Oregon’s Court of Appeals ruled in Trapp v. Hodges that a plaintiff was entitled to seek attorneys’ fees after trial because two commas made a settlement offer ambiguous. 

Background
The case concerned a minor motor vehicle accident. Before suit was filed, the claimant demanded $10,000, plus reimbursement of his PIP benefits. The defendant’s carrier responded to the $10,000 demand with this offer: “We’ve evaluated your client’s claim based on the information presented and are prepared to resolve their injury claim for $3,900 (Three Thousand Nine Hundred Dollars), inclusive of all liens, plus PIP owed to State Farm.” State Farm’s PIP lien was $2,684.36.

The plaintiff filed suit and was awarded $2,500 after a jury trial. The plaintiff then sought $31,960 in attorneys’ fees. He relied on ORS 20.080, a statute that allows a plaintiff to recover attorneys’ fees if the plaintiff (1) prevails in a tort case; (2) is seeking $10,000 or less; (3) made a pre-suit demand for payment; and (4) recovered more than the defendant offered before suit was filed.

The plaintiff satisfied the first three elements; the dispute was about the last element. Based on the language above, the plaintiff argued the pre-suit settlement offer was $3,900 ˗ $2,684.36 = $1,215.64. As he recovered $2,500, he was thus entitled to seek attorneys’ fees. The defendant argued the settlement offer was $3,900, excluding the PIP lien; $2,500 is less than $3,900, thus the plaintiff could not seek attorneys’ fees. The trial court agreed with the defendant but the plaintiff appealed.

The Appeal
Oregon’s Court of Appeals reversed in a 7–2 decision. The majority concluded the offer was ambiguous. “Given the relevant context, that plaintiff’s settlement demand specifically excluded PIP reimbursement, interpreting defendant’s pre-trial offer letter as inclusive of the PIP subrogation claim was reasonable.” The majority explained “the question is whether the use and placement of the commas distinctly delineate whether the PIP amount is part of or separate from the $3,900 for all reasonable readers. They do not, and, as a result, give rise to an ambiguity as to whether PIP was included from [sic], or excluded from, the offer.” The majority construed the letter against the drafter and concluded the plaintiff could request attorneys’ fees per ORS 20.080 because $2,500 > $1,215.64.

Analysis
Practically speaking, clients can make settlement offers clearer. In this case, the offer letter could have said “We’ve evaluated your client’s claim based on the information presented and are prepared to resolve their injury claim for $3,900 (Three Thousand Nine Hundred Dollars). This amount includes all liens. It does not include PIP owed to State Farm.” Although seemingly conveying the exact same information, by phrasing the offer in three separate sentences perhaps the risk of ambiguity is lowered.