Court Opinion

ID: 4275559
Source: CourtListenerOpinion
Date Created: 2018-05-16 15:05:55.18473+00
Date Added: 2024-06-11T14:33:47.403107
License: Public Domain

Third District Court of Appeal
                                State of Florida

                            Opinion filed May 16, 2018.
          Not final until disposition of timely filed motion for rehearing.
                                ________________

                                 No. 3D16-355
                          Lower Tribunal No. 10-46125
                              ________________

                            Ramon Pacheco, et al.,
                                    Appellants,

                                         vs.

                             R. Randy Gonzalez,
                                     Appellee.

      An Appeal from the Circuit Court for Miami-Dade County, Jerald Bagley,
Judge.

      Cole, Scott & Kissane, P.A., and Kathryn L. Ender and George R. Truitt;
White & Case LLP, and Raoul G. Cantero, for appellants.

      Coffey Burlington, P.L., and Jeffrey B. Crockett and Kevin C. Kaplan, for
appellee.

Before LAGOA, LOGUE, and SCALES, JJ.

      LAGOA, J.

      Appellants, Ramon Pachecho (“Pacheco”) and Ramon Pacheco and

Associates, Inc. (the “Corporation”), appeal the trial court’s final judgment for
attorneys’ fees in the amount of $232,440 in favor of appellee, R. Randy Gonzalez

(“Gonzalez”), based upon a Proposal for Settlement (the “Proposal”) served

pursuant to section 768.79, Florida Statutes (2011), and Florida Rule of Civil

Procedure 1.442. Because the conditional nature of the Proposal divested Pacheco

and the Corporation of their ability to independently evaluate and accept the

Proposal irrespective of the other party’s decision, we hold that the Proposal was

invalid under Attorneys’ Title Insurance Fund, Inc. v. Gorka, 36 So. 3d 646 (Fla.

2010), and reverse.

I.    FACTUAL AND PROCEDURAL BACKGROUND

      On August 24, 2010, Gonzalez filed suit against Pacheco and the

Corporation, among others, seeking damages for the defective design of an air

conditioning system in his new home.        The complaint alleged claims against

Pacheco and the Corporation, which the complaint referred to collectively as the

“PACHECO Defendants,” for breach of contract (Count I), negligence (Count II),

and negligent misrepresentation (Count III). On September 27, 2011, Gonzalez

served the    Proposal on “Defendants RAMON PACHECO and RAMON

PACHECO        AND      ASSOCIATES,          INC.    (collectively,   ‘PACHECO

DEFENDANTS’)” pursuant to rule 1.442 and section 768.79, Florida Statutes.

Making no distinction between Pacheco and the Corporation, the Proposal stated

that it was made to the “PACHECO DEFENDANTS” and was offered to resolve

all claims against the “PACHECO DEFENDANTS.” The Proposal stated, in part:

                                        2
            4.      Total amount of proposal:
            The monetary amount of this Proposal is payment by the
            PACHECO DEFENDANTS to Plaintiff in the total
            amount of $300,000.00, which shall include payment for
            all alleged damages of any kind, compensatory, punitive
            or otherwise, which may be awarded in a final judgment
            in this action against the PACHECO DEFENDANTS,
            including costs and prejudgment interest upon the total
            damages, and is to settle all claims which have been
            brought or which could have been brought by Plaintiff
            against the PACHECO DEFENDANTS in the above-
            styled matter. The payment shall be allocated as follows:
            $150,000.00 from Defendant RAMON PACHECO, and
            $150,000.00 from Defendant RAMON PACHECO AND
            ASSOCIATES, INC.

            5.    Except as provided herein, Plaintiff and the
            PACHECO DEFENDANTS will otherwise bear their
            own respective attorneys’ fees and costs.

            6.    Acceptance of this Proposal: Upon acceptance of
            this offer by the PACHECO DEFENDANTS, Plaintiff
            and the PACHECO DEFENDANTS shall authorize their
            counsel to sign and file a stipulation of voluntary
            dismissal with prejudice in the form attached hereto as
            Exhibit “A.”

