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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Dixon v. Blackwell (3/29/2013) sp-6771

Dixon v. Blackwell (3/29/2013) sp-6771

        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, email 

        corrections@appellate.courts.state.ak.us. 



                THE SUPREME COURT OF THE STATE OF ALASKA 



DIXIE D. DIXON,                               ) 

                                              )       Supreme Court No. S-14313 

                 Appellant,                   ) 

                                              )       Superior Court No. 3AN-07-10604 CI 

        v.                                    ) 

                                              )       O P I N I O N 

JOSHUA PAUL BLACKWELL,                        ) 

                                              )       No. 6771 – March 29, 2013 

                 Appellee.                    ) 

                                              ) 



               Appeal from the Superior Court of the State of Alaska, Third 

               Judicial District, Anchorage, Patrick J. McKay, Judge. 



               Appearances:  William H. Ingaldson, Ingaldson, Maassen & 

               Fitzgerald, P.C., Anchorage, for Appellant. Jimmy E. White, 

               Hughes       Gorski    Seedorf     Odsen    &    Tervooren,     LLC, 

               Anchorage, for Appellee. 



               Before:      Carpeneti,    Chief    Justice,  Fabe,   Winfree,    and 

                Stowers, Justices, and Matthews, Senior Justice.* 



               MATTHEWS, Senior Justice. 

               WINFREE, Justice, concurring. 



I.      INTRODUCTION 



               Dixie Dixon was injured in an automobile accident when a car driven by 



Joshua Paul Blackwell ran a red light.       She sued and received a verdict that was lower 



        *       Sitting   by   assignment   made   under   article   IV,   section   11   of   the   Alaska 



Constitution and Alaska Administrative Rule 23(a). 


----------------------- Page 2-----------------------

than Blackwell’s Alaska Civil Rule 68 offer of judgment.  On appeal she challenges the 



adequacy of the verdict and the efficacy of the offer of judgment.       We affirm. 



II.    FACTS AND PROCEEDINGS 



       A.      Facts 



               Dixon was injured in an accident on February 14, 2006, as a result of being 



hit by a car driven by Blackwell.     Blackwell admitted liability for the accident.    Dixon 



received medical treatment for various ailments for several years after the accident.  She 



ultimately claimed that nearly $200,000 of her medical expenses were related to the 



accident. 



               Dixon    had  auto  insurance   through    State  Farm   and  had  other   health 



insurance through Premera Blue Cross Blue Shield of Alaska and   Alaska Laborer’s 



Trust.  Dixon’s State Farm policy had medical payments coverage of $100,000, under 



which State Farm paid $29,699.24 of her medical expenses.  State Farm decided that her 



other medical expenses were unrelated to the accident and did not pay them. 



               Dixon    requested   arbitration  with  State  Farm,  claiming   that   her  other 



medical expenses were covered.         Dixon and two doctors who performed independent 



medical exams on her were deposed in connection with the arbitration.  State Farm also 



provided automobile liability insurance for Blackwell.  State Farm’s medical payments 



adjuster on the Dixon policy wrote to State Farm’s liability adjuster on the Blackwell 



policy on August 1, 2007, requesting reimbursement of the $29,699.24 paid in medical 



expenses that State Farm had determined were related to the accident. 



       B.      Proceedings 



               Dixon    filed  a  complaint  against  Blackwell    on  October   9,  2007,  and 



withdrew the request for arbitration with State Farm. The same attorney who represented 



State Farm in the arbitration represented Blackwell in the superior court. 



                                              -2-                                         6771
 


----------------------- Page 3-----------------------

                In   his   answer   to   the   complaint,   Blackwell   asserted   that   Dixon   was   not 



entitled to seek medical expenses that had been paid by her insurer to the extent that the 



insurer had instructed her not to seek recovery of those expenses in the lawsuit.                  Two 



days after filing the answer, November 29, 2007, he served an offer of judgment that 



provided: 



                Defendant Joshua Paul Blackwell, pursuant to Civil Rule 68, 

                hereby offers to allow entry of judgment in favor of Plaintiff 

                Dixie D. Dixon in this action for a total sum of TWENTY­ 

                EIGHT       THOUSAND           EIGHT      HUNDRED         SEVENTY­ 

                EIGHT        DOLLARS          AND      EIGHTY-THREE             CENTS 

                ($28,878.83), plus Civil Rule 79 costs, pre-judgment interest 

                as of the date of this offer, and Civil Rule 82(b)(1) attorney 

                fees.    In addition, Defendant will assume responsibility for 

                the   State   Farm   Medical   Payments   lien     arising   from   Ms. 

