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Florida Statute 768.79

How to Factor a Postoffer Settlement into a Proposal for Settlement Analysis

Posted by David Adelstein on November 17, 2019
Trial Perspectives / Comments Off on How to Factor a Postoffer Settlement into a Proposal for Settlement Analysis

A plaintiff may serve a proposal for settlement (a/k/a offer of judgment) to create a mechanism to recover attorney’s fees as the prevailing party.  When it comes to proposals for settlement served by the plaintiff on the defendant, Florida Statute s. 768.79 provides:

(b) If a plaintiff serves an offer which is not accepted by the defendant, and if the judgment obtained by the plaintiff is at least 25 percent more than the amount of the offer, the plaintiff shall be awarded reasonable costs, including investigative expenses, and attorney’s fees, calculated in accordance with the guidelines promulgated by the Supreme Court, incurred from the date the offer was served.

For purposes of the determination required by paragraph (a), the term “judgment obtained” means the amount of the net judgment entered, plus any postoffer collateral source payments received or due as of the date of the judgment, plus any postoffer settlement amounts by which the verdict was reduced. For purposes of the determination required by paragraph (b), the term “judgment obtained” means the amount of the net judgment entered, plus any postoffer settlement amounts by which the verdict was reduced.

Of interest is the underlined language talking about adding back “post offer settlement amounts” to the calculation.

For example, say the plaintiff sues multiple defendants.  It serves a proposal for settlement on a defendant and the defendant does not accept the proposal.  During the case, the plaintiff settles with the other defendant and proceeds to trial against the defendant that refused to accept the proposal.   The plaintiff’s net judgment would be reduced by the amount of the settlement BUT when it comes to determine whether the plaintiff should be entitled to its fees against the defendant it proceeded to trial against, this postoffer settlement is added back to the net judgment to see if plaintiff’s judgment is at least 25 percent more than the offer.

This was the situation in Wilcox v. Neville, 2019 WL 5584878 (Fla. 1st DCA 2019).  In this car accident case, a plaintiff sued two defendants.  During the case, the plaintiff served a proposal for settlement on each defendant.  One of the defendants  accepted the proposal against him for $60,400.  The other defendant did not accept the plaintiff’s proposal and the case moved to trial.  At trial, the jury returned a verdict for $126,592.33.  The trial judge reduced this amount by the $60,400 settlement with the co-defendant and insurance benefits, to come up with a net judgment amount of $58,856.73.  The issue, for purposes of determining whether the plaintiff should be entitled to attorney’s fees pursuant to its proposal, was whether the $60,400 should be added back to the net judgment of $58,856.73 for purposes of the attorney’s fees calculation.   The appellate court held the trial court was required to add this back:

Thus, the clear and unambiguous language of section 768.79(6) requires the judgment obtained to include the amount of any settlement by a co-defendant after the date of service of the offer on the defendant by which the verdict was reduced.  Here, it is undisputed that [plaintiff] reached a $60,400 settlement with [co-defendant] after serving her offer on [other defendant] and the verdict was reduced by that amount.  Accordingly, the trial court was required to add the $60,400 settlement amount to the net judgment in calculating the judgment obtained and determining [plaintiff’s] entitlement to fees. 

Wilcox, 2019 WL at *4.

Hence, when it comes to the attorney’s fees calculation for purposes of proposal for settlements, keep in mind that postoffer settlements will be added back into the calculation, even if the verdict or judgment is reduced by virtue of this settlement.

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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Considerations when Multiple Proposals for Settlement are Served on Separate Defendants

Posted by David Adelstein on February 17, 2019
Trial Perspectives / Comments Off on Considerations when Multiple Proposals for Settlement are Served on Separate Defendants

I have previously discussed proposals for settlement / offers of judgment (“proposals for settlement”).  A proposal for settlement is a statutory vehicle pursuant to both Florida Statute s. 768.79 and Florida Rule of Civil Procedure 1.442 to create an argument to recover attorney’s fees based on the judgment amount.  (See this article for more on proposals for settlement).

