Florida Supreme Court Clarifies You Do Not Get Five Extra Days When Responding To A Proposal For Settlement

The Florida Supreme Court issued THIS opinion today and amended the Florida Rules of Civil Procedure to clarify that the additional five days allowed to respond to a filing/pleading served by email or mail does not apply when the pleading/email is a proposal for settlement. Therefore, a party has thirty days to respond to a proposal for settlement (not thirty-five).

Apostrophe-Challenged

In Bradshaw v. Boynton-JCP Associates (4D11-4242), the court reversed an order awarding attorneys fees based upon an offer of judgment because the terms of the offer were not clear. Specifically, the court stated that the offer was "apostrophe-challenged." Regarding the offer in this case, the court stated:

The offer, entitled “Defendant’s Joint Proposal for Settlement,” also appears to have been adopted from a form without sufficient editing; it requires “Plaintiff’(s)” to “execute a stipulation,” and “Plaintiff(s)” to “execute a general release of “Defendant(s).”

The rule requires that “the settlement proposal be sufficiently clear and definite to allow the offeree to make an informed decision without needing clarification. If ambiguity within the proposal could reasonably affect the offeree’s decision, the proposal will not satisfy the particularity requirement.” Therefore, the order awarding fees in this case was reversed.

The opinion can be viewed HERE.

Untimely Claim Reporting & Late Acceptance Of Proposal For Settlement

In Kroener v. Florida Insurance Guaranty Association (4D09-3604 & 4D09-4102), the Fourth District affirmed two orders entered by the circuit court "(1) final summary judgment entered in favor of the Florida Insurance Guarantee Association (FIGA) on their claim for hurricane damage, and (2) denial of their motion to enforce FIGA’s proposal for settlement, which the Kroeners attempted to accept after entry of the final summary judgment."

The appellant's purchased the property in 2007. "When the hurricane struck, however, the prior owners were not residing in the home. They had moved out shortly before the hurricane to rent it out. Although the prior owners were aware of some damage from Hurricane Wilma, they never notified Atlantic of their property damage losses or made a claim on their homeowners’ policy. Sometime after the prior owners sold their home to the Kroeners, the Kroeners discovered a roof leak, which their contractor attributed to Hurricane Wilma. At the request of the Kroeners, on December 5, 2007, the prior owners executed an Assignment of Benefits form..." 

"FIGA filed a motion for summary judgment, arguing that the previous owners had no claim to assign, and no insurable interest, by the time they executed an assignment to the Kroeners, and that the policy’s timely notice requirements had been violated. FIGA further contended that, as a matter of law, a two-year delay for a hurricane loss claim is a violation of the policy’s conditions precedents, without the need to prove prejudice." On the day before the summary judgment hearing, FIGA served a proposal for settlement. The appellants attempted to accept the proposal for settlement after the trial court granted FIGA's summary judgment motion.

With regard to the timely reporting of the claim, the Fourth District held:

Although the trial court entered final summary judgment for FIGA under several theories, we agree with the trial court’s ruling that, as a matter of law, notice to the insurer of a claim of loss more than two years and two months after the loss occurred was not prompt notice; the untimely reporting of the loss violated the insurance policy and was sufficient to bar the claim.

With regard to the proposal for settlement issue, the court held:

As discussed above, the courts which permit acceptance of an offer after a court has entered summary judgment rely on the proposition that the offer is absolutely irrevocable. In Florida, however, the proposal for settlement is revocable at any time before its acceptance by the offeror, Fla. R. Civ. P. 1.442(e). Further, we find more persuasive the reasoning of the courts that preclude a party’s ability to accept a pending offer of judgment after the grant of final summary judgment. This is more in accord with the reasoning of our courts, which do not allow a party to accept an offer of judgment after trial has commenced or a verdict has been announced because it would frustrate the purpose of Rule 1.442 to encourage settlement, obviate the necessity of protracted litigation, and ―totally defeat the ends of justice and allow a mockery of the judicial system." Braham, 514 So. 2d at 73. 

Three Offer of Judgment Questions Certified To Florida Supreme Court

In Auto-Owners Insurance Co. v. Southeast Floating (09-15846), the Eleventh Circuit certified three questions relating to offers of judgment to the Florida Supreme Court. The first question is below:

DOES FLA. STAT. § 768.79 ALLOW FOR VALID OFFERS OF JUDGMENT IN A SEPARATE SECOND TRIAL; AND, IF SO, MAY OFFERS BE DEEMED VALID IN INSTANCES WHERE AN APPELLATE COURT REINSTATES THE JUDGMENT OF THE FIRST TRIAL?