                Dixon’s      post-accident     treatment.    Plaintiff    will  assume 

                responsibility   for   any   and   all   liens   relating   to   the   subject 

                accident other than the aforementioned State Farm Medical 

                Payments   lien.      This   offer   of   judgment   will   result   in   the 

                dismissal of this action with prejudice.           This is an offer of 

                compromise only, and is not to be construed as an admission. 



Dixon did not accept the offer. 



                Trial was held in January of 2011.         At trial, the jury heard testimony and 



viewed depositions from numerous physicians.               Dr. John Duddy testified that the knee 



injuries   Dixon   had   sustained   in   the   accident   had   cleared   up   as   of   an   MRI   taken   on 



July 12, 2006.      Dixon presented evidence of medical expenses totaling $196,208.72, 



including the medical expenses that had been paid by State Farm under her Medical 



Payments coverage. 



                In his closing statement, Blackwell’s attorney stated: 



                Ms. Dixon had the bruise on her knee and Ms. Dixon had the 

                cervical issue, the minor cervical strain, and the aggravation 

                of her interstitial cystitis and [Blackwell]’s here to tell you 



                                                  -3-                                             6771
 


----------------------- Page 4-----------------------

                 my fault, okay.       Do what’s right with regard to the injuries 

                 she   sustained   in   the   accident,   but   that’s   all. Past   medical 

                 expenses.     Here’s the chart that Mr. Ingaldson showed you. 

                 There’s     the   first  page.    It  shows     that  she’s   got   almost 

                 $200,000 in medical expenses. 



He   then   listed   a   series   of   medical   expenses   that   occurred   between   the   accident   and 



July 12, 2006, the point when, Dr. Duddy testified, Dixon’s MRI showed no lingering 



effects from the accident.        Blackwell’s attorney compared the total of these expenses, 



$17,955, to the amount Dixon was requesting, nearly $200,000. Dixon claims that in this 



portion   of   the   closing   statement,   Blackwell’s   attorney   conceded   that   the   $17,955   in 



expenses were related to the accident.            Blackwell claims that this figure was quoted to 



illustrate the large gap between what Dixon claimed and the maximum of what could 



have been related to the accident. 



                 The jury returned a verdict for Dixon, awarding $12,710 in past medical 



expenses and $4,000 in past non-economic loss. Blackwell moved for the entry of a final 



judgment   and   asked   for   attorney’s   fees   pursuant   to   Civil   Rule   68.   Dixon   opposed, 



claiming that the offer was indefinite and conditional, that she had beaten the offer, and 



that   the   offer   was   unreasonable   because   it   was   made   before   the   exchange   of   initial 



disclosures.      The   superior   court   granted   the   motion   and   entered   an   order   awarding 



Blackwell $79,459.87 in attorney’s fees. 



                 Dixon appeals, arguing:  (1) that the jury’s verdict was inadequate; (2) that 



the November 29, 2007 offer was procedurally defective, invalid, and unenforceable; and 



(3) that she beat the offer. 



                                                     -4-                                               6771
 


----------------------- Page 5-----------------------

III.     STANDARD OF REVIEW
 



                “An offer of judgment’s compliance with Rule 68 is a question of law 

which we review independently.”1            “Calculation of the value of a verdict to determine 



if   it   exceeded   an   offer   of   judgment   presents   questions   of   law,   which   we   review   de 

novo.”2    “The adequacy of evidence supporting [a] jury’s award is a mixed question of 



law and fact.”3    In reviewing a jury’s verdict, this court reviews the evidence in the light 



most   favorable   to   the   prevailing   party   and   evaluates   de   novo   the   legal   question   of 

whether the evidence is sufficient to support the jury’s award.4 



IV.      DISCUSSION 



        A.       The Jury’s Verdict Was Adequate. 



                “The question of whether damages are inadequate . . . is in the first instance 



committed to the discretion of the trial judge and should be raised on a motion for a new 

trial.”5 We reverse the denial of a motion for new trial on verdict inadequacy grounds 



only   when   there   is   no   reasonable   evidentiary   basis   for   the   jury’s   award.6 Where   a 



        1       Thomann v. Fouse, 93 P.3d 1048, 1050 (Alaska 2004). 



        2       Power Constructors, Inc. v. Taylor & Hintze , 960 P.2d   20, 34 (Alaska 



1998). 



