Keesee v. Bank of America, Na, 603CV1746ORL31JGG.

• Decision Date: 01 June 2005
• Docket Number: No. 603CV1746ORL31JGG.,603CV1746ORL31JGG.
• Citation: 371 F.Supp.2d 1370
• Parties: Sandra D. KEESEE, Plaintiff, v. BANK OF AMERICA, NA, Defendant.
• Court: U.S. District Court — Middle District of Florida

371 F.Supp.2d 1370

Sandra D. KEESEE, Plaintiff, v. BANK OF AMERICA, NA, Defendant.

No. 603CV1746ORL31JGG.

United States District Court, M.D. Florida, Orlando Division.

June 1, 2005.

Wayne L. Allen, Adrienne Elise Trent, Wayne L. Allen, P.A., Melbourne, FL, for Plaintiff.

Robert T. Kofman, Annette Torres, Stearns, Weaver, Miller, Weissler, Alhadeff & Sitterson, P.A., Miami, FL, for Defendant.

ORDER

PRESNELL, District Judge.

Before the Court is Defendant Bank of America's ("BOA") Motion for Attorney's Fees and Costs (Doc. 82) and Plaintiff Sandra Keesee's Opposition (Doc. 83) thereto.

I. Introduction

Keesee initially filed this civil action in state court, and BOA thereafter removed the action to this Court. Keesee's claims were for alleged violations of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., and the Florida Civil Rights Act of 1992, FLA. STAT. § 760 et seq. ("FCRA").¹ Well into this action, BOA served Keesee with a settlement proposal according to Florida Statute § 768.79 ("Section 768.79") among other provisions. Keesee did not accept BOA's settlement proposal, and about six weeks after BOA served its proposal, the Court granted Summary Judgment in BOA's favor.

BOA now seeks an order requiring Keesee to pay $38,277.65 in attorney's fees BOA purportedly accrued since service of its proposal. Keesee contends that she should not be held liable for BOA's attorney's fees, in relevant part, because Section 768.79 does not apply to this action under the principles announced in Erie Railroad Company v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), and related cases. The Court agrees that this is not an action in which Section 768.79 applies.

II. Analysis

Section 768.79 provides, in relevant part, that:

In any civil action for damages filed in the courts of this state, if a defendant files an offer of judgment which is not accepted by the plaintiff within 30 days, the defendant shall be entitled to recover reasonable costs and attorney's fees incurred by her or him ... from the date of filing of the offer if the judgment is one of no liability ...

FLA. STAT. § 768.79(1). The purpose and intent of this statute is "to encourage parties to settle claims without going to trial." Aspen v. Bayless, 564 So.2d 1081, 1083 (Fla.1990). For this reason, Florida courts are to apply Section 768.79 even to actions under the substantive law of other states because such actions place the same burden on the Florida courts as actions under the substantive law of Florida. BDO Seidman, LLP, v. British Car Auctions, Inc., 802 So.2d 366, 369 (Fla. 4th DCA 2001). It is, therefore, evident that Section 768.79 can act independently of claims arising under Florida law. At issue is whether Section 768.79 applies in the instant action, which arises under Title VII.

BOA contends that Section 768.79 is a "substantive" rule of decision, that this case is based on diversity jurisdiction, and that this Court must, therefore, apply the statute according to the analysis in Erie. In this regard, BOA misapprehends the nature of the instant action and misinterprets the meaning, scope, and application of Erie.

Erie is a watershed precedent in which the Supreme Court stated a beguilingly succinct rule: "Except in matters governed by the Federal Constitution or by acts of Congress, the law to be applied in any case is the law of the state." Erie, 304 U.S. at 78, 58 S.Ct. 817. Erie held, in essence, that federal courts are to apply state law, including state common law, in deciding diversity cases. Id. The contours of Erie's holding are not obvious or simple, and efforts to distill the holding by rule of thumb can easily lead to error.

Litigants and courts often use a "substance" versus "procedure" dichotomy in finding the rules of decision to apply in actions before federal courts. The theory is that if a state-law rule is procedural, a federal court should apply a conflicting federal rule, but if a state-law rule is substantive, a federal court should apply the state-law rule. Troubling, however, is that "[t]he line between `substance' and `procedure' shifts as the legal context changes." Hanna v. Plumer, 380 U.S. 460, 471, 85 S.Ct. 1136, 14 L.Ed.2d 8 (1965). As the Supreme Court stated in its first significant revisitation of Erie, in Guaranty Trust Company of New York v. York, 326 U.S. 99, 108, 65 S.Ct. 1464, 89 L.Ed. 2079 (1945):

Matters of `substance' and matters of `procedure' are much talked about in the books as though they defined a great divide cutting across the whole domain of law. But, of course, `substance' and `procedure' are the same key-words to very different problems. Neither `substance' nor `procedure' represents the same invariants. Each implies different variables depending upon the particular problem for which it is used.

