Title: William J. White v. Steak And Ale of Florida, Inc.

State: florida

Issuer: Florida Supreme Court

Document:

Supreme 
Court 
of 
Florida
 
____________
No. SC01-96
____________
WILLIAM J. WHITE,
Petitioner,
vs.
STEAK AND ALE OF FLORIDA, INC., d/b/a BENNIGAN'S,
Respondent.
[April 18, 2002]
PARIENTE, J.
We have for review the decision of the Second District Court of Appeal in
White v. Steak & Ale of Florida, Inc., 779 So. 2d 527, 528 (Fla. 2d DCA 2000),
which certified conflict with the decision of the Third District Court of Appeal in 
Perez v. Circuit City Stores, Inc., 721 So. 2d 409 (Fla. 3d DCA 1998), review
dismissed, 729 So. 2d 390 (Fla. 1999).  The issue in this case is whether, under the
offer of judgment statute, section 768.79, Florida Statutes (1993), pre-offer taxable
costs are included in calculating the "judgment obtained" for the purpose of
-2-
determining whether the party making the offer is entitled to attorneys' fees under
section 768.79.  We have jurisdiction.  See art. V, § 3(b)(4), Fla. Const. 
BACKGROUND  
Petitioner William White filed a personal injury lawsuit against Steak and Ale
for injuries arising out of an incident that occurred on December 16, 1993, claiming
Steak and Ale was negligent in the maintenance of its premises.  On August 27,
1996, Steak and Ale served on White an "Offer of Settlement and Dismissal
Pursuant to Florida Statutes § 768.79," in the total amount of $15,000.   White
rejected the offer and the case proceeded to trial, resulting in a net verdict of
$8,025.  
Steak and Ale then moved to recover fees and costs under section 768.79(6),
Florida Statutes (1993).  This statute provides that when the plaintiff rejects an offer
and the judgment obtained is "at least 25% less" than the offer, the defendant who
makes the offer is entitled to recover its post-offer attorneys' fees and costs.  At the
same time, White separately filed a motion to tax costs incurred before Steak and
Ale's offer in the amount of $4,243, and the trial court entered a cost judgment for
White in that amount.  White then asserted that Steak and Ale was not entitled to
recover its fees and costs under the offer of judgment statute because the judgment
obtained was $12,268, consisting of the jury verdict of $8,025 plus the pre-offer
-3-
taxable costs of $4,243.  Thus, White argued the judgment obtained exceeded the
25%-of-offer threshold of $11,250 (75% of $15,000).  
Although the trial court granted White's motion to tax $4,243 as pre-offer
costs in his favor as prevailing party, the trial court felt bound by Mincin v. Short,
662 So. 2d 1323 (Fla. 2d DCA 1995), not to consider those pre-offer costs in
determining whether the judgment obtained exceeded the 25%-of-offer threshold. 
The trial court then found Steak and Ale's fees and costs to be $96,487.59 and, after
making appropriate statutory adjustments, entered a final judgment for Steak and
Ale in the amount of $98,624.40.  White appealed to the Second District, which
affirmed the trial court, citing Mincin, and certified conflict with Perez.  See White,
779 So. 2d at 528. 
ANALYSIS
In resolving the conflict between the district courts, we begin with the
language of the controlling statute, section 768.79.  Specifically, section 768.79(6)
sets forth how the court must determine whether the offeror is entitled to recover
attorneys' fees and costs:
Upon motion made by the offeror within 30 days after the entry
of judgment or after voluntary or involuntary dismissal, the court shall
determine the following:
(a) If a defendant serves an offer which is not accepted by the
plaintiff, and if the judgment obtained by the plaintiff is at least 25
-4-
percent less than the amount of the offer, the defendant shall be
awarded reasonable costs, including investigative expenses, and
attorney's fees, calculated in accordance with the guidelines
promulgated by the Supreme Court, incurred from the date the offer
was served, and the court shall set off such costs in attorney's fees
against the award.  When such costs and attorney's fees total more than
the amount of the judgment, the court shall enter judgment for the
defendant against the plaintiff for the amount of the costs and fees, less
the amount of the award to the plaintiff.
(b) If a plaintiff serves an offer which is not accepted by the
defendant, and if the judgment obtained by the plaintiff is at least 25
percent more than the amount of the offer, the plaintiff shall be
awarded reasonable costs, including investigative expenses, and
attorney's fees, calculated in accordance with the guidelines
promulgated by the Supreme Court, incurred from the date the offer
was served.
