Marcy v. Daimlerchrysler Corp.

• Decision Date: 24 February 2006
• Docket Number: No. 5D05-1495.,5D05-1495.
• Citation: 921 So.2d 781
• Parties: Marilyn MARCY and Kenneth Marcy, Appellant, v. DAIMLERCHRYSLER CORPORATION, Appellee.
• Court: Florida District Court of Appeals

921 So.2d 781

Marilyn MARCY and Kenneth Marcy, Appellant, v. DAIMLERCHRYSLER CORPORATION, Appellee.

No. 5D05-1495.

District Court of Appeal of Florida, Fifth District.

February 24, 2006.

Alex D. Weisberg of Krohn & Moss, Ltd., Sunrise, and Theodore F. Greene, III of Law Offices of Theodore F. Greene, LC, Orlando, for Appellant.

Gregory A. Anderson and Jeffrey L. Smith, of AndersonGlenn, LLC, Jacksonville, and John J. Glenn of AndersonGlenn, LLC, Boca Raton, for Appellee.

MONACO, J.

In this appeal the appellants, Kenneth and Marilyn Marcy, challenge the legality of an award of attorneys' fees against them as a result of an unsuccessful claim that they brought under 15 USC Section 2301, the Magnuson-Moss Warranty Act. Because we conclude that the fees were properly awarded to the appellee, DaimlerChrysler Corporation, we affirm.

Mr. and Mrs. Marcy purchased a Dodge Neon having a standard new car factory warranty from an authorized Daimler-Chrysler dealer. The air conditioner did not work to the satisfaction of the Marcys, despite numerous attempts at repair by DaimlerChrysler. Although Mr. and Mrs. Marcy sent a letter revoking acceptance of the Neon, and demanding a refund and attorneys' fees, DaimlerChrysler refused to take back the vehicle, and the Marcys filed suit on a breach of warranty theory under the Magnuson-Moss Warranty Act ("MMWA").

During the course of the suit, Daimler-Chrysler made a proposal for settlement to Mr. and Mrs. Marcy in the amount of $1,500 in accordance with rule 1.442, Florida Rules of Civil Procedure, and section 768.79, Florida Statutes (2003). The Marcys rejected the offer, filed a motion to strike it, and proceeded to a non-jury trial.

The trial had an unhappy result for Mr. and Mrs. Marcy. The trial court directed a verdict against them, and they recovered nothing. DaimlerChrysler then filed a motion for attorneys' fees premised on their proposal for settlement. Mr. and Mrs. Marcy objected, arguing that the MMWA preempted the mechanism for awarding attorneys' fees under state statutes. The trial court, however, found that the MMWA did not preempt Florida's attorneys' fees statute and rule, and awarded $19,435.85 in favor of DaimlerChrysler.¹ In its order awarding fees the trial court found that the settlement offer was made in good faith, and that the award was based in part on the "frivolity of the (Marcys') claims." The trial judge wrote, as well, that Mr. and Mrs. Marcy "certainly knew [that the case was frivolous] after discovery." The Marcys then appealed.

A. Standard of Review.

When faced with questions of statutory application and federal preemption, we apply a de novo standard of review. See Clines v. State, 912 So.2d 550 (Fla. 2005); Montage Group, Ltd. v. Athle-Tech Computer Sys., Inc., 889 So.2d 180, 190 (Fla. 2d DCA 2004). In this instance, we conclude after application of that standard that the trial court was correct in its determination that the MMWA did not preempt the Florida statute and rule concerning an award of attorneys' fees to a successful defendant.

B. Federal Preemption.

Within constitutional limits, and specifically by virtue of the Supremacy Clause of the United States Constitution, Congress may preempt state statutes and regulations in essentially three ways. See New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645, 115 S.Ct. 1671, 131 L.Ed.2d 695 (1995); Pacific Gas & Elec. Co. v. Energy Res. Conservation & Development Comm'n, 461 U.S. 190, 103 S.Ct. 1713, 75 L.Ed.2d 752 (1983); Frank Bros., Inc. v. Wisconsin Dep't of Transp., 409 F.3d 880 (7th Cir.2005). First, Congress may preempt state authority by expressly articulating the intention to preempt in the language of a statute. See Jones v. Rath Packing Co., 430 U.S. 519, 525, 97 S.Ct 1305, 51 L.Ed.2d 604 (1977). Second, federal preemption might be implied from a scheme of federal regulation that is so pervasive that it can reasonably be inferred that Congress left no room for the states to supplement it; or because the field is such that the federal interest is so dominant as to preclude the enforcement of state laws on the same subject; or because the object sought to be obtained by federal law and regulation yields the same implication of preemption. See Fidelity Fed. Sav. & Loan Ass'n v. de la Cuesta, 458 U.S. 141, 153, 102 S.Ct. 3014, 73 L.Ed.2d 664 (1982). Finally, even in cases where Congress does not entirely displace state regulation in a particular area, state law may be preempted to the extent that it actually conflicts with federal law. That is to say, where "compliance with both federal and state regulations is a physical impossibility." See Fla. Lime & Avocado Growers, Inc. v. Paul, 373 U.S. 132, 142-43, 83 S.Ct. 1210, 10 L.Ed.2d 248 (1963). After examining the Florida statute and rule, and comparing it to the MMWA, we find no express, implied or conflict federal preemption by the MMWA.

