Oruga Corp., Inc. v. AT &T Wireless of Florida, Inc.

• Decision Date: 10 June 1998
• Docket Number: No. 97-2797,97-2797
• Citation: 712 So.2d 1141
• Parties: 23 Fla. L. Weekly D1401 ORUGA CORPORATION, INC., on behalf of itself and all others similarly situated, Appellant, v. AT&T WIRELESS OF FLORIDA, INC., a Florida Corporation, Appellee.
• Court: Florida District Court of Appeals

Page 1141

712 So.2d 1141

23 Fla. L. Weekly D1401

ORUGA CORPORATION, INC., on behalf of itself and all others similarly situated, Appellant, v. AT&T WIRELESS OF FLORIDA, INC., a Florida Corporation, Appellee.

No. 97-2797.

District Court of Appeal of Florida,

Third District.

June 10, 1998.

Robles & Gonzalez and Michael Pfundstein, Jack Reise and Ervin Gonzalez, Miami, for appellant.

Ackerman, Link & Sartory and Julie E. Fox and David Ackerman, West Palm Beach, for appellee.

Before NESBITT, GREEN and FLETCHER, JJ.

GREEN, Judge.

We have before us on the main appeal of this cause the issue of whether the offer of judgment statute, section 768.79, Florida Statutes (1995), is applicable to offers made to representatives of class action suits. On the cross appeal, we have the issue of whether an attorney's fees award made pursuant to section 768.79, may include fees incurred for the prosecution of the amount of attorney's fees. We conclude that: (1) section 768.79, as presently written, applies to all civil actions, including class actions; and (2) an attorney's fee award made pursuant to this section may not include fees for litigating the amount of attorney's fees. Accordingly, we affirm both the main and cross appeals.

The class action complaint was originally filed on June 13, 1995, by the law firm of John H. Ruiz, P.A. against AT&T Wireless Services, Inc. f/k/a McCaw Cellular Communications, Inc. ("AT&T") and Virginia Surety Company, Inc. ("Virginia Surety"). According to its allegations, Mr. Ruiz purchased a cellular telephone from AT&T. The telephone was insured by Virginia Surety. The telephone was subsequently stolen from Mr. Ruiz' automobile and AT&T and/or Virginia Surety refused to replace the same. Ruiz's three count class action complaint was for breach of contract, petition for declaratory relief and conspiracy to defraud. AT&T moved to dismiss the complaint. By an agreed order dated October 25, 1995, Ruiz was permitted to file an amended complaint. Ruiz then filed an amended three count class action complaint for breach of contract, petition for declaratory relief and conspiracy to defraud. AT&T again moved to dismiss the amended complaint based on inter alia, its argument, that the allegations were legally insufficient for the certification of a class.

Shortly after filing its motion to dismiss the amended complaint, AT&T served an offer of judgment/settlement pursuant to section 768.79 upon Ruiz for six hundred and twenty-five dollars ($625). This figure represented the replacement value of the stolen cellular telephone. Ruiz never responded to this offer. Rather, after an agreed upon dismissal of the amended complaint without prejudice was entered, Ruiz filed a three count second amended complaint which substituted the appellant, Oruga Corp., Inc., as the named plaintiff. Both AT&T and Virginia Surety thereafter filed their respective motions to dismiss the second amended complaint. On July 23, 1996, the lower court granted AT&T's motion to dismiss with prejudice; no appeal was taken from this order of dismissal.

AT&T then filed a motion for attorney's fees and costs based upon the appellant's rejection of its offer of judgment pursuant to section 768.79. After a hearing on the motion, the lower court entered an order awarding AT&T five thousand dollars ($5000) as its reasonable attorney's fees and five hundred dollars ($500) in costs. The court, however, declined to award AT&T its fees for litigating the amount of attorney's fees. This appeal and cross appeal followed.

On the main appeal, the appellant asserts that the offer of judgment statute should not provide a basis for an award of attorney's fees and costs in class action suits. The offer of judgment statute provides in pertinent part that:

(1) 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 him or on his 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....