For purposes of the determination required by paragraph (a), the term
"judgment obtained" means the amount of the net judgment entered,
plus any postoffer collateral source payments received or due as of the
date of the judgment, plus any postoffer settlement amounts by which
the verdict was reduced.  For purposes of the determination required by
paragraph (b), the term "judgment obtained" means the amount of the
net judgment entered, plus any postoffer settlement amounts by which
the verdict was reduced.
§ 768.79(6), Fla. Stat. (1993) (emphasis added). 
Pursuant to this statutory scheme, if a defendant properly serves an offer on a
plaintiff who rejects the offer, then an amount 25% less than the offered amount
constitutes the judgment threshold.  If the plaintiff later obtains a judgment that is at
or below this threshold, then the defendant may recover any attorneys' fees and
1  Although different statutes originally governed offers made by plaintiffs and offers
made by defendants, in 1990 the Legislature consolidated the offer of judgment
statute with section 45.061, Florida Statutes (1989), a statute entitled "Offers of
settlement."  Fla. S. Comm. on Insurance, CS for SB 2670 Staff Analysis 7 (May
24, 1990).  The Legislature expanded section 768.79 to cover both offers of
settlement and judgment, and limited the applicability of section 45.061 to causes of
action accruing before October 1, 1990.  See id. at 4, 6.   
2  For example, if the plaintiff rejects an offer for $100,000, the judgment threshold
is $75,000.  If the defendant rejects an offer for $100,000, the judgment threshold is
$125,000. 
-5-
taxable costs incurred after the plaintiff rejected the offer, and the plaintiff is entitled
only to the taxable costs incurred before receiving the offer.  
The statute operates in a parallel manner with regard to offers made by a
plaintiff.1  If a plaintiff serves an offer on a defendant, then an amount that is 25%
more than the amount demanded constitutes the judgment threshold.  If the plaintiff
later obtains a judgment that is at or above the threshold, then the plaintiff may
recover any attorneys' fees and taxable costs incurred after rejecting the offer.2  
In determining whether the threshold amount has been met, the components
included in the judgment obtained become critical.  The question presented by this
case is whether a prevailing party's pre-offer taxable costs are included for purposes
of calculating the "judgment obtained."  The Second and Fifth District Courts of
Appeal have defined the term "judgment obtained" as limited to "the amount of the
judgment for damages awarded by the jury."  Mincin, 662 So. 2d at 1325 (quoting
-6-
Williams v. Brochu, 578 So. 2d 491, 493 (Fla. 5th DCA 1991)); see also Gulf Coast
Transp. v. Padron, 782 So. 2d 464, 467 (Fla. 2d DCA 2001).  The Third District in
Perez and the Fourth District Court of Appeal have disagreed, concluding that a trial
court is required to add taxable costs incurred up to the time of the offer when
calculating the judgment obtained for purposes of determining entitlement to
attorneys' fees and costs under section 768.79.  See Perez, 721 So. 2d at 412;
Herzog v. K-Mart Corp., 760 So. 2d 1006, 1009, n.3 (Fla. 4th DCA 2000),
disapproved on other grounds by Allstate Indem. Co. v. Hingson, 808 So. 2d 197
(Fla. 2002).  
We conclude that the "judgment obtained" is not limited to or equated solely
with the amount of the judgment for damages.  As the Third District reasoned in
Perez, the amount of the judgment for damages awarded by the jury is the "verdict,"
not the judgment.  Perez, 721 So. 2d at 411 (citing Black's Law Dictionary 1559
(6th ed. 1990)).  The Third District explained in Perez that "[w]hile a jury's verdict
is certainly an important part of the 'judgment obtained,'" the judgment obtained
could not be equated with the jury verdict.  Perez, 721 So. 2d at 411.  See also State
Farm Mut. Auto. Ins. v. Kujawa, 782 So. 2d 1003, 1005 (Fla. 4th DCA 2001)
(citing Perez and holding that "the correct source from which to determine whether
to award section 786.79 attorneys' fees is the judgment, not the verdict"). 
