Maldonado et al v. Municipality of Barceloneta et al

Filing 396

MEMORANDUM AND ORDER re 374 MOTION for Attorney Fees filed by Plaintiffs. The Court hereby orders the Municipal Defendants to respond to Plaintiffs request for attorney's fees. Response to Motion Deadline due by 9/19/2011.Signed by Judge Jay A Garcia-Gregory on 08/19/2011.(DPS)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO

MADELINE MALDONADO, et al.,
Plaintiffs
CIVIL NO. 07-1992(JAG)

v.
MUNICIPIO DE BARCELONETA, et
al.,
Defendants

MEMORANDUM AND ORDER
Before the Court is a Motion for Attorney’s fees filed by
Plaintiffs. (Docket No. 374). For the reasons set forth below
the Court hereby orders the Municipal Defendants to file their
opposition to Plaintiffs’ motion by September 19, 2011.
FACTUAL AND PROCEDURAL BACKGROUND
On January 11, 2011, after receiving the First Circuit’s
Mandate

dismissing

the

interlocutory

appeal

filed

by

several

employees of the Municipality of Barceloneta who, along with
Mayor Sol L. Fontanes, are the Municipal Defendants, the Court
scheduled the case for trial on the merits. (Docket No. 321,
325). On April 28, 2011, the Municipal Defendants filed a Notice
to the Court indicating they had delivered Plaintiffs an offer
of judgment pursuant to Fed.R.Civ.P. 68 (“Rule 68”). (Docket No.
351). The offer states:

Civil Case No. 07-1992 (JAG)

2

[The Municipal Defendants] hereby offer judgment in
favor of the Plaintiffs, for all claims, and all
claims that could have been brought by all of the
Plaintiffs, in the total amount of $300,000 pursuant
to Federal Rule of Civil Procedure 68. (Docket No.
379, p. 4).
Shortly

thereafter,

on

May

3,

2011,

a

Pretrial

and

Settlement Conference was held before the undersigned. (Docket
No.

363).

During

the

conference,

attorneys

for

Plaintiffs

informed the Court that they were forced to request withdrawal
from the legal representation of plaintiffs Antonia Morales and
her two sons (the “Morales household”).1

After the attorneys

explained their reasons, the Court found them to be compelling
and agreed to grant the withdrawal, but ordered the attorneys to
make the request on the record. The motion was eventually filed
and granted by the Court. (Docket Nos. 361, 362).
During the conference, Plaintiffs informed that they would
accept

the

offer

of

judgment

tendered

by

the

Municipal

Defendants. The Court considered that an order had to be issued
informing the Morales household of the state of the proceedings
and giving them a reasonable period of time to either accept the
offer or proceed to trial. The Municipal Defendants thus agreed
to deposit the total amount of the offer of judgment with the

1

  Hereinafter, the term “Plaintiffs” will refer to all plaintiffs

except the Morales household.

Civil Case No. 07-1992 (JAG)

3

Court and to have an amount equal to what would proportionally
be awarded to the Morales household earmarked for them.2
On May 5, 2011, two days after the conference before the
undersigned,
motion.

the

(Docket

Municipal
No.

364).

Defendants
In

it

they

filed
state

an

informative

that

they

had

delivered an offer of judgment to Plaintiffs on April 28, 2011
and

that

“[p]ursuant

to

the

terms

agreed

to

by

the

parties

during the course of the Settlement Conference, the Defendants
reaffirm the Offer of Judgment.” (Docket No. 364). Several hours
later, Plaintiffs filed an Amended Motion for Entry of Judgment
Pursuant to Fed.R.Civ.P. 68 stating that they had notified the
Municipal

Defendants

that

their

April

28th

offer

had

been

accepted. (Docket No. 366). They requested entry of judgment and
that the judgments exclude the Morales household.
Shortly thereafter, on May 10, 2011, the Court entered
the following judgment:
On April 28, 2011, co-defendants Municipality of
Barceloneta, Sol Luis Fontanes, Elsa Pérez, Silvia
Riquelme, Amid Molina Morales, Leonides González,
Esther Ruiz and Edgardo Santiago (jointly, “Municipal
Defendants”), tendered an offer of judgment pursuant
to Fed.R.Civ.Proc. 68 to all plaintiffs. (Docket No.
351). On May 5, 2011, all plaintiffs, except for
Antonia Morales, Kelvin Morales and Randy Morales,
notified the Court that they had accepted the offer
and requested the entry of judgment. (Docket No. 366).

