Prejudgment interest is routinely a component of a claimant’s monetary damages.   The claimant wants prejudgment interest on the principal amount due and owing. If no interest rate is set forth in the claimant’s contract, then the interest will accrue at the statutory rate. Then, once a judgment is entered, post-judgment interest will accrue on the judgment until it is paid.   See Florida Statute s. 55.03.

Florida’s statutory interest rate is set by the Chief Financial Officer and published here.

For instance, the current statutory interest rate is 4.75% per annum (and it has been 4.75% for numerous years). This translates to a daily rate as a decimal of .000130137.   Say you are owed $100,000 for 125 days. The calculation could be made two ways to determine the statutory interest rate on this amount for 125 days:

1. $100,000 x 4.75% / 365 days in a year= $13.01 per day x 125 days = $1,626.25;

OR

2. $100,000 x .000130137 = $13.01 per day x 125 days = $1,626.25.

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

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In an earlier posting I talked about proposals for settlement / offers of judgment.   Again, these are used as a vehicle to create an argument for attorney’s fees down the road, particularly in cases where a party does not have a contractual or statutory basis to recover attorney’s fees. Please check out this article for more information on proposals for settlement because they have become an unnecessarily complicated vehicle with nuances that have resulted in an exorbitant amount of case law, some of which is conflicting. As a result, while the argument to recover fees is preserved by serving the proposal for settlement, it is an argument and not a guaranty.

Sometimes, parties with a contractual or statutory basis to recover attorney’s fees will still serve a proposal for settlement. This becomes tricky because the right to attorney’s fees per the contract or statute is not cut-off by virtue of the proposal for settlement.

Say, for example, a defendant serves a proposal for settlement. The plaintiff, however, prevails in the case through trial in a claim in which the plaintiff is entitled to contractual attorney’s fees. There are two considerations.  

First, when determining the merits of a proposal for settlement, you need to look at the “net” judgment, which would include attorney’s fees and costs incurred by the opposing party (party receiving offer that prevailed in the case) through the date of the offer. See Leon F. Cohn, M.D., P.A. v. Visual Health and Surgical Center, Inc., 125 So.3d 860, 863 (Fla. 4^th DCA 2013) (“Because Cohn prevailed on the breach of contract claim and the contract contained a provision awarding attorney’s fees to the prevailing party, we reverse and remand for the trial court to reconsider the issue of Cohn’s entitlement to fees after conducting an evidentiary hearing to determine the total net judgment, which shall include the amount of fees and taxable costs incurred by Cohn in litigating the breach of contract claim up to the date of the offer.”). Since the proposal for settlement is based on the net judgment, to determine whether the above defendant would be a prevailing party for purposes of recovering its attorney’s fees from the date of the proposal on forward would require an analysis to see what the total net judgment to the plaintiff would be factoring in fees and taxable costs through the date the defendant served the proposal.   The issue in looking at the net judgment is to determine whether the defendant could offset some of the attorney’s fees entitled to the plaintiff by being entitled to attorney’s fees from the date of the proposal on forward.

Second, the proposal for settlement does not cut-off the opposing party’s contractual right to fees incurred after the proposal for settlement is served. See Tierra Holdings, Ltd. v. Mercantile Bank, 78 So.3d 558 (Fla. 1^st DCA 2011).   The above plaintiff would still be entitled to its attorney’s fees if deemed the prevailing party under the contract through the trial.   The issue, as discussed above, is whether the defendant could offset some of the fees entitled to the plaintiff by being entitled to attorney’s fees from the date of the proposal on forward.

Let’s use real numbers. Assume the defendant served the proposal for settlement to the plaintiff for $100,000. The plaintiff has a contractual right to attorney’s fees. The plaintiff rejects the proposal for settlement and at trial the plaintiff is awarded $40,000. Now, let’s assume the total net judgment through the date of the proposal for settlement factoring in fees and costs entitled to the plaintiff as the prevailing party under the contract is $60,000.   This $60,000 is at least 25% less than the defendant’s proposal for settlement of $100,000, meaning the defendant would be entitled to its attorney’s fees from the date of the proposal on forward. Assume those reasonable fees are $75,000. Assume the plaintiff’s total reasonable fees are $90,000.

Under step one, the defendant would presumably be the prevailing party for purposes of fees per the proposal for settlement and be entitled to its reasonable fees of $75,000 from the date of the proposal through trial.   The reason being is that the total net judgment to the plaintiff at the time the defendant served the proposal when factoring in fees and costs was at least $25% less than the defendant’s proposal for settlement.

Under step two, the plaintiff is still entitled to its attorney’s fees for prevailing under the contract, which are $90,000 through trial. Thus, the $75,000 owed to the defendant in fees would simply be credited in a judgment given to the plaintiff (reducing the plaintiff’s judgment by $75,000). For example, if the court entered an attorney’s fees judgment, the plaintiff would be entitled to $15,000 in fees, or the difference between the $90,000 and the $75,000.

