Early Use of Statutory Offers of Settlement Can Help Effect Legislative Intent

By John Merriam

[1] $10,000 cap on RCW 4.84.250 et seq. does not apply if a statutory offer of settlement is not timely accepted.

[2] An offer of settlement should be made early in the litigation, with a reasonable time limit for acceptance.

“Millions for Defense, But Not One Dime for Tribute!” RCW 4.84.250 et seq. is ostensibly limited to “small” cases, with the statutory maximum being $10,000 for offers of settlement. If the offering side equals or betters the amount offered to settle the case, the offering party is entitled to be reimbursed its reasonable attorney secs. Id. However, if the offer of settlement is not timely accepted, the offering party is no longer limited to the $10,000 lid. Beckmann v. Spokane Transit, 107 Wn.2d 785 (1987).

Some practitioners in the insurance defense bar are trying to increase their market share by being particularly obstreperous. The purpose of this article is to suggest a method whereby the clients of these particular attorneys come to realize that the hardball tactics used are not cost effective.

The use of RCW 4.84.250 et seq. is limited to state court. Under those statutes, the soonest one can serve an offer of settlement is 30 days after service of process. Id.

My practice is to serve (not file) an offer of settlement 30 days after serving process, and to include a ten-day deadline for acceptance of said offer. That prevents defense counsel from accepting one’s offer of settlement “on the courthouse steps.”

In this writer’s experience, the worst offenders-those utilizing the most onerous and time consuming defense tactics-have never timely accepted statutory offers of settlement. It seems, therefore, that making an offer of settlement under the statute in any amount is probably a safe gamble. It is still a gamble, however, since if the defendant does accept the offer within the ten-day limitation, the case is over for that amount. The biggest obstacle I have experienced in utilizing this tactic is the suspicion of my own client: Is this simply a lawyer trick to get the client’s case over with quickly without much effort? To alleviate those concerns remind the client that, under a contingent fee agreement, if the client makes less money so do I. Moreover, should the defendant accept such an offer of settlement made early in the litigation, I will reduce my fee since I have not put much work into the case.

I encourage my clients to give me authority to make offers of settlement as low as they have the courage to go. The refusal to accept “low-ball”offers of settlement leads one to wonder whether some members of the insurance defense bar are more concerned with their fees than they are with their clients’ best interests. For reasonable insurance defense lawyers, of course, accepting offers of settlement effectuates the legislative intent of having cases settle early.

In a recent case, a client of mine had the guts to gamble, making a $10,000 offer of settlement-the statutory maximum-in a case involving a serious back injury aboard a fish processing vessel. The offer of settlement was not timely accepted. The case did settle “on the courthouse steps” for $80,000. The settlement value included recognition of the fact that an award of attorney fees was a distinct possibility, to say nothing of the potential for embarrassment on the part of defense counsel. The case was Joe Moesta v, Arctic Alaska, King County Cause No. 91-2-24202-0. Plaintiff was represented by John Merriam of Geisness & Merriam. Defendant was represented by various attorneys at LeGros Buchanan & Paul.