Dearlove v. Campbell
In Dearlove v. Campbell, 301 P.3d 1230 (Alaska 2013), Campbell sued Dearlove for her damages arising from a vehicular collision. Id. at 1232. Campbell rejected Dearlove's pretrial offer of judgment of $18,000, which had required Campbell to satisfy her insurer's outstanding subrogation claim for medical expenses. Id. Dearlove's insurer subsequently paid Campbell's insurer $20,000 to satisfy the claim. Id.
Dearlove thereafter made a second offer of judgment for $5,000, which was conditioned upon Campbell satisfying all accident-related liens and expenses except the $20,000 subrogation payment Dearlove already had paid. Id. Campbell did not accept the second offer, and a jury, having been instructed to not "make an economic award for those expenses that have already been paid," awarded Campbell $3,870 in damages. Id.
The Alaska Supreme Court held that when evaluating the first offer of judgment for purposes of Rule 68, the trial court should compare the offer to the offeree's ultimate recovery--calculated by adding the previously paid subrogation payment to the amount the offeree recovered at trial. Id. at 1235.