Florida Supreme Court Addresses Validity of Offers of Settlement that Fail to Mention Attorney’s Fees in Cases Where the Complaint Does Not Seek Fees

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Kuhajda v. Borden Dairy Co. of Alabama, LLC, 41 Fla. L. Weekly S 471 (Fla. Oct. 20, 2016)

The Florida Supreme Court recently decided the question of whether an offer of settlement under section 768.79(1), Florida Statutes, is invalid when the offer of judgment fails to address attorney’s fees pursuant to Fla. R. Civ. P. Rule 1.442(c)(2)(F) and attorney’s fees were not sought in the pleadings.

In Kuhajda, a negligence case, plaintiff did not seek attorney’s fees in her complaint. Plaintiff served identical offers of judgment on the defendants, consisting of all damages or monies recoverable under the complaint and by law, as well as costs and interest. The defendants did not accept the offers of judgment and the case proceeded to trial. Plaintiff recovered a judgment that was at least 25% greater than her offer. The trial court granted Plaintiff’s motion to tax attorney’s fees and costs pursuant to section 768.79(1) and Florida Rule of Civil Procedure 1.442(c)(2)(F).

Even though section 768.79(1), Florida Statutes, does not require the attorney’s fees language mandated in Fla. R. Civ. P. Rule 1.442(c)(2)(F), the First DCA held on appeal that Plaintiff was required to strictly comply with Fla. R. Civ. P. Rule 1.442(c)(2)(F). That rule requires that a proposal “shall . . . state whether the proposal includes attorney’s fees and whether attorney’s fee are part of the legal claim.” The First DCA reversed the trial court’s order granting attorney’s fees and costs because Plaintiff’s proposal did not contain the information about attorney’s fees pursuant to rule 1.442(c)(2)(F).

The Florida Supreme Court accepted jurisdiction to review Kuhajda based on the First DCA’s certification that its decision was in direct conflict with the Fourth DCA’s decision in Bennett v. American Learning Systems of Boca Delray, Inc., 857 So. 2d 986 (Fla. 4th DCA 2003).

The Florida Supreme Court began its analysis by noting that section 768.79, Florida Statutes, provides for a substantive right to attorney’s fees, which is implemented by the procedural framework in rule 1.442. The Court noted its prior holding in Diamond Aircraft Industries, Inc. v. Horowitch, 107 So. 3d 362 (Fla. 2013), which held that an offer of judgment was invalid because it failed to state whether attorney’s fees were part of the claim. The complaint in Diamond Aircraft demanded attorney’s fees, which created an ambiguity in the offer of settlement that did not mention attorney’s fees.

Where attorney’s fees are not sought in the complaint, the requirement of rule 1.442(c)(2)(F) is “totally irrelevant” to the settlement of the case, the Kuhajda Court explained. The Court went on to express that Plaintiff’s offers of judgments will not be invalidated solely for violating a procedural requirement in rule 1.442 that is not required by the applicable statute. The Supreme Court held that “if attorney’s fees are not sought in the pleadings an offer of settlement is not invalid for failing to state whether the proposal includes attorney’s fees and whether attorney’s fees are part of the legal claim.”

The Florida Supreme Court concluded that Plaintiff is entitled to attorney’s fees under section 768.79, Florida Statutes, reasoning that Plaintiff complied with the pertinent requirements of rule 1.442 that implement the statute’s substantive requirements. The offers of judgment were not ambiguous because Plaintiff did not request attorney’s fees in her complaint.

As a result of its holding, the Court quashed the First DCA’s decision under review and approved the Fourth DCA’s decision in Bennett.