For a plaintiff (party seeking affirmative relief), the plaintiff must obtain a judgment 25% greater than the proposal for settlement amount. When there are multiple defendants, the plaintiff needs to serve a proposal for settlement on each defendant. 

In Cassedy, Jr. v. Wood,44 Fla.L.Weekly D422a (Fla. 1st DCA 2019), a landlord sued his tenants for breach of a lease when the tenants vacated the property and stopped paying rent.  The lease agreement provided that if collection was required by the landlord, the tenant was required to pay 10% of the judgment amount to cover attorney’s fees.  I have no clue why the attorney’s provision in the lease included this language versus the standard prevailing party attorney’s fees language.

The landlord, obviously knowing the lease would not make him whole for purposes of recovering his attorney’s fees based on that interesting attorney’s fees language, also served a proposal for settlement on each of his tenants.  The proposal for settlement required each tenant, independent of the other tenants, to pay the landlord $25,000.   If the landlord recovered a judgment 25% greater than any proposal for settlement amount, the landlord would now have an argument to recover his attorney’s fees from the date he served the proposal for settlement on forward.

The landlord recovered a judgment of $83,657.60 against the tenants.  The tenants were jointly and severally liable for this amount, meaning they were ALL on the hook for this total amount and the landlord could collect this judgment amount from any one or a combination of the tenants.  This makes sense since likely all of the tenants were on the lease and signed the lease.

The trial court denied attorney’s fees pursuant to the proposal for settlements, which was subject to a de novo standard of appellate review.  The appellate court reversed.

The tenants argued the separate $25,000 proposal for settlement amounts should be aggregated (totaling $75,000) for purposes of determining whether the judgment amount was 25% greater than the proposals for settlement amount for purposes of determining whether attorney’s fees should be awarded.  This was shot down on appeal.  There is no requirement that separate proposals for settlement be aggregated and there was no dispute that the landlord recovered a judgment against all the defendants ($83,657.6) 25% greater than the $25,000 proposal for settlement amounts, especially since all of the tenants were jointly and severally liable for the judgment.

The tenants also argued that the landlord could not recover attorney’s fees pursuant to the lease and also through a proposal for settlement.  This was shot down on appeal.  “Based on the imposition of a penalty pursuant to section 768.79 [Florida Statutes] and its mandatory application if all requirements are met, we find a party is not precluded from receipt of attorney’s fees under a contract and the [proposal for settlement] statute simultaneously.”  Cassedy, Jr., supra.

 

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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Considerations Involving Proposals for Settlement / Offers for Judgment

Posted by David Adelstein on March 29, 2015
Trial Perspectives / Comments Off on Considerations Involving Proposals for Settlement / Offers for Judgment

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There needs to be a contractual or statutory basis in order to be entitled to recover your reasonable attorneys’ fees at trial. See Cadenhead v. Gaetz, 677 So.2d 96, 97 (Fla. 1st DCA 1996). This means either the contract needs to support a basis for the party to recover attorney’s fees (such as a prevailing party attorneys’ fees provision or a contractual indemnification provision that authorizes attorneys’ fees) or there needs to be a statute that authorizes you to recover reasonable attorneys’ fees. Absent these bases, there is generally no basis to recover attorneys’ fees.

However, there is a vehicle under Florida law that allows you to create the argument to recover reasonable attorneys’ fees irrespective of any contractual or statutory basis. This vehicle is referred to as a Proposal for Settlement a/k/a Offer for Judgment (“Proposal”). This vehicle is governed under both Florida Statute s. 768.79 and Florida Rule of Civil Procedure s. 1.442.