2

  According to what the parties expressed during the Pretrial and
Settlement Conference, the Morales household’s proportional
share of the offer of judgment is $20,000.

Civil Case No. 07-1992 (JAG)

4

Pursuant to the Amended Motion for Entry of
Judgment, the Court hereby enters partial judgment
dismissing with prejudice the plaintiffs’ claims
against
the
Municipal
Defendants.
This
partial
judgment does not relate to the claims filed by
Antonia Morales, Kelvin Morales and Randy Morales
against the Municipal Defendants, which are still
pending before the Court. (Docket No. 370).

On that same day, May 10, 2011, as discussed during the
Pretrial and Settlement Conference, the Court issued an Order
with

the

purpose

of

notifying

the

Morales

household

of

the

status of the case and giving them 30 days within which they had
to either retain legal counsel or accept the offer of judgment
and request the withdrawal of their portion. (Docket No. 372).
Failure to do either within 30 days of the receipt of the Order
would entail the dismissal of their claims with prejudice. The
Court ordered the United States Marshal Service to hand deliver
a copy of the Order with a certified translation to the Spanish
language

to

the

last

know

addresses

of

Antonia

Morales

and

Kelvin Morales. Randy Morales, who was at that time believed to
be a minor, was notified through his mother, Antonia Morales.
In

that

same

Order,

the

Court,

after

stating

Plaintiffs had accepted the offer of judgment, ordered that:
The totality of the funds comprised in the offer of
judgment is to be deposited in Court pursuant to Local
Rule 67. Plaintiffs may withdraw all funds except an
amount equaling $20,000.00. Said amount is hereby
earmarked for Antonia Morales, Kelvin Morales and
Randy Morales. Id. at 2.

that

Civil Case No. 07-1992 (JAG)

5

On May 24, 2011, Plaintiffs filed a Motion for Attorney’s
fees.

(Docket

attorney’s

No.

fees,

374).
spate

a

As

a

of

result

motion

of

the

practice

request

ensued

and

for
the

Court, after having initially denied the Municipal Defendants’
request,

decided

to

hold

a

hearing

in

order

to

discuss

the

parties’ respective positions on the matter.
In essence, Plaintiffs contend that when a party accepts an
offer

of

judgment

made

pursuant

to

Rule

68,

the

Court

must

separately award costs, which, in this case, includes attorney’s
fees pursuant to 42 U.S.C. § 1988. They argue that the Municipal
Defendants’ failed to expressly mention that the amount offered
included costs and attorney’s fees. Their silence, Plaintiffs
say, created and ambiguity that should be interpreted against
them and the Court is compelled by Rule 68 and by applicable
case law, to award costs and attorney’s fees.
The Municipal Defendants, on the other hand, argue that
once the issue of the Morales household arose, all the parties,
working with the Court agreed to structure a transaction. They
aver that the judgment entered by the Court was the result of
negotiations

made

between

the

parties

and

was,

therefore,

a

garden-variety settlement offer, not a judgment entered pursuant
to

a

Rule

68.

