Attorneys' Title Ins. Fund Inc v. Gorka

Decision Date24 May 2010
Docket NumberNo. SC08-1899.,SC08-1899.
Citation36 So.3d 646
PartiesATTORNEYS' TITLE INSURANCE FUND, INC., Petitioner,v.Joseph W. GORKA, et al., Respondents.
CourtFlorida Supreme Court

John H. Pelzer and David L. Boyette of Ruden, McClosky, Smith, Schuster and Russell, P.A., Fort Lauderdale, FL, for Petitioner.

Robert C. Widman of Morris and Widman, P.A., Venice, FL, for Respondent.

PER CURIAM.

This case is before the Court to review the decision of the Second District Court of Appeal in Attorneys' Title Insurance Fund, Inc. v. Gorka, 989 So.2d 1210 (Fla. 2d DCA 2008). The district court certified its decision to be in conflict with the decision of the First District Court of Appeal in Clements v. Rose, 982 So.2d 731 (Fla. 1st DCA 2008), with regard to the validity and enforceability of a joint offer or proposal of settlement that is conditioned on the mutual acceptance of all joint offerees. We have jurisdiction. See art. V, § 3(b)(4), Fla. Const. We hold that this type of joint offer is invalid and unenforceable because it is conditioned such that neither offeree can independently evaluate or settle his or her respective claim by accepting the proposal. Accordingly, we approve the well reasoned decision of the Second District and disapprove the decision of the First District to the extent it holds otherwise.

BACKGROUND

Joseph W. Gorka and Laurel Lee Larson (respondents) own property insured under a title insurance policy issued by Attorneys' Title Insurance Fund, Inc. (Attorneys' Title). See Attorneys' Title, 989 So.2d at 1211-12. When Attorneys' Title allegedly refused to defend the respondents in a dispute with regard to the property, the respondents filed an action against the company seeking declaratory relief and damages for breach of contract. See id. at 1212. Before trial, Attorneys' Title served a proposal for settlement on the respondents pursuant to section 768.79, Florida Statutes (2004), and Florida Rule of Civil Procedure 1.442, which offered a payment of $12,500 to each party in full settlement of all claimed damages, attorneys' fees, and costs. See id.1 However, the proposal stated:

This offer is conditioned upon the offer being accepted by both John W. Gorka and Laurel Lee Larson. In other words, the offer can only be accepted if both John W. Gorka and Laurel Lee Larson accept and neither Plaintiff can independently accept the offer without their co-plaintiff joining in the settlement.
(Emphasis supplied.) Neither respondent accepted the proposal. See id.

Following a bench trial, the court rendered a final judgment in favor of Attorneys' Title. See id. Subsequently, Attorneys' Title filed a motion to tax fees and costs against the respondents pursuant to the unaccepted proposal for settlement. See id. While the respondents sought review of the final judgment in the Second District Court of Appeal,2 Attorneys' Title filed a motion with the Second District for appellate attorneys' fees pursuant to the unaccepted proposal for settlement. See 989 So.2d at 1212. The Second District remanded the fee issue to the trial court for a determination of whether Attorneys' Title was entitled to fees. See id.

The trial court concluded that the proposal was invalid and unenforceable based on the authority of Lamb v. Matetzschk, 906 So.2d 1037 (Fla.2005), because neither party was able to independently evaluate or accept the offer since the proposal demanded the mutual acceptance of both parties. Accordingly, the trial court entered orders denying the motions for attorneys' fees. The Second District affirmed the orders and held that the proposal for settlement was invalid and unenforceable because it was

conditioned upon both of them accepting the amounts offered and specifies that neither of them may independently accept the amount offered. By so conditioning the proposal, neither Gorka nor Larson could independently settle his or her respective claim by accepting the proposal. If one wished to accept but the other elected not to accept, the acceptance would not be effective. In this scenario, the offeree who wished to accept would be exposed to the fee sanction under section 768.79 and rule 1.442 due to the conduct of the other offeree rather than as a result of his or her independent decision to reject the proposal.

Id. at 1214. In so holding, the Second District certified conflict with Clements v. Rose, 982 So.2d 731 (Fla. 1st DCA 2008), to the extent that Clements held that joint offers conditioned on the mutual acceptance of all of the joint offerees are valid and enforceable. In Clements, the First District held that a settlement offer to a husband and wife was not ambiguous as to whether the settlement offer was conditioned on both parties' agreement. See

id. at 732.

