Twin City Const. of Fargo, North Dakota v. Cantor

• Decision Date: 23 July 1974
• Docket Number: CA-CIV,No. 1,1
• Citation: 22 Ariz.App. 133,524 P.2d 967
• Parties: TWIN CITY CONSTRUCTION CO. OF FARGO, NORTH DAKOTA, a North Dakota corporation, doing business through its division, Skarphol Co., and United States Fidelity and Guaranty Company, a Maryland corporation, Petitioners, v. The Honorable Irwin CANTOR, Judge of the Maricopa County Superior Court, Respondent, and J. Richard WELLS dba Wells Masonry Constructors, Real Party in Interest. 2767.
• Court: Arizona Court of Appeals

Page 967

524 P.2d 967

22 Ariz.App. 133

TWIN CITY CONSTRUCTION CO. OF FARGO, NORTH DAKOTA, a North Dakota corporation, doing business through its division, Skarphol Co., and United States Fidelity and Guaranty Company, a Maryland corporation, Petitioners, v. The Honorable Irwin CANTOR, Judge of the Maricopa County Superior Court, Respondent and J. Richard WELLS dba Wells Masonry Constructors, Real Party in Interest.

No. 1 CA-CIV 2767.

Court of Appeals of Arizona, Division 1, Department B.

July 23, 1974.

Rehearing Denied Aug. 22, 1974.

Review Denied Oct. 8, 1974.

Shimmel, Hill, Bishop & Gruender by Arthur W. Pederson, Phoenix, for petitioners

Strong & Pugh, P.A., by William K. Strong, Phoenix, for respondent.

OPINION

JACOBSON, Chief Judge, Division 1.

This special action presents the limited question of whether a trial court may relieve a party of the sanctions imposed by Rule 68, Rules of Civil Procedure, authorizing an offer of judgment.

The facts necessary for a determination of this matter are not in dispute. Petitioners, Twin City Construction Co. of Fargo, N.D. and United States Fidelity & Guaranty Company (petitioners) are defendants in an action brought by real party in interest, J. Richard Wells dba Wells Masonry Constructors (Wells). In that action, Wells seeks $20,034.57, allegedly due from petitioners by reason of a subcontract for construction of a school in Lake Havasu City, Arizona. Petitioners filed an answer denying liability and a counterclaim for damages caused by Wells allegedly failing to complete the work. The counterclaim seeks damages in excess of $40,000, more than the alleged unpaid balance sought by Wells.

Certain discovery was instituted by Wells, which has not been completed due to the failure of petitioners to adequately respond. While the case was in this posture, petitioners, pursuant to Rule 68, Rules of Civil Procedure, 16 A.R.S. made an offer of judgment to Wells in the sum of $4,001.00. Within the time allowed for acceptance of such offer (10 days), Wells filed a motion to extend the time for responding to the offer or in the alternative 'for an order relieving plaintiff of the effect of not accepting defendants' offer of judgment in the event plaintiff recovers less than or the amount of the offer in the final judgment entered herein . . ..' The 'effect' referred to in Wells' motion is the following language from Rule 68:

'If the judgment finally obtained by the offeree is not more favorable than the offer, the offeree must pay the costs incurred after the making of the offer.'

The trial court denied Wells' motion for an extension of time within which to respond to the offer of judgment, but ruled 'since plaintiffs cannot evaluate their claim umtil discovery shall be completed, the court will relieve the plaintiff of being bound for any costs pursuant to the rule.' Wells argued successfully before the trial court that because petitioners are in default in discovery matters, he is unable to intelligently respond to the offer of judgment and thus should be relieved from the sanctions of the rule. We accepted special action jurisdiction of this matter to determine the important question of whether a trial court may relieve a noncomplying plaintiff from the sanctions of Rule 68. See, Mubi v. Broomfield, 108 Ariz. 39, 492 P.2d 700 (1972).

Rule 68, Rules of Civil Procedure, provides in part as follows:

'At any time more than 10 days before the trial begins, a party defending against a claim may serve upon the adverse party an offer to allow judgment to be taken against him for the money or property or to the effect specified in his offer, with costs then accrued. If within 10 days after the service of the offer the adverse party serves written notice that the offer is accepted, either party may then file the offer and notice of acceptance together with proof of service thereof and a judgment complying with the requirements of Rule 58(a) shall be entered. An offer not accepted shall be deemed withdrawn and evidence thereof is not admissible except in a proceeding to determine costs. If the judgment finally obtained by the offeree is not more favorable than the offer, the offeree must pay the cost incurred after the making of the offer. . . .'

In any analysis of Rule 68, we must start with the proposition that an offer of judgment once made is irrevocable for the ten-day period, and if not accepted within that ten-day period, the offer is deemed withdrawn. Mubi v. Broomfield, Supra. We further note that an offer of judgment can be made by a defending party at any time prior to ten days before trial. Rule 68, Supra. Thus,...