In the Commercial Litigation and Appeals practice area, it is important to stay on top of new developments in the law and procedure, including changes to Florida Statutes, rules of procedure and new appellate court case law. This includes routinely reviewing new appellate opinions. I would like to discuss a couple of recent decisions that impact both litigation and appeals.
Generally, each party is responsible for their own attorney’s fees in litigation unless a statute or contract applies. Florida Statute § 768.79 creates a substantive right to attorney’s fees relating to a proposal for settlement or “PFS.” The purpose of a PFS is to encourage settlements and to act as a penalty against a party who rejects a reasonable settlement offer.
That statute is implemented by rule 1.442, which governs the form of such proposals. If a defendant serves a PFS, 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 the defendant from the date of filing the offer, if the judgment is of no liability, or the judgment obtained by the plaintiff is at least 25% less than the amount offered in the PFS, and the court shall set off such costs and attorney’s fees against the award.
On the other hand, if a plaintiff serves a PFS which is not accepted by the defendant within 30 days, and the plaintiff recovers a judgment in an amount at least 25% greater than the offer, the plaintiff will be entitled to recover reasonable costs and attorney’s fees incurred from the date of serving the PFS.
As per the rule, a PFS must be in writing and must include a number of items. Currently, under the rule, a party serving a PFS must state the particularity of any relevant conditions, and to state the particularity of all non-monetary terms of the proposal. But recently, the Florida Supreme Court made an important change to the rule governing PFS. Effective July 1, 2022, this rule will no longer include the requirement that a PFS must state with particularity any relevant conditions and to state with particularity all non-monetary terms of the proposal. Effective July 1, 2022, the rule will provide that the PFS must exclude non-monetary terms with the exceptions of a voluntary dismissal of all claims with prejudice and any other non-monetary terms allowed by statute.
The Florida Supreme Court's opinion stated that the reason for this change is to comport with the statute. This new change is important as it now appears that a release, which has been commonly included in a PFS, may not be included as a term in the PFS as of July 1, 2022.
Another Florida Supreme Court opinion worth noting relates to punitive damages. Under Florida law, a defendant may be held liable for punitive damages only if the trier-of-fact, based on clear and convincing evidence, finds that the defendant was personally guilty of intentional misconduct or gross negligence. A motion for leave to add a claim for punitive damages must be first presented to the trial court before it can be brought into a lawsuit. Until recently, a trial court's order denying or granting a motion for leave to add a claim for punitive damages could only be reviewed by an appellate court before trial through a petition for writ of certiorari, or after trial by way of an appeal of the final judgment.
An appellate court, on certiorari review, would only conduct a limited review of the trial court’s order on the punitive damages issue. However, effective April 1, 2022, the Florida Supreme Court amended appellate rule 9.130. In this recent decision, the Florida Supreme Court expanded the rule to authorize appeals of orders granting or denying motions for leave to add a claim for punitive damages. In other words, a party, before trial, may now appeal the court's non-final order on punitive damages and the party is not required to file a certiorari petition with the appellate court. With this change, appellate courts will now be able to review the evidence in the record to determine whether the trial court correctly handled the punitive damages issue.
Jeremy Dicker is an associate in Sachs Sax Caplan’s Commercial Litigation & Appeals Practice Group. Learn more about Jeremy here