 

How a Proposal Works if You are a Defendant

 

If you are a defendant, you can serve a Proposal no earlier than 90 days from the date the plaintiff initiated the lawsuit and no later than 45 days from the trial date (or first day of the trial docket). You should be entitled to recover your reasonable attorneys’ fees and costs from the date of the Proposal on forward if the plaintiff does not accept the Proposal within 30 days and the “judgment [against you] is one of no liability or the judgment obtained by the plaintiff [against you] is at least 25 percent less than” the Proposal. For instance, let’s say you are a defendant and serve a proposal for $100,000. The plaintiff does not accept the Proposal within 30 days. Now let’s say the plaintiff gets a judgment against you for $70,000. The 70,000, however, is at least 25 percent less than the $100,000 Proposal. This gives you the argument that you should be entitled to your reasonable attorneys’ fees from the date of the Proposal on forward and these fees and costs would set off from the $70,000 judgment against you and/or the plaintiff would owe you any excess (if your fees and costs exceeded $70,000).

 

How a Proposal Works if You are a Plaintiff

 

If you are a plaintiff, you can serve a Proposal no earlier than 90 days from the date the defendant was served with the complaint and no later than 45 days from the trial date (or first day of the trial docket). You should be entitled to recover your reasonable attorneys’ fees and costs from the date of the Proposal on forward if the defendant does not accept the Proposal within 30 days and you recover a “judgment in an amount at least 25 percent greater than the” Proposal. Let’s say you are a plaintiff and serve a proposal for $100,000. The defendant does not accept the Proposal within 30 days. Now, let’s say you get a judgment against the defendant for $130,000. The $130,000, however, is at least 25 percent greater than the Proposal. This gives you the argument that you should be entitled to your reasonable attorney’s fees from the date of the Proposal on forward.

 

 Proposal Considerations

 

There is a lot of thought to Proposals that need to be ironed out with your counsel before serving the Proposal. The content and form of the Proposal must be specific and reference and comply with both Florida Statute s. 768.79 and Florida Rule of Civil Procedure s. 1.442.   However, this is an area of law that contains extensive and, sometimes, conflicting case law meaning that you really cannot bank your entire case on recovering attorneys’ fees pursuant to a Proposal. This is why I use the terminology that the Proposal is a vehicle to create an argument to recover attorneys’ fees, since recovery is never an absolute.

Here are some considerations regarding Proposals:

  • Amount – The amount to include in the Proposal needs to be made in good faith and a nominal amount included in the Proposal does not mean it was not made in good faith. See, e.g., Isaias v. The H.T. Hackney Co., 40 Fla. L. Weekly D753a (Fla. 3d DCA 2015) (finding a $500 offer was made in good faith since offeror / proposer had reasonable basis at time Proposal was made that its exposure was nominal);
  • Joint Proposal – If the Proposal is made jointly on behalf of multiple parties it must apportion the amounts to each proposer / offeror. See Arnold v. Audiffred, 98 So.3d 746 (Fla. 1st DCA 2012); Carey-All Transport, Inc. v. Newby, 989 So.2d 1201 (Fla. 2d DCA 2008);
  • Release – If the Proposal requires a mutual release or a release of the offeror / proposer, it needs to specifically attach a form of the release. See Jones v. Publix Supermarkets, Inc., 68 So.3d 422 (Fla. 4th DCA 2011);
  • Net Judgment – You need to consider whether to include and factor attorneys’ fees, prejudgment interest, and other taxable costs in the Proposal. See White v. Steak and Ale of Florida, Inc., 816 So.2d 546, 551 (Fla. 2002) (“We conclude that the ‘judgment obtained’ pursuant to section 768.79 includes the net judgment for damages and any attorneys’ fees and taxable costs that could have been included in a final judgment if such final judgment was entered on the date of the offer [Proposal]. Thus, in calculating the ‘judgment obtained’ for purposes of determining whether the party who made the offer is entitled to attorneys’ fees, the court must determine the total net judgment, which includes the plaintiff’s taxable costs up to the date of the offer and, where applicable, the plaintiff’s attorneys’ fees up to the date of the offer.”); and
  • Timing – You need to consider whether to serve a Proposal at all and, if so, the appropriate timing. Once the Proposal is served, the cat is already out of the bag regarding that amount and the other party may always feel this is an amount they can resolve the case down the road if the Proposal is not accepted.

 

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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