Indiana Intellectual Property Law News
Indianapolis, Indiana – Judge Richard L. Young of the Southern District of Indiana issued a decision on cross-motions for attorneys’ fees and costs in the case of Richard N. Bell (“Bell”) versus Michael Maloney (“Maloney”). The Court first entered judgment in favor of Bell on June 11, 2019 granting him $200 in statutory damages, and costs. Bell sought $33,536,25 in attorney’s fees and $4,719.80 in costs. Maloney made a cross-motion “for leave to file a Bill of Costs totaling $2,183.77 and to enforce the Rule 68 offer. The Court found that the Rule 68 offer should be enforced and Maloney is entitled to the costs he incurred after the offer was rejected.
Bell sent a demand letter to Maloney for $5,000.00 prior to filing this suit. After Bell filed suit, Maloney filed his Answer and then sent Bell an Offer of Judgment pursuant to FRCP 68. This offer was for $2,500.00 for Bell to take judgment against Maloney and would include all attorney’s fees and costs. Bell denied the Rule 68 offer and after the denial of cross-motions for summary judgment, the case went to a bench trial. After the one-day bench trial, the Court found Bell was the prevailing party and was entitled to $200 in statutory damages. Bell filed his motion for fees and costs eleven months after the bench trial occurred.
FRCP 68 provides in part, “[i]f the judgment that the offeree finally obtains is not more favorable than the unaccepted offer, the offeree must pay the costs incurred after the offer was made.” The court in Payne v. Milwaukee Cty., 288 F.3d 1021, 1024 (7th Cir. 2002), found that “Rule 68 is designed to provide a disincentive for plaintiffs from continuing to litigate a case after being presented with a reasonable offer.” In determining if a final judgment obtained is less favorable than a Rule 68 offer, “the attorney’s fees and costs that accrued before the offer must be added to the judgment.” Lawrence v. City of Philadelphia, 700 F.Supp. 832, 836 (E.D. PA. 1988).
In this case, Bell’s attorney’s fees prior to the Rule 68 offer totaled $360.00. Bell’s costs prior to the Rule 68 offer were for the filing fee and service fee totaling $417.50. Therefore, Bell’s attorney’s fees, costs, and $200 judgment, totaling $977.50, was far below Maloney’s offer of $2,500.00. Because of this, the Court found Maloney is entitled to his costs incurred after the Rule 68 offer date. Maloney’s Bill of Costs included $1,484.30 for transcript fees, $527.23 for copying costs, $147.24 for witness fees, and $25.00 for parking fees on the day of the trial totaling $2,183.77. The Court found this was a reasonable and appropriate amount of costs under federal law and as such Maloney is entitled to the full $2,183.77.
The Court noted that “Bell took a risk when he rejected Maloney’s Offer of Judgment and lost.” If Bell had accepted Maloney’s offer, he would have received approximately $1,522.50 once his costs and attorney’s fees were paid from the $2,500.00. However, because he rejected Maloney’s offer and ultimately was awarded a lesser judgment amount than the Rule 68 offer, Bell has to pay the net difference in his damages and Maloney’s costs of $1,206.27 to Maloney. Further, Bell will not receive the $38,256.05 originally sought.
The Decision was from US District Court Judge Richard L. Young on October 10, 2019.