14‐3817‐cv(L) Donald J. Steiner, Dax Labs, LLC v. Lewmar, Inc., Lewmar, Ltd.

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

August Term 2015

(Argued: October 26, 2015 Decided: March 7, 2016)

Docket No. 14‐3817‐cv(L), 14‐4002‐cv(XAP)

DONALD J. STEINER, DAX LABS, LLC,

Plaintiffs‐Appellants‐Cross‐Appellees,

v.

LEWMAR, INC., LEWMAR, LTD.,

Defendants‐Appellees‐Cross‐Appellants.

ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF CONNECTICUT

Before: KATZMANN, Chief Judge, CHIN, Circuit Judge, and CASTEL, District Judge.*

* The Honorable P. Kevin Castel, of the Southern District of New York, sitting by designation.

Cross‐appeals from a post‐judgment order of the United States

District Court for the District of Connecticut (Squatrito, J.). After plaintiffs

accepted defendantsʹ Rule 68 offer of judgment and the district court entered

judgment dismissing all claims, plaintiffs moved for attorneysʹ fees and costs

under an attorneysʹ fee provision in the partiesʹ contract and under the

Connecticut Unfair Trade Practices Act (ʺCUTPAʺ), Conn. Gen. Stat. § 42‐110g(d).

The district court denied attorneysʹ fees but awarded costs. We affirm the denial

of fees under the partiesʹ agreement, but vacate and remand as to plaintiffsʹ

request for fees under CUTPA. We affirm the award of costs.

AFFIRMED IN PART, VACATED IN PART, AND REMANDED.

SCOTT R. LUCAS (Jeffrey S. Bagnell, on the brief), Lucas Bagnell Varga LLC, Southport, Connecticut, for Plaintiffs‐Appellants‐Cross‐Appellees.

GENE S. WINTER (Stephen Ball, on the brief), St. Onge Steward Johnston & Reens LLC, Stamford, Connecticut, for Defendants‐Appellees‐Cross‐ Appellants.

CHIN, Circuit Judge:

In this case, the parties seemingly resolved this matter in the district

court when defendants made ‐‐ and plaintiffs accepted ‐‐ an offer of judgment

pursuant to Rule 68 of the Federal Rules of Civil Procedure. In exchange for the

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dismissal of ʺall claims,ʺ defendants agreed to the entry of judgment awarding

plaintiffs $175,000 and granting injunctive relief. The offer of judgment,

however, did not mention attorneysʹ fees or costs. After judgment was entered,

plaintiffs moved for attorneysʹ fees of $383,804 and costs of $41,470. The district

court denied attorneysʹ fees but awarded costs of $2,926. Plaintiffs appeal from

the denial of fees, and defendants cross‐appeal from the award of costs. We

affirm in part, vacate in part, and remand.

STATEMENT OF THE CASE

In January 2005, plaintiffs‐appellants Donald J. Steiner and Dax

Labs, LLC (together, ʺSteinerʺ) and defendants‐appellees Lewmar Inc. and

Lewmar Ltd. (together, ʺLewmarʺ) entered into a contract (the ʺAgreementʺ) that

gave Lewmar the exclusive right to manufacture and sell Steinerʹs patented

sailboat winch handle, a device used to control the lines and sails of a sailboat.

The Agreement included the following provision:

In the event of a dispute arising out of or in connection with this Agreement, the Party prevailing in such dispute shall be entitled to recover its reasonable expenses, costs and attorneyʹs fees, in addition to all other appropriate relief.

Appelleesʹ Suppl. App. at 303.

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Disputes arose between the parties concerning Lewmarʹs

performance of the Agreement. On December 4, 2009, Steiner brought this action

in the United States District Court for the District of Connecticut seeking

damages and equitable relief for violations of the Lanham Act, breach of contract,

breach of the implied covenant of good faith and fair dealing, conspiracy for

aiding and abetting, and unfair trade practices in violation of CUTPA. Lewmar

filed counterclaims for a declaration that its actions did not violate Steinerʹs

rights.

On January 6, 2012, Steiner filed a motion for prejudgment remedy

pursuant to Federal Rule of Civil Procedure 64 and Connecticut General Statutes

§ 52‐278a et seq., claiming actual damages between $478,318 and $634,678, with

attorneysʹ fees amounting to $220,314 and projected to reach a total of $350,000

through trial. Steiner sought prejudgment relief apparently because of a concern

that Lewmar did not have insurance to cover a judgment in Steinerʹs favor.