Attached as Exhibit A to the Proposal was a Stipulation of Voluntary Dismissal

With Prejudice (the “Stipulation”), stating that the “PACHECO DEFENDANTS

dismiss with prejudice all claims, counterclaims and third-party claims that were

brought or could have been brought by them in this action” and that “Plaintiff

voluntarily dismisses with prejudice all claims that were brought or could have

been brought in this action against the PACHECO DEFENDANTS.”1 The

Proposal was not accepted.

                                       3
      The matter proceeded to a bench trial. The trial court entered Findings of

Fact and Conclusions of Law and held “that both Ramon Pacheco, individually,

and Ramon Pacheco and Associates, Inc., are liable to Mr. Gonzales [sic] for the

defective system.” The trial court further found “[b]oth Pacheco individually and

the [Corporation] are responsible pursuant to the Contract” and that Pacheco

signed the contract in his own name, without corporate designation. Alternatively,

the trial court found both Pacheco and the Corporation responsible under principles

of negligence and negligent misrepresentation. Gonzalez appealed to this Court,

arguing that the trial court erred in failing to award him loss of use damages.

Pacheco and the Corporation cross-appealed, arguing that the trial court erred in

holding Pacheco individually liable under the contract and on the negligence

counts. This Court reversed and remanded for the trial court to determine loss of

use damages, but affirmed the trial court’s findings as to Pacheco’s individual

liability. Gonzalez v. Barrenechea, 170 So. 3d 13 (Fla. 3d DCA 2015).

      On remand, the trial court entered a Third Amended Final Judgment Against

Ramon Pacheco and Ramon Pacheco and Associates, Inc., ordering that Gonzalez

recover from Pacheco and the Corporation, jointly and severally, the amount of

$377,019.45.   The trial court also entered an Amended Findings of Fact and

1  We note that rule 1.442 does not require that a stipulation of voluntary dismissal
or release be attached to a proposal for settlement when served on a party. See
State Farm Mut. Auto. Ins. Co. v. Nichols, 932 So. 2d 1067, 1079 (Fla. 2006)
(stating that “a summary of the proposed release can be sufficient to satisfy rule
1.442”).

                                         4
Conclusions of Law, making the same findings as to liability for Pacheco and the

Corporation.

      Gonzalez filed a Motion for Attorney’s Fees and to Tax Costs, seeking

attorney’s fees pursuant to section 768.79. Gonzalez argued that he had filed the

Proposal “and offered to resolve all outstanding claims against Pacheco

Defendants for a settlement payment of $300,000.00 by the Pacheco Defendants to

Gonzalez.”     In a footnote, Gonzalez further stated that “Gonzalez’ [sic] offer

included the following terms: Ramon Pacheco, individually, and Ramon Pacheco

and Associates, Inc., would each pay Gonzalez $150,000.00.” Pacheco and the

Corporation filed a response to Gonzalez’s motion for attorney’s fees, arguing that

the proposal was facially invalid and unenforceable under rule 1.442 and that

Gonzalez was not entitled to fees under section 768.79 because, among other

things, the Proposal improperly required acceptance by both Pacheco and the

Corporation and failed to provide each with the ability to independently accept the

Proposal.

      The trial court conducted a hearing on Gonzalez’s motion for fees and costs

and entered an order finding that Gonzalez was entitled to attorney’s fees. The

parties stipulated to the amount of fees. The trial court subsequently entered a final

judgment for attorney’s fees ordering that Gonzalez recover from Pacheco and the

Corporation, jointly and severally, the amount of $232,440 in attorney’s fees. This

appeal followed.

                                          5
II.    STANDARD OF REVIEW

       We review de novo a trial court’s determination as to eligibility to receive

attorney’s fees under section 768.79 and rule 1.442. Pratt v. Weiss, 161 So. 3d
1268, 1271 (Fla. 2015); Miami-Dade County v. Ferrer, 943 So. 2d 288, 290 (Fla.

