Superior Court County: King. Superior Court Cause No: 92-2-18249-1. Date filed in Superior Court: 8-18-94. Superior Court Judge Signing: Charles W. Mertel.
Written by: Baker, C.j., Concurred by: Kennedy, A.c.j., Agid, J.
BAKER, C.J. - Minute Muffler Installation, Ltd. appeals the trial court's award of attorney fees and costs to Larry and Patricia Brader (Brader) for its violations of the Franchise Investment Protection Act (FIPA). Minute Muffler argues that the Braders owed it attorney fees and costs for their failure to accept an offer of judgment greater than the amount they later recovered at trial. The Braders cross appeal the trial court's exclusion of their business operating losses as part of the rescission remedy provided under FIPA. Each party also requests attorney fees on appeal under various theories.
We hold that the offer of judgment was untimely, that the Braders failed to properly prove their business losses, and that neither party is entitled to appellate attorney fees.
The Braders sued Minute Muffler for FIPA violations including failure to register and to distribute required pre-sale information. The trial court granted summary judgment finding Minute Muffler liable, and set the trial to determine damages for April 25, 1994. On April 15 Minute Muffler presented an offer of judgment for $50,000 to Brader. The offer was made exactly ten days before the scheduled trial date. Brader declined the offer but recovered
a lesser amount at trial. On the date set for trial, the parties were assigned to a courtroom. They submitted written motions and discussed the case with the judge, but argument, rulings and opening statements were not made until the next day. Minute Muffler moved for attorney fees and costs under CR 68, but the trial court ruled the offer of judgment untimely, denied the motion, and awarded fees and costs to Brader. The court further awarded rescission and restitution to Brader but determined that its negligent business practices precluded a recovery of business losses.
Minute Muffler argues that the trial court erred in denying its motion for attorney fees and costs under CR 68, the offer of judgment rule. CR 68, which is patterned after the federal rule, provides this tool to encourage settlement before trial. If the plaintiff rejects the offer and recovers less than the amount of the offer at trial, it is liable for the defendant's costs, including attorney fees. Offers of judgment must be made more than ten days "before trial begins".*fn1
Minute Muffler argues that its offer was valid because trial actually began on April 26 with the commencement of formal proceedings. When a trial "begins" under CR 68 is a question of first impression in Washington. Minute Muffler presents several cases construing analogous civil rules from other jurisdictions for the proposition that trial begins with the arguments and presentation of evidence. Its first line of authority flows from Cover v. Chicago Eye Shield Co.,*fn2 where the Seventh Circuit of the United States Court of Appeals found offers of judgment to be timely if made more than ten days before the beginning of the
second stage of a bifurcated trial.*fn3 The second line of authority stems from Greenwood v. Stevenson,*fn4 where the United States District Court for Rhode Island held that for purposes of FRCP 68, a trial does not begin with jury selection but rather when the court calls the proceedings to order and hears argument and the presentation of evidence.*fn5 The procedure followed in Greenwood, ...