Nordby v. Anchor Hocking Packaging Co., s. 98-4161

• Decision Date: 02 December 1999
• Docket Number: 99-1146,Nos. 98-4161,s. 98-4161
• Citation: 199 F.3d 390
• Parties: (7th Cir. 1999) A. Eugene Nordby, Plaintiff-Appellant/Cross-Appellee, v. Anchor Hocking Packaging Company, Defendant-Appellee, and Johnson & Bell, Ltd., Cross-Appellant
• Court: U.S. Court of Appeals — Seventh Circuit

Page 390

199 F.3d 390 (7th Cir. 1999)

A. Eugene Nordby, Plaintiff-Appellant/Cross-Appellee, v. Anchor Hocking Packaging Company, Defendant-Appellee, and Johnson & Bell, Ltd. Cross-Appellant.

Nos. 98-4161, 99-1146

In the United States Court of Appeals For the Seventh Circuit

Argued November 3, 1999

Decided December 2, 1999

Appeals from the United States District Court for the Northern District of Illinois, Eastern Division. No. 97 C 823--Milton I. Shadur, Judge.

Before Posner, Chief Judge, and Coffey and Rovner, Circuit Judges.

Posner, Chief Judge.

Rule 68 of the Federal Rules of Civil Procedure authorizes a defendant to make an offer of judgment "for the money . . . specified in the offer, with costs then accrued." If the plaintiff refuses the offer and goes on to win at trial but wins less than the amount of the offer, the plaintiff must pay the costs incurred by the defendant from the time of making the offer. If, as in this case--a suit by a sales representative for breach of contract and statutory violations--the plaintiff accepts the offer within ten days, judgment is entered for him.

The offer here was for "judgment in the amount of $56,003.00 plus $1,000 in costs as one total sum as to all counts of the amended complaint." One of the counts of the complaint was for violation of the Illinois Sales Representative Act, 820 ILCS 120/1 et seq. The Act expressly provides for an award of reasonable attorneys' fees to the sales representative whose rights under the Act have been violated, 820 ILCS 120/3, and so the count that is based on the Act expressly requested attorneys' fees as well as damages.

The plaintiff accepted the defendant's Rule 68 offer and then moved the district court for an award of attorneys' fees pursuant to the Illinois Act. The court turned him down on the ground that the offer that he had accepted was inclusive of attorneys' fees.

In the case on which the plaintiff primarily relies, Webb v. James, 147 F.3d 617, 623 (7th Cir. 1998), this court held that any ambiguities in a Rule 68 offer must be resolved against the defendant, that is, the offeror, not only because the defendant drafted the offer but also because the plaintiff is being asked to give up his right to a trial. See also Gavoni v. Dobbs House, Inc., 164 F.3d 1071, 1076 (7th Cir. 1999). We add that an ambiguous offer places the plaintiff in an uncomfortable position. Not knowing the actual value of the offer, he can't make an intelligent choice whether to accept it--and there are consequences either way. For unlike the case of an ordinary contract offer, the offeree cannot reject it without legal consequences, since if he rejects it and then doesn't do better at trial he has to pay the defendant's post-offer costs. 12 Charles Alan Wright, Arthur R. Miller & Richard L. Marcus, Federal Practice and Procedure sec. 3002, pp. 94-96 (2d ed. 1997).

The offer in Webb was "of judgment in the above- captioned matter in the amount of Fifty Thousand Dollars ($50,000)." 147 F.3d at 619. It was unclear whether attorneys' fees were included, since such fees are often sought as an add-on to the judgment. That is the basis of the rule that the judgment and the award of attorneys' fees are separate appealable orders. E.g., Budinich v. Becton Dickinson & Co., 486 U.S. 196, 202-03 (1988); In re Stoecker, 5 F.3d 1022, 1026 (7th Cir. 1993); Kirkpatrick v. Shaw, 70 F.3d 100, 102 n. 1 (11th Cir. 1995) (per curiam). In other words, "judgment" can mean either the substantive relief ordered (whether legal or equitable), or that plus attorneys' fees. The defendants in Webb failed to indicate which they meant, and this made their offer ambiguous.

There is no ambiguity here. "[O]ne total sum as to all counts of the amended complaint" can only mean one amount encompassing all the relief sought in the counts. One of those counts specified attorneys' fees as part of the relief sought. That relief was covered by the offer. We are mindful that Stewart v. Professional Computer Centers, Inc., 148 F.3d 937 (8th Cir. 1998), held that an ambiguous offer that the defendant then clarified by offering judgment "on any or all counts against Defendant in a total amount not to exceed $4,500"--and some of the counts requested attorneys' fees, just as in this case--was nevertheless incurably ambiguous. But the ambiguity lay not in the terms of clarification but in the fact that the plaintiff had coupled its acceptance of the offer with a request for attorneys' fees. This led the court to conclude that the plaintiff may not have understood the offer to be inclusive of attorneys' fees. If the request for fees was deemed a part of the plaintiff's "acceptance," then it was not an acceptance but a counteroffer, which Rule 68 does not authorize and which in any event was not accepted. See also Radecki v. Amoco Oil Co., 858 F.2d 397 (8th Cir. 1988); Johnson v. University College, 706 F.2d 1205, 1209 (11th Cir. 1983).

We need not decide whether we agree that the plaintiff's acceptance of the defendant's Rule 68 offer in Stewart was really a counteroffer, a characterization rendered doubtful by the fact that the acceptance and the fee demand were not simultaneous. The...