Case Name: Vicky TALBOTT, Appellant, v. AMERICAN ISUZU MOTORS, INC., n/k/a Isuzu Motors America, Inc., Appellee
Court: Florida District Court of Appeal
Jurisdiction: Florida
Decision Date: 2006-08-02
Citations: 934 So. 2d 643
Docket Number: No. 2D04-3680
Parties: Vicky TALBOTT, Appellant, v. AMERICAN ISUZU MOTORS, INC., n/k/a Isuzu Motors America, Inc., Appellee.
Judges: WALLACE, J., Concurs.
Reporter: Southern Reporter, Second Series
Volume: 934
Pages: 643–653

Head Matter:
Vicky TALBOTT, Appellant, v. AMERICAN ISUZU MOTORS, INC., n/k/a Isuzu Motors America, Inc., Appellee.
No. 2D04-3680.
District Court of Appeal of Florida, Second District.
Aug. 2, 2006.
Scott Cohen, Alex D. Weisberg, and Theodore F. Greene, III, of Krohn <& Moss, Ltd., Sunrise, for Appellant.
Frank D. Hosley and Richard P. Spence of Seipp, Flick & Kissane, P.A., Lake Mary, for Appellee.

Opinion:
VILLANTI, Judge.
Vicky Talbott appeals the trial court's order granting American Isuzu Motors, Inc., attorney's fees and costs under the offer of judgment statute, section 768.79, Florida Statutes (2003). Talbott contends that 15 U.S.C. § 2310(d)(2) of the Magnu-son-Moss Warranty — Federal Trade Commission Improvement Act (Magnuson-Moss Act), 15 U.S.C. § 2301-2312, preempts Florida's offer of judgment statute and precludes Isuzu from recovering attorney's fees. We disagree and affirm the trial court's award of attorney's fees and costs. While this appeal was pending, the Fifth District, in Marcy v. Daimler-Chrysler Corp., 921 So.2d 781 (Fla. 5th DCA 2006), issued its opinion explaining why the Magnuson-Moss Act does not preempt Florida's offer of judgment statute. We write to express our agreement with the result in Marcy.
Vicky Talbott, unhappy with her brand new 2002 Isuzu Trooper, filed suit against Isuzu under the Magnuson-Moss Act, seeking damages for breach of express and implied warranties. Isuzu twice made Tal-bott offers of judgment, first for $500 about three months after Talbott initially filed her complaint and then for $1500 four months later. Talbott did not accept either offer. Isuzu subsequently won final summary judgment in its favor on two counts in Talbott's complaint and, after a trial, final judgment in its favor on the remaining count. Isuzu filed a motion for attorney's fees and costs under Florida's offer of judgment statute, section 768.79. Talbott argued to the trial court that section 768.79 was preempted by the Magnu-son-Moss Act. The trial court disagreed and granted Isuzu's motion for attorney's fees and costs, awarding Isuzu $27,253 in attorney's fees and $2036.14 in costs. Tal-bott appeals.
Whether a federal statute preempts a state statute is a question of law that we review de novo. Federal preemption "may be either express or implied, and is compelled whether Congress' command is explicitly stated in the statute's language or implicitly contained in its structure and purpose." Morales v. Trans World Airlines, Inc., 504 U.S. 374, 383, 112 S.Ct. 2031, 119 L.Ed.2d 157 (1992) (quoting FMC Corp. v. Holliday, 498 U.S. 52, 56-57, 111 S.Ct. 403, 112 L.Ed.2d 356 (1990)).
The Magnuson-Moss Act does not contain an express preemption of state statutes governing attorney's fee awards. Therefore, we turn to a discussion of implied preemption.
Preemption can be implied when there is a conflict between a federal and a state law. State v. Wolland, 902 So.2d 278, 281 (Fla. 3d DCA 2005) (citing English v. Gen. Elec. Co., 496 U.S. 72, 78-79, 110 S.Ct. 2270, 110 L.Ed.2d 65 (1990)). There is a conflict between a federal and a state law when "it is either physically impossible to comply with the dictates of both sets of laws or where dual compliance is technically possible but state law creates an obstacle to fulfilling federal policy and goals." Id.