3d DCA 2006).

III.   ANALYSIS

       “Section 768.79, Florida Statutes, governs offers of judgment, and rule 1.442

delineates the procedures that implement this statutory provision.” Audiffred v.

Arnold, 161 So. 3d 1274, 1277 (Fla. 2015). The Florida Supreme Court has made

clear that Florida courts must strictly construe the statute and the rule as they “are

in derogation of the common law rule that each party pay its own fees.” Willis

Shaw Express, Inc. v. Hilyer Sod, Inc., 849 So. 2d 276, 278 (Fla. 2003); accord

Kuhajda v. Borden Dairy Co. of Ala., LLC., 202 So. 3d 391, 394 (Fla. 2016); Pratt,
161 So. 3d at 1271. Moreover, proposals for settlements made under the rule and

statute must “be sufficiently clear and definite to allow the offeree to make an

informed decision without needing clarification.” State Farm Mut. Auto. Ins. Co.

v. Nichols, 932 So. 2d 1067, 1079 (Fla. 2006). “[A]ny drafting deficiencies [will

be] construed against the drafter.” Paduru v. Klinkenberg, 157 So. 3d 314, 318

(Fla. 1st DCA 2014). An extensive body of case law construing proposals for

settlements made under these provisions has developed, further narrowing the

grounds upon which attorneys’ fees may be awarded for a failure to accept a

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settlement offer. The instant case, however, is controlled by only one: Attorneys’

Title Insurance Fund, Inc. v. Gorka, 36 So. 3d 646 (Fla. 2010).

      Gorka concerned an offer made by a single offeror to two offerees that was

conditioned on mutual acceptance2 within the context of rule 1.442(c)(3).3 The

Florida Supreme Court held that joint offers “conditioned on the mutual acceptance

of all joint offerees” are “invalid and unenforceable because it is conditioned such

that neither offeree can independently evaluate or settle his or her respective claim

by accepting the proposal.” Id. at 647.       In reaching its conclusion, the Florida

Supreme Court explained that:

             we have drawn from the plain language of rule 1.442 the
             principle that to be valid and enforceable a joint offer
             must (1) state the amount and terms attributable to each
             party, and (2) state with particularity any relevant
             conditions. A review of our precedent reveals that this
             principle inherently requires that an offer of judgment

2 In Gorka, the defendant, Attorneys’ Title Insurance Fund, Inc., served a proposal
for settlement on the two plaintiffs, Gorka and Larson, who were husband and
wife. See Attorneys’ Title Ins. Fund, Inc. v. Gorka, 989 So. 2d 1210, 1211 (Fla. 2d
DCA 2008). “The proposal offered payment of $12,500 to Gorka and payment of
$12,500 to Larson in full settlement of all claimed damages, attorneys’ fees, and
costs.” Id. at 1212. The proposal also stated that it was “‘conditioned upon the
offer being accepted by both John W. Gorka and Laurel Lee Larson. In other
words, the offer can only be accepted if both John W. Gorka and Laurel Lee
Larson accept and neither Plaintiff can independently accept the offer without their
co-plaintiff joining in the settlement.’” Id.
3Rule 1.442(c)(3) provides: “A proposal may be made by or to any party or parties
and by or to any combination of parties properly identified in the proposal. A joint
proposal shall state the amount and terms attributable to each party.”

                                          7
             must be structured such that either offeree can
             independently evaluate and settle his or her respective
             claim by accepting the proposal irrespective of the other
             parties’ decisions. Otherwise, a party’s exposure to
             potential consequences from the litigation would be
             dependently interlocked with the decision of the other
             offerees.

Id. at 650 (emphasis added) (citation omitted); see also Pratt, 161 So. 3d at 1272

(discussing that the purpose of rule 1.442(c)(3) “is to allow each offeree to

evaluate the terms and the amount of the offer as it pertains to him or her” and

stating that in Gorka, “[w]e held that the proposal . . . was invalid because the

conditional nature of the offer divested each plaintiff of independent control over

the decision to settle”); Audiffred, 161 So. 3d at 1279-80. The Court’s holding in

Gorka was based on the principle that “[a]n offer that cannot be unilaterally

accepted to create a binding settlement is an illusory offer.” Gorka, 36 So. 3d at

652.