They

specifically

contend

that

because

the

original offer of judgment was not accepted by all plaintiffs

Civil Case No. 07-1992 (JAG)

6

and, instead, a counteroffer was made, the offer of judgment
lost its validity. (Docket No. 379, p. 8).
The Court must, therefore, decide if this case involves Rule 68
or a traditional settlement offer. If it finds that it is the
former, it must then determine if costs and attorney’s fees
should be awarded.
DISCUSSION
A. Rule 68 offer of judgment or garden-variety settlement
agreement?
As a threshold matter, the Court must determine if this
case involves an offer of judgment pursuant to Rule 68 or a
garden-variety settlement offer. After a careful analysis of the
sequence of events and the parties’ filings on the record, the
Court finds that this case involves a Rule 68 offer of judgment.
Rule 68 provides in its pertinent part that:
At least 14 days before the date set for trial, a
party defending against a claim may serve upon the
adverse party an offer to allow judgment on specific
terms, with costs then accrued. If, within 14 days
after being served, the opposing party serves written
notice accepting the offer, either party may then file
the offer and notice of acceptance, plus proof of
service. The Clerk must then enter judgment.
An unaccepted offer is considered withdrawn, but it
does not preclude a later offer. […]. Fed.R.Civ.P. 68.

Civil Case No. 07-1992 (JAG)

7

“The plain purpose of this rule is to encourage settlement
and avoid litigation.” Spooner v. EEN, Inc., No. 10-2393, 2011
U.S. App. LEXIS 13650, at *18 (1st Cir. July 5, 2011)(quoting
Marek v. Chesny, 473 U.S. 1, 5 (1985)). It “allows a defendant
to make a firm, non-negotiable offer of judgment […] leaving the
plaintiff two options: either accept or reject the offer within
a

set

period.”

Id.

(quoting

Util.

Automation

2000,

Inc.

v.

Choctawhatchee Elec. Coop., Inc., 298 F.3d 1238, 1240 (11th Cir.
2002)).

By

the

terms

of

the

rule,

if

the

plaintiff

remains

silent, the offer is deemed withdrawn. Fed.R.Civ.P. 68(b).
The

rule

affords

the

party

making

the

offer

a

certain

protection by shifting costs to the opposing party when the
offer is rejected and less than the amount of the offer is
eventually recovered. Fed.R.Civ.P. 68(d). This is known as the
cost-shifting provision. However, “[a] garden-variety settlement
offer made without resort to Rule 68 affords the offeror no
similar

protection:

he

cannot

reasonably

expect

to

gain

the

benefits that Rule 68 confers. Spooner, 2011 U.S. App. LEXIS
13650 at *19 (citing Coutin v. Young & Rubicam P.R., Inc., 124
F.3d 331, 341 & n.8 (1st Cir. 1997)).
Some courts have found that when an offer of judgment is
met by a counteroffer the original offer is deemed rejected.
See, e.g., Henderson v. Sterling, Inc., No. 97-1910, 1998 U.S.

Civil Case No. 07-1992 (JAG)

8

App. LEXIS 7437, at *11 (4th Cir. April 14, 1998)(“An acceptance
must

be

offerer:
offer

unequivocal
A

and

Material

results

in

unqualified

variance
a

between

rejection

of

in

order

the

acceptance

the

to

original

bind

the

and

the

offer

and

transforms the putative acceptance into a counteroffer.”). Other
courts have found that an offer of judgment is irrevocable and a
plaintiff may still accept an original offer of judgment even if
he

or

she

made

counteroffers

that

were

rejected

by

the

defendant. See, e.g., Butlet v. Smithfield Foods, 179 F.R.D. 173
(E.D.N.C. 1998).
Regarding counteroffers, in Amati v. City of Woodstock, 176
F.3d 952 (7th Cir. 1999), the Seventh Circuit held that it is
perfectly valid for a defendant to impose a condition requiring
all plaintiffs to accept the offer of judgment. It stated, “[a]
plaintiff has no right to demand a Rule 68 offer and therefore
no right to demand that the defendant configure the offer in a
way that will assure its acceptance.” Id. at 958.
In

this

case,

as

indicated

above,

Municipal

Defendants

tendered Plaintiffs an offer of judgment “to settle all claims
of all plaintiffs” for an amount specified in the offer. (Docket
No.

351).

Subsequently,

because

Plaintiffs

were

willing

to

accept the offer of judgment except for the situation with the
Morales household, the Court and the parties devised a plan to

Civil Case No. 07-1992 (JAG)

9

afford the Morales household its due process while at the same
time allowing the parties properly before the Court to avoid
trial.

