United States District Court, Northern District of Illinois, E.D
September 3, 1982
ALFRED W. CHESNY, ETC., PLAINTIFF,
J. MAREK, ET AL., DEFENDANTS.
The opinion of the court was delivered by: Shadur, District Judge.
MEMORANDUM OPINION AND ORDER
Alfred W. Chesny ("Chesny"), individually and as
administrator of the estate of his deceased son Steven, sued
defendants under 42 U.S.C. § 1983 ("Section 1983") and a number
of state tort laws based on the allegedly unlawful fatal
shooting of Steven. After trial on the merits a jury found in
part for Chesny and awarded a total of $60,000 against
defendants Marek, Wadycki and Rhode. Chesny now moves for an
additur to the judgment as well as an award of attorneys' fees.
Defendants move for judgment n.o.v. as well as an award of
attorneys' fees. For the reasons stated in this memorandum
opinion and order Chesny's motions are granted in part and
denied in part and defendants' motions are denied.
Loss of Future Earnings
Though the jury failed to award Chesny any amount as
compensation for the loss of Steven's future earnings, Chesny
claims he is entitled to such recovery as a matter of
law.*fn1 Chesny's expert economist testified that based on
Steven's wage rate at the time of his death ($5.50 an hour),
less a 30% deduction for personal consumption, the present
value of his future lost earnings amounted to $504,859.
But a plaintiff is not absolutely entitled to recover such
future earnings in a death action. Recovery is limited to the
damage suffered by the next of kin. That damage can take two
1. what amount decedent would have spent on
next of kin during his lifetime, and
2. what amount would have accumulated in
decedent's estate by the time of his death.
Keel v. Compton, 120 Ill. App.2d 248, 256 N.E.2d 848
1970); Denton v. Midwest Dairy Products Corp., 284 Ill. App. 279,
1 N.E.2d 807 (4th Dist. 1936).
As to the first of those elements, there was ample evidence
from which a jury could conclude Steven was not supporting
anyone and his entire future earnings would have gone either
into savings or personal consumption. Thus a jury could
reasonably have limited its award to the amount (if any)
Steven would have left in an estate at the time of his death
(assuming a normal life expectancy).
As for the second factor, this Court also finds the jury
could reasonably conclude Steven would not have left any money
in his estate. It is true the testimony of Chesny's expert was
that Steven would personally consume only 30% of his total
future earnings and the remaining 70% would be left as an
estate. Defendants offered no expert testimony on that score.
But a plaintiff carries the burden of proof as to all damages,
and the jury was entitled to reject the expert's testimony and
draw its own conclusions.*fn2 This Court cannot overturn the
jury's implicit determination that Steven would have left no
estate at his death.
Chesny also claims the uncontradicted testimony demonstrated
he was entitled to recover $3,000 in funeral expenses.
Defendants correctly contend that the verdict
forms approved by Chesny's counsel, providing separate lines
for separate categories of damages, asked only for the jury's
listing of (1) compensatory damages for the constitutional
injury and (2) lost earnings. They say Chesny failed to ask
for pecuniary damages and therefore lost his chance to get
recovery for funeral expenses.
Under the circumstances Chesny cannot prevail:
1. If funeral expenses could not be within the
"compensatory damages" awarded by the jury, Chesny
effectively waived his right to their recovery by
failing to provide a separate instruction for such
2. If funeral expenses could be part of the
"compensatory damages" award, the jury must be
viewed as having included it within the damage
Once again (as with the issue described at n. 1) Chesny
wrongly seeks to exercise hindsight.
Defendants' Motion for Judgment N.O.V.
Defendants' motion for judgment n.o.v. is based on this
Court's failure to instruct the jury on the requirements of
the Illinois Criminal Code for police conduct. That failure
does not constitute error because (1) federal law not state
law establishes the proper standard of conduct and (2) in any
case defendants have failed to point to any substantive
difference between the standard of conduct outlined in the
Illinois Criminal Code and the actual instruction given by this
Court. Again the jury's resolution of the factual issues was
rational. Accordingly defendants' motion for judgment n.o.v.
and their related motion for fees and costs must be denied.
Fed.R.Civ.P. ("Rule") 68
Rule 68 provides:
At any time more than ten days before the trial
begins, a party defending against a claim may
serve upon the adverse party an offer to allow
judgment to be taken against him for the money or
property or to the effect specified in his offer,
with costs then accrued. . . . An offer not
accepted shall be deemed withdrawn and the
evidence thereof is not admissible except in a
proceeding to determine costs. If the judgment
finally obtained by the offeree is not more
favorable than the offer, the offeree must pay
the costs incurred after the making of the offer.
Defendants made a proper Rule 68 offer of judgment to Chesny
for $100,000 plus costs and attorneys' fees then accrued.