       The rule articulated in Gorka has two significant limitations. First, Gorka

does not apply to a proposal for settlement made by multiple offerors to a single

offeree. As our sister court, the Fourth District Court of Appeal, explained in

Hoang Dinh Duong v. Ziadie, 153 So. 3d 354 (Fla. 4th DCA 2014)4:

4In Duong, plaintiffs made a proposal for settlement to a single defendant-offeree.
The proposal offered a settlement in the total amount of $1,000,000, with specific
amounts of the total allocated to individual plaintiffs. Id. at 356. After trial, the
offerors moved for attorney’s fees pursuant to the proposal for settlement. The
offeree argued that the proposal was invalid under Gorka because it deprived him
of the ability to evaluate the offer with respect to each of the offerors. Id. at 357.

                                          8
             Unlike Gorka, which involved an offer to multiple
             offerees conditioned on acceptance of all the offerees,
             this case involves an offer to a single offeree, conditioned
             on that single offeree accepting the offer as to all of the
             multiple offerors. . . . [W]here there is only one offeree,
             it is the offeree’s decision alone to accept or reject the
             proposal, without the decision being dependent on any
             other party. Thus, Gorka’s concern that the offer there
             “divest[ed] each party [i.e., offeree] of independent
             control of the decision to settle” was not implicated.

Id. at 359 (emphasis in original); accord Wolfe v. Culpepper Constructors, Inc.,

104 So. 3d 1132, 1134-35 (Fla. 2d DCA 2012) (concluding that Gorka did not

control where joint proposal was made by two offerors to a single offeree because

Gorka involved a single offeror and joint offerees).

      The second limitation on Gorka, which Gonzalez asserts applies to the facts

of this case, is set forth in rule 1.442(c)(4) and applies to cases involving vicarious

liability. Rule 1.442(c)(4) provides:

             Notwithstanding subdivision (c)(3) [requiring a joint
             proposal to state the amount and terms attributable to
             each party], when a party is alleged to be solely
             vicariously, constructively, derivatively, or technically
             liable, whether by operation of law or by contract, a joint
             proposal made by or served on such a party need not
             state the apportionment or contribution as to that party.
             Acceptance by any party shall be without prejudice to
             rights of contribution or indemnity.

The trial court granted the motion for fees. In affirming the trial court’s award of
attorney’s fees, the Fourth District held that the proposal “was an appropriate ‘all
or nothing’ proposal to which Gorka did not apply,” id. at 358, and that there was
“no obligation for the claimants in this case to make individual offers to a single
offeree,” id. at 359.

                                          9
Fla. R. Civ. P. 1.442(c)(4) (emphasis added).         Gonzalez argues that because

apportionment is not required under subsection (c)(4), the intent of the subsection

was to permit “all-or-nothing” offers where a party is alleged to be vicariously

liable. Gonzalez further asserts that because the liability of Pacheco and the

Corporation was vicarious, the Proposal was valid and enforceable. Rule 1.442

(c)(4), however, does not apply to the facts of this case.

      The plain language of rule 1.442(c)(4) limits its application to scenarios

where a party’s liability is alleged to be solely vicarious or otherwise indirect.

Indeed, “[t]he focus of the exception contained in rule 1.442(c)(4) is not whether a

party is liable for the full amount of damages, but rather, it is whether the claims

against the party are direct claims or solely claims of vicarious or other forms of

indirect liability.” Saterbo v. Markuson, 210 So. 3d 135, 138 (Fla. 2d DCA 2016)

(footnote omitted).     Compare Saterbo, 210 So. 3d at 139 (holding that

“apportionment was not necessary pursuant to rule 1.442(c)(4)” where claim

against one of two offerees was based solely on vicarious liability as owner of

vehicle), and Miley v. Nash, 171 So. 3d 145, 150 (holding that no apportionment in

joint proposal was necessary under rule 1.442(c)(4) where one of two defendants

was sued solely for vicarious liability as vehicle’s owner), with Haas Automation,

Inc. v. Fox, 43 Fla. L. Weekly D725, D728 (Fla. 3d DCA April 4, 2018) (holding

that rule 1.442(c)(4)’s exception to rule 1.442(c)(3)’s apportionment requirement

                                          10
did not apply where joint offerors did not have indirect liability for their claims

against single offeree).