The

Municipal

Defendants’

attempt

to

characterize

the

unforeseen change in the legal scenario as a counteroffer, which
according

to

them,

is

the

equivalent

of

a

rejection,

fails

because, instead of reaffirming that their offer was all or
nothing as was perfectly valid, see Amati, supra, the Municipal
Defendants filed an informative motion stating that, “[p]ursuant
to the terms agreed to by the parties during the course of the
Settlement

Conference,

the

Defendants

reaffirm

Judgment.” (Docket No. 364)(Emphasis ours).

the

Offer

of

Clearly, they were

aware of the risk of having the Morales household later choose
to go to trial and in spite of it stood by their Rule 68 offer.
According to the Oxford English Dictionary the word “reaffirm”
means “[t]o confirm again or once more; to strengthen again” and
“[t]o affirm or assert again or once more; to maintain and stand
by (a statement, etc.) again, restate strongly.”3 The Court must
presume that they intended to use the plain meaning of the word.
That is, that they intended to assert their offer of judgment
once again. Hence, they cannot reasonably argue that they were
simply making a new and independent settlement offer outside of
Rule 68.

3

Oxford English Dictionary (3rd ed. 2008); online version June
2011. <http://www.oed.com/view/Entry/158908>; accessed August
15, 2011.

Civil Case No. 07-1992 (JAG)

10

Further proof of their intention of standing by their offer
of judgment despite the new scenario is the fact that the term
“offer of judgment” was also employed, without any objection on
their part, by the Plaintiffs in their Amended Motion for Entry
of Judgment Pursuant to Fed.R.Civ.P. 68 and more than once by
the Court in its Partial Judgment without any objection on their
part.

(Docket

Defendants

No.

object

366,

to

370).

the

order

Neither
issued

by

did

the

the

Municipal

Court

to

the

Morales household even though the Order clearly states that,
“[t]he totality of the funds comprised in the offer of judgment
is to be deposited in Court pursuant to Local Rule 67.” (Docket
No. 372)(Emphasis ours).
The Court suspects that the Municipal Defendants are simply
using

the

special

circumstances

that

arose

because

of

the

Morales household issue in an attempt to escape a situation they
did not foresee.
The Court now turns to the issue of whether the offer of
judgment included costs and attorney’s fees.
B. The Request for attorney’s fees
Plaintiffs contend that because the offer of judgment was
silent as to costs and attorney’s fees the Court must award them
both pursuant to Marek v. Chesny, 473 U.S. 1 (1985). In Marek, a
sharply divided Supreme Court decided that a Rule 68 offer of

Civil Case No. 07-1992 (JAG)

11

judgment does not have to separately itemize an amount tendered
for settlement of the substantive claim and an amount for costs
in order for it to be valid. It did, however, clarify that a
court must in any case award costs because the rule “allows
judgment to be taken against a defendant for both the damages
caused by the challenged conduct and the costs then accrued.”
Id. at 6. The Court explained that,
If an offer recites that costs are included or
specifies an amount for costs, and the plaintiff
accepts the offer, the judgment will necessarily
include costs; if the offer does not state that costs
are included and an amount for costs is not specified,
the court will be obliged by the terms of the Rule to
include in its judgment an additional amount which in
its discretion it determines to be sufficient to cover
the costs. Id. at 6 (internal citation omitted).

The Supreme Court also found that when a statute defines
attorney’s fees as “costs,” a court must also award attorney’s
fees under Rule 68. The Court stated that, “all costs properly
awardable in an action are to be considered within the scope of
Rule 68 ‘costs.’ Thus, absent congressional expressions to the
contrary,

where

the

underlying

statute

defines

‘costs’

to

include attorney’s fees, we are satisfied such fees are to be
included as costs for purposes of Rule 68.” Id. at 9. (internal
citations

omitted).

Applying

this

rationale,

the

Court

found

that attorney’s fees pursuant to 42 U.S.C. § 1988 are subject to
the cost-shifting provision of Rule 68.

