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Mitchell v. Xu.

2021 COA 39. No. 19CA1129.  Statutory Offer of Settlement—Costs—CRS § 13-17-202.

March 25, 2021

In this personal injury case, defendant made two pretrial statutory offers of settlement, which plaintiff declined. The first proposed to settle “all claims” for $3,500 “inclusive of costs.” The second proposed to settle “all claims” for $5,000 but made no explicit reference to costs. A jury awarded plaintiff $2,700 in economic damages, and the court entered judgment.

Following trial, both parties moved for costs under CRS § 13-17-202: plaintiff claimed as a prevailing party, and defendant claimed that she was entitled to her actual costs because her second offer of settlement exceeded plaintiff’s recovery. The court examined the prejudgment interest accrued before each offer of settlement but only considered the costs incurred before the first offer, based on the lack of reference to costs in the second offer. It awarded plaintiff $829.10 in costs and $331.43 in pre- and post-judgment interest and awarded defendant $12,370.31 in costs.

On appeal, plaintiff argued that the district court misapplied the law by excluding the actual costs she incurred before the second offer. A plaintiff may be awarded actual costs only if the final judgment, which is the amount that disposes of the entire litigation, exceeds the offer of settlement. If a final judgment does not exceed the offer of settlement the defendant may recover costs. A statutory offer of settlement under CRS § 13-17-202 purporting to cover “all claims” includes actual costs predating the offer, so when evaluating an offer of judgment against trial success a “final judgment” must include the plaintiff’s actual costs accrued before the settlement offer. Here, when plaintiff’s actual costs accrued before the second settlement offer are included, her final judgment amount would be $6169.61, which exceeds the amount of defendant’s settlement offer. Accordingly, plaintiff is entitled to costs and defendant is not.

The judgment was reversed and the case was remanded for entry of judgment in plaintiff’s favor.

Official Colorado Court of Appeals proceedings can be found at the Colorado Court of Appeals website.

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