C. Analysis.

In considering whether there is a federal preemption, we first focus on the premise that state law is displaced only "to the extent that it actually conflicts with federal law." See Pacific Gas, 461 U.S. at 204, 103 S.Ct. 1713. See also Gade v. Nat'l Solid Wastes Mgmt. Ass'n, 505 U.S. 88, 112 S.Ct. 2374, 120 L.Ed.2d 73 (1992). The attorneys' fee provision contained with the MMWA states:

If a consumer finally prevails in any action brought under [this section], he may be allowed by the court to recover as part of the judgment a sum equal to the aggregate cost and expenses (including attorneys' fees based on actual time expended) determined by the court to have been reasonably incurred by the plaintiff for or in connection with the commencement and prosecution of such action, unless the court in its discretion shall determine that such an award of attorneys' fees would be in appropriate.

15 U.S.C. § 2310(d)(2). The purpose of the MMWA's provision for prevailing plaintiff's attorneys' fees is to encourage meritorious claims for breach of warranty. Catalina Yachts v. Pierce, 105 P.3d 125, 128 (Alaska 2005); State Farm Fire & Cas. Co. v. Miller Elec. Co., 231 Ill.App.3d 355, 172 Ill.Dec. 890, 596 N.E.2d 169, 171-72 (1992). The provision, however, does not specifically address the subject of a prevailing defendant's attorneys' fees.

In Motor Vehicle Manufacturers Association of U.S., Inc. v. Abrams, 899 F.2d 1315, 1319 (2d Cir.1990), cert. denied, 499 U.S. 912, 111 S.Ct. 1122, 113 L.Ed.2d 230 (1991), the United States Court of Appeals for the Second Circuit observed after an insightful analysis of the MMWA that "Congress intended federal law in this area to supplement, not supplant, the rights and remedies provided by state law." Similarly, in Walsh v. Ford Motor Co., 807 F.2d 1000 (D.C.Cir.1986), cert. denied, 482 U.S. 915, 107 S.Ct. 3188, 96 L.Ed.2d 677 (1987), the United States Court of Appeals for the D.C. Circuit held that Congress did not intend by the MMWA to replace state law except in those instances where it explicitly said it was doing so. Moreover, 15 U.S.C. Section 2311, the section of the MMWA that details its application to other statutes, does not either expressly or implicitly preempt any state statute concerning an award of attorneys' fees for a prevailing party. Rather, this section provides that the MMWA preempts state warranty law in very specific and limited circumstances, and does not affect the applicability of other enumerated federal statutes. See Catalina Yachts. If the MMWA is only supplementary to state law, and if it is intended to preempt state warranty law only in a narrow area, then there appears to be ample room for state law to apply in the areas not specifically addressed by the federal act.

Consider now the applicable Florida legislation. Section 768.79(1) states in relevant part:

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 or on the defendant's behalf pursuant to a policy of liability insurance or other contract from the date of filing of the offer if the judgment is one of no liability or the judgment obtained by the plaintiff is at least 25 percent less than such offer, and the court shall set off such costs and attorney's fees against the award.

Florida's offer of judgment and demand for judgment statute applies to all civil actions for damages brought in Florida, even where the substantive law of another jurisdiction is applied. See Bennett v. Morales, 845 So.2d 1002, 1004 (Fla. 5th DCA 2003) (applying Virginia law). The statute creates a mandatory award for attorney's fees when the appropriate conditions are met. See Keesee v. Bank of America, N.A., 371 F.Supp.2d 1370, 1376 (M.D.Fla.2005). Rule 1.442, Florida Rules of Civil Procedure, applies to "all proposals for settlement authorized by Florida law," including presumably a proposal under section 768.79(1), and details the procedural process to be followed in implementing the statute. See Willis Shaw Exp., Inc. v. Hilyer Sod, Inc., 849 So.2d 276 (Fla.2003).

When the MMWA and the offer of judgment statute and rule are read together, it becomes clear that they are not in conflict. The MMWA is silent as to attorneys' fees except with respect to a possible award to a prevailing plaintiff. No section of the federal statute denies a defendant the ability to recover fees and costs, or for that matter, even addresses whether a defendant can recover such expenditures. Moreover, several cases from other jurisdictions facing the same issue confirm that the MMWA was not intended to preempt state attorneys' fees statutes in cases brought under it.

In Deadwyler v. Volkswagen of America, Inc., 748 F.Supp. 1146 (N.C.1990), affirmed, 966 F.2d 1443 (4th Cir.), cert. denied, 506 U.S. 956, 113 S.Ct. 415, 121 L.Ed.2d 339 (1992), a...