Civil Case No. 07-1992 (JAG)

12

In King v. Rivas, 555 F.3d 14 (1st Cir. 2009), the First
Circuit criticized Rule 68’s effect of having to deny attorney’s
fees to a plaintiff who reasonably rejected an offer of judgment
when the jury proved to be stingier than might be expected. It
stated that, “[s]uch outcomes could be avoided if courts could
read into Rule 68 a discretionary power of the judge not to
allow costs where the result would be unfair. But Rule 68 uses
the term “must.” King v. Rivas, 555 F.3d 14 (1st Cir. 2009).
In
Coop.,

Util.
Inc.,

Circuit

Automation
298

found

regarding

F.3d

2000,

1238

Inc.

(11th

v.

Cir.

that

where

an

offer

of

attorney’s

fees,

the

ambiguity

Choctawhatchee
2002),

the

judgment
must

be

Elec.

Eleventh

is

silent

interpreted

against the drafter of the offer. There, the offer of judgment
stated

that

Forty-five

defendants
thousand

would

and

0/100

pay

to

plaintiffs

Dollars

“the

($45,000)

with

sum

of

costs

accrued.” Id. at 1339. The Eleventh Circuit, after analyzing
similar cases, found that the silence regarding attorney’s fees
created an ambiguity that had to be resolved against the drafter
of the offer because “[o]nly the offeror can ensure that the
offer clearly includes or excludes fees.” Id. at 1244. Hence, it
found that fees were not included in the $45,000 offer.
In McCain v. Detroit II Auto Finance Center, 378 F.3d 561,
563

(6th

Cir.

2004)

the

offer

of

judgment

stated,

“[the

Civil Case No. 07-1992 (JAG)

13

Defendant] offers to the Plaintiff, Rebekah MaCain, the amount
of three thousand dollars ($3,000.00), as to all claims and
causes of actions for this case.”

The Sixth Circuit found that

the offer’s silence regarding costs meant that true costs were
recoverable but that attorney’s fees were not because “none of
the statutes that McCain’s Amended Complaint sought to call into
play, and none of the common law claims that McCain sought to
advance,

treats

‘costs.’”

Id.

potentially

at

564.

Hence,

awardable
“the

attorney’s

Detroit

II

fees

as

offer--which

expressly embraced ‘all claims and causes of action for this
case’ […]--leaves no room for a post-offer effort by McCain to
collect attorney’s fees.” Id.
The courts in Util. Automation 2000 and McCain recognized,
however, that an offer that unambiguously includes attorney’s
fees will bar the party who accepts it from seeking additional
fees under costs or the relevant statute awarding attorney’s
fees to the prevailing party. Both cases cited Nordby v. Anchor
Hocking Packging Co., 199 F.3d 390 (7th Cir. 1999)(Posner, R.)
as an example.
Nordby, however, is not a clear example of an unambiguous
offer because the offer there was for “judgment in the amount of
$56,003.03 plus $1,000 in costs as one total sum as to all
counts

of

the

amended

complaint.”

Id.

at

391.

The

Seventh

Civil Case No. 07-1992 (JAG)

14

Circuit found that it did not need to decide if attorney’s fees
fell within a statutory claim included in one of the counts of
the complaint or within costs because, either way, they would
have been included in the offer of judgment. It stated, “[i]f
the fees that the plaintiff is seeking in this case are part of
the substantive relief they are covered by the part of the Rule
68 offer that refers to the judgment, and if they are part of
the costs that the plaintiff is seeking then they are covered by
the part of the offer that refers to costs.” Id. at 393.
Courts

have

responsibility

to

repeatedly
be

clear

stated

that

regarding

it

the

is

an

offeror’s

contents

of

their

offer. See, e.g., Utility Automation 2000, 298 F.3d at 1249 (“We
note, as have other courts, that defendants can easily preempt
the

dispute

exemplified

here,

as

well

as

others

by

clearly

stating their intent in the offer of judgment.”); Nordby, 199
F.3d

393

(“[T]he

prudent

defendant…

will

mention

[attorney’s

fees] explicitly”); Gavoni v. Dobbs House, Inc., 164 F.3d 1071,
1076 (7th Cir. 1999)(“a defendant should state his intentions
clearly, and any failure to do so will be at his peril”).
In the case at bar, the offer of judgment states that the
Municipal

