North Carolina Business Litigation Report

Burgess v. American Express Company, Inc., 2007 NCBC 22 (N.C. Super. Ct. June 29, 2007)(Diaz)

Plaintiff, who was pro se, moved for Rule 11 sanctions based on defendant's Rule 68 Offer of Judgment of a single dollar. After noting that the purpose of Rule 68 is to "encourage settlements and avoid protracted litigation," the Court found that the $1.00 offer provided little chance of seriously opening negotiations or settling a case. It found, instead, that the minimal offer "was not intended to promote a settlement but instead it was a tactical maneuver intended to trigger the cost-shifting mandate of Rule 68 in the event of a defense verdict."

The Court held, however, that this tactic did not warrant sanctions. The offer satisfied the literal requirement of Rule 68, and a defendant is not required to offer a substantial sum to obtain the benefit of the statute if it is convinced that the case lacks merit. The Court denied the motion for sanctions, although it expressed doubt as to whether the $1.00 offer would entitle the defendant to recover its costs if it was successful.

The plaintiff had also moved for sanctions against the defendant for removing the case to the Business Court. The defendant cross-moved for sanctions, and the Court granted this motion. It held that even though the plaintiff was pro se, he could have readily determined from the Court's own information that the removal was proper. It found that the purpose of the motion was to harass the defendant, to unnecessarily delay the proceedings, and to needlessly increase the cost of litigation. Plaintiff, as a pro se litigant, was not exempt from the operation of Rule 11.

Full Opinion

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Mack Sperling
Brooks Pierce, LLP
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