Question two is phrased as follows:

DOES THE CONDITIONING OF AN OFFER OF JUDGMENT ON THE RESOLUTION AND DISMISSAL WITH PREJUDICE OF THE OFFEREE'S CLAIMS IN THE ACTION AGAINST A THIRD-PARTY RENDER THE OFFER OF JUDGMENT A JOINT PROPOSAL, AS THAT TERM IS USED IN FLORIDA RULE OF CIVIL PROCEDURE 1.442(c)(3)?

The third question is below:

DOES FLA. STAT. § 768.79 APPLY TO CASES THAT ARE GOVERNED BY THE SUBSTANTIVE LAW OF ANOTHER JURISDICTION; AND, IF SO, IS THIS STATUTE APPLICABLE EVEN TO CONTROVERSIES IN WHICH THE PARTIES HAVE CONTRACTUALLY AGREED TO BE BOUND BY THE SUBSTANTIVE LAWS OF ANOTHER JURISDICTION?

Fourth District Reverses Oder Finding Offer of Judgment To Be Ambiguous

In Donovan Marine, Inc. v. Delmonico (4D09-897), the Fourth District reversed the trial court's order finding a proposal for settlement ambiguous.  In this case:

The plaintiff filed a complaint against two defendants; one defendant was the employee of the other. The complaint alleged that the employee had made defamatory statements and the employer was vicariously liable. The employee admitted to making the statement.

The defendants served a joint proposal for settlement, pursuant to section 768.79, Florida Statutes and Florida Rule of Civil Procedure 1.442. The proposal offered the plaintiff $20,000 in exchange for the dismissal with prejudice of both defendants. It also required, among other things, that “[t]he writing evidencing acceptance of this proposal must include the explicit acknowledgement by the plaintiff that by making this proposal, defendants are not admitting that they have said or done anything improper referable to the plaintiff, and that the defendants are attempting to purchase their peace from this plaintiff.”  The plaintiff rejected the proposal, but ultimately settled with the employee.

The trial court found the proposal to be ambiguous due to the language "that the defendants are attempting to purchase their peace from this plaintiff." However, the Fourth District disagreed.  The court stated:

Rather than be ambiguous, the defendants specifically directed the language to be contained within the written acceptance. Reading the paragraph as a whole, the last phrase merely explains why the defendants were willing to pay $20,000....“Ambiguity is defined as ‘the condition of admitting more than one meaning.’”...Here, the plaintiff has not suggested a second meaning to the allegedly ambiguous phrase.

Proposal For Settlement Conditioned Upon Acceptance of Two Defendants Is Not Valid

In Traynor v. Delmonico (4D09-881), the Fourth District affirmed the trial court's order concluding that a proposal for settlement conditioned upon the acceptance of two defendants is invalid.  The court quoted a recent decision of the Florida Supreme Court which stated:

a joint offer of settlement or judgment that is conditioned on the mutual acceptance of all of the joint offerees . . . is invalid and unenforceable because it is conditioned such that neither offeree can independently evaluate or settle his or her respective claim by accepting the proposal.

Attorneys Title Ins. Fund, Inc. v. Gorka, 35 Fla. L. Weekly S196 (Fla. Apr. 1, 2010).

Proposal For Settlement To Multiple Parties Not Enforceable

In a 4-3 decision released today in Attorney’s Title Insurance Fund, Inc., v. Joseph W. Gorka, Et Al. (SC09-1899), the Florida Supreme Court held a proposal for settlement is invalid if it is conditioned upon actions out of the control of the offeree.  The court stated:

This case is before the Court to review the decision of the Second District Court of Appeal in Attorneys‟ Title Insurance Fund, Inc. v. Gorka, 989 So. 2d 1210 (Fla. 2d DCA 2008). The district court certified its decision to be in conflict with the decision of the First District Court of Appeal in Clements v. Rose, 982 So. 2d 731 (Fla. 1st DCA 2008), with regard to the validity and enforceability of a joint offer or proposal of settlement that is conditioned on the mutual acceptance of all joint offerees. We have jurisdiction. See art. V, § 3(b)(4), Fla. Const. We hold that this type of joint offer is invalid and unenforceable because it is conditioned such that neither offeree can independently evaluate or settle his or her respective claim by accepting the proposal. Accordingly, we approve the well reasoned decision of the Second District and disapprove the decision of the First District to the extent it holds otherwise.

***

The issue presented by the conflicting decisions is whether a joint offer of settlement or judgment that is conditioned on the mutual acceptance of all of the joint offerees is valid and enforceable. We approve the decision of the Second District Court of Appeal and hold that this type of joint offer is invalid and unenforceable because it is conditioned such that neither offeree can independently evaluate or settle his or her respective claim by accepting the proposal. The conditional nature of the offer divests each party of independent control of the decision to settle, thereby rendering the offer of judgment invalid and unenforceable.