3  With regard to the dissenting opinion's reference to the Fifth District's 1991
decision in Williams, 578 So. 2d at 493, we note that Williams was decided under a
prior version of section 768.79.  Unlike the current version of section 768.79, the
prior version dealt only with offers of judgment.  See supra note 1.  Indeed, in
explaining its reasoning, the Fifth District observed:
Perhaps the difference is between the concept of an offer to settle as
opposed to the concept of an "offer of judgment."  An offer to settle
would be more inclusive resolving all matters for one stated sum
whereas a plaintiff, accepting an Offer of Judgment (for damage
claims) would still be entitled to an award of taxable costs under
-7-
In fact, the "judgment obtained," as defined by statute, is the net judgment
entered, plus any post-offer collateral source payments received or due as of the
date of the judgment, plus any post-offer settlement amounts by which the verdict
was reduced.  See § 768.79(6)(b).  This definition does not limit the net judgment
entered to the verdict.
In excluding the calculation of the amount of costs from the term "judgment
obtained," the Mincin and Williams courts relied upon cases holding that costs are
incidental to an action for jurisdictional purposes.  See Mincin, 662 So. 2d at 1324
(citing Golub v. Golub, 336 So. 2d 693 (Fla. 2d DCA 1976)); Williams, 578 So. 2d
at 493 n.3 (citing Louisville & Nashville Railroad Co. v. Sutton, 44 So. 946 (Fla.
1907)).  However, although costs may be incidental for determining the
jurisdictional threshold, they are not incidental for determining the judgment
threshold because a prevailing party is entitled to a judgment for taxable costs. 3 
section 57.041, Florida Statutes. 
Williams, 578 So. 2d at 493.  Because the present version of section 768.79 does
not make the distinction between offers of judgment and offers to settle, the
reasoning in Williams is no longer applicable.  
4  See Stouffer Hotel Co. v. Teachers Ins., 944 F. Supp. 874, 875 (M.D. Fla. 1995),
("An offer of judgment ought to fairly account for the risks of litigation, the costs
and fees at stake, and the other components of uncertainty that sophisticated persons
assay when deciding whether to settle."), aff'd, 101 F.3d 707 (11th Cir.1996).  
-8-
Moreover, common sense, fairness, and the purpose of the offer-of-judgment
statute, which is to encourage settlements of lawsuits, also lead us to this
conclusion.  In determining both the amount of the offer and whether to accept the
offer, the party necessarily must evaluate not only the amount of the potential jury
verdict, but also any taxable costs, attorneys' fees, and prejudgment interest to
which the party would be entitled if the trial court entered the judgment at the time
of the offer or demand.4  As we stated in Danis Industries Corp. v. Ground
Improvement Techniques, Inc., 645 So. 2d 420, 421-22 (Fla. 1994): 
[A]ny offer of settlement shall be construed to include all damages,
attorney fees, taxable costs, and prejudgment interest which would be
included in a final judgment if the final judgment was entered on the
date of the offer of settlement.
Id. at 421-22.  We reaffirmed this principle in our recent decision in Scottsdale
Insurance. Co. v. DeSalvo, 748 So. 2d 941, 944 n.3 (Fla. 1999), where we
explained that the plaintiff's "recovery" must be added to its "attorney fees, costs,
5  Although Danis and Scottsdale involved an award of attorneys' fees under section
627.428, we see no reason why this rationale should not apply equally to offers or
demands made under section 768.79(6).  
-9-
and prejudgment interest" accrued up to the date of the "offer" to determine the total
"judgment."  It is this judgment to which the offer must be compared in determining
whether to award fees and costs.  Id.5
In summary, we conclude that the "judgment obtained" pursuant to section
768.79 includes the net judgment for damages and any attorneys' fees and taxable
costs that could have been included in a final judgment if such final judgment was
entered on the date of the offer.  Thus, in calculating the "judgment obtained" for
purposes of determining whether the party who made the offer is entitled to
attorneys' fees, the court must determine the total net judgment, which includes the
plaintiff's taxable costs up to the date of the offer and, where applicable, the
plaintiff's attorneys' fees up to the date of the offer.  
In this case the total amount offered by Steak and Ale pursuant to the offer of
judgment statute was $15,000.  The net judgment obtained by White was $12, 268,
which included White's pre-offer costs of $4,243 for which the trial court entered a
separate judgment.  Accordingly, the judgment obtained by White exceeded the
25%-of-offer threshold.
6  Perez v. Circuit City Stores, Inc., 721 So. 2d 409 (Fla. 3d DCA 1998).
-10-
We therefore quash the decision below, approve Perez, and disapprove Gulf
Coast, Mincin, and Williams to the extent they are inconsistent with this opinion.
It is so ordered.
WELLS, C.J., and SHAW, ANSTEAD, LEWIS, and QUINCE, JJ., concur.
HARDING, J., concurs in part and dissents in part with an opinion.
NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION, AND IF
FILED, DETERMINED.
HARDING, J., concurring in part and dissenting in part.
In order to determine whether the term “judgment obtained” in section 768.79
includes costs, one must first determine whether the offer of judgment included
costs.  In other words, apples must be compared to apples.  This was the reasoning
of the Third District in Perez,6 which the majority claims to approve:
In State Farm Life Insurance Co. v. Bass, 605 So. 2d 908 (Fla.
3d DCA 1992), we held that in order for a plaintiff to preserve his
entitlement to attorney's fees, the plaintiff's demand must include costs. 
In accordance with the Bass rule, the plaintiff's $6,000.00 demand for
judgment stated that it was inclusive of costs and prejudgment interest
and that it was meant to resolve all pending claims.
There is a correlation between the amount demanded and the
amount that needs to be recovered in order to trigger entitlement to
attorney's fees under the demand for judgment statute.  The higher the
demand, the higher the judgment threshold.  Because the inclusion of
costs in a plaintiff's demand necessarily raises the amount demanded, it
-11-
follows that the inclusion of costs in the demand also raises the
judgment threshold.  It would be inherently unfair to force the plaintiff
to include costs in his demand for judgment, and consequently in
setting the judgment threshold, and not to include them in determining
whether that threshold has been met.  Apples must be compared to
apples.
Moreover, we note that other demand for judgment statutes
require evenhanded comparisons.  For example, Section 45.061,
Florida Statutes (1997), which applies to causes of action accruing on
or before October 1, 1990, and Section 627.428, Florida Statutes
(1997), which applies in insurance disputes, require pre-demand costs
to be included in the "judgment" for purposes of determining
entitlement to attorney's fees.  Section 45.061 explicitly provides that
the judgment obtained is "the total amount of money damages awarded
plus the amount of costs and expenses reasonably incurred by the
plaintiff or counter-plaintiff prior to the making of the offer."  §
45.061(2)(b), Fla. Stat.  (1997).  Section 627.428 has been interpreted
in the same manner.  See DeSalvo v. Scottsdale Ins. Co., 705 So .2d
694 (Fla. 1st DCA 1998), review granted, 717 So. 2d 537 (Fla. May
20, 1998).  Because Section 768.79 serves the same purpose as these
statutes, we follow the same reasoning.  See Stephenson v. Holiday
Rambler, 709 So. 2d 139 (Fla. 4th DCA 1998).
721 So. 2d at 411-12 (emphasis added) (footnote and some citations omitted). 
In the Third District, offers and demands for judgment under section 768.79
must include costs.  See Clinica Lourdes, Inc. v. Miro, 713 So. 2d 1062 (Fla. 3d
DCA 1998).  Therefore, the Perez court reasoned that if offers or demands are
inclusive of costs, then the judgment threshold under section 768.79 must also be
inclusive of costs.  However, not all districts require that offers and demands include
costs.  See Siedlecki v. Arabia, 699 So. 2d 1040, 1042 (Fla. 4th DCA 1997) (“[T]he
-12-
trial court ruled that the demands were not valid because they failed to specify a
sum certain for costs, including attorney's fees.  This was error, as a plaintiff need
not include taxable costs or attorney's fees otherwise provided by statute and rule
that the court would tax against a defendant incidental to the jury's damage
award.”); Hellmann v. City of Orlando, 610 So. 2d 103, 104 (Fla. 5th DCA 1992)
(“[T]he failure to state claimed cost in a dollar amount does not invalidate an
otherwise valid offer of judgment.”).  Just as it would “ be inherently unfair to force
the plaintiff to include costs in his demand for judgment . . . and not to include them
in determining whether that threshold has been met,” Perez, 721 So. 2d at 411, it
would also be inherently unfair to include costs in the judgment threshold under
section 768.79 when it has not been established that the initial offer or demand
included costs.  
In the present case, Steak and Ale’s offer did not include costs.  At the time
of the offer, there had not been any cases out of the Second District requiring such
offers to include costs.  Arguably, had White accepted Steak and Ale’s offer, he
would have been entitled to an award of taxable costs under section 57.041, Florida
Statutes (1993).  See Williams v. Brochu, 578 So. 2d 491, 493 (Fla. 5th DCA 1991)
(“[A] plaintiff, accepting an Offer of Judgment (for damage claims) would still be
7 In Williams, the district court reasoned:
Perhaps the difference is between the concept of an offer to settle as
opposed to the concept of an "offer of judgment."   An offer to settle
would be more inclusive resolving all matters for one stated sum
whereas a plaintiff, accepting an Offer of Judgment (for damage
claims) would still be entitled to an award of taxable costs under
section 57.041, Florida Statutes.   