On December 2, 2013, ten days prior to a scheduled hearing on

Steinerʹs motion for prejudgment remedy, Lewmar made an offer of judgment

(the ʺOfferʺ) pursuant to Rule 68 of the Federal Rules of Civil Procedure. The

Offer provided that Lewmar would agree to the entry of judgment against it in

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the amount of $175,000, and an injunction preventing it from various uses of

Steinerʹs trademark. The Offer stated that:

This action will be dismissed with prejudice including all claims that have been made or could have been made concerning the LiteTouch trademark, winch handles sold under the LiteTouch trademark, or the Agreement, except that the Court shall retain jurisdiction to enforce the terms of this offer.

Joint App. at 97. The Offer did not mention attorneysʹ fees or costs.

Steiner filed a timely Notice of Acceptance of the Offer. On

December 13, 2013, the district court entered final judgment in Steinerʹs favor

based upon the notice of acceptance. The judgment stated:

This action is hereby dismissed with prejudice including all claims that have been made or could have been made concerning the LiteTouch trademark, winch handles sold under the LiteTouch trademark, or the Agreement, except that the Court shall retain jurisdiction to enforce the terms of this Judgment and Permanent Injunction.

Joint App. at 101.

On December 23, 2013, Steiner moved for attorneysʹ fees and costs as

well as interest. Steiner sought fees: 1) under the prevailing party clause of the

Agreement, and 2) pursuant to section 42‐110g(d) of CUTPA.1

1 Steiner also sought attorneysʹ fees under the Lanham Act,

(a), but has not challenged the district courtʹs ruling on this point.

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The district court denied Steinerʹs motion for attorneysʹ fees, holding

that the language of the Offer and the Rule 68 judgment ‐‐ dismissing ʺall claims

that have been made or could have been made concerning . . . the Agreementʺ ‐‐

precluded Steinerʹs claim for fees under the Agreement. Joint App. at 105.

Steinerʹs request for costs under Rule 68 was granted, provided that Steiner file a

verified bill of costs in compliance with Local Civil Rule 54. The district court

also awarded post‐judgment interest pursuant to

(a).

With respect to the CUTPA claim, the district court held that,

because judgment had been entered by agreement of the parties without any

findings having been made, ʺthe particular circumstances of this case do not

warrant an award of attorneyʹs fees or costs under CUTPA.ʺ Joint App. at 108.

These appeals followed.

DISCUSSION

Federal Rule of Civil Procedure 68 provides that: ʺ[a]t least 14 days

before the date set for trial, a party defending against a claim may serve on an

opposing party an offer to allow judgment on specified terms, with the costs then

accrued.ʺ Fed. R. Civ. P. 68(a). If, within 14 days, the opposing party accepts the

offer in writing, either side may file the offer and notice of acceptance, and ʺ[t]he

clerk must then enter judgment.ʺ Fed. R. Civ. P. 68(a). If the opposing party

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does not accept the offer, it must pay the ʺcostsʺ incurred after the offer was

made if it does not obtain a judgment ʺmore favorable than the unaccepted

offer.ʺ Fed. R. Civ. P. 68(d).

Rule 68 is a cost‐shifting rule intended to encourage settlement and

avoid protracted litigation. Marek v. Chesny,

(1985). Rule 68 offers of

judgment and acceptances thereof are contracts to be interpreted according to

ordinary contract principles. Goodheart Clothing Co. v. Laura Goodman Enters., Inc.,

(2d Cir. 1992). Rule 68 offers of judgment, however, are

different from other contract offers in that they carry legal consequences: a party

that rejects a Rule 68 offer may be subject to the cost‐shifting provision of Rule

68(d) if it does not obtain a more favorable judgment. See Sanchez v. Prudential

Pizza, Inc.,

(7th Cir. 2013). Hence, as discussed more fully

below, ambiguities will be construed against the party making the offer.

(ʺ[B]ecause the consequences of a Rule 68 offer are so great, the offering

defendant bears the burden of any silence or ambiguity concerning attorney

fees.ʺ). We review de novo a district courtʹs interpretation of a Rule 68 offer.

Goodheart Clothing, 962 F.2d at 272‐73.

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The issue presented is whether, under the terms of the Offer, Steiner

is entitled to recover attorneysʹ fees and costs in addition to the relief awarded in

the judgment.

