A plaintiff who makes a claim for damages of $25,000 or less in a personal injury action in Idaho can take advantage of a fee-shifting statute which will allow the plaintiff to recover her fees at arbitration or trial. In order to limit plaintiff’s ability to use this statute, it is important that a defendant receiving such a claim respond to the demand, in writing, with a reasonable settlement offer prior to the onset of litigation.
Under Idaho Code § 12-120(4), for plaintiff to avail herself of this statute she must submit a statement of claim to the defendant’s insurer, or if not known, directly to the defendant, more than sixty days before filing a lawsuit. The statement of claim must be signed by the plaintiff or her attorney, and must set forth an itemized statement of each and every item of damage claimed by the plaintiff including the amount claimed for general damages, medical bills incurred to date, a good faith estimate of future medical bills, lost income incurred to date, and a good faith estimate of future lost income. Plaintiff must also provide copies of all medical records and bills relating to her alleged damages.
Only a written demand will trigger the statute. As a general rule, if plaintiff includes in her complaint a different alleged injury or a significant new item of damages that was not included in the Idaho Code § 12-120(4) statement of claim, the plaintiff will be “deemed to have waived any entitlement to attorney’s fees” under the statute. Idaho Code §12-120(4). However, Idaho courts have allowed plaintiffs some flexibility to recover fees under the statute where relatively insignificant itemized damages are not disclosed in a statement of claim, but are later introduced at trial. See Contreras v. Rubley, 130 P.3d 1111, 1115 (Idaho 2005).
If a defendant receiving a statement of claim responds with a timely settlement offer, then the plaintiff will not recover her fees if that offer is at least 90% of what she recovers at trial. It is important to understand that if a defendant fails to respond to the claim, then plaintiff will recover her attorney fees if she recovers any amount, no matter how small, at arbitration or trial. In these small personal injury matters, the amount of attorney fees incurred by plaintiff can quickly exceed the amount of the claim itself.
There is no avenue for a defendant to recover its attorney fees under this statute. That is, if the defendant’s settlement offer “beats” plaintiff’s award at trial, the defendant is not awarded its attorney fees. Similarly, if a defendant prevails on a counterclaim at trial, the defendant is not awarded its attorney fees.
Thus it is advantageous to potentially cut off a plaintiff’s right to attorney fees under this statute by making a reasonable, written settlement offer within sixty days of receiving a demand in a personal injury claim of $25,000 or less. Failing to respond to such a demand prior to the filing of a lawsuit creates an uphill battle for defendants seeking to settle the case prior to trial.
Blog by: Elizabeth Wright, Partner, Oregon