Bailey v. Mount Diablo Unified School District

Background

Bret Bailey filed a notice accepting Mount Diablo Unified School District’s offer of judgment under Federal Rule of Civil Procedure 68. The offer stated that the $20,000 amount included fees and costs, but another paragraph stated that fees and costs would be “determined by the court.” Bailey argued that the offer was ambiguous and that the $20,000 was not inclusive of fees and costs. The district argued that the offer was expressly limited to $20,000, including costs and attorney fees.

Court’s Analysis

The court explained that Rule 68 offers of judgment are analyzed as contracts. Applying California contract law, the court noted that a contract requires a meeting of the minds on all material terms and that the parties must agree to the same thing in the same sense.

The court identified two possible readings of the offer. Under one reading, the court would determine reasonable fees and costs within the $20,000 amount. Under another, the conflicting paragraphs could create two separate offers: one capped at $20,000 and another providing $20,000 plus fees and costs. Under either reading, the court found that Bailey had not agreed to the same material terms that the district intended to offer.

Ruling

The court determined that no valid contract was created from the Rule 68 offer because the parties lacked mutual assent. It ordered Bailey and the district to meet and confer about whether another Rule 68 offer was warranted. The court also stayed briefing on the district’s motion for summary judgment. Judge Charles R. Breyer did not rule on that motion in this order.