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White v. Harvey (5/21/99), 979 P 2d 1012

     Notice:  This opinion is subject to correction before publication in
the Pacific Reporter.  Readers are requested to bring errors to the attention of
the Clerk of the Appellate Courts, 303 K Street, Anchorage, Alaska 99501, phone
(907) 264-0608, fax (907) 264-0878.


CHARLES G. WHITE,             )
                              )    Supreme Court No. S-8639
             Appellant,       )
                              )    Superior Court No.
     v.                       )    4FA-96-02847 CI
JUDITH HARVEY,                )    O P I N I O N
             Appellee.        )    [No. 5117 - May 21, 1999]

          Appeal from the Superior Court of the State of
Alaska, Fourth Judicial District, Fairbanks,
                      Mary E. Greene, Judge.

          Appearances: Clifford W. Holst, Anchorage, for
Appellant.  David F. Leonard, Fairbanks, for Appellee.

          Before:   Matthews, Chief Justice, Eastaugh,
Fabe, Bryner, and Carpeneti, Justices.  

          PER CURIAM

          The judgment is AFFIRMED for the reasons expressed in
Judge Greene's decision set forth in the appendix. [Fn. 1]
                     FOURTH JUDICIAL DISTRICT
JUDITH HARVEY,           )
          Plaintiff,     )
vs.                      )
CHARLES G. WHITE,        )
          Defendant.     )
Case No. 4FA-96-2847 CIV

                    SUMMARY DECISION AND ORDER

     Judith Harvey has moved to enforce the Offer of Judgment in
this case.  On November 12, 1997, Charles White sent a Civil Rule
68 offer of judgment to Harvey to settle the action for a judgment
in the sum of $10,000 plus costs, pre-judgment interest, and
scheduled Civil Rule 82(b)(1) attorney's fees.  Harvey accepted the
offer of judgment timely by filing it and a Notice of Acceptance on
November 20, 1997.  A final judgment was entered December 5, 1997,
effective November 20, 1997.
     The issue now before the court deals with whether White's
insurer will pay Harvey the full value of the judgment or whether
White's insurer will deduct the subrogated claim of State Farm for
approximately $4,000 paid to Harvey for past medical expenses. 
Certainly, if he had chosen to do so, White could have specifically
included the subrogated amount in the offer of judgment.  See Jaso
v. McCarthy, 923 P.2d 795, 802 (Alaska 1996); Grow v. Ruggles, 860
P.2d 1225, 1227 (Alaska 1993).  However, the offer was silent on
the issue of subrogated claims.
     In this action Harvey's insurer, State Farm, had told her not
to pursue its medical expenses.  White requested that Harvey admit
that "[she did] not represent the interests of State Farm Insurance
Company in this action."  Harvey admitted that she did not.  She
also admitted that she was not "attempting to recover as damages in
this action the amount of any medical payments paid by State Farm
Insurance Company for medical benefits arising out of the
accident."  She later supplemented her answers to qualify that she
might seek to admit evidence of the expenses paid by State Farm not
to claim them as damages, but "to inform the jury of the
circumstances of this case and of proving, among other things, the
extent of her personal injury, the likelihood of future medical
expenses, and any other damages."  
     Had Harvey not accepted the offer of judgment, and her
recovery at trial was less than the offer, she would have faced
substantial penalties.  See Alaska R. Civ. P. 68(b).  However, her
recovery at trial could not and would not include the medical
expenses paid by State Farm.  She had made a binding admission that
she did not seek those damages; that admission would have been
enforced at trial.  Since the offer was silent on the claim for
State Farm's medical expenses, claims which were not included in
the lawsuit, it would be unfair to interpret the offer to include
them.  Harvey could not use the subrogated claims to show she had
beat the Rule 68 offer at trial.
     Once an offer of judgment is served, the offeror cannot modify
the terms of the offer.  See LaPerriere v. Shrum, 721 P.2d 630,
634-35 (Alaska 1986); Rules v. Sturn, 661 P.2d 615, 619 (Alaska
1983).  White could not modify the words of the offer after it was
made; it was irrevocable for 10 days after it was made.  See id. 
Rice v. Denley, 944 P.2d 497 (Alaska 1997), does not compel a
different result.  In Rice, the subrogation claim was mentioned
when the settlement was put on the record, and more importantly,
Rice did not involve a Rule 68 offer of judgment.  Id. at 499 n.3.
     IT IS ORDERED that the Motion to Enforce is GRANTED.
     DATED this 7th day of April, 1998, at Fairbanks, Alaska.

                                               /s/ Mary E. Greene
                                             Superior Court Judge


Footnote 1:

     The decision has been edited in conformity with our court's
technical standards.