ANALYSIS

The issue presented by the conflicting decisions is whether a joint offer of settlement or judgment that is conditioned on the mutual acceptance of all of the joint offerees is valid and enforceable. We approve the decision of the Second District Court of Appeal and hold that this type of joint offer is invalid and unenforceable because it is conditioned such that neither offeree can independently evaluate or settle his or her respective claim by accepting the proposal. The conditional nature of the offer divests each party of independent control of the decision to settle, thereby rendering the offer of judgment invalid and unenforceable.

As background to this analysis, section 768.79 generally creates a right to recover reasonable costs and attorney fees when a party has satisfied the terms of the statute and rule. See MGR Equipment Corp. v. Wilson Ice Enters., Inc., 731 So.2d 1262, 1263 (Fla.1999).3 It provides a sanction against a party who unreasonably rejects a settlement offer. See Willis Shaw Express, Inc. v. Hilyer Sod, Inc., 849 So.2d 276, 278 (Fla.2003). Florida Rule of Civil Procedure 1.442 4 provides the method and means of implementing this right by outlining the required form and content of a proposal for settlement. See TGI Friday's Inc. v. Dvorak, 663 So.2d 606, 611 (Fla.1995). An award of attorneys' fees is in derogation of the common law principle that each party pays its own attorneys' fees. This Court strictly construes the language of the statute and rule when reviewing the several requirements. See Willis Shaw, 849 So.2d at 278.

The expected result of the attorneys' fee sanction was to reduce litigation costs and conserve judicial resources by encouraging the settlement of legal actions. See Sarkis v. Allstate Ins. Co., 863 So.2d 210, 218 (Fla.2003). The effect, however, has been in sharp contrast to the intended outcome because the statute and rule have seemingly increased litigation as parties dispute the respective validity and enforceability of these offers. See, e.g., Security Professionals, Inc. v. Segall, 685 So.2d 1381, 1384 (Fla. 4th DCA 1997) (We regret that this case is just one more example of the offer of judgment statute causing a proliferation of litigation, rather than fostering its primary goal to ‘terminate all claims, end disputes, and obviate the need for further intervention of the judicial process.’) (quoting Unicare Health Facilities, Inc. v. Mort, 553 So.2d 159, 161 (Fla.1989)). For instance, since the implementation of the statute and rule, our courts have frequently been called upon to sort through creative proposals to establish definitive rules with regard to the validity of offers made to or from multiple parties. In these cases, 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. See Fla. R. Civ. P. 1.442(c)(3). 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.

First, in Allstate Indemnity Co. v. Hingson, 808 So.2d 197 (Fla.2002), we considered whether a former version of rule 1.442-which did not use the specific language found in the current rule with regard to apportionment of terms to each party-required an offer of settlement made by a defendant to multiple plaintiffs to state the amount and terms attributable to each plaintiff. We held that the former rule also required differentiation based on the plain language and goals of the statute: “Each party who receive [s] an offer of settlement is entitled ... to evaluate the offer as it pertains to him or her.” Id. at 199 (quoting C & S Chemicals, Inc. v. McDougald, 754 So.2d 795, 797-98 (Fla. 2d DCA 2000)). Reading the plain language of the statute, we recognized that the reference to party in the singular in section 768.79(2)(b) indicated the intent of the Legislature that an offer must specify the amount attributable to each party. See id. Moreover, we evaluated the practical necessity of differentiating between parties in an offer to provide the trial court a basis to correctly determine the amount attributable to each party when evaluating the amount of the final judgment against the settlement offer to apply the statute and rule. See id.

Next, in Willis Shaw Express, Inc. v. Hilyer Sod, Inc., 849 So.2d 276 (Fla.2003), two plaintiffs served a joint proposal to one defendant. In considering the undifferentiated joint proposal, we held that a strict construction of the plain language of rule 1.442(c)(3) required offers of judgment made by multiple offerors to apportion the amounts attributable to each offeror. See id. at 278-79.5 Thereafter, in Lamb v. Matetzschk, 906 So.2d 1037, 1041 (Fla.2005), this Court again reiterated that a joint proposal must...

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