Florida's offer of judgment statute provides:
In any civil action for damages filed in the courts of this state, if a defendant flies 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. Where such costs and attorney's fees total more than 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 plaintiffs award. If a plaintiff files a demand for judgment which is not accepted by the defendant within 30 days and the plaintiff recovers a judgment in an amount at least 25 percent greater than the offer, she or he shall be entitled to recover reasonable costs and attorney's fees incurred from the date of the filing of the demand. If rejected, neither an offer nor demand is admissible in subsequent litigation, except for pursuing the penalties of this section.
§ 768.79(1). The Magnuson-Moss Act provides:
If a consumer finally prevails in any action brought under paragraph (1) of this subsection, he may be allowed by the court to recover as part of the judgment a sum equal to the aggregate amount of 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....
15 U.S.C. § 2310(d)(2). Section 768.79 provides for awards of attorney's fees to parties who previously attempted to settle a case by making offers of judgment — not based on their status as prevailing parties but on their offers of judgment and the ultimate determination of liability. The Magnuson-Moss Act, on the other hand, provides for awards of attorney's fees to prevailing consumers. It is possible to comply with the dictates of both section 768.79 and the Magnuson-Moss Act because the Magnuson-Moss Act does not say that defendants or manufacturers can never recover their attorney's fees; de fendants or manufacturers simply cannot argue entitlement to attorney's fees based on only the Magnuson-Moss Act. Here, Isuzu would not be entitled to recover attorney's fees under the Magnuson-Moss Act because it is not a consumer. However, it could recover attorney's fees under section 768.79 because the judgment was ultimately one of no liability and Isuzu made an offer of judgment. Theoretically, it is possible to comply with the dictates of both section 768.79 and the Magnuson-Moss Act even if the plaintiff consumer prevails' — -the court could award a prevailing consumer attorney's fees and costs and then offset that award against the defendant's post-offer of judgment fees and costs as the Supreme Court of Alaska discussed in Catalina Yachts v. Pierce, 105 P.3d 125, 129 (Alaska 2005). Although not binding, Catalina Yachts has a sound analysis on this issue:
Two provisions are in direct conflict when they cannot both be followed— when complying with one necessarily means violating the other. If Magnu-son-Moss, by authorizing awards only to consumers, bars fee awards to defendants, then [Alaska's court rule allowing for attorney's fees based on an offer of judgment] cannot be followed without violating the federal law. But the [Mag-nuson-Moss] Act's failure to authorize awards to defendants is not the same as a bar on such awards when they are allowed by another authority. This silence distinguishes Magnuson-Moss from other federal laws that place limits on the circumstances in which defendants can receive fee awards and that therefore may conflict with state fee provisions....
. [I]t is possible to follow both the state rule and the federal act without violating either. A court could . award the prevailing plaintiff [consumer] full fees and costs, then offset that award against the defendant's post-offer fees and costs....
Id. at 129 (footnotes omitted).
The Magnuson-Moss Act and Florida's offer of judgment statute also do not conflict in purpose. Florida's offer of judgment statute does not create an obstacle to fulfilling the federal goal of encouraging consumers to bring valid breach of warranty claims. In fact, the goals of the Magnuson-Moss Act and Florida's offer of judgment statute are complementary — encouraging consumers to bring valid breach of warranty claims and then encouraging them to evaluate and settle those claims. Similar reasoning was used by the United States Supreme Court in Marek v. Chesny, 473 U.S. 1, 105 S.Ct. 3012, 87 L.Ed.2d 1 (1985). In Marek, the Supreme Court discussed a federal offer of judgment rule that "prompts both parties to a suit to evaluate the risks and costs of litigation, and to balance them against the likelihood of success upon trial on the merits." Id. at 5, 105 S.Ct. 3012. The Court reasoned that a federal statute that sought to "en courage[] plaintiffs to bring meritorious civil rights suits" was "consistent with the policies and objectives" of the offer of judgment rule, which "simply encourages settlements." Id. at 11, 105 S.Ct. 3012. "There is nothing incompatible in these two objectives." Id.