      Here, a review of Gonzalez’s claims against Pacheco and the Corporation

shows that neither “is alleged to be solely vicariously, constructively, derivatively,

or technically liable.”     Although the complaint refers to Pacheco and the

Corporation collectively as the “PACHECO Defendants,” and alleges claims

against the “PACHECO Defendants” for breach of contract (Count I), negligence

(Count II), and negligent misrepresentation (Count III), the complaint does not

allege that either party is vicariously liable. Significantly, after a bench trial, the

trial court held “that both Ramon Pacheco, individually, and Ramon Pacheco and

Associates, Inc., are liable to Mr. Gonzales [sic] for the defective system.” The

trial court further found that “[b]oth Pacheco individually and the [Corporation] are

responsible pursuant to the Contract,” and that each had breached their duty to

properly design the air conditioning system and thus were responsible under

principles of negligence and negligent misrepresentation. In their plenary appeal

to this Court, Pacheco and the Corporation specifically argued that the trial court

erred in holding Pacheco individually liable under both the contract count and the

negligence counts.5    This Court rejected that argument and affirmed the trial

5An appellate court can take judicial notice of its own files and records. See
Miami Stage Lighting, Inc. v. Budget Rent-A-Car Systems, Inc., 712 So. 2d 1135,
1137 n.2 (Fla. 3d DCA 1998); Buckley v. City of Miami Beach, 559 So. 2d 310,
313 n.1 (Fla. 3d DCA 1990).

                                          11
court’s findings. Gonzalez, 170 So. 3d at 15 n.1; see also id. at 19 (Suarez, J.,

concurring in part and dissenting in part) (joining “the majority in affirming the

trial court’s findings as to the architect’s liability”).

       Thus, contrary to Gonzalez’s assertion on this appeal that there was “no

distinction” between the liability of Pacheco and the Corporation, Gonzalez’s

complaint alleged that Pacheco and the Corporation were each directly liable, the

trial court made findings of fact that Pacheco and the Corporation were each

directly liable, and this Court affirmed the trial court’s findings in that earlier

appeal. Accordingly, Gonzalez’s assertion that rule 1.442(c)(4) applies fails, as the

plain language of the rule only applies “when a party is alleged to be solely

vicariously, constructively, derivatively, or technically liable, whether by operation

of law or by contract.”

       Turning to the question of whether the Proposal is valid under Gorka, we

find the Proposal to be invalid and unenforceable.6 The Proposal seeks “payment
6 While Gorka involved a proposal explicitly conditioned on mutual acceptances of
joint offerees, we find no logical basis to prevent Gorka from applying to proposals
for settlement where the text, though not explicitly requiring mutual acceptance,
clearly prevents either offeree from independently evaluating the settlement offer.
See, e.g., Chastain v. Chastain, 119 So. 3d 547, 550 (Fla. 1st DCA 2013) (finding
the proposal invalid under Gorka where the proposal “did not expressly require
joint acceptance,” but it was “clear from the proposal in this case that there was
one offer in the amount of $5,002 and that the offer . . . was conditioned on joint
acceptance”); Schantz v. Sekine, 60 So. 3d 444, 446 (Fla. 1st DCA 2011)
(“Although not as direct as the wording of the settlement offer in Gorka, the . . .
language [stating that ‘Plaintiffs shall execute a general release’ and that ‘Plaintiffs
shall dismiss this case’]. . . conditions settlement on Appellants’ mutual acceptance
of the offer and joint action in accordance with its terms.”).

