(a) Time for Making; Procedure. Any party may serve on any other party an offer to allow judgment to be entered in the action.
(1) Trial. An offer of judgment must be made more than 30 days before trial begins.
(2) Arbitration. In actions assigned to arbitration, no offer of judgment may be made during the time period beginning 25 days before the arbitration hearing and ending when a Rule 77(a) notice of appeal is filed.
(b) Contents of Offer.
(1) Money Judgment. An offer that includes a money judgment must specifically state the sum of money to be awarded, inclusive of all damages, taxable court costs, interest, and attorney’s fees, if any, sought in the action.
(2) Attorney’s Fees. If specifically stated, attorney’s fees may be excluded from an offer. If an offer that excludes attorney’s fees is accepted and attorney’s fees are allowed by statute, contract, or otherwise, either party may seek an award of attorney’s fees.
(3) Apportionment. The offer need not be apportioned by claim.
(c) Acceptance of Offer; Entry of Judgment. To accept an offer, the offeree must serve written notice–during the effective time period–that the offer is accepted. After either party files the offer and proof of acceptance, the court must enter judgment in accordance with Rule 58(b).
(d) Rejection of Offer; Waiver of Objections.
(1) Rejection of Offer. An unaccepted offer is considered rejected. Evidence of an unaccepted offer is not admissible except in a proceeding to determine sanctions under this rule.
(2) Objections to Offer. An offeree who objects to the validity of an offer must–within 10 days after the offer is served–serve on the offeror written notice of the objections. The failure to serve timely objections waives the right to object to the offer’s validity in any proceeding to determine sanctions under this rule.
(e) Multiple Offerors. Multiple parties may make a joint unapportioned offer of judgment to a single offeree.
(f) Multiple Offerees.
(1) Unapportioned Offers. Unapportioned offers may not be made to multiple offerees.
(2) Apportioned Offers. One or more parties may make an apportioned offer to multiple offerees conditioned on acceptance by all of the offerees. Each offeree may serve a separate written notice of acceptance of the offer. If fewer than all offerees accept, the offeror may enforce any of the acceptances if:
(A) the offer discloses that the offeror may exercise this option; and
(B) the offeror serves written notice of final acceptance no later than 10 days after the offer expires.
The sanctions provided in this rule apply to each offeree who did not accept the apportioned offer.
(1) Amount. A party who rejects an offer, but does not obtain a more favorable judgment, must pay as a sanction:
(A) the offeror’s reasonable expert witness fees and double the taxable costs, as defined in A.R.S. § 12-332, incurred after the offer date; and
(B) prejudgment interest on unliquidated claims accruing from the offer date.
(2) Taxable Costs and Attorney’s Fees. To determine if a judgment that includes an award of taxable costs or attorney’s fees is more favorable than the offer, the court must consider only those taxable costs and attorney’s fees that were reasonably incurred as of the offer date.
(3) Arbitration. To determine whether to impose a sanction after an arbitration hearing, the court must compare the offer to the final judgment entered either on the award under Rule 76(b)(4) or after appeal under Rule 77.
(h) Effective Period of Offers; Later Offers; Offers on Damages.
(1) Effective Date. An offer of judgment must remain effective for 30 days after it is served, except:
(A) an offer made within 60 days after service of the summons and complaint must remain effective for 60 days after the offer is served;
(B) an offer made within 45 days of trial must remain effective for 15 days after it is served; and
(C) in an action subject to arbitration, an unexpired offer will automatically expire at 5:00 p.m. on the fifth day before the arbitration hearing.
If the court enlarges the effective period, the offeror may withdraw the offer at any time after the initial effective period expires and before the offer is accepted.
(2) Later Offers. A rejected offer does not preclude a later offer.
(3) Offers on Damages. When one party’s liability to another has been determined but the extent of liability remains to be determined by further proceedings, any party may make an offer of judgment. It must be served within a reasonable time–but at least 10 days–before the date set for a hearing to determine the extent of liability.