I. Attorneysʹ Fees

a. Applicable Law

Whether a Rule 68 judgment encompasses claims for attorneysʹ fees

authorized to prevailing parties by statute or contract depends on the terms of

the accepted offer. ʺ[W]here the language of the contract [i.e., the Rule 68 offer

and acceptance thereof] is clear and unambiguous, the contract is to be given

effect according to its terms.ʺ Lee v. BSB Greenwich Mortg. Ltd. Pʹship,

, 178 (2d Cir. 2001) (quoting Barnard v. Barnard,

(1990)). If a

Rule 68 offer unambiguously includes attorneysʹ fees, plaintiffs may not accept

the offer and then apply to the court for fees in addition to the accepted

settlement. See Goodheart Clothing,

(ʺ[I]f a writing, or the term in

question, appears to be plain and unambiguous on its face, its meaning must be

determined from the four corners of the instrument . . . .ʺ (quoting John D.

Calamari & Joseph M. Perillo, Contracts 166‐67 (3d ed. 1987))); Util. Automation

2000, Inc. v. Choctawhatchee Elec. Co‐op., Inc.,

(11th Cir. 2002)

(ʺAn offer that . . . unambiguously include[s] attorneysʹ fees . . . will bar the

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plaintiff who accepts it from seeking additional attorneysʹ fees under the relevant

statute . . . .ʺ); Nordby v. Anchor Hocking Packaging Co.,

(7th Cir. 1999)

(affirming denial of attorneysʹ fees where plaintiff accepted an unambiguous

offer); see also Marek, 473 U.S. at 6‐7 (ʺIf defendants are not allowed to make

lump‐sum offers that would, if accepted, represent their total liability, they

would understandably be reluctant to make settlement offers.ʺ). If the terms of a

contract are clear, courts must ʺtake care not to alter or go beyond the express

terms of the agreement, or to impose obligations on the parties that are not

mandated by the unambiguous terms of the agreement itself.ʺ Red Ball Interior

Demolition Corp. v. Palmadessa,

(2d Cir. 1999). The simplest way

for parties to avoid ambiguity ‐‐ and the risk of further litigation ‐‐ is to refer

explicitly to ʺattorneysʹ feesʺ in the written Rule 68 offer.

Where an offer is silent on attorneysʹ fees there may be a question as

to whether fees are included and whether claims for fees will be extinguished.

See Hennessy v. Daniels Law Office,

(8th Cir. 2001); Nordby,

(ʺʹ[J]udgmentʹ can mean either the substantive relief ordered (whether

legal or equitable), or that plus attorneysʹ fees. The defendants . . . failed to

indicate which they meant, and this made their offer ambiguous.ʺ). Courts have

generally held that such ambiguities will be construed against the offeror. See

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Sanchez,

; Util. Automation 2000, Inc.,

(ʺ[T]he

responsibility for clarity and precision in the offer must reside with the offeror.ʺ);

Nusom v. Comh Woodburn, Inc.,

, 833‐34 (9th Cir. 1997) (ʺ[I]t is

incumbent on the defendant making a Rule 68 offer to state clearly that attorney

fees are included as part of the total sum for which judgment may be entered if

the defendant wishes to avoid exposure to attorney fees in addition to the sum

offered plus costs.ʺ).

A contract is ambiguous if it is ʺreasonably susceptible of more than

one interpretation,ʺ and unambiguous if it has ʺa definite and precise meaning,

unattended by danger of misconception in the purport of the [contract] itself, and

concerning which there is no reasonable basis for a difference of opinion.ʺ

Goodheart Clothing,

(alteration in original) (first quoting Burger

King Corp. v. Horn & Hardart Co.,

(2d Cir. 1990); then quoting

Hunt Ltd. v. Lifschultz Fast Freight, Inc.,

(2d Cir. 1989)).

Courts are not required to find contract language ambiguous where

ʺthe interpretation urged by one party would ʹstrain[] the contract language

beyond its reasonable and ordinary meaning.ʹʺ Hunt,

(alteration

in original) (quoting Bethlehem Steel Co. v. Turner Constr. Co.,

(1957)). Thus, although use of the words ʺattorneysʹ feesʺ is the best practice, an

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offer that does not use these exact words may nonetheless be unambiguous. See

Nordby,

(rejecting ʺa magic‐words approach . . . in favor of an

approach . . . that gives effect to an unambiguous offer even if it does not

mention attorneysʹ fees explicitlyʺ).

b. Application

We consider separately Steinerʹs claims for attorneysʹ fees under the

Agreement and under CUTPA.

i. Attorneysʹ Fees Under the Agreement

We agree with the district court that Steinerʹs acceptance of the Offer

fully resolved the claim for attorneysʹ fees under the Agreement.