                                            12
by the PACHECO DEFENDANTS to Plaintiff in the total amount of $300,000.00”

in order to settle Gonzalez’s claims. Although the Proposal provides that the

$300,000 offer be apportioned as a $150,000 payment from Pacheco and a

$150,000 payment from the Corporation, it is unclear how much Pacheco or the

Corporation would have to pay if either wanted to settle Gonzalez’s claim

individually. As a result, the Proposal is not structured to permit either Pacheco or

the Corporation to “independently evaluate or settle his . . . respective claim by

accepting the proposal.” See Gorka, 36 So. 3d at 647. Moreover, the Proposal

clearly conditions settlement on Pacheco and the Corporation’s “mutual acceptance

of the offer and joint action in accordance with its terms.”7 See Schantz, 60 So. 3d

at 446. For example, the Proposal requires “acceptance of this offer by the

PACHECO DEFENDANTS,” and that the “PACHECO DEFENDANTS shall

authorize their counsel to sign and file a stipulation of voluntary dismissal with

prejudice.”8 Because the Proposal deprived Pacheco and the Corporation of the

7 Gonzalez states in his answer brief that the Stipulation was also drafted “to cover
the situation in which the joint offer would be accepted by both defendants.”
Specifically, the Stipulation provides that the “PACHECO DEFENDANTS
dismiss with prejudice all claims, counterclaims and third-party claims that were
brought or could have been brought by them in this action” and that “Plaintiff
voluntarily dismisses with prejudice all claims that were brought or could have
been brought in this action against the PACHECO DEFENDANTS.”
8Gonzalez’s counsel acknowledged at the fee hearing that the Proposal was based
on an assumption that both Pacheco and the Corporation would accept the offer:

             We did have [an] apportionment and yes, the form that
             we granted [sic] was on the assumption they both would

                                         13
ability to evaluate and independently act to resolve Gonzalez’s claims, the

Proposal is invalid under Gorka and cannot form the basis of an award of

attorney’s fees under section 760.79 and pursuant to rule 1.442.

IV.   CONCLUSION

      While “‘[p]roposals for settlement are intended to end judicial labor, not

create more,’” Nichols, 932 So. 2d at 1079 (quoting Lucas v. Calhoun, 813 So. 2d
971, 973 (Fla. 2d DCA 2002)), the opposite has occurred, and proposals for

settlement made under section 768.79 and rule 1.442 have instead generated

significant ancillary litigation and case law.   See Paduru, 157 So. 3d at 318

(“[M]any jurists have lamented that the offer of judgment statute has had the

unfortunate and unintended consequence of spawning additional litigation, even

though the statute was enacted to have exactly the opposite effect.”). Indeed, even

in a case where the results obtained at the trial court suggest that fees should be

awarded, we remain bound by the principle set forth in Gorka, and as a result, joint

proposals have become a trap for the wary and unwary alike. Justice Polston, in

his Gorka dissent, warned that the majority’s opinion “effectively eliminates the

ability to make joint offers.” Gorka, 36 So. 3d at 654 (Polston, J., dissenting).

Justice Polston’s warning proved prescient. See, e.g., Schantz, 60 So. 3d at 446

            accept, but if only one had called us and said “we will
            accept only on the company or only on the personal,”
            they could have and we would have just changed the
            signature from plural to singular, so that’s not – they had
            that right under the law.

                                        14
(invalidating joint offer even where offer apportioned the settlement amount

among the parties and stating that “the new rule announced in Gorka . . . we

believe, ‘effectively eliminates the ability to make joint offers’” (emphasis added)

(quoting Gorka, 36 So. 3d at 654 (Polston, J., dissenting))). If we were writing on

a blank slate, we may have reached a different result than the rule articulated in

Gorka. However, until the law is further clarified or corrected, we caution counsel

in our district to avoid joint proposals lest a similar fate befall them. Accordingly,

we reverse the trial court’s award of attorney’s fees to Gonzalez.

      REVERSED.

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