578 So. 2d at 493.  The majority opinion claims that “Williams was decided under a
predecessor statute before offers of judgment and offers to settle were consolidated
into section 768.79.”  Majority op. at n. 3.  Actually, the Williams court was
interpreting section 768.79, the offer of judgment statute, and comparing it to
section 45.061, the offer of settlement statute.  Recognizing that there was confusion
regarding these two similar statutes, the Legislature in 1990 consolidated the two
statutes into section 768.79, in essence eliminating section 45.061 except for those
causes of action that accrued on or before October 1, 1990.  See CS/HB 2670
(1990) Staff Analysis 7 (May 24, 1990).  However, section 768.79–the offer of
judgment statute–remained in effect, and therefore the reasoning of the Williams
court with regard to offers of judgment is still applicable despite the changes that
occurred in 1990.  
-13-
entitled to an award of taxable costs under section 57.041.”);7 see generally Carson
v. Quaile, 616 So. 2d 462, 463-64 (Fla. 4th DCA 1993) (holding that the provision
in a settlement agreement requiring payment of an unspecified amount of taxable
costs was enforceable even though case did not go to trial).  Pursuant to the “apples
to apples” logic of the Perez court, since Steak and Ale’s offer was exclusive of
costs, then the judgment threshold of section 768.79 must also be exclusive of
8Another example of a court requiring an evenhanded comparison is Stephenson v.
Holiday Rambler Corp., 709 So. 2d 139 (Fla. 4th DCA 1998).  In Stephenson, the
defendant initially made an offer of judgment to pay the plaintiff $10,000 inclusive
of attorney's fees.  The parties later settled and a judgment was entered for $4,450,
exclusive of fees.  The parties agreed that both sides could still seek an award of
attorney's fees under section 768.79.  The $10,000 offer was made after more than a
year of litigation, by which time plaintiff's counsel claimed to have incurred
approximately 58 billable hours, which the plaintiff asserted would have resulted in
his incurring a $16,500 fee.  The trial court awarded fees to the defense, finding that
the actual recovery of $4,450 was more than 25% less than the $10,000 offer.  On
appeal, the district court reversed and remanded, reasoning that where an offer is
made inclusive of fees, the offeror has a burden to demonstrate that the 25%
required disparity exists within the offer exclusive of a reasonable fee.  On remand,
the trial court was directed to calculate the plaintiff's reasonable attorney's fees up to
the time of the offer, and then add this amount to the final judgment.
9 The majority seems to adopt this requirement: “In determining both the amount of
the offer and whether to accept the offer, the party necessarily must evaluate not
only the amount of the potential jury verdict, but also any taxable costs, attorneys’
-14-
costs.8  Unfortunately, the majority is applying the result of Perez rather than the
reasoning, and, as a result, the majority is changing the rules of this case in the
middle of the game. 
It appears that the recent trend is to construe offers and demands for
judgment to include taxable costs.  See Danis Industries Corp. v. Ground
Improvement Techniques, Inc., 645 So. 2d 420, 421-22 (Fla. 1994); Stouffer Hotel
Co. v. Teachers Ins., 944 F. Supp. 874, 875 (M.D. Fla. 1995).  In order to be
consistent with these cases, I would require that all future offers made pursuant to
section 768.79 be inclusive of costs.9  In turn, I would also construe the term
fees, and prejudgment interest to which the party would be entitled if the judgment
was entered at the time of the offer or demand.”  Majority op. at 8.
-15-
"judgment obtained" in section 768.79(1)(a) to include taxable costs incurred prior
to an offer or demand for judgment.  But for all pending cases, I would only include
costs in the judgment obtained if the offer itself included costs. 
Application for Review of the Decision of the District Court of Appeal - Certified
Direct Conflict of Decisions
Second District - Case No. 2D99-5043
(Pinellas County)
Joseph A. Eustace, Jr. of Anthony J. Laspada, P.A., Tampa, Florida,
for Petitioner
Charles Tyler Cone of Fowler, White, Gillen, Boggs, Villareal and Banker, P.A.,
Tampa, Florida,
for Respondent
Thomas R. Thompson of Thompson, Crawford & Smiley, Tallahassee, Florida,
for Florida Defense Lawyers Association, Amicus Curiae