        3       Central   Bering   Sea   Fishermen’s   Ass’n   v.   Anderson,   54   P.3d   271,   277 



(Alaska 2002). 



        4       Id . 



        5       Heacock v. Town , 419 P.2d 622, 623 (Alaska 1966) (citations omitted). 



        6       Hutchins v. Schwartz , 724 P.2d 1194, 1199 (Alaska 1986): 



                If there is an evidentiary basis for the jury’s decision, then the 

                denial of a motion for a new trial must be affirmed.              If the 

                evidence is so slight and unconvincing as to make the verdict 

                                                                                         (continued...) 



                                                   -5-                                             6771
 


----------------------- Page 6-----------------------

challenge to the amount of damages has not been raised in the trial court, “we may refuse 

to review the issue or we may, in our discretion, review the award.”7              If we choose to 



review, we examine whether “damages awarded appellant were so grossly inadequate 

as to amount to a miscarriage of justice.”8       Dixon did not challenge the adequacy of the 



jury’s verdict or move for a new trial in the superior court. 



                Dixon argues that Blackwell conceded in his closing argument that at least 



$17,955 in medical expenses were related to the accident.   She contends that this aspect 



of his closing argument was a binding judicial admission. Because the jury only awarded 



$12,710 in medical expenses, Dixon argues that the verdict was necessarily inadequate 



and that a new trial is required. 



                In Hayes v. Xerox Corporation , we stated:          “A judicial admission, to be 

binding, must be one of fact and not a conclusion of law or an expression of opinion.”9 



It must be “clear, deliberate, and unequivocal.”10          In Xerox , in the closing argument, 



Xerox’s counsel stated: “I think he’s been significantly injured.            I think he has injury 

now.    I   think it may need treatment.       We don’t know for sure.”11         Xerox’s counsel 



        6(...continued) 



                unreasonable and unjust, then we must reverse the denial of 

                the motion for new trial. 



        7       Murray v. Feight , 741 P.2d 1148, 1160 (Alaska 1987) (citing Heacock , 724 



P.2d at   624). 



        8       Heacock , 724 P.2d at 624. 



        9       718 P.2d 929, 931 (Alaska 1986). 



        10      Id. at 933. 



        11      Id . at 932. 



                                                 -6-                                           6771
 


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conceded   that   lost   wages   were   “reasonably   certain   to   be   incurred.”12       Counsel   then 



estimated how much he felt the jury could award on each claim, and came out to a total 

of $69,000 to $70,000.13          This court held that because Xerox’s counsel couched his 



language      as  estimates     and   opinions    and    included    the  phrase    “I  think”    before   his 



statements, they were not clear, deliberate, and unequivocal statements of fact and were 

not judicial admissions.14 



                 In this case, Blackwell’s counsel’s statement was, in context, not a “clear, 

deliberate,   and   unequivocal”   statement   that   could   be   a   judicial   admission.15        In   his 



closing, Blackwell’s attorney argued that one of Dixon’s doctors noted that any objective 



evidence of injury was gone six months after the accident.                   He then added up all of the 



expenses that occurred within that six-month window, noting that some of them were 



probably not related to the accident. Finally, Blackwell’s attorney compared the total of 



those six months of expenses, $17,955, to the nearly $200,000 that Dixon was asking for. 



Taken   in   context,   Blackwell’s   closing   was   not   a   judicial   admission   that   Dixon   had 



incurred $17,955 of medical expenses related to the accident. 



                 Because there was no judicial admission that Dixon’s medical expenses 



caused by the accident exceeded the amount awarded, Dixon has not established that the 



award was so inadequate as to amount to a miscarriage of justice. 