First, the plain wording of the Offer supports the conclusion that

claims for attorneysʹ fees under the Agreement are covered. The Offer provided

for the dismissal with prejudice of ʺall claims that have been made or could have

been made concerning . . . the Agreement.ʺ Joint App. at 97. The Agreement

provides that with respect to any dispute arising out of the Agreement, the

prevailing party is entitled to reasonable attorneysʹ fees. Any contractual claim

for reasonable attorneysʹ fees brought pursuant to the Agreement necessarily

ʺconcern[s]ʺ the Agreement. Hence, the language of the Offer unambiguously

includes a claim for attorneysʹ fees under the Agreement.

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Second, the context makes clear that the parties intended to include

contractual claims for attorneysʹ fees. See Law Deb. Trust Co. of N.Y. v. Maverick

Tube Corp.,

(2d Cir. 2010) (ʺAn ambiguity exists where the terms

of the contract ʹcould suggest more than one meaning when viewed objectively

by a reasonably intelligent person who has examined the context of the entire

integrated agreement and who is cognizant of the customs, practices, usages and

terminology as generally understood in the particular trade or business.ʹʺ

(quoting Int’l Multifoods Corp. v. Commercial Union Ins. Co.,

(2d Cir.

2002))). In determining whether the contract is ambiguous, a court looks at the

contract as a whole ʺin light of the circumstances present when the contract was

entered.ʺ Turner Constr. Co. v. Ace Prop. & Cas. Ins. Co.,

(2d Cir.

2005) (quoting Natʹl Union Fire Ins. Co. v. CBI Indus., Inc.,

(Tex. 1995)).

Steiner had made claim for attorneysʹ fees at the time of the Offer, as

Steiner had sought attorneysʹ fees in a motion for prejudgment remedy. See

Appelleesʹ Suppl. App. at 145. In an affidavit accompanying the motion, Steiner

asserted that Lewmar continued to act ʺin clear violation of the intent and terms

of the Agreement.ʺ Id. at 155. In the same paragraph, Steiner stated that the

ʺ[a]ttorneysʹ fees and costs to date on my ca[s]e are approximately $220,314 and

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are projected to total $350,000 through trial and any post‐trial proceedings.ʺ Id.

The motion for prejudgment remedy sought a total of $1,065,000 against

Lewmar, which included actual and projected attorneysʹ fees of $350,000. Id. at

155‐56. When attorneysʹ fees are sought by motion, the act of seeking them is

fairly embraced in the word ʺclaim.ʺ See Fed. R. Civ. P. 54(d)(2)(A) (instructing

that a ʺclaim for attorneyʹs feesʺ be made by motion); Omega Engʹg, Inc. v. Omega,

S.A.,

(2d Cir. 2005) (ʺIn determining whether the language in a

contract is ambiguous, the words must be given ʹtheir natural and ordinary

meaning.ʹʺ (quoting United Illuminating Co. v. Wisvest‐Conn., LLC,

(2002))). Therefore, Steinerʹs demand for attorneysʹ fees was a claim

concerning the Agreement that had already been made at the time of the Offer,

and both parties were acutely aware of Steinerʹs pending claim for fees at the

time of the Offer. In opposing the motion for a prejudgment remedy, Lewmar

specifically contested the attorneysʹ fee claim. Furthermore, the Rule 68 Offer

was made just ten days before the scheduled hearing on the motion for

prejudgment remedy.

Under all the circumstances, it is highly unlikely that the parties

intended to resolve the case for $175,000 while leaving open the significant

possibility of litigation over some $383,000 in attorneysʹ fees. The primary goal

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of contract interpretation is to ʺeffectuate the intent of the parties as manifested

by the language used in the contract.ʺ Aetna Cas. & Sur. Co. v. Aniero Concrete Co.,

, 598 (2d Cir. 2005). A fair and natural reading of the language

ʺdismissed with prejudice including all claims that have been made or could

have been made concerning . . . the Agreementʺ conveys the partiesʹ attempt to

settle all the pending claims related to the Agreement. See Lee v. BSB Greenwich

Mortg. Ltd. Pʹship,

, 179 (2d Cir. 2001) (ʺ[T]he intent of the parties is to

be ascertained by a fair and reasonable construction of the written words and . . .

the language used must be accorded its common, natural, and ordinary meaning

and usage where it can be sensibly applied to the subject matter of the contract.ʺ)

(quoting Barnard,

)).

