• Offers of Judgment in Tort Cases in Federal Court
  • January 16, 2015 | Author: Elizabeth A. Rose
  • Law Firm: Drew Eckl & Farnham, LLP - Atlanta Office
  • In Wheatley v. Moe’s Southwest Grill, LLC, the applicability of offers of judgment under O.C.G.A. § 9-11-68 was addressed in the context of tort cases in federal court based upon diversity jurisdiction.

    There appears to be no binding decision regarding the applicability of offers under O.C.G.A. § 9-11-68 in federal court. This code section provides:

    At any time more than 30 days after the service of a summons and complaint on a party but not less than 30 days (or 20 days if it is a counteroffer) before trial, either party may serve upon the other party, but shall not file with the court, a written offer, denominated as an offer under this Code section, to settle a tort claim for the money specified in the offer and to enter into an agreement dismissing the claim or to allow judgment to be entered accordingly.

    ....

    If a defendant makes an offer of settlement which is rejected by the plaintiff, the defendant shall be entitled to recover reasonable attorney's fees and expenses of litigation incurred by the defendant or on the defendant's behalf from the date of the rejection of the offer of settlement through the entry of judgment if the final judgment is one of no liability or the final judgment obtained by the plaintiff is less than 75 percent of such offer of settlement.

    ....

    If a plaintiff makes an offer of settlement which is rejected by the defendant and the plaintiff recovers a final judgment in an amount greater than 125 percent of such offer of settlement, the plaintiff shall be entitled to recover reasonable attorney's fees and expenses of litigation incurred by the plaintiff or on the plaintiff's behalf from the date of the rejection of the offer of settlement through the entry of judgment.

    O.C.G.A. § 9-11-68.

    Although there is no binding decision on the issue, case law suggests that O.C.G.A. §9-11-68 is applicable in diversity cases in federal court. In Wheatley v. Moe's Southwest Grill, LLC, 580 F.Supp.2d 1324 (N.D. Ga. 2008), the court held that O.C.G.A. § 9-11-68 is substantive in nature and does not conflict with a federal law or rule of procedure. Thus, federal courts are bound to apply state substantive law in diversity tort cases. Id.; see also Gowen Oil Co., Inc. v. Abraham, 511 Fed.App’x 930 (11th Cir. 2013) (applying O.C.G.A. § 9-11-68 in federal diversity tort case).

    The Eleventh Circuit has yet to rule on this exact issue. However, in Tanker Management, Inc. v. Brunson, 918 F.2d 1524 (11th Cir. 1990), the Court held that a similar Florida statute which provided that a prevailing defendant could recover attorney's fees if the plaintiff unreasonably rejected either a settlement offer or an offer of judgment did not conflict with Fed.R.Civ.P. 68 and thus applied in federal diversity cases. Id.; see also Gowen Oil Co., Inc. v. Abraham, 511 Fed.App’x 930 (11th Cir. 2013) (applying O.C.G.A. § 9-11-68 in federal diversity tort case). Accordingly, although there is no binding precedent for utilizing offers pursuant to O.C.G.A. § 9-11-68 in diversity tort cases, a court ruling allowed use of the Georgia statutory procedure in federal court.