         12      Id . 



         13      Id . 



         14      Id. at 932-33. 



         15      See id . at 933. 



                                                     -7-                                                6771
 


----------------------- Page 8-----------------------

        B.      The Offer Was Valid 



                1.      The offer was not premature. 



                Dixon argues that the November 29, 2007 offer was procedurally defective 



because it was served only two days after an answer to the complaint was filed and 



before either side had a chance for discovery.          She interprets Rule 68’s reference to an 



offer made “any time more than 10 days before the trial” as establishing only the last, 



and not the earliest, point at which an offer may be made.   She argues that the language 



of Rule 68, with its reference to “costs then accrued” at the time of the offer, implies that 



the defendant will have accrued some costs by the time a valid offer can be made, which 



will not be the case at the time the answer is filed.   Dixon also argues that an offer served 



shortly after the answer and before initial disclosures does not serve the intent of Rule 



68, which is to encourage reasonable settlement practices.             She claims that the purpose 



of the offer was merely strategic; it was designed to shift the burden of the litigation costs 



to Dixon. 



                Rule 68(a) states that an offer may be made “[a]t any time more than 10 

days before the trial begins.”16  In Cook Schuhmann & Groseclose, Inc. v. Brown & Root, 



Inc. , we addressed the issue of whether there is a limit on how early a Rule 68 offer may 

be made.17    Cook argued that a Rule 68 offer was made prematurely because it was made 



before Rule 26 disclosures had been exchanged.18               We held that a party can make an 



offer “at any time” more than 10 days before the trial begins.19 



                In Cook we evaluated the following legislative history of Rule 68: 



        16      Alaska R. Civ. P. 68(a). 



        17      116 P.3d 592, 597-99 (Alaska 2005). 



        18      Id. at 598. 



        19      Id . 



                                                  -8-                                             6771
 


----------------------- Page 9-----------------------

                 [W]hat we’re saying is that if this offer is made within a short 

                 period of time, from the ability that you would have after a 

                 case is   filed to get discovery, so you kind of know where 

                 you’re at, if a short period of time after that the offer is made, 

                 60 days after that, and you don’t accept it, and when you 

                 finally go to trial, the offer is within 5 percent of — less than 

                 what     you   would    have    settled  for,  you’ve     got  to  pay   all 

                 reasonable actual attorney’s fees and costs, from the time the 

                 offer was made . . . .[20] 



We held that while this history indicates that offers were allowable after Civil Rule 26 



disclosures,   it   did   not   indicate   that   offers   were  not   allowable  before  Civil   Rule   26 

disclosures.21 



                 We have held that some Rule 68 offers are not valid, based on their timing 



and amount, because they do not serve the intent of Rule 68.                    In Anderson v. Alyeska 



Pipeline Service Co. , we held that a ten-dollar offer made at the outset of litigation was 



not   valid   under   Rule   68   because   it   had   no   prospect   of   acceptance   or   of   furthering 

settlement negotiations, but was simply an attempt to shift the costs of litigation.22                     In 



Beal v. McGuire , one-dollar offers were similarly held to be invalid and merely efforts 

to benefit from the enhanced fees provision of Rule 68.23              In both cases we noted that the 



invalidated offers did not advance the legitimate purposes of Rule 68 and thus could not 

serve as a basis for an award of enhanced fees.24 



        20       Id . at 599 (quoting H. Jud. Comm. notes, 20th Leg., 1st Sess (Feb. 21, 



1997)). 



         21      Id . 



         22      234 P.3d 1282, 1289-90 (Alaska 2010). 



         23      216 P.3d 1154, 1178 (Alaska 2009). 



         24      Anderson ,   234   P.3d   at   1290; Beal ,   216   P.3d   at   1178   (“Even   though   a 



                                                                                            (continued...) 



                                                     -9-                                               6771
 


----------------------- Page 10-----------------------

              The language of Rule 68 does not indicate any intent to disallow offers 



made    before   initial  disclosures. We    see  no  reason  to  overturn Cook.    Further, 



Blackwell’s offer was for $28,878.83, and the jury ultimately awarded only $16,710. 



Unlike in Anderson and Beal , it cannot be said that the offer, viewed objectively, had no 



prospect of acceptance or of furthering settlement negotiations or that it was merely a 



tactical effort to shift fees. Further, even though the offer was made only a few days after 



Blackwell filed his answer, State Farm, which was directing Blackwell’s defense, and 



Dixon had been litigating the critical causation issue for some months in arbitration 



proceedings.    In the arbitration, as previously noted, Dixon and two doctors had been 



deposed and much documentary information had been exchanged.  Therefore the timing 



of the offer does not raise suspicions concerning the legitimacy of its purpose. 



