Nevada has both a Statute and a Court Rule allowing any party to make an Offer of Judgment on an opposing party. The Rules are given a specific purpose:
A party makes a formal Offer of Judgment on an opposing Party by serving it on them during the course of litigation. The party who receives the Offer of Judgment has 10 days to accept it. If that Party fails to do so within that time, then the Offer is deemed rejected. NRS 17.115 and NRCP 68 facilitate settlement by penalizing a Party who rejects an Offer of Judgment then fails to obtain a more favorable Judgment. What the Rule and Statute are saying is that if you don’t accept an Offer resulting in additional time, fees and costs, to the Party making the Offer, then you may have to pay for those additional costs.
Under NRS 17.115:
4. Except as otherwise provided in this section, if a party who rejects an offer of judgment fails to obtain a more favorable judgment, the court:
- May not award to the party any costs or attorney’s fees;
- May not award to the party any interest on the judgment for the period from the date of service of the offer to the date of entry of the judgment;
- Shall order the party to pay the taxable costs incurred by the party who made the offer; and
- May order the party to pay to the party who made the offer any or all of the following:
- A reasonable sum to cover any costs incurred by the party who made the offer for each expert witness whose services were reasonably necessary to prepare for and conduct the trial of the case.
- Any applicable interest on the judgment for the period from the date of service of the offer to the date of entry of the judgment.
Likewise, the penalties for rejecting an Offer of Judgment under NRCP 68 are set forth in Paragraph (f)
- (f) Penalties for Rejection of Offer. If the offeree rejects an offer and fails to obtain a more favorable judgment,
- the offeree cannot recover any costs or attorney’s fees and shall not recover interest for the period after the service of the offer and before the judgment; and
- the offeree shall pay the offeror’s post-offer costs, applicable interest on the judgment from the time of the offer to the time of entry of the judgment and reasonable attorney’s fees, if any be allowed, actually incurred by the offeror from the time of the offer. If the offeror’s attorney is collecting a contingent fee, the amount of any attorney’s fees awarded to the party for whom the offer is made must be deducted from that contingent fee.
Making the Offer of Judgment stronger
As a result of the slight differences in the penalties available under NRS 17.115 and NRCP 68, Parties typically make a single Offer of Judgment citing to both of them. This makes the Offer stronger and prevents the loss of any penalties or the need to make a separate Offer under each Rule.
As an example, suppose Person A (the Plaintiff) is the victim of a personal injury car accident and sues the adverse driver Person B (the Defendant.) At some point during the litigation, Person A serves an Offer of Judgment on Person B pursuant to NRCP 68 and NRS 17.115 seeking full compensation for the damages and injuries caused in the car accident. If Person B, accepts the Offer within 10 days, then the case will be concluded on the terms of the Offer. If Person B does not accept the Offer within 10 days, it is deemed rejected. If Person A does not obtain a Judgment in excess of the Offer, there are no penalties to either side. (Note that neither NRS 17.115 nor NRCP 68 penalize a Party for failing to do better than an Offer they make – to do so would, as stated in Matthew v. Collman be counter to the purpose of the Statute and Rule.) If Person A, as the victim of the personal injury accident, obtains a Judgment in excess of the award, the penalties of NRS 17.115 and NRCP 68 apply.
NRS 17.117 and NRCP 68 have been considered by the Nevada Supreme Court on several occasions and the Court has made specific rulings interpreting them. This brief post does not consider those specific Rulings and should not be considered a full discussion of either NRCP 17.115 or NRCP 68. Federal Rule FRCP 68 has differences in both its language and case law than Nevada’s FRCP 68. Any person attempting to interpret these, and any Rules and Statutes, should make sure to have a full understanding of any relevant case law effecting the meaning or use of those Rules or Statutes. I strongly suggest seeking advice of Counsel should you wish to make an Offer of Judgment or receive one in a case in which you are a Party.