Marryshow v. Flynn

986 F.2d 689, 1993 WL 23761
Court of Appeals for the Fourth Circuit·Decided February 4, 1993·No. No. 92-1348·Published·Cited by 38 cases

Opinions

OPINION

NIEMEYER, Circuit Judge:

Following a five-day trial, a jury awarded Derek Marryshow $7,500 in compensatory damages and $7,000 in punitive damages on his suit brought under 42 U.S.C. § 1983 against James Flynn and Matthew Rhomba, members of the Bladensburg, Maryland police department, for use of excessive force in connection with a false arrest. The court thereafter awarded Marryshow attorney’s fees and costs of $24,892 under 42 U.S.C. § 1988. This appeal challenges the award of attorney’s fees and costs.

Two weeks before trial Flynn and Rhomba offered to settle the case with Marryshow, pursuant to Fed.R.Civ.P. 68, by entry of judgment for damages, attorney’s fees, and costs in the amount of $20,000. They now allege that they are entitled to shift the post-offer costs, including attorney’s fees, to Marryshow because the judgment ultimately entered was not more favorable to Marryshow than the offer of judgment. [691]*691Flynn and Rhomba also contend that the trial court’s award of attorney’s fees should have been disallowed because .the petition was not timely filed under D.Md.R. 109.2 and, alternatively, because the award was excessive. Because we conclude that Rule 68 was not improperly applied and the magistrate judge did not abuse his discretion in awarding attorney’s fees, we affirm.

I

Two weeks before trial, which began on January 6, 1992, the defendants offered Marryshow “to allow judgment to be taken against them in this action for a total sum, to include all costs now accrued and attorney’s fees, of $20,000,” in accordance with Fed.R.Civ.P. 68. The offer was refused. The jury rendered a verdict in favor, of Marryshow totaling $14,500, and the court awarded attorney’s fees of $20,808 and costs of $4,084. The judgment, including allowed attorney’s fees and costs, totalled $39,392.

At the time of the offer of judgment, time records of Marryshow’s attorney revealed that slightly over 105 hours had been expended on pre-trial preparation. When that time is valued at $175 per hour, the rate claimed by Marryshow’s attorney to be reasonable, fees then accrued amounted to over $18,000. When the preoffer hours are valued as the court ultimately allowed, i.e. at $125 per hour and reduced overall by 10%, slightly more than $11,800 would be attributed to fees as of the date of the offer. Marryshow contends that, however valued, pre-offer attorney’s fees must be added to the jury verdict to compare the judgment obtained with the offer of judgment. When that is done, using either value for his pre-offer attorney’s fees, the sum exceeds defendant’s offer of $20,000 and accordingly, Marryshow contends, post-offer fees should not be shifted under Rule 68.

Defendants contend that their $20,000 offer was “nearly 40% more than the amount Marryshow received by verdict ... and [Marryshow] is therefore not entitled to an award of costs or fees incurred after the $20,000 offer of judgment was made.” They, argue that by virtue of the plain language of Rule 68 “the offer should simply be compared to the amount of the judgment without any adjustments” for costs. They acknowledge that they have no authority to support the position. But cf. 28 U.S.C. § 1920 (“A bill of costs shall be filed in the case, and upon allowance, included in the judgment or decree” (emphasis added)).

Rule 68, a cost-shifting rule adopted to encourage parties to settle and avoid the costs of litigation, provides that at any time more than ten days before trial a defendant may invoke the rule by offering “to allow judgment to be taken against [the defendant]” in a specified amount with costs “then accrued.” If the plaintiff rejects the offer and “[i]f the judgment finally obtained by the [plaintiff] is not more favorable than the offer, the [plaintiff] must pay the costs incurred after the making of the offer.” Fed.R.Civ.P. 68.

The "costs" that may be shifted have already been interpreted to include attorney’s fees, a holding that has heightened interest in Rule 68. In Marek v. Chesny, 473 U.S. 1, 105 S.Ct. 3012, 87 L.Ed.2d 1 (1985), the Supreme Court held that costs which are shifted under Rule 68 include all costs properly awardable under relevant substantive statutes, including statutes which define costs to include attorney’s fees. Id. at 9, 105 S.Ct. at 3016-17. Here, as in Marek, the relevant statute is the Civil Rights Attorney’s Fees Awards Act of 1976, 42 U.S.C. § 1988(b), which provides that the prevailing party may be allowed "a reasonable attorney’s fee as part of the costs." (Emphasis added); cf. Farrar v. Hobby, — U.S. —, 113 S.Ct. 566, 121 L.Ed.2d 494 (1992). Accordingly, if a defendant in a civil rights case makes an offer to allow judgment, including costs then accrued, to be entered in an amount that is determined to be more favorable than the judgment that the plaintiff ultimately obtains, attorney’s fees that otherwise might be included in post-offer costs by reason of 42 U.S.C. § 1988 can be avoided by the defendant. The particular question presented here focuses on whether [692]*692these post-offer attorney’s fees allowable under § 1988 should be considered when making the threshold comparison between the offer of judgment and the judgment obtained that triggers the cost shifting rule.

Rule 68 requires that a comparison be made between an offer of judgment that includes “costs then accrued” and the “judgment finally obtained.” It is neither logical nor consistent with the rule and applicable authority to compare an offer of judgment which includes all costs, including attorney’s fees, and a judgment finally obtained which includes no costs. To make a proper comparison between the offer of judgment and the judgment obtained when determining, for Rule 68 purposes, which is the more favorable, like “judgments” must be evaluated. Because the offer includes costs then accrued, to determine whether the judgment obtained is “more favorable,” as the rule requires, the judgment must be defined on the same basis—verdict plus costs incurred as of the time of the offer of judgment. The post-offer costs—the very costs at issue by virtue of the rule’s application—should not, however, also be included in the comparison and thereby become the vehicle to defeat the rule’s purpose. This construction of Rule 68 appears to be instructed by Marek. See 473 U.S. at 7, 105 S.Ct. at 3015; see also Grosvenor v. Brienen, 801 F.2d 944, 948 (7th Cir.1986).

In Marek,

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Marryshow v. Flynn, 986 F.2d 689, 1993 WL 23761 (4th Cir. 1993).

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