              2.	    Blackwell’s offer allowed for entry of judgment and was not 

                      contingent. 



              Dixon argues that because Blackwell’s offer would have resulted in the 



dismissal of her case with prejudice, the offer was not a valid Rule 68 offer. 



              Rule 68 states that “the party defending against a claim may serve upon the 



adverse party an offer to allow judgment to be entered in complete satisfaction of the 

claim for the money or property or to the effect specified in the offer.”25   We have held 



that valid Rule 68 offers must allow for judgment to be entered.26   In Sayer v. Bashaw, 



a physician had offered a money settlement that did not allow for judgment to be entered 



       24(...continued) 



purpose of Rule 68 is to encourage settlement and avoid protracted litigation, offers of 

judgment made without any chance or expectation of eliciting acceptance or negotiation 

do not accomplish the purposes behind the rule.”). 



       25     Alaska R. Civ. P. 68(a). 



       26     Sayer v. Bashaw, 214 P.3d 363, 366 (Alaska 2009). 



                                            -10-	                                      6771
 


----------------------- Page 11-----------------------

against   him.27     Had   judgment   been   entered,   the   physician   would   have   faced   higher 



malpractice   insurance   rates   and   feared   damage   to   his   reputation.28         We   noted   that 



California courts had interpreted a similar rule as not requiring entry of judgment, but we 

rejected this interpretation.29      Instead, we held that to be valid a Rule 68 offer must allow 



for judgment to be entered.30 



                 We also held an offer invalid   under Rule 68 in ASRC Energy Services 

Power and Communications, LLC v. Golden Valley Electric Association, Inc.31                           In that 



case “[Golden Valley Electric Association] made an offer ‘to allow entry of Judgment 



in favor of [ASRC] for Seven Hundred and Fifty Thousand Dollars ($750,000.00) . . . 

contingent on the [consolidated lawsuits] being dismissed with prejudice.’ ”32                    We noted 



that “[i]n its brief [Golden Valley Electric Association] described its offer as an offer to 

pay   [ASRC]   in   return   for   a   dismissal   of   the   litigation   with   prejudice.”33    We   also 



described the superior court’s characterization of the offer as “an offer to pay, not an 

offer of judgment.”34 



                 The November 29, 2007 offer stated, in relevant part:  “Defendant Joshua 



Paul Blackwell, pursuant to Civil Rule 68, hereby offers to allow entry of judgment in 



        27       Id . at 364-66. 



        28       Id . at 365. 



        29       Id . at 365 n.13, 366. 



        30       Id. at 366. 



        31       267 P.3d 1151, 1168-69 (Alaska 2011). 



        32       Id. at 1168. 



        33       Id. 



        34       Id . 



                                                     -11-                                               6771
 


----------------------- Page 12-----------------------

favor of Plaintiff Dixie D. Dixon in this action for a total sum of [$28,878.83] . . . .  This 



offer of judgment will result in the dismissal of this action with prejudice.”     This offer 



explicitly called for the entry of judgment.    Unlike the offer in ASRC , the offer was not 



contingent on the dismissal of the action with prejudice and was not construed by the 



trial court or the offeror as a mere offer to pay in return for dismissal of the suit with 



prejudice.   We read the statement “[t]his offer of judgment will result in the dismissal of 



this action with prejudice” as an inartful statement of consequences rather than of a 



contingency.  The language merely meant that entry of judgment would terminate all of 



Dixon’s claims against Blackwell. 



               Because the offer allowed for entry of judgment and was not contingent, 



the language in the offer regarding dismissal with prejudice did not prevent it from being 

a valid Rule 68 offer.35 



               3.     The offer did not require Dixon to assume improper obligations. 



               Dixon claims that the offer sought to   impose burdens on her that were 



beyond the scope of the pleadings.   She argues that the offer improperly required her to 



potentially face at least $75,000 in claims from her other insurers.  She also argues that 



the offer would require   her to waive over $70,000 in State Farm Medical Payments 



coverage. 