§ 768.79(1), Fla. Stat. (1995). The appellant urges us to construe this statute as being inapplicable to offers of judgment made to class representatives in class action suits. Appellant points to the fact that a class representative has been found to be a fiduciary, see Austin v. Pennsylvania Dep't. of Corrections, 876 F.Supp. 1437, 1454 (E.D.Pa.1995), and as such, cannot have interests antagonistic to putative or actual class members, see White v. Deltona Corp., 66 F.R.D. 560, 562-63 (S.D.Fla.1975). Appellant argues that section 768.79 creates an inherent conflict of interest for a class representative in that while it may be personally alluring or advantageous for the representative to accept an offer of judgment to avoid potential personal exposure for substantial class action attorney's fees and costs, the offer of judgment may not necessarily be in the best interest of the remaining class members. In this case, for example, the appellant points out that while AT&T's $625 offer of judgment would have fully recompensed Mr. Ruiz for his losses, it would not have compensated the putative class members for their losses. Moreover, the appellant asserts that if section 768.79 is found to be applicable to class actions, defendants could effectively derail or moot out such suits by making offers of judgment to class representatives early on in the litigation when discovery may not have commenced and at a time when the representatives may have insufficient information as to the potential damages of the putative class.

At the outset, we acknowledge that the appellant raises some valid and legitimate concerns about applying the offer of judgment statute to class action representatives. Nevertheless, we conclude that we cannot, by judicial fiat, exempt class actions from section 768.79 whose plain and unambiguous language states that it is applicable to any civil action for damages. Indeed, "when the language of the statute is clear and unambiguous and conveys a clear and definite meaning, there is no occasion for resorting to the rules of statutory interpretation and construction; the statute must be given its plain and obvious meaning." Holly v. Auld, 450 So.2d 217, 219 (Fla.1984) (citations omitted); accord Modder v. American Nat'l Life Ins. Co. of Tex., 688 So.2d 330, 333 (Fla.1997); Capers v. State, 678 So.2d 330, 332 (Fla.1996). Further, in the seminal Holly decision, the supreme court reiterated that the courts of this state are "without power to construe an unambiguous statute in a way which would extend, modify, or limit, its express terms or its reasonable and obvious implications. To do so would be an abrogation of legislative power." Holly, 450 So.2d at 219 (citation omitted)(emphasis in original).

There are no cogent reasons for us to believe that the express and literal meaning of section 768.79 does not accurately represent the legislative intent. Hence, we cannot, as appellant urges, limit this statute to all non class action civil suits for damages. Appellant cites us to the federal decision of Gay v. Waiters' and Dairy Lunchmen's Union, Local No. 30, 86 F.R.D. 500 (N.D.Cal.1980), wherein that court construed the federal offer of judgment rule, Rule 68 ¹, to be inapplicable to class actions because of the conflict it created between the class representative's personal interests and fiduciary responsibilities to the remaining class members. We do not find the Gay decision to be controlling or persuasive in this case because the federal offer of judgment rule is a rule of procedure rather than a legislative enactment such as section 768.79. Consequently, the Gay court was not faced with the same constitutional restraints that we have before us in this case.

The appellant alternatively asserts that even if section 768.79 is applicable to class actions, AT&T's offer of judgment was not made in good faith since it sought only to recompense the then class representative for his stolen telephone and not the remaining class members. For that reason, the appellant argues that this nominal offer of judgment cannot serve as a basis for an award of attorney's fees. We disagree.

At the time the offer was made, AT&T had a pending motion to dismiss the amended complaint for class certification. The sole count in this amended complaint against AT&T was for conspiracy to defraud. ² In this count, it was essentially alleged that AT&T and the codefendant, Virginia Surety, fraudulently induced appellant and other similarly situated members of the putative class to enter into insurance agreements which purportedly represented that their cellular telephones would be replaced in the event that they were lost, stolen or damaged. As a basis for its motion to dismiss, AT&T correctly pointed out that this proposed class action violated Florida's longstanding Osceola fraud class action rule prohibiting fraud class action suits based upon separate agreements. ³ See Osceola Groves, Inc. v. Wiley, 78 So.2d 700, 702 (Fla.1955); see also Lance v. Wade, 457 So.2d 1008, 1011 (Fla.1984); Avila S. Condominium Ass'n, Inc. v. Kappa Corp., 347 So.2d 599, 608 (Fla.1977); Southeast Bank, N.A. v. Almeida, 693 So.2d 1015, 1018 (Fla. 3d DCA 1997). Thus, at the time AT&T made its offer of judgment, AT&T had a reasonable basis in the law for believing that a class certification would never be sustained based upon the allegations then contained in the...