Erie and its progeny lay down a far more textured framework for analyzing the variant contexts within which a choice between federal law and state law arises. See, e.g., Hanna, 380 U.S. 460, 85 S.Ct. 1136, 14 L.Ed.2d 8; Byrd v. Blue Ridge Rural Elec. Coop., Inc., 356 U.S. 525, 78 S.Ct. 893, 2 L.Ed.2d 953 (1958); Guaranty Trust, 326 U.S. 99, 65 S.Ct. 1464, 89 L.Ed. 2079.

One notable commentator has delineated the following test to determine when federal law may apply in diversity actions:

If there is no conflict between state and federal law, both are to be applied. But if state and federal law are inconsistent, the following questions must be asked. First, is there a valid federal statute or Federal Rule of Procedure on point, such as a provision of the Federal Rules of Civil Procedure or the Federal Rules of Appellate Procedure? If so, then the federal law is to be applied, even if there is conflicting state law. If there is not a valid statute or Rule of Procedure, the second question is whether the application of the state law in question is likely to determine the outcome of the lawsuit. If the state law is not outcome determinative, then federal law is used. But if the state law is deemed to be outcome determinative, then [a] third question is asked: Is there an overriding federal interest justifying the application of federal law? If state law is outcome determinative and there is no countervailing federal interest, then state law controls. Otherwise, federal law is applied. In applying this test, federal courts are to be guided by the goals of the Erie doctrine, which are to prevent forum shopping and the inequitable administration of justice.

ERWIN CHEMERINSKI, FEDERAL JURISDICTION § 5.3.5 at 316-17 (4th ed.2003). In this manner, an analytical framework is posed for the Erie doctrine, which derives, at base, from federal statute and ultimately the Constitution — viewed, of course, in its context: a dual sovereignty.

The Rules of Decision Act, 28 U.S.C. § 1652, formally entitled "State laws as rules of decision," provides that:

The laws of the several states, except where the Constitution or treaties of the United States or Acts of Congress otherwise require or provide, shall be regarded as rules of decision in civil actions in the courts of the United States, in cases where they apply.

Congress, in this regard, divided the rules on which the judicial power of the United States is to operate. As to the judicial power, the Constitution provides, in relevant part, that:

The judicial Power of the United States, shall be vested in one supreme Court, and in such inferior Courts as the Congress may from time to time ordain and establish .....

The judicial Power shall extend to all Cases, in Law and Equity, arising under this Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority;... — to Controversies ... between citizens of different States....

U.S. CONST. Art. III §§ 1-2. Amongst the various provisions in the Constitution, this latter provision embodies sovereign power vested in the federal government.

The Constitution grants judicial power that extends to "Cases," not merely claims, arising under the Constitution and acts of Congress. Id. § 2. The Constitution also grants judicial power to hear "Controversies" between citizens of different states. Id. Congress has vested the judicial power in federal district courts in the following, among other, terms:

• "The district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States," 28 U.S.C. § 1331 (emphasis added);

• "The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between ... citizens of different States," 28 U.S.C. § 1332(a) (emphasis added); and

• "[With certain exceptions], in any civil action of which the district courts have original jurisdiction, the district courts shall have supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution," 28 U.S.C. § 1367(a) (emphasis added).

It is not happenstance that Congress selected these terms; they include clear references to the Constitution. What the terms reflect and what the Constitution, itself, contemplates is a system of federal courts capable of acting in two similar — but distinct — capacities.

Federal courts are forums that may decide "Controversies," so-called "diversity cases," between citizens of different states and based solely on state-law claims; and when federal courts do so, they are generally required to decide the matter as would a state court. Guaranty Trust, 326 U.S. at 108-10, 65 S.Ct. 1464. This entails federal courts acting as neutral fora in controversies where state statutory- and common-law rules are generally the rules of decision. See 28 U.S.C. § 1652; Erie, 304 U.S. at 78, 58 S.Ct....