               The    November     29,  2007   offer  specified:  “Defendant     will  assume 



responsibility for the State Farm Medical Payments lien arising from Ms. Dixon’s post­ 



       35      While    we   find  Dixon’s    argument    unpersuasive    on   the  merits, we 



additionally conclude that Dixon waived this issue by failing to raise it in the superior 

court.   “We will not consider issues on appeal that were not raised [in the trial court] 

absent plain error, which exists ‘where an obvious mistake has been made which creates 

a high likelihood that injustice has resulted.’ ”  David S. v. State, Dept. of Health & Soc. 

Servs., 270 P.3d 767, 774 (Alaska 2012) (quoting D.J. v. P.C. , 36 P.3d 663, 667-68 

(Alaska 2001)). 



                                             -12-                                        6771
 


----------------------- Page 13-----------------------

accident treatment.     Plaintiff will assume responsibility for any and all liens relating to 



the subject accident other than the aforementioned State Farm Medical Payments lien.” 



                Dixon’s non-State Farm medical insurers might have asserted that they 



were owed reimbursement out of the cash portion of Blackwell’s offer. However, unless 



the insurers had specifically instructed Dixon not to seek to recover medical expenses 

that   they   had   paid36  or   unless   they   were   parties   to   the   suit   against   Blackwell   and 



instructed her not to settle, Dixon would not have been put in a position in which she 



would have had to reach into her own pocket and pay back medical expenses to her 



insurers.   Dixon does not claim that either of these conditions was met. 



                It was not improper for the offer to emphasize that it would only satisfy the 



State Farm Medical Payments lien, and that Dixon would be responsible for other liens. 



If the offer had referred to claims, rather than liens, a different case would be presented. 



Arguably “claims” language would have made Dixon the indemnitor of Blackwell and 



State Farm as to any amounts asserted by her other medical insurers in excess of the 



amount of the offer of judgment. But stating that Dixon would be responsible for “liens” 



simply underscored what the law already provided.                 Dixon could be responsible for 



payment of her medical providers’ liens out of the proceeds she received from the offer 

of judgment less prorated costs and fees.37 



                As to Dixon’s argument that the offer if accepted would have resulted in 



a waiver on her part of her remaining $70,000 in medical payments coverage from State 



Farm, we see no impropriety.   Immediately after bringing suit against Blackwell, Dixon 



withdrew her arbitration request for the remaining $70,000.                 This withdrawal either 



        36      See Ruggles ex rel. Estate of M ayer v. Grow, 984 P.2d 509, 512 (Alaska 



1999). 



        37      See id . 



                                                  -13­                                              6771 


----------------------- Page 14-----------------------

waived   her   remaining   medical   payments   claim   in   itself   or   it   made   the   question   of 



whether     she   was   owed    an   additional   amount     on   her  medical    payments     coverage 



dependent on the outcome of the litigation.             Either way, the acceptance of the offer 



would not have required Dixon to give up a benefit that was extraneous to the litigation. 



                4.      The offer was not made in bad faith. 



                Dixon also argues that the offer was not made in good faith because “the 



offer implied that Dixon’s lawsuit encompassed State Farm’s subrogated claim.”  She 



argues that because State Farm had instructed Dixon not to pursue reimbursement for the 



$29,699.24 that State Farm had paid in her suit against Blackwell, and since State Farm’s 



reimbursement claim as medical payments insurer for Dixon had already been presented 



to State Farm in its capacity as Blackwell’s liability insurer, the implication in the offer 



that the lawsuit encompassed the subrogated claim was necessarily false.                    It follows, 



Dixon argues, that the offer was “deceptive on its face” and should for this reason be 



deemed invalid for the purpose of triggering enhanced fees. 



                Dixon correctly suggests that State Farm had the right to instruct Dixon not 



to pursue State Farm’s Medical Payments claim against Blackwell, and that once such 

instructions were given Dixon lacked authority to pursue that claim.38               But we fail to see 



        38      As we stated in Ruggles : 



                When an insurer pays expenses on behalf of an insured it is 

                subrogated to the insured’s claim.            The   insurer effectively 

                receives an assignment of its expenditure by operation of law 

                and contract.     If the insurer does not object, the insured may 

                include the subrogated claim in its claim against a third-party 

                tortfeasor.    Any   proceeds   recovered   must   be   paid   to   the 

                insurer, less pro rata costs and fees incurred by the insured in 

                prosecuting   and   collecting   the   claim.    But   the   subrogated 

                claim belongs to the insurer.   The insurer may pursue a direct 

                                                                                         (continued...) 