Steiner argues that because attorneysʹ fees under the Agreement

could be claimed only after one party becomes the ʺprevailing party,ʺ it was not a

claim that ʺha[d] been made or could have been madeʺ at the time of the Offer,

and therefore was not encompassed by the Rule 68 judgment. This ripeness

argument is not convincing, and is belied by the fact that Steiner had already

made a claim for attorneysʹ fees in his motion for prejudgment remedy. See

Arronwood Indem. Co. v. King,

, 739‐40 (2d Cir. 2012) (ʺ[A] court will

not torture words to import ambiguity where the ordinary meaning leaves no

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room for ambiguity. . . . Similarly, any ambiguity in a contract must emanate

from the language used in the contract rather than from one partyʹs subjective

perception of the terms.ʺ (quoting Conn. Med. Ins. Co. v. Kulikowski,

(2008))).

Because claims under the Agreement were unambiguously included

in the Offer, Steiner was precluded from seeking fees pursuant to the Agreement

in addition to the $175,000 settlement amount.

ii. Attorneysʹ Fees Under CUTPA

Steinerʹs claim for attorneysʹ fees under CUTPA2 requires a separate

analysis, for the question here is whether the language of the Offer

unambiguously encompassed claims for attorneysʹ fees under CUTPA. We think

there is some ambiguity here.

The Offer provided for the dismissal of ʺall claims that have been

made or could have been made concerning the LiteTouch trademark, [or] winch

handles sold under the LiteTouch trademark.ʺ Joint App. at 97. While the

2 Section 42‐110g(d) of Connecticut General Statutes provides in pertinent part: In any action brought by a person under [CUTPA], the court may award, to the plaintiff, in addition to the relief provided in this section, costs and reasonable attorneysʹ fees based on the work reasonably performed by an attorney and not on the amount of recovery.

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substantive claims under CUTPA are encompassed by the language ʺall claimsʺ

relating to the LiteTouch trademark or winch handles sold under that mark, it is

unclear whether that language encompasses claims for attorneysʹ fees under

CUTPA. In contrast to the contractual claim for attorneysʹ fees, which derived its

source of authority directly from the Agreement and thus clearly fell within the

language of the Offer, the claim for attorneysʹ fees under CUTPA arguably does

not fall within the language of the Offer. The claim for attorneysʹ fees under

CUTPA arguably is not encompassed by the language ʺall claims . . . concerning

the LiteTouch trademark, winch handles sold under the LiteTouch trademark, or

the Agreement.ʺ

Indeed, courts have held that statutory attorneysʹ fees claims are not

unambiguously encompassed in a Rule 68 offer when the offer refers to

substantive claims but does not explicitly refer to attorneysʹ fees. See Sanchez, 709

F.3d at 690‐91; Lima v. Newark Police Depʹt,

(3d Cir. 2011). In

Lima, the Third Circuit held that an offer covering ʺall of Plaintiffʹs claims for

reliefʺ did not explicitly encompass attorneysʹ fees under § 1988, as a request for

attorneysʹ fees under § 1988 is ʺcollateral to the main cause of actionʺ and thus

not a ʺclaimʺ included in the offer.

. Similarly, in Sanchez, the

Seventh Circuit determined that a Rule 68 offer including ʺall of Plaintiffʹs claims

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for reliefʺ was ambiguous as to whether attorneysʹ fees were included because it

failed to specify the claims in question. 709 F.3d at 692‐93. In so holding, the

Seventh Circuit distinguished its prior decision in Nordby, where it had found

that the term ʺjudgment in the amount of $56,003.00 plus $1000 in costs as one

total sum as to all counts of the amended complaintʺ was sufficiently clear so as

to include fees, where one of the ʺcountsʺ was a statutory claim for attorneysʹ

fees.

at 693 (citing Nordby, 199 F.3d at 391‐92).

Under ordinary contract principles, we would next look to the

extrinsic evidence to determine the intent of the parties. As noted above,

however, the Rule 68 context is different. The ambiguity must be resolved

against the offeror, as Rule 68 offerees are at risk for costs if the ultimate award is

less favorable than the offer. See

at 694‐95; Fed. R. Civ. P. 68(d). A rule that

requires defendants to clearly state whether attorneysʹ fees are included also

complies with the policy underlying Rule 68, which is to encourage settlement

and avoid protracted litigation. Marek, 473 U.S. at 6‐9.

