Opinion ID: 779977
Heading Depth: 1
Heading Rank: 2

Heading: the determination of entitlement

Text: 9 MBM and McMahan contend the district court erred by awarding Toto any attorney's fees and costs because his offer was facially defective in several ways. Toto's offer of judgment provided as follows: 10 Defendant, WILLIAM A. TOTO, hereby offers pursuant to Fla. Stat. § 45.061 to settle this case for the amount of $100.00 (One Hundred Dollars) upon a stipulation for dismissal, or, alternatively, pursuant to Fla. Stat. § 768.79, at Plaintiff's election, to allow judgment to be taken against him in the total sum of $100.00 (One Hundred Dollars), in full and final resolution of all claims made in this action. 11 We review de novo a district court's interpretation of a state law. Fioretti v. Mass. Gen. Life Ins. Co., 53 F.3d 1228, 1234 (11th Cir.1995). 12 First, MBM and McMahan contend the offer was invalid because it failed to state whether it included their claims for attorney's fees and costs and Toto's own claims for costs in his answer. 13 Florida Rule of Civil Procedure 1.442 governs settlements and provides that a settlement proposal must state the total amount of the proposal ... [and] state whether the proposal includes attorney's fees. Fla. R. Civ. P. 1.442(c)(2)(D) and (F). That rule applies to offers made pursuant to § 768.79. See United Servs. Auto. Ass'n v. Behar, 752 So.2d 663 (Fla. 2d DCA 2000). Where an offer explicitly excludes attorney's fees, it is invalid because the total amount of the proposal is not stated. See State Farm Life Ins. Co. v. Bass, 605 So.2d 908, 910 (Fla. 3d DCA 1992) (holding offer of judgment stating that attorney's fees and costs were to be determined at a later date did not satisfy Rule 1.442). But where an offer does not explicitly exclude attorney's fees, they are assumed to be included. See Unicare Health Facilities, Inc. v. Mort, 553 So.2d 159, 161 (Fla.1989) (stating that [t]here is an organic right of parties to contract a settlement, which by definition concludes all claims unless the contract of settlement specifies otherwise); George v. Northcraft, 476 So.2d 758, 759 (Fla. 5th DCA 1985) (We think the right to an award of attorney's fees ... is encompassed in an offer of judgment ... which fails to mention them specifically or reserve a right to seek them later.). 14 Toto's offer did not specifically exclude attorney's fees. Further, it stated that it would be in full and final resolution of all claims made in this action  (emphasis added), and that language is broad enough to cover both MBM and McMahan's claims for costs and attorney's fees, and Toto's own claims for costs. See Liberty Mut. Fire Ins. Co. v. Ramos, 565 So.2d 798, 800 (Fla. 4th DCA 1990) (where offer did not specifically mention attorney's fees, holding that when Ramos made the offer of settlement ... the amount of money demanded necessarily included attorney's fees. If it were otherwise, the claims would not be terminated, the disputes would not be at an end, and the judicial process would be needed to intervene to resolve the disputed amount of attorney's fees.). Therefore, the offer of judgment was not invalid for failure to cover costs and attorney's fees. 15 Second, MBM and McMahan contend that Toto's offer was invalid because it failed to state with particularity the amount, if any, applicable to the claim for punitive damages. Both § 768.79 and Rule 1.442 provide that an offer must state with particularity the amount, if any, offered to settle a claim for punitive damages. Fla. Stat. § 768.79(2)(c); Fla. R. Civ. P. 1.442(c)(2)(E). Toto's offer did not specifically mention punitive damages, but it did state that, if accepted, it would be in full and final resolution of all claims made in this action. 16 Florida courts have not addressed whether an offer that does not specifically address punitive damages can be valid under § 768.79 and Rule 1.442, but their approach to the attorney's fees requirement of Rule 1.442 is instructive. Rule 1.442(c)(2)(F) does say that offers should state whether they include attorney's fees, yet Florida courts have held those fees are included in offers where they are not mentioned as long as they are not specifically excluded. See Unicare Health Facilities, 553 So.2d at 161; Northcraft, 476 So.2d at 759. 17 Extending that logic to the context of the punitive damages requirements of § 768.79(2)(c) and Rule 1.442(c)(2)(E) — and there is no apparent reason we should not — we conclude that Toto's offer satisfied those requirements because it did not explicitly exclude punitive damages from its coverage. If simple omission were not enough, the final resolution language of the offer is. The offer was not invalid under § 768.79 and Rule 1.442.
18 If an offer satisfies the requirements of § 768.79(1)-(6), as this one did, [t]he sole basis on which a court can disallow an entitlement to an award of fees is if it determines that [the] offer was not made in good faith. Levine v. Harris, 791 So.2d 1175, 1177 (Fla. 4th DCA 2001); see also § 768.79(7)(a) (If a party is entitled to costs and fees pursuant to the provisions of this section, the court may, in its discretion, determine that an offer was not made in good faith. In such case, the court may disallow an award of costs and attorney's fees.). The district court found that Toto's offer was made in good faith because an appellate court of New York had ... held that the Releasors had not breached their contracts, which means Toto was reasonable in concluding that Plaintiffs could not make out their remaining claim of tortious interference, breach of contract being an essential element of that claim. 19 MBM and McMahan contend Toto's offer was made in bad faith because, at the time Toto made his offer, he had no reasonable basis for making it. At that time, although the New York court had entered its decision in McMahan & Co. v. Bass, 250 A.D.2d 460, 673 N.Y.S.2d 19 (N.Y.App. Div.1998), the district court had since denied Toto's motion for summary judgment on the tortious interference claim based on the Bass decision. That means, according to MBM and McMahan, the validity of appellants' claim had been confirmed by the trial court, Toto was facing millions of dollars of potential liability and appellants had incurred thousands of dollars in legal fees incurred during three years of litigation so the $100 Offer could not be bona fide.  20 We review only for clear error the district court's finding that Toto acted in good faith, Turner v. Orr, 759 F.2d 817, 821 (11th Cir.1985), and [t]he burden is upon the offeree to prove that the offeror acted without good faith, Levine, 791 So.2d at 1178 (citing Schmidt v. Fortner, 629 So.2d 1036, 1041 n. 6 (Fla. 4th DCA 1993), approved by TGI Friday's, Inc. v. Dvorak, 663 So.2d 606, 613 (Fla.1995)). Here, the offerees did not come close to carrying their burden of proof in the district court, and they are even further from convincing us that the district court clearly erred in deciding this issue against them. 21 Toto offered $100.00, a nominal amount. Although nominal offers are suspect where they are not based on any assessment of liability and damages, Fox v. McCaw Cellular Communications of Fla., Inc., 745 So.2d 330, 332 (Fla. 4th DCA 1998), they can be valid if the offerors have a reasonable basis at the time of the offer to conclude that their exposure was nominal. Id. at 333. The good faith requirement of § 768.79(7)(a) does not demand that an offeror necessarily possess, at the time he makes an offer or demand under the statute, the kind or quantum of evidence needed to support a judgment. The obligation of good faith merely insists that the offeror have some reasonable foundation on which to base an offer. Schmidt, 629 So.2d at 1039. 22 The argument of MBM and McMahon that Toto lacked any reasonable basis for believing that he would prevail against them ignores the inconvenient fact that he did prevail against them. To accept in the same case in which a party did prevail the notion that there was no reasonable basis for that party prevailing would require self-contradiction on a scale that we are unwilling to consider. It is MBM and McMahon's argument that is illogical, and thus unreasonable.