Because the eventual jury award was only $60,000, Rule 68
comes into play. It poses several problems in the context of
If Rule 68 is applicable, there is no doubt Chesny cannot
collect from defendants any "costs" incurred after the date of
the offer of judgment. That in turn poses the question whether
"costs" as used in Rule 68 include attorneys' fees, preventing
Chesny from recovering fees incurred after the date of the
Chesny first contends Rule 68 should not apply because the
$100,000 offer was not reasonable in light of the nature of
this action. Rule 68 does not literally require a "reasonable"
offer, but Chesny cites August v. Delta Air Lines, Inc.,
600 F.2d 699 (7th Cir. 1979) to support a reasonableness
In August the plaintiff eventually lost at trial after a
nominal Rule 68 offer of judgment. Our Court of Appeals held
Rule 68 would not apply because the offer was not a good faith
attempt to settle the action. But the Supreme Court affirmed on
entirely different grounds, Delta Air Lines, Inc. v. August,
450 U.S. 346, 101 S.Ct. 1146, 67 L.Ed.2d 287 (1981). It held
Rule 68 did not apply at all to a situation where a plaintiff
lost a trial after a valid Rule 68 offer of judgment. Instead
Rule 68 operates only where a plaintiff eventually prevails at
trial but for an amount less than the offer of judgment. Chesny
in essence argues the Seventh Circuit August rule should still
apply in that event.
That reading is dubious at best in light of the Supreme
Court's treatment of the issue. If a plaintiff wins at trial,
but is awarded a
judgment for less than the earlier Rule 68 offer, it is really
a contradiction in terms to label that offer a sham. As the
Supreme Court said, 450 U.S. at 355, 101 S.Ct. at 1151-1152:
But the plain language of the Rule makes it
unnecessary to read a reasonableness requirement
into the Rule. A literal interpretation totally
avoids the problem of sham offers, because such
an offer will serve no purpose, and a defendant
will be encouraged to make only realistic
Moreover, even if a reasonableness requirement were
incorporated into Rule 68 this Court would find defendants'
offer of $100,000 met that test. In August the sham or
unreasonable offer with which our Court of Appeals was
concerned was a truly nominal offer whose only purpose was to
put the plaintiff at peril under Rule 68. While Chesny might
have been of the opinion the $100,000 offer was low, and while
defendants may well have been prepared to go higher in
negotiations, the offer was certainly a good faith attempt to
settle the action and not simply a sham designed to invoke Rule
68. That Rule must be held to apply here.
As already indicated, the real question then becomes whether
attorneys' fees are part of the post-offer "costs" Chesny
cannot recover. Authority on that question is sparse. Two
early cases may arguably be said to support the proposition
that costs under Rule 68 should not include attorneys' fees.
Gamlen Chemical Co. v. Dacar Chemical Products Co., 5 F.R.D.
215, 216 (W.D.Pa. 1946); Cruz v. Pacific American Insurance
Corp., 337 F.2d 746 (9th Cir. 1964).*fn3 But more recent cases
stand for a different result when an underlying statute
specifically provides for an award of fees as part of costs to
a prevailing plaintiff.
In Waters v. Heublein, Inc., 485 F. Supp. 110 (N.D.Cal. 1979)
a plaintiff prevailed at trial after a Rule 68 offer of
judgment, but like Chesny obtained a judgment for less than the
offer. Waters involved the Equal Pay Act, which like Section
1983 permits an award of attorneys' fees to prevailing
plaintiffs. "Costs" in Rule 68 were held to include fees for
1. Under the statutory scheme the award of fees
was treated as a component of plaintiff's
entitlement to costs.
2. Case law under Title VII required an award
of fees to prevailing plaintiffs unless there was
a showing of special circumstances.
3. Defendant's offer of judgment had included
an offer of costs and attorneys' fees then
4. Including fees within Rule 68's definition
of "costs" would promote the policy of
See also Scheriff v. Beck, 452 F. Supp. 1254, 1260 (D.Colo.
Two other cases lend support to the Waters position. In
Greenwood v. Stevenson, 88 F.R.D. 225 (D.R.I. 1980) a Section
1983 plaintiff accepted a Rule 68 settlement offer, which
defendants then contended did not include attorneys' fees.
Prevailing Section 1983 plaintiffs are entitled to fees as part
of costs under 42 U.S.C. § 1988. After analysis the Greenwood
court said that were the matter a question of first impression
the court would agree with Waters and include fees as part of
costs in Rule 68. However the court felt bound to rule
otherwise because of a First Circuit opinion (the district
court sat in that Circuit) that held a motion for allowance of
fees came under Rule 59(e) and was not part of a motion for
costs under Rule 54. That underpinning for the anti-Waters
conclusion has since collapsed, for the First Circuit opinion
was reversed by the Supreme Court in White v. New Hampshire
Department of Employment Security, ___ U.S. ___, 102 S.Ct.
1162, 71 L.Ed.2d 325 (1982). There the Supreme Court held a
motion for fees was not properly made under Rule 59(e).
Finally this Court's own opinion in Coleman v. McLaren, 92
F.R.D. 754 (N.D.Ill. 1981) considered whether an accepted Rule
68 settlement had included fees as part of the costs offer.
Although this Court held it had not, the opinion specifically
pointed out the underlying statute in that case did not provide
for an award of fees to a prevailing plaintiff.