                                                  -14-                                             6771
 


----------------------- Page 15-----------------------

how the offer of judgment was in any sense deceptive when it stated that the defendant 



would assume responsibility for the State Farm Medical Payments lien.  This statement 



simply clarified that the intent of the offer was that it would be a “new money offer” in 

the sense that there would be no offset for the State Farm Medical Payments lien.39                     As 



such, the questioned language of the offer was neither deceptive nor made in bad faith.40 



                 Because the offer was not premature, called for the entry of judgment, 



imposed no improper obligations on Dixon, and was not made in bad faith, the offer was 

valid.41 



        38(...continued) 



                 action against the tortfeasor, discount and settle its claim, or 

                 determine that the claim should not be pursued . . . .            When 

                 [the   insurer]    instructed    [the   insured]    not   to  pursue    its 

                 subrogation claim, [the insured] lacked authority to pursue it. 

                 [The defendant tortfeasor] was entitled to raise this lack of 

                 authority, for it represented a legitimate partial defense to [the 

                 insured’s] claim. 



Id . 



        39       We used the term “new money” in Jackman v. Jewel Lake Villa , 170 P.3d 



173, 177 (Alaska 2007) to refer to an offer that would not be subject to an offset for 

payments already made for the benefit of the insured. 



        40       Further, Dixon’s argument that the offer was deceptive because it implied 



that her claim encompassed State Farm’s claim rings false for another reason.  It appears 

that Dixon actually did present the medical bills that State Farm had paid to the jury as 

part of her claim for damages. 



        41       Dixon makes other claims related to the validity of the offer which we 



decide summarily.  She argues that the offer was indefinite because the value of the State 

Farm Medical Payments lien was unclear.                 However, since Dixon had withdrawn the 

arbitration claim against State Farm, the lien would have remained at $29,966.24 if she 

had accepted the offer.  Dixon also argues that the offer was not in complete satisfaction 

of her potential claims.        She contends that the only way the offer could have been a 

                                                                                           (continued...) 



                                                   -15-                                              6771
 


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        C.      Dixon Did Not Beat The Offer. 



                Dixon claims that the jury’s verdict was actually more than the offer when 



the “liens” that she would have had to assume responsibility for, totaling at least $75,000, 



are taken into account.      She also claims that accepting the offer would have amounted 



to waiving her remaining $70,000 State Farm Medical Payments coverage.                         Since the 



offer was for $28,878.83, she argues, the net amount of the offer was actually negative 



($28,878.83 - $70,000 - $75,000).           Because the jury gave her a positive amount, she 



argues that the verdict beat this negative offer. 



                Rule 68(b) states:   “If the judgment finally rendered by the court is at least 



5 percent less favorable to the offeree than the offer, . . . the offeree . . . shall pay all costs 



as allowed under the Civil Rules and shall pay reasonable actual attorney’s fees incurred 

by the offeror . . . .”42 



                Dixon’s method of accounting is logically untenable.   Dixon did not have 



to assume responsibility for $75,000 in liens of other medical providers.  As explained 



above, the liens of medical providers were liens only against her recovery less prorated 



costs and fees.     Further, the value of her waiver of the remaining $70,000 in medical 



payments coverage was not $70,000.              As the jury determined, she had no additional 



claim against that coverage.         Thus there is no basis to subtract either of the claimed 



amounts from the amount of the offer of judgment. 



        41(...continued) 



complete satisfaction of her claims was if Blue Cross Blue Shield and Alaska Laborer’s 

Trust had agreed to give up their option to sue Blackwell or his insurer.   But the fact that 

the other insurers   could   have had claims against Blackwell that were not barred by 

Dixon’s   acceptance   of   the   offer   does   not   mean   that   the   offer   was   not   in   complete 

satisfaction of her claims. 



        42      Alaska R. Civ. P. 68(b). 



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              Because Dixon’s recovery was at least five percent less favorable than 



Blackwell’s offer, she did not beat the offer for Rule 68 purposes. 



V.     CONCLUSION 



              Because the jury’s verdict was not inadequate, the offer Blackwell made 



was a valid Rule 68 offer, and the judgment finally rendered by the court was at least five 



percent less favorable to Dixon than the offer, we AFFIRM the judgment of the superior 



court. 



