Wednesday, November 18, 2009

Proposal For Settlement That Addressed A Complaint That Included Non-Damage Claims Is Invalid

In Palm Beach Polo Holding, Inc. v. Equestrian Club Estates Property Owners Association, Inc. (4D08-2250), the Fourth District reversed a trial court order awarding attorneys fees pursuant to the proposal for settlement/offer of judgment statute. The issue was an issue of first impression for the Fourth District, "whether a general offer applying to an entire case that includes both claims for damages and other claims can be binding upon the unsuccessful party."

The facts of the case were discussed in a prior opinion from the court, Palm Beach Polo Holdings, Inc. v. Equestrian Club Estates Property Owners Ass’n, Inc., 949 So. 2d 347 (Fla. 4th DCA 2007). Generally, the facts are:

Appellee, Equestrian Club Estates Property Owners Association, Inc. (Association) owns a private road which the appellant, Palm Beach Polo Holdings, Inc. (Palm Beach Polo) wanted to use to access an otherwise landlocked parcel of property know as the “one hundred acre lot.”
After a non-jury trial, which was affirmed by the 2007 decision linked above:
The defendant moved for attorney’s fees based, in part, on three proposals for settlement dated December 4, 2001, February 1, 2002 and April 30, 2004. Each proposal for settlement was pursuant to Rule 1.442, Florida Rules of Civil Procedure and Section 768.79, Florida Statutes (2008), and offered to pay $1,001.00 as complete and final resolution and settlement of all claims. The Association’s April 30, 2004 proposal offered the payment “as a complete and final resolution and settlement of all claims asserted by [Palm Beach Polo] against [Association] in this action.” The February 1, 2002 proposal for settlement used similar language. It stated “the proposal for settlement is for all claims brought against defendant, Equestrian Club Estates Property Owners Association, Inc., a Florida corporation, by the plaintiff, Palm Beach Polo Holdings, Inc., arising out of the litigation in this lawsuit.”
The trial court awarded attorneys fees pursuant to the offer of judgment statute, leading to this appeal. "Section 768.79 provides the substantive law concerning offers of judgment and proposals for settlement, while Rule 1.442, provides its procedural mechanism. Saenz v. Campos, 967 So. 2d 1114, 1116 (Fla. 4th DCA 2007)."

The offer of judgment statute applies only to civil actions “for damages.” § 768.79. In this case, the action brought by Palm Beach Polo involved three essential Counts, two seeking declaratory judgment and only one seeking damages. One of the declaratory counts sought a way of necessity to obtain access to the “one hundred acre lot.” As pointed out by the trial judge, this claim served as a predicate for the tortious interference action, but it also had significant value independent of any monetary recovery for tortious interference.
In the instant case, the complaint contained two independent, significant claims, such that it could be characterized only as an action for both damages and non-monetary, declaratory relief. In order to determine whether the trial court erred in finding that the defendant is entitled to attorney’s fees pursuant to the offer of settlement, it must be determined whether a general offer applying to an entire case that includes both claims for damages and other claims can be binding upon the unsuccessful party. This issue has not yet been addressed by this court.
(emphasis added). After an analysis of the statute, the court concluded:

Here, the proposals for settlement did not state whether the association was agreeing to entry of any injunctions, or declaration of Palm Beach Polo’s grant of way of necessity, yet it claimed to be a proposal to settle all claims. If the statute were read to permit a proposal for settlement to apply to a case in which there were claims for noneconomic relief as well as for damages, the offeree would be forced either to accept the proposal and continue to litigate the request for injunctive and non-economic relief or to give up their non-damage claims. The purposes of section 768.79 include the early termination of litigation. A proposal for settlement in a case such as this one does not satisfy that purpose, as its acceptance would not terminate the litigation nor resolve those claims not seeking damages. Because the proposals for settlement addressed a complaint that included non-damages claims, they do not comply with the statute, and we find them invalid and reverse the trial court’s order awarding fees.


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