Pima County v. Hogan

In Pima County v. Hogan, 197 Ariz. 138, 3 P.3d 1058 (App. 1999), the court addressed the scope of the court's discretion to assess costs under the statute within the context of a Rule 68 offer of judgment. There, the condemnor served the property owner with a Rule 68 offer of judgment. Following a bench trial, the court awarded the property owner less than the offer of judgment. The condemnor moved for Rule 68 sanctions, specifically expert witness fees and double its taxable costs. The superior court found Rule 68 inapplicable and applied the statute. The court affirmed, after first finding that a conflict existed between the statute and the rule: Under 12-1128(A), a court has broad discretion to award costs among the parties, and therefore may, but need not, award costs to a party who rejected an offer of judgment and did no better after a trial. Rule 68, however, mandates the shifting of costs to the offeror under such circumstances and would require it here. Further, although this case does not involve an institution covered by 12-1128(C), we agree with the trial court that applying Rule 68 to condemnation cases could yield incongruous results. Given the direct conflict between the statute and rule, it appears they cannot be harmonized. Thus, we must decide which of the two applies to eminent domain proceedings. Id. at 140, 3 P.3d at 1060. The court then concluded that mandatory cost allocation under Rule 68 in a condemnation proceeding implicated a substantive, constitutional right - the right to just compensation - not just a procedural matter and therefore the rule was inapplicable. Id. at 141, 3 P.3d at 1061.