There is much force in the Waters approach. Shortly after the
Supreme Court decision in White our own Court of Appeals held
attorneys' fees should be sought along with costs under Rule
54(d). Spray-Rite Service Corp. v. Monsanto Co., 684 F.2d 1226
at 1248-1249 (7th Cir. 1982). Because Section 1988 specifies
attorneys' fees are awarded as part of "costs," it makes
eminently good sense to give the same word the same content for
Rule 68 purposes in a Section 1983 case.
It is true that one important policy consideration was not
addressed by the Waters court. Section 1983 suits are civil
rights actions, which carry with them a strong policy of
encouraging vigorous enforcement. Most Section 1983 plaintiffs
cannot independently afford to pay counsel, who thus receive
compensation — only if they prevail — under Section 1988.
That creates a potential conflict of interest for a plaintiff's
counsel faced with a Rule 68 offer of judgment. Already
undertaking a risk of handling a case without compensation
should he or she lose, counsel would now confront the added
risk of conducting a trial without compensation should the
eventual verdict be less than the offer of judgment. Because
the offer of judgment must include fees accrued to that time,
trying the case may present greater peril than potential
benefit for the lawyer (as contrasted with the client). That
creates a real possibility that a lawyer who genuinely believes
(but is unsure) his or her client will receive more from a jury
than from the Rule 68 offer of judgment might "sell out" the
client to insure the lawyer's receipt of fees. Any such danger,
always distressing, is doubly so in the context of enforcement
of civil rights laws.
Despite that factor, after careful consideration this Court
is persuaded to the Waters result. First, the Waters point of
view is consistent with the literal language of Rule 68 and
Section 1988 (as well as our Court of Appeals' ruling that fees
should be sought under Rule 54 as part of "costs"). Second,
such an interpretation will stimulate realistic settlement
efforts before trials. Finally, the problem Chesny claims is
presented by this case — and any consequent deterrence of
civil rights actions — will rarely arise. It requires a
combination of (1) a plaintiff's lawyer's reasonable assessment
of the case as worth considerably more than defendant's offer
and (2) an actual result less than that offer. This Court
cannot be persuaded to adopt a wrong rule because the right one
may have a harsh application in a few cases. Accordingly it
holds that under Rule 68 Chesny cannot recover costs, including
attorneys' fees, incurred after the offer of judgment.
Rule 68 poses one last problem suggested by the language
the offeree must pay the costs incurred after the
making of the offer.
To this point this opinion has dealt with the offeree's
(plaintiff's) payment of his own costs. But the rule also
raises the question whether the defendants' "costs" are also
payable by the plaintiff — and if so, whether such "costs"
include defendants' attorneys' fees.
As for the latter question, a "no" answer is readily
reached. Defendants, having lost the case (albeit by less than
they originally offered in settlement) are not thereby
rendered "prevailing parties" under Section 1988. Their
"costs" therefore do not include attorneys' fees.
Waters, 485 F. Supp. at 117.
In fact the same conclusion reasonably follows as to
defendants' "costs" in the conventional sense. As the Supreme
Court said in August, 450 U.S. at 359 n. 24, 101 S.Ct. at 1153
Some commentators assume that the Rule, even when
applicable, operates to deny costs to a
prevailing plaintiff and not to impose liability
for defendants' costs on that plaintiff.
It then quoted extensively from Wright & Miller, Federal
Practice and Procedure, Moore's Federal Practice and a Virginia
Law Review article. This Court agrees with the position taken
by the cited authorities.*fn4
It will not award defendants any
costs against Chesny.
Chesny will obviously have to submit a revised fee request
limited to fees incurred up to the time of the judgment offer.
However this Court can make the following comments at this
1. It will not permit an award for costs
incurred for clerical and secretarial services.
Those costs are part of an attorney's overhead
and are included in the attorney's hourly fee.
Awards for paralegal time are not analogous, for
those expenses are customarily separately billed
to a client.
2. It finds, based on the professional
experience of Chesny's attorneys, that the hourly
rates sought are reasonable.*fn5
3. It rejects defendants' arguments that a
reasonable amount of fees should be determined by
looking either to defendants' fees or to an
amount equal to one-third of the eventual award.
Reasonableness of the time spent, in light of the
factors identified in the case law, is the issue.
4. Defendants are of course entitled to an
evidentiary hearing if they so desire. But fees
generated by such a hearing are also compensable
(and would be charged to defendants
notwithstanding Rule 68). Spray-Rite, 684 F.2d at
1250. Under the circumstances it appears to be in
the parties' mutual self-interest to resolve
accounting and verification matters without
requiring a formal hearing.
This Court will not make any determination at this time as to
the reasonableness of the hours spent by Chesny's counsel or
as to the possible use of a multiplier.
Defendants' motion for judgment n.o.v. and attorneys' fees
is denied. Chesny's motion for an additur is denied. Chesny's
motion for fees as a prevailing party under Section 1988 is
granted except that Chesny shall be entitled to fees and costs
incurred only until the time of the offer of judgment.
Chesny's counsel shall submit a revised fee request on or
before September 13, 1982. On or before September 20, 1982
defendants' counsel shall notify the Court and opposing
counsel whether an evidentiary hearing will be required.