Rule 68. Offer of Judgment

(a) Time for Making; Procedure Any party may serve on any other party an offer to allow judgment to be entered in the action.

(1) Trial An offer of judgment must be made more than 30 days before trial begins.

(2) Arbitration In actions assigned to arbitration, no offer of judgment may be made during the time period beginning 25 days before the arbitration hearing and ending when a Rule 77(a) notice of appeal is filed.

(b) Contents of Offer

(1) Money Judgment An offer that includes a money judgment must specifically state the sum of money to be awarded, inclusive of all damages, taxable court costs, interest, and attorney's fees, if any, sought in the action.

(2) Attorney's Fees If specifically stated, attorney's fees may be excluded from an offer. If an offer that excludes attorney's fees is accepted and attorney's fees are allowed by statute, contract, or otherwise, either party may seek an award of attorney's fees.

(3) Apportionment The offer need not be apportioned by claim.

(c) Acceptance of Offer; Entry of Judgment To accept an offer, the offeree must serve written notice--during the effective time period--that the offer is accepted. After either party files the offer and proof of acceptance, the court must enter judgment in accordance with Rule 58(b).

(d) Rejection of Offer; Waiver of Objections

(1) Rejection of Offer An unaccepted offer is considered rejected. Evidence of an unaccepted offer is not admissible except in a proceeding to determine sanctions under this rule.

(2) Objections to Offer An offeree who objects to the validity of an offer must--within 10 days after the offer is served--serve on the offeror written notice of the objections. The failure to serve timely objections waives the right to object to the offer's validity in any proceeding to determine sanctions under this rule.

(e) Multiple Offerors Multiple parties may make a joint unapportioned offer of judgment to a single offeree.

(f) Multiple Offerees

(1) Unapportioned Offers Unapportioned offers may not be made to multiple offerees.

(2) Apportioned Offers One or more parties may make an apportioned offer to multiple offerees conditioned on acceptance by all of the offerees. Each offeree may serve a separate written notice of acceptance of the offer. If fewer than all offerees accept, the offeror may enforce any of the acceptances if:

(A) the offer discloses that the offeror may exercise this option; and

(B) the offeror serves written notice of final acceptance no later than 10 days after the offer expires.

(g) Sanctions

(1) Amount A party who rejects an offer, but does not obtain a more favorable judgment, must pay as a sanction-twenty percent of the difference between the amount of the offer and the amount of the final judgment.

(2) Taxable Costs and Attorney's Fees To determine if a judgment that includes an award of taxable costs or attorney's fees is more favorable than the offer, the court must consider only those taxable costs and attorney's fees that were reasonably incurred as of the offer date.

(3) Arbitration To determine whether to impose a sanction after an arbitration hearing, the court must compare the offer to the final judgment entered either on the award underRule 76(b)(4) or after appeal under Rule 77.

(4) Application

(A) A court may not assess a sanction under this rule if the action seeks solely injunctive relief

(B) A court may reduce or eliminate a sanction otherwise required by this rule only if it finds the sanction to be manifestly unjust

(h) Effective Period of Offers; Later Offers; Offers on Damages

(1) Effective Date An offer of judgment must remain effective for 30 days after it is served, except:

(A) an offer made within 60 days after service of the summons and complaint must remain effective for 60 days after the offer is served;

(B) an offer made within 45 days of trial must remain effective for 15 days after it is served; and

(C) in an action subject to arbitration, an unexpired offer will automatically expire at 5:00 p.m. on the fifth day before the arbitration hearing.

(2) Later Offers A rejected offer does not preclude a later offer.

(3) Offers on Damages When one party's liability to another has been determined but the extent of liability remains to be determined by further proceedings, any party may make an offer of judgment. It must be served within a reasonable time--but at least 10 days--before the date set for a hearing to determine the extent of liability.