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

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Attention should be given to the verdict form you want the jury to fill out after listening to and seeing the evidence presented in the case.   This verdict form dictates how the jury decides the facts in your case in the context of the theme of your case and the jury instructions. Needless to say, the verdict form is very, very important!

There are times when a party may want a simple, all-or-nothing verdict form.  A party may like this (such as the plaintiff) versus a special interrogatory form that contains numerous potentially confusing questions the jury is asked to answer. For example, an all-or-nothing verdict form may simply ask the jury as the first question whether the defendant breached the contract. If the jury answers yes, then they need to answer the second question which would be the amount of damages that should be awarded to the plaintiff as a consequence of the defendant’s breach of the contract. On the other hand, if the jury answers no to the first question, they should not answer any more questions as the jury’s verdict is in favor of the defendant.

In Finkel v. Batista, 41 Fla.L.Weekly D2279b (Fla. 3d DCA 2016), the liability portion of the trial was bifurcated from the damages portion. The case dealt with a car accident that resulted in personal injury. During the liability portion, the jury found the defendant 100% liable for the car accident. During the damages trial, the parties agreed on a verdict form that read:

1. Evan Finkel [Defendant] was negligent. Was such negligence the legal cause of loss, injury or damage to the Plaintiff, Yarielsi Batista?

Yes_______ No_______

If you answered “NO” to Question 1, your verdict is for the Defendant, Evan Finkel and you should not proceed further except to date and sign this verdict form and return it to the courtroom. If you answered “YES” to Question 1, please answer Questions 2 and 3.

The jury answered “No” to this first question finding for the defendant; no damages were awarded to the plaintiff.

The plaintiff appealed arguing that she should be entitled to damages for medical expenses she incurred. The trial court agreed and ordered a new jury trial.   The appellate court reversed with directions to reinstate the jury’s verdict:

[T]he plaintiffs here did not object to the verdict form that invited the jury to return a verdict on an “all-or-nothing” basis. The jury answered the first question presented to it in the negative, finding that the accident was not the legal cause of loss, injury, or damage to Ms. Batista [plaintiff]. Consistent with verdict form’s instructions, the jury answered no further questions and awarded no damages. It is well-settled law that “the jury cannot be faulted for doing exactly what it was instructed to do” in these circumstances. For these reasons, we reverse the order granting a new trial.

Finkel, supra (internal citation omitted).

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

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If you have looked through the articles on this blog before, you will know that the business records exception to the hearsay rule is a very important hearsay exception in business disputes (or any dispute involving business records!). The business records exception requires a proper foundation to be laid by a witness before the records are admitted into evidence to ensure the accuracy and reliability of the records.  The proper foundation requires the witness to show that “(1) the record was made at or near the time of the event; (2) was made by or from information transmitted by a person with knowledge; (3) was kept in the ordinary course of a regularly conducted business activity; and (4) that it was a regular practice of that business to make such a record.” Ocwen Loan Servicing, LLC v. Gunderson, 41 Fla.L.Weekly D2238a (Fla. 4^th DCA 2016) quoting Yisrael v. State, 993 So.2d 952, 956 (Fla. 2008).

The business records exception to the hearsay rule comes up quite a bit in the mortgage foreclosure context.   This is because the loans (notes and mortgage) get assigned or assumed by a new servicer or lender and the new servicer or lender moves to foreclosure on the mortgage. Many times the issue is laying the proper foundation with the witness being relied upon in order to admit certain documents under the business records exception to the hearsay rule.

In Ocwen Loan Servicing, LLC, the witness was trying to lay the foundation for records maintained by the original loan servicer (which was a company whose assets were purchased by the new loan servicer). He testified about the verification process of getting the original servicer’s records to the new servicer to ensure the accuracy of the records and then entering that information into the new servicer’s computer system.

The witness also tried to lay the foundation for a screenshot to show that the original promissory note was entered into the original servicer’s system / loan servicing platform. The trial judge sustained a hearsay objection and excluded this evidence because the witness did not work for the original servicer and had no personal knowledge as to its computer system / servicing platform.   The trial court also excluded the loan payment history and the default letter that was entered into the original servicer’s computer system as hearsay. As a result, the loan servicer could not support a mortgage foreclosure claim and the court entered judgment in favor of the homeowners.

The appellate court reversed finding that the documents that the trial court excluded as hearsay were admissible under the business records exception even though the new loan servicer took custody of the original servicer’s records:

Where a business takes custody of another business’s records and integrates them within its own records, the acquired records are treated as having been ‘made’ by the successor business, such that both records constitute the successor business’s singular ‘business record.’ [T]he authenticating witness need not be ‘the person who actually prepared the business records.’ As such, it is not necessary to present a witness who was employed by the prior servicer or who participated in the boarding process. Rather, the records of a prior servicer are admissible where the current note holder presents testimony that it had procedures in place to check the accuracy of the information it received from the previous note holder. The testifying witness just need[s] [to] be well enough acquainted with the activity to provide testimony. Once this predicate is laid, the burden is on the party opposing the introduction to prove the untrustworthiness of the records. 

Ocwen Loan Servicing, LLC, supra (internal citations and quotations omitted).

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

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