                                            -17-                                      6771
 


----------------------- Page 18-----------------------

WINFREE, Justice, concurring. 



                I respectfully disagree with the court’s conclusion that Joshua Blackwell’s 



Rule 68 Offer of Judgment was an offer to allow entry of judgment rather than an offer 



to pay money in exchange for dismissal.   But because the court alternatively concludes 



that Dixie Dixon waived this argument by failing to raise it to the superior court, and I 



agree with that conclusion, I concur in the ultimate decision by the court. 



                It is clear from the record that Dixon did not argue to the superior court that 



Blackwell’s offer of judgment was an offer to pay rather than an offer to allow entry of 

judgment. 1   The “indefinite and conditional” argument Dixon raised to the superior court 



related   to   statements   in   the   offer   of   judgment   about   resolution   of   potential   liens   on 



Dixon’s recovery.   The first time Dixon argued that Blackwell’s offer of judgment was 



ambiguous regarding an entry of judgment or payment and dismissal was in her opening 

appellate brief.    Dixon therefore did not preserve this issue for appeal,2 and that should 



be enough to resolve this issue, as the court expressly states.3 



                But because the court nonetheless addresses the merits of the issue, I will 



set out the nature of my disagreement.  An offer of judgment that includes language for 



        1       See ASRC Energy Servs. & Power Commc’n, LLC v. Golden Valley Elec. 



Ass’n , 267 P.3d 1151, 1168-69 (Alaska 2011) (holding invalid an offer of judgment that 

was ambiguous as to payment for dismissal or entry of judgment); Sayer v. Bashaw, 214 

P.3d 363, 366 (Alaska 2009) (holding invalid Rule 68 offer to pay settlement amount in 

return for dismissal). 



        2       “We will not consider issues on appeal that were not raised [in the trial 



court] absent plain error, which exists ‘where an obvious mistake has been made which 

creates a high likelihood that injustice has resulted.’ ” David S. v. State, Dep’t of Health 

& Soc. Servs., 270 P.3d 767, 774 (Alaska 2012) (quoting D.J. v. P.C. , 36 P.3d 663, 667­ 

68 (Alaska 2001)). 



        3       Slip Op. note 35. 



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the entry of judgment in exchange for dismissal is, as noted in ASRC Energy Services & 



Power Communications, LLC v. Golden Valley Electric Ass’n , ambiguous at best and an 

offer to pay at worst, and therefore unenforceable.4        In my view we should draw a bright- 



line rule on this point.  Moreover, contrary to the court’s discussion today, Blackwell’s 



superior court briefing and the superior court’s order both support the conclusion that 



Blackwell’s offer actually was an offer to pay, not an offer to allow entry of judgment. 



When arguing whether the offer of judgment language about liens was vague, indefinite, 



or conditional, Blackwell stated: 



                [Blackwell] offered to pay Ms. Dixon $28,878.83, plus Rule 

                79 costs, prejudgment interest, Rule 82 attorney fees, and to 

                assume responsibility for the State Farm Medical Payments 

                lien, the amount of which has been disclosed and discussed 

                at length in the medical payments arbitration process over the 

                prior year.   That was the offer, plain and simple. 



The superior court’s order awarding Rule 68 attorney’s fees stated: 



                Mindful of the case law cited by the parties, the court finds 

                the   offer  of  judgment     sufficiently   clear  and   enforceable 

                without   conditions.     State   Farm   was   going   to   pay   to   Ms. 

                Dixon,     on   behalf   of  .  .  .  Mr.  Blackwell,     the  sum    of 

                $28,878.83, plus ARCP 82 attorneys fees, plus interest, plus 

                allowable costs,   and State Farm would additionally eat its 

                own med pay lien . . . . 



                It  is  apparent   that  both   Blackwell    and   the  superior   court   considered 



Blackwell’s Rule 68 offer to be an offer to pay in return for a dismissal, not an offer to 



allow entry of judgment.       But because this specific issue was not raised to the superior 



court and our ASRC Energy Services decision had not yet been issued, I cannot conclude 



        4       ASRC Energy Servs. , 267 P.3d at 1168-69. 



                                                 -19-                                              6771 


----------------------- Page 20-----------------------

that it was plain error for the superior court to enforce the offer as an offer to allow entry 

of judgment.5 



       5       See note 2, supra . 



                                              -20-                                         6771 

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