Strategic Reasons for Serving a “Good Faith” Proposal for Settlement
You know how proposals for settlement / offers of judgment (“proposals for settlement”) work because I previously wrote about this topic. You know that such proposals for settlement need to be made in good faith. Remember, proposals for settlement create the argument to recover attorney’s fees from the date the proposal for settlement is served on forward.
The recent case of Key West Seaside, LLC v. Certified Lower Keys Plumbing, Inc., 40 Fla. L. Weekly D2052b (Fla. 3d DCA 2015), exemplifies a defendant relying on a proposal for settlement. In this case, a defendant served the plaintiff with a proposal for settlement. The defendant was being indemnified by a co-defendant meaning another defendant was paying for its legal fees. This defendant prevailed at trial by getting a judgment of no liability. The trial court, however, refused to grant this defendant its reasonable attorney’s fees from the time it served the proposal for settlement on forward.
On appeal, the Third District maintained that because the trial court did not find that the defendant’s proposal for settlement was made in bad faith–not in good faith–there was no basis to deny the defendant its reasonable attorney’s fees. The Third District further held that the fact that another party may have paid the defendant’s legal fees was of no relevance.
There is a value for serving proposals for settlement, especially if you have no statutory or contractual right to recover your legal fees. But, even if you do, there still may be a strategic reason to serve a proposal for settlement in good faith to create another basis to recover your attorney’s fees and costs.
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