The majority included Justice Pariente, Justice Lewis, Justice Labarga, and Justice Perry.  Justice Polston wrote a dissent and was joined by Justice Canady and Chief Justice Quince.

Fee Award Reversed Because Underlying Judgment Previously Reversed

In Morton, et al v. Boyd, et al (2D08-5207), the Second District reversed the award of attorneys fees based upon a proposal for settlement because the court had previously reversed the underlying judgment.

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.

Proposal For Settlement Not Enforceable Without A Certificate of Service

In Milton v. Reyes (3D08-3121), the Third District held a proposal for settlement was not enforceable because it did not contain a certificate of service as required by Florida Rule of Civil Procedure 1.442.  The result was based upon te Florida Supreme Court's decision in Campbell v. Goldman, 959 So. 2d 223 (Fla. 2007) and was reached regardless of the fact that it was agreed the document was received.  The court disagreed with Jefferson v. City of Lake City, 965 So. 2d 174, 175 (Fla. 1st DCA 2007) and quoting  the dissent in Jefferson stated:

“[p]rudent counsel, being aware of [Campbell], may have well made a tactical decision not to respond to the offer of settlement in this case, confident that, because the form of the offer was defective, no sanctions could flow from rejection of the offer.” Id. (Kahn, J., dissenting). “The . . . result here may be viewed as strict, but it is certainly not harsh.” Id.

Fourth DCA on Proposals for Settlement

In Alioto-Alexander v. Toll Bros. Inc. et al (4D08-1011), the Fourth DCA distinguished a proposal for settlement that is made by two parties from a proposal for settlement made by one party that dismisses the case in its entirety. The court stated:

During the course of the litigation, Toll Brothers served Alioto-Alexander with a $5,000 proposal for settlement, pursuant to the offer of judgment statute, section 768.79, Florida Statutes (2003). The proposal stated that it was being made by Toll Brothers, but provided that the offer was conditioned upon the dismissal of the entire action, including the claims against Barr. Toll Brothers and Barr prevailed in the underlying case giving rise to the attorney’s fees judgment on appeal.

***

Appellant insists that the proposal for settlement was a “joint proposal” from Toll Brothers and Barr. Accordingly, the proposal cannot support an attorney’s fee award as it failed to apportion the $5,000 between Toll Brothers and Barr. We disagree. By its own terms, the proposal for settlement was made by Toll Brothers and Toll Brothers alone was offering to pay the sum of $5,000. The dismissal of the entire suit, including the claims against Barr, was simply a condition of the proposal and did not serve to transform the proposal for settlement into one made by multiple offerors.

Proposals for Settlement and Real Estat Commission

In Eastern Atlantic Realty and Investment Inc. v. GSOMR, LLC (3D06-685 & 3D06-1839), the Third District "affirm[ed] the trial court’s final judgment against Eastern, and...reverse[d] the trial court’s denial of attorneys’ fees and costs." The case involved an appeal "from a final judgment determining it was not entitled to a real estate brokerage commission...Biscayne Joint Venture, Ltd. ("BJV") appeals from a final order denying an award of attorneys’ fees and costs."

Where contractual provisions are clear and unambiguous, these terms control and must be given their plain and ordinary meaning. See Idearc Media Corp. v. M.R. Friedman & G.A. Friedman, P.A., 985 So. 2d 1159, 1161 (Fla. 3d DCA 2008). Given that paragraph 19 of the GRO agreement states that the agreement is "the entire agreement between the parties with respect to the transaction contemplated herein, and it supersedes all prior understandings or agreements between the parties," Eastern cannot recover other than as contemplated by the GRO agreement. Indeed, no binding agreement was formed between GRO and BJV as the initial condition precedent – BRI’s waiver – never occurred...Moreover, GRO relinquished its rights under the GRO agreement pursuant to a global settlement agreement. Because the "purchase and sale of the property as contemplated under the [GRO] agreement" did not occur, Eastern is not entitled to a commission.

Cross Appeal

Section 768.79, Florida Statutes (2007), provides for an award of attorneys’ fees and reasonable costs in any civil action for damages where a defendant files an offer of judgment that is not accepted by the plaintiff within thirty days...While Rule 1.442 requires a proposal for settlement to state with particularity any relevant conditions and all non-monetary terms, the Rule "merely requires that the settlement proposal be sufficiently clear and definite to allow the offeree to make an informed decision without needing clarification." Carey-All Transp., Inc. v. Newby, 989 So. 2d 1201, 1206 (Fla. 2d DCA 2008), review denied, 5 So. 3d 669 (Fla. 2009) (quoting Nichols, 932 So. 2d at 1079). Moreover, a proposal for settlement does not require more than "a summary of the proposed release." Nichols, 932 So. 2d at 1079.