Here, because the Offer did not unambiguously encompass claims

for attorneysʹ fees under CUTPA, Steiner was not precluded from seeking

attorneysʹ fees under CUTPA.

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That holding does not end the inquiry, however, for an award of

attorneysʹ fees under CUTPA is discretionary. Fabri v. United Techs. Intʹl, Inc.,

, 128‐29 (2d Cir. 2004) (citing Gargano v. Heyman,

(1987)). Whether attorneysʹ fees are appropriate under CUTPA ʺlie[s] within the

discretion of the trial court, which is in the best position to evaluate the particular

circumstances of a case.ʺ Heller v. D.W. Fish Realty Co.,

(2006) (quoting LaMontagne, 61 Conn. App. at 63‐64). The exercise of discretion

ʺwill not ordinarily be interfered with on appealʺ unless the ʺabuse is manifestʺ

or ʺinjustice appears to have been done.ʺ Sturman v. Socha,

(1983).

ʺThe salient inquiry is whether the court could have reasonably concluded as it

did. . . . [T]he term abuse of discretion does not imply a bad motive or wrong

purpose but merely means that the ruling appears to have been made on

untenable grounds.ʺ Thames River Recycling, Inc. v. Gallo,

(1998).

The district court denied Steiner attorneysʹ fees under CUTPA,

concluding that:

judgment was entered in this case by agreement of the parties pursuant to Rule 68 of the Federal Rules of Civil Procedure without any findings having [been] made. The Court concludes that the particular circumstances

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of this case do not warrant an award of attorneyʹs fees or costs under CUTPA.

Joint App. at 108.

We are unsure from this language whether the district judge denied

attorneysʹ fees under CUTPA merely because judgment had been entered

pursuant to Rule 68, or because it concluded, in the exercise of its discretion, that

an award of attorneysʹ fees was not warranted in the circumstances of the case. If

the district court did not consider the claim for fees on the merits but rejected it

simply because it believed the Rule 68 judgment precluded a claim for attorneysʹ

fees under CUTPA, that would be an abuse of discretion. See Goodheart Clothing,

(holding that when district court is authorized to award

attorneysʹ fees, it is an abuse of discretion not to consider whether it should do

so).

Accordingly, we remand for the district court (1) to clarify whether

it considered the claim for attorneysʹ fees under CUTPA on the merits and, (2) if

not, to do so. We express no view as to whether an award of attorneysʹ fees

under CUTPA is warranted.

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II. Costs

The district court granted Steiner costs pursuant to Rule 68.3 On

appeal, Lewmar argues that the district court erred in awarding costs under Rule

68 because the Offer encompassed all post‐judgment remedies.

In Marek v. Chesny, the Supreme Court held that a valid Rule 68 offer

always includes costs, whether or not specified, because Rule 68 authorizes such

an offer only with costs then accrued. 473 U.S. at 6‐9; accord Barbour v. City of

White Plains,

(2d Cir. 2012). ʺ[I]f the offer does not state that

costs are included and an amount of costs is not specified, the court will be

obliged by the terms of the Rule to include in its judgment an additional amount

which in its discretion, it determines to be sufficient to cover the costs.ʺ Marek,

(internal citation omitted).

The Offer neither states that costs are included nor specifies an

amount. Under the circumstances, Marek clearly holds that they be added. See

Barbour, 700 F.3d at 633‐34 (where Rule 68 offer ʺdid not mention, much less

specify an amount for, costs,ʺ the argument that the offer nevertheless clearly

3 Steiner initially requested $41,470.31 in costs. In its September 25, 2014 order, the district court concluded that Steiner was entitled to costs, but found that some of the costs itemized by Steiner included items that may not be taxable as costs under the Local Rules of Civil Procedure. The district court directed Steiner to file a verified bill of costs that complies with the requirements of Local Civil Rule 54. Steiner subsequently filed a verified bill of costs amounting to $2,926.95.

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intended to include them ʺfails on the meritsʺ). Thus, the district court correctly

added costs under the ʺcosts then accruedʺ provision of Rule 68.

CONCLUSION

For the reasons set forth above, the order of the district court is

AFFIRMED in part, VACATED in part, and REMANDED for further

proceedings consistent with this opinion.

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