An unaccepted offer of judgment that contains internal inconsistencies and ambiguities as to its scope is neither enforceable nor supports an award of attorney’s fees under Georgia’s Rule 68. Reversing a trial court’s $837,445 award of attorney’s fees to defendants, the Georgia Court of Appeals held the defendants’ offer of judgment could not be enforced because it was unclear as to which claims it offered to resolve in a case involving both contract and tort claims. Eichenblatt v. Piedmont/Maple, LLC, Case No. A20A2052, 2021 Ga. App. LEXIS 38 (Jan. 29, 2021).
In Eichenblatt, a former part-owner of a real estate investment company sued his prior company and business partners for mismanagement after the company ran into financial difficulties that diminished quarterly distributions. Over the next decade, the case expanded due to a myriad of claims and counterclaims, two jury trials, and four appeals. During the course of the litigation, the defendants made an offer of judgment, or “offer of settlement,” pursuant to Georgia’s Rule 68, O.C.G.A. § 9-11-68. This code section provides, with some significant differences, Georgia’s state-law corollary to Federal Rules of Civil Procedure Rule 68 offers of judgment.
As part of the lawsuit, the plaintiff asserted breach of contract and breach of fiduciary duty tort claims. Georgia’s Rule 68, however, applies only “to settle a tort claim.” Where applicable, it entitles defendant offerors to recover reasonable attorney’s fees should the plaintiff reject the offer and obtain a final judgment for less than 75 percent of the offered amount.
After rejecting the offer of judgment, the plaintiff prevailed at trial but ultimately recovered only 63 percent of what the defendants had offered under Rule 68. The trial court thus ordered the plaintiff to pay $837,445 in attorney’s fees to the defendants.
On appeal, the plaintiff successfully argued that the attorney’s fees award could not be enforced under Georgia’s Rule 68 because the rejected offer, by its terms, applied to both plaintiff’s contract and tort claims. Indeed, in one paragraph, the defendants offered to settle the claim “for breach of fiduciary duty”; yet, in another, they offered to settle “any and all” claims asserted by the plaintiff. The appellate court held that this drafting ambiguity rendered the defendants’ offer unenforceable “[b]ecause a plausible reading . . . is that it required settlement of both the tort claim and the contract claim.” Given that Georgia’s Rule 68 is limited to resolving tort claims, the appellate court found defendants’ offer invalid and reversed their hefty award of attorney’s fees.
Eichenblatt emphasizes how important it is to carefully draft Rule 68 offers of judgment or settlement. See also, e.g., Vasconcelo v. Miami Auto Max, Inc., 981 F.3d 934, 943 (11th Cir. 2020) (considering ambiguity challenge to award of costs under Federal Rule 68 in FLSA action). Whether in state or federal court, such offers are valuable in dealing with unreasonable plaintiffs, but only if drafted clearly and consistently with applicable rules. Employers considering whether to make an offer of judgment must account for nuances in the forum’s offer of judgment rules. Jackson Lewis attorneys are available to help employers evaluate whether to make an offer of judgment and, if so, how to make them enforceable and effective.
