “court's objective in construing a statute is to determine the intent of the legislature,” which is “derived from the language of the statute.” Niccum, 152 Wash.App. at 500, 215 P.3d 987 (citing State v. Jacobs, 154 Wash.2d 596, 600, 115 P.3d 281 (2005); State v. Westling, 145 Wash.2d 607, 610, 40 P.3d 669 (2002)). Unfortunately, the Court of Appeals did not derive its rule “from the language of the statute.” It held that “RCW 7.06.050(1)(b) should be read so that any segregated amount of an offer must replace an amount in the same category granted under the arbitrator's award.” Id. at 500–01, 215 P.3d 987 (emphasis added). RCW 7.06.050(1)(b) directs courts to “replace” the arbitrator's award with the “amount of the offer of compromise.” There is not a word in that statute about subtracting “any segregated amount” from that offer.

¶ 10 Instead of following the statutory language, the Court of Appeals derived its rule from the doctrine it had developed in prior opinions of “comparing comparables.” See Niccum, 152 Wash.App. at 501, 215 P.3d 987 (citing Mei Tran v. Yue Han Yu, 118 Wash.App. 607, 612, 75 P.3d 970 (2003)). By “compare comparables,” the court means that compensatory damages should be compared to compensatory damages, not to compensatory damages plus costs. See id. The court's reliance on this doctrine in preference to the plain language of the statute is problematic for several reasons. First, this court has not adopted the doctrine of comparing comparables.⁵ Second, none of these prior cases involving the doctrine of comparing comparables addressed postarbitration offers of compromise; the courts in those cases were simply asked to compare a party's position after arbitration to its position after trial de novo. See Tran, 118 Wash.App. at 610–11, 75 P.3d 970;Wilkerson v. United Inv., Inc., 62 Wash.App. 712, 715–16, 815 P.2d 293 (1991); Christie–Lambert Van & Storage Co. v. McLeod, 39 Wash.App. 298, 300, 693 P.2d 161 (1984). Thus, the cases do not settle the question of whether the jury's award should be compared to something less than the full “amount of the offer of compromise” under RCW 7.06.050(1)(b).

¶ 11 Even accepting the doctrine of comparing comparables, it is still improper to subtract costs from an offer of compromise. That is so because a party is not entitled to costs in connection with an offer of compromise, the legislature having made this abundantly clear in RCW 7.06.060(1), which states that a “court may assess costs and reasonable attorneys' fees against a party who voluntarily withdraws a request for a trial de novo if the withdrawal is not requested in conjunction with the acceptance of an offer of compromise.” (Emphasis added.) In other words, if a party makes an offer of compromise, and that offer is accepted, the party cannot recover costs by court order.

¶ 12 Furthermore, the costs statute, RCW 4.84.010, provides that “there shall be allowed to the prevailing party upon the judgment certain sums for the prevailing party's expenses in the action, which allowances are termed costs.” ⁶ (Emphasis added.) RCW 7.06.050(1) provides, in turn, that “the arbitrator shall file his decision and award with the clerk of the superior court” and that “[w]ithin twenty days after such filing, any aggrieved party may file with the clerk a written notice of appeal and request for a trial de novo in the superior court.” Finally, RCW 7.06.050(2) provides:

If no appeal has been filed at the expiration of twenty days following filing of the arbitrator's ... award, a judgment shall be entered and may be presented to the court by any party, on notice, which judgmentwhen...