Where "two offerors make a proposal for settlement to one offeree, the offeree is entitled to know the amount and terms of the offer that are attributable to each offeror in order to evaluate the offer as it pertains to that party." Allstate Ins. Co. v. Materiale, 787 So. 2d 173, 175 (Fla. 2d DCA 2001). The plain language of Rule 1.442(c)(3) only requires apportionment if the proposal is made jointly by several parties. Because the proposal at issue here was made solely by BJV, no apportionment between BJV and GSOMR was required.

Accordingly, we affirm the trial court’s finding that Eastern was not the procuring cause of the sale and was not entitled to a broker’s commission. As to the cross-appeal, we reverse and remand for a determination of BJV’s reasonable attorneys’ fees and costs.

Third DCA Finds Proposal for Settlement Enforceable

In Harris Specialty Chemicals, Inc. v. Punto Azul S.A. de C.V. (3D08-1340) the Third DCA reversed the circuit court's order that found a proposal for settlement to be ambiguous.

A proposal may be made by or to any party or parties and by or to any combination of parties properly identified in the proposal. See Fla. R. Civ. P. 1.442(c)(3); see also § 768.79, Fla. Stat. (2007). The rule does not require that a settlement proposal cover all claims between all parties involved, or that it settle all claims between the parties to the proposal. Jacksonville Golfair, Inc. v. Grover, 988 So. 2d 1225, 1227 (Fla. 1st DCA 2008). The rule merely requires that a settlement proposal be sufficiently clear and definite to allow the offeree to make an informed decision without needing clarification. Carey-All Transp., Inc. v. Newby, 989 So. 2d 1201, 1206 (Fla. 2d DCA 2008). Further, courts are urged to "use reason and common sense and interpret the offer as a whole to avoid unreasonable results." Jacksonville Golfair, 988 So. 2d at 1227.

Prejudgment Interest on Fees and Costs Begins on Date of Entitlement

In Lorillard Tobacco Company v. French (3D08-1525) the Third DCA held "plaintiff’s counsel became “entitled” to the fees and costs as of the date the plaintiff obtained a judgment substantially higher than 125% of her written settlement offer, we affirm."

The holding speaks for itself, however, the facts are worth mentioning.

"The plaintiff was one of several thousand flight attendants who sued tobacco companies for second-hand exposure to smoke. On November 13, 2000, Ms. French’s attorney tendered an offer of judgment to settle her claim for $2,676. Lorillard did not accept the offer. At trial of the case in 2002, a jury awarded Ms. French $5,500,000. On September 24, 2002, the court granted a motion for remittitur and entered an amended final judgment in the amount of $500,000."

Proposal for Settlement Valid Beyond Thirty Days

In another opinion relating to a proposal for settlement, the Fourth DCA disagreed with the appellants argument that a request for an extension of time to accept the offer invalidates the offer. In Baratta v. Bradford Electric, Inc. (4D08-968) the court held that nothing prevents an offeree from accepting an untimely acceptance. As long as there is an offer, acceptance and meeting of the minds the settlement is binding. A brief explanation of proposals for settlement and the holding are below:

Bradford made its offer of settlement by referring to section 768.79 and rule 1.442. Although the plain meaning of the statute and the rule of procedure clearly contemplate strict compliance, the statute and the rule implementing the statute apply only when there has been a rejection of a proposal for settlement and the case goes to trial resulting in a judgment. Depending upon which party is making the proposal for settlement, if the final judgment is either twenty-five percent less or twenty-five percent more than the proposal for settlement, only then are the sanctions of attorney’s fees and costs applicable. See § 768.79.

As noted in Wright v. Caruana, 640 So. 2d 197 (Fla. 3d DCA 1994), neither section 768.79 nor rule 1.442 prevents an offeree from actually accepting an untimely offer and avoiding trial. Rather, it me rely prevents the offer from later serving as a basis for an award of costs and attorney’s fees under the statute. Id. at 198-99; accord Hanzelik v. Grottoli & Hudon Inv. of Am., Inc., 687 So. 2d 1363, 1366 (Fla. 4th DCA 1997). In the instant case, there were exchanges of offers and counter offers and a final acceptance by Baratta. There is substantial, competent evidence to support the trial court’s determination that there was a meeting of the minds. An offer and acceptance took place and, therefore, the settlement should be enforced.