PERSONAL INJURY Corner
JOINT PROPOSALS FOR SETTLEMENT
PERSONAL INJURY Corner
JOINT PROPOSALS FOR SETTLEMENT
TED BABBITT
Fla . Stat . 768.79 and Fla . R . Civ . P . 1.442 govern offers for judgment in Florida . That statute and rule have been the subject of more appellate decisions than just about any other legal principal . Pacheco v . Gonzalez , 43 Fla . L . Weekly 1084 ( Fla . 3rd DCA 2018 ) is no exception . In that case at 1086 the Third District concludes
While ‘”[ p ] roposals for settlement are intended to end judicial labor , not create more ,’” Nichols , 932 So . 2d at 1079 ( quoting Lucas v . Calhoun , 813 So . 2d 971 , 973 ( Fla . 2d DCA 2002 )), the opposite has occurred , and proposals for settlement made under section 768.79 and rule 1.442 have instead generated significant ancillary litigation and case law . See Paduru , 157 So . 3d at 318 (“[ M ] any jurists have lamented that the offer of judgment statute has had the unfortunate and unintended consequence of spawning additional litigation , even though the statute was enacted to have exactly the opposite effect .”).
In the Pacheco case , an individual contractor and his corporation were sued alleging defective design of an air conditioning system in plaintiff ’ s new home . At the appropriate time , plaintiff made an offer of judgment and proposal for settlement to the “ Pacheco defendants ” for $ 300,000.00 including terms that Ramon Pacheco , individually , would pay $ 150,000.00 and his corporation , Ramon Pacheco , Inc ., would pay the other $ 150,000.00 . A bench trial resulted in a judgment for $ 377,019.45 thus surpassing the amount that would generate attorney ’ s fees . The parties stipulated that a reasonable fee would be $ 242,440.00 . The trial court entered a judgment for that amount . The defendants appealed claiming that the offer of judgment was invalid because it was a joint offer and did not give the opportunity of either defendant to accept the offer without regard to the decision of the remaining defendant .
The Third District prefaced its opinion reversing the award of attorney ’ s fees on the principal enunciated by the Florida Supreme Court that Florida courts must strictly construe the statute and the rule as they are in derogation of the common law that ordinarily each party pays their own fees . Willis Shaw Express , Inc . v . Hilyer Sod , Inc ., 849 So . 2d 276 , 278 ( Fla . 2003 ) accord Kuhajda v . Borden Dairy Co . of Ala ., LLC , 202 So . 3d 391 , 394 ( Fla . 2016 ) and Pratt v . Weiss , 161 So . 3d 1268 ( Fla . 2015 ).
In addition the Third District relied on State Farm Mut . Auto Ins . Co . v . Nichols , 932 So . 2d 1067 ( Fla . 2006 ) that proposals for settlement must be sufficiently “ clear and definite to allow the offeree to make an informed decision without needing clarification .” Also under Paduru v Klinkenberg , 157 So . 3d 314 ( Fla . 1st DCA 2014 ) “ any drafting deficiencies will be construed against the drafter .”
The Third District felt controlled by the Florida Supreme Court case of Attorneys ’ Title Insurance Fund , Inc . v . Gorka , 36 So . 3d 646 ( Fla . 2010 ). At 650 the Gorka court held
we have drawn from the plain language of rule 1.442 the principle that to be valid and enforceable a joint offer must ( 1 ) state the amount and terms attributable to each party , and ( 2 ) state with particularity any relevant conditions . A review of our precedent reveals that this principle inherently requires that an offer of judgment must be structured such that either offeree can independently evaluate and settle his or her respective claim by accepting the proposal irrespective of the other parties ’ decisions . Otherwise , a party ’ s exposure to potential consequences from the litigation would be dependently interlocked with the decision of the other offerees . ( highlighted in original )
The Gorka court held at 652 “[ a ] n offer that cannot be unilaterally accepted to create a binding settlement is an illusory offer .”
Rule 1.442 ( c )( 4 ) specifically provides that when a party is alleged to be solely vicariously liable a joint proposal need not state the apportionment or contribution
PALMBEACHBAR . ORG 12 as to that party . The problem in the Pacheco case was that the plaintiff alleged individual liability of the corporate and individual defendant and the trial court found both defendants to be independently liable . Thus , the corporate defendant was not just vicariously liable for the individual defendant ’ s action and thus at 1086 the Third District found
As a result , the Proposal is not structured to permit either Pacheco or the Corporation to “ independently evaluate or settle his . . . respective claim by accepting the proposal .” See Gorka , 36 So . 3d at 647 . Moreover , the Proposal clearly conditions settlement on Pacheco and the Corporation ’ s “ mutual acceptance of the offer and joint action in accordance with its terms .”
In Gorka Justice Polson , in his dissent , concluded that the majority ’ s opinion effectively eliminated the ability to make joint offers . That concern was echoed by the First District Court of appeal in Schantz v . Sekine , 60 So . 3d 44 ( Fla . 1st DCA 2011 ) where the court stated that Gorka “ effectively eliminates the ability to make joint offers .” Chance at 446 .
In Pacheco , the Third District cautioned counsel to avoid joint proposals in light of Gorka .
This case adds to the body of law regarding offers of judgment and it , together with Gorka , supra , makes joint offers of settlement dangerous and something to be avoided .
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