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Flowers v. SteerPoint Marketing, LLC

United States District Court, S.D. Indiana, Indianapolis Division

September 3, 2019

JOSEPH D FLOWERS, II, Plaintiff,
v.
STEERPOINT MARKETING, LLC, JOHN SLIMAK, Defendants.

          ORDER

          Doris L. Pryor United States Magistrate Judge

         This matter comes before the Court on the Defendants' Verified Motion for Relief from Judgment (Dkt. 69). The Plaintiff filed a response on June 3, 2019. The Motion was referred to the Undersigned for ruling and, for the reasons set forth below, is hereby DENIED.

         I. Background

         Mr. Flowers's Complaint alleges that Defendants, SteerPoint Marketing, LLC and John Slimak (“SteerPoint”) failed to pay him overtime wages pursuant to the Fair Labor Standards Act (“FLSA”), Indiana's Minimum Wage Statute, and Indiana's Wage Claims Statute. [Dkt. 1.] The parties participated in a settlement conference on December 28, 2018, which was unsuccessful. [Dkt. 44.] After the settlement conference, the parties conducted further discovery and continued to discuss settlement options. [Dkt. 57 ¶¶ 2-4.] On April 1, 2019, SteerPoint submitted a written settlement offer to Mr. Flowers, via email, of $25, 000. [Dkt. 57 ¶ 4.] The written offer captioned “Defendants' Offer of Judgment” and signed by defense counsel, states in full:

Pursuant to Federal Rule of Civil Procedure 68, Defendants SteerPoint Marketing, LLC and John Slimak, by counsel, hereby offer to allow the Plaintiff to take a judgment against them in the amount of Twenty-five Thousand Dollars ($25, 000.00).

(“April 1 Offer”) [Dkt. 57-2.]

         After receiving the April 1 offer, Mr. Flowers's counsel emailed SteerPoint's counsel to discuss the terms. The parties' respective counsel had a telephonic conversation on April 3, 2019, wherein SteerPoint's counsel indicated that the April 1 Offer was intended to include all costs, expenses, and attorney fees. Mr. Flowers's counsel responded that he believed Rule 68 allowed Mr. Flowers to recover attorney fees in addition to the $25, 000 Offer of Judgment. [See Dkt. 57-3.]

         Immediately after the April 3, 2019 phone conversation at 3:52 p.m., SteerPoint's counsel emailed Mr. Flowers's counsel to confirm their position that the April 1 Offer was intended to be inclusive of all costs, expenses, and attorney fees. [Dkt. 57-3.] Five minutes later at 3:57 p.m., SteerPoint's counsel emailed to Mr. Flowers's counsel “Defendants' Amended Offer of Judgment” that offered Mr. Flowers $25, 000 and expressly stated the offer included attorney fees, costs and all expenses (“April 3 Offer”). [Dkt. 57 at ¶ 6.] Fourteen minutes later at 4:11 p.m., Mr. Flowers filed his “Notice of Acceptance of Offer of Judgment” with this Court, which purported to accept the April 1 Offer. [Dkt. 51.]

         On May 2, 2019, the Court determined that Federal Rule of Civil Procedure 68 did not allow alterations, modifications, or clarifications to offers of judgment and that it did not have the discretion to alter or modify the parties' agreement. [Dkt. 61 at 5-6.] Accordingly, the Court entered judgment in favor of Mr. Flowers in the amount of $25, 000. [Dkt. 61 at 6.] SteerPoint now seeks relief from that judgment pursuant to Rule 60. (Dkt. 69). The parties presented oral argument before the Undersigned on August 2, 2019.

         II. Discussion

         a. Offer of Judgment

         Federal Rule of Civil Procedure 68 permits a defending party to “serve on an opposing party an offer to allow judgment on specified terms.” Fed.R.Civ.P. 68(a). The offer does not need to be filed with the court at the time of service. See Id. The offeree then has 14 days to accept or reject the offer. Id. If the offeree accepts the offer by written notice, “either party may then file the offer and notice of acceptance, plus proof of service. The clerk must then enter judgment.” Id. If the offeree rejects the offer of judgment and “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. Id.

         The purpose of Rule 68 is to encourage settlements and it favors neither plaintiffs nor defendants. Marek v. Chesny, 473 U.S. 1, 5-6, 10 (1985). But, Rule 68 offers of judgment carry serious legal consequences for those who reject them. See Webb v. James, 147 F.3d 617, 621 (7th Cir. 1998); Nordby v. Anchor Hocking Packaging Co., 199 F.3d 390, 392 (7th Cir. 1999); Sanchez v. Prudential Pizza, Inc., 709 F.3d 689, 692 (7th Cir. 2013).

         Because of these consequences, Rule 68 has spawned a body of case law which guides the Court's analysis. In Marek v. Chesny, the Supreme Court considered the requirements of a valid Rule 68 offer. Marek, ...


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