Defendants

“hereby

offer

judgment

in

favor

of

the

Plaintiffs, for all claims, and all claims that could have been

Civil Case No. 07-1992 (JAG)

15

brought

by

all

of

the

Plaintiffs,

in

the

total

amount

of

$300,000.” (Docket No. 379, p.4).
There is no doubt that attorney’s fees in this case must be
considered costs because it was precisely in Marek that the
Supreme Court held that 42 U.S.C. § 1988 fees are costs for
purposes of Rule 68. Since the Municipal Defendants offer is
patently silent regarding costs, this Court must award both true
costs and attorney’s fees as part of the judgment. Even though
the offer is clear regarding its inclusion of “all claims and
all claims that could have been brought,” this language refers
to

Plaintiffs’

substantive

claims,

not

costs.

It

was

the

Municipal Defendants’ responsibility, as drafters of the offer,
to be clear regarding the inclusion of costs and attorney’s fees
in their offer.
CONCLUSION
Since Defendants have not yet properly opposed the request
for attorney’s fees but timely reserved their right to do so
while the Court determined the issue regarding the nature of the
judgment in this case, they are hereby ORDERED to file their
opposition to Plaintiffs motion by September 19, 2011.
Finally, it is clear from the sequence of events reflected
in the Court’s docket that at all times before and after the

Civil Case No. 07-1992 (JAG)

16

entry

of

the

Partial

Judgment

and

up

until

the

moment

when

Plaintiffs filed their motion for attorney’s fees, the Municipal
Defendants,

the

Plaintiff

and

the

Court

were

under

the

understanding that everything was being done pursuant to Rule
68.

It

is

not

until

Plaintiffs

moved

the

Court

to

grant

attorney’s fees that the Municipal Defendants came up with the
traditional
virtue

of

settlement
its

power

theory.
to

sua

It

is

sponte

therefore
mend

its

necessary,
oversights

by
and

mistakes through Fed.R, Civ.P. 60(a), that the Court correct the
Partial Judgment it entered on May 10, 2011.4 (Docket No. 370).
The amended partial judgment must state:
On April 28, 2011, co-defendants Municipality of
Barceloneta, Sol Luis Fontanes, Elsa Pérez, Silvia
Riquelme, Amid Molina Morales, Leonides González,
Esther Ruiz and Edgardo Santiago (jointly, “Municipal
Defendants”), tendered an offer of judgment pursuant
to Fed.R.Civ.Proc. 68 to all plaintiffs. (Docket No.
351). On May 5, 2011, they informed the Court that,
“[p]ursuant to the terms agreed to by the parties
during the course of the Settlement Conference, the
Defendants reaffirm the Offer of Judgment.” (Docket
No. 364). On that same date, all plaintiffs, except
for Antonia Morales, Kelvin Morales and Randy Morales,
notified the Court that they had accepted the offer
and requested the entry of judgment. (Docket No. 366).
Pursuant to the Memorandum and Order issued today
(Docket No. 395), the Court hereby enters an Amended
Partial Judgment against the Municipal Defendants for
$280,000. This partial judgment does not relate to the

4

It is noted that during the hearing held on July 8, 2011, the
undersigned expressed that the judgment should have ordered the
Municipal Defendants to deposit the amount of the offer of
judgment instead of dismissing Plaintiffs claims and that none
of the parties objected to the Court’s finding.

Civil Case No. 07-1992 (JAG)

17

claims filed by Antonia Morales, Kelvin Morales and
Randy Morales against the Municipal Defendants, which
are still pending before the Court.

IT IS SO ORDERED.

In San Juan, Puerto Rico, this 19th day of August, 2011.

S/ Jay A. Garcia-Gregory
JAY A. GARCIA-GREGORY
United States District Judge