Florida's offer of judgment statute penalizes parties who "fail to act reasonably and in good faith in settling lawsuits." Eagleman v. Eagleman, 673 So.2d 946, 947 (Fla. 4th DCA 1996). Consumers should not be exempt from this penalty if they fail to act reasonably and in good faith simply because they are consumers. Because section 768.79 and the Magnuson-Moss Act do not conflict either in language or in purpose, we conclude that section 768.79 is not preempted by the federal statute.
Talbott next suggests that Isuzu's offer of judgment was not made in good faith. The standard of review is abuse of discretion. Hall v. Lexington Ins. Co., 895 So.2d 1161, 1166 (Fla. 4th DCA 2005). Once Isuzu showed that it was entitled to attorney's fees, Talbott had the burden to show that the offer was not made in good faith. See id. "The determination of whether an offer was served in good faith turns entirely on whether the offeror had a reasonable'foundation upon which to make the offer." Id. Isuzu made an initial offer of $500 and a subsequent offer of $1500 because it evaluated no liability, a conclusion also reached by the jury. A review of the record reveals no evidence that the trial court abused its discretion in finding that Isuzu's offer was made in good faith.
Talbott's final argument is that the amount of attorney's fees was excessive, an argument we also find to be without merit. The trial court's final order granting attorney's fees to Isuzu properly made findings regarding the reasonableness of the hourly rate and number of hours charged as required by Florida Patient's Compensation Fund v. Rowe, 472 So.2d 1145, 1151 (Fla.1985). The record contains competent, substantial evidence to support the amount awarded. Debra J. Sutton, P.A. v. LeBeau, 912 So.2d 327, 328 (Fla. 2d DCA 2005) ("An award of attorney's fees must be supported by substantial competent evidence and contain express findings regarding the number of hours reasonably expended and a reasonable hourly rate for the type of litigation involved.") (quoting Tutor Time Merger Corp. v. MeCabe, 763 So.2d 505, 506 (Fla. 4th DCA 2000)).
In sum, we affirm this case because the trial court did not err in granting attorney's fees to Isuzu under Florida's offer of judgment statute. Florida's offer of judgment statute, section 768.79, is not preempted by federal law. The trial court's finding that Isuzu's offer was made in good faith was not an abuse of discretion, and the trial court's determination of the amount of attorney's fees was supported by competent, substantial evidence.
Affirmed.
WALLACE, J., Concurs.
KELLY, J., Dissents with opinion.
. The dissent argues that because of the American Rule, "[b]y not including an exception for manufacturers, Congress has expressed its intention to preclude manufacturers from recovering fees." We disagree. The American Rule is that "attorney's fees may be awarded by a court only when authorized by statute or by agreement of the parties." State Farm Fire & Cas. Co. v. Palma, 629 So.2d 830, 832 (Fla.1993). Applying the American Rule does not mean that Congress is the only legislative body that can provide for attor ney's fees, nor does it mean that Congress' silence is an absolute bar to recovering attorney's fees. Rather, under the American Rule, if Congress is silent on attorney's fees, a state statute, or even the parties themselves in a contract, can provide for attorney's fees. The Magnuson-Moss Act does not authorize fees for defendants; it authorizes fees for prevailing consumers. However, Florida's offer of judgment statute authorizes attorney's fees for any party who makes a settlement offer and then meets certain statutory conditions. Congress was presumably acting under the American Rule and knew that defendants would have to pay their own attorney's fees unless a statute provided otherwise. By remaining silent on attorney's fees for defendants, Congress left open the possibility that defendants could recover their attorney's fees under another statute, even if they could not recover their fees under the Magnuson-Moss Act.
. The dissent cites numerous cases from this court and other districts that discuss whether federal statutes other than the Magnuson-Moss Act preempt Florida's offer of judgment statute. These cases are inapplicable; they do not specifically address the unique language of the Magnuson-Moss Act. See, e.g., Moran v. City of Lakeland, 694 So.2d 886 (Fla. 2d DCA 1997).