Court Opinion

ID: 2761939
Source: CourtListenerOpinion
Date Created: 2014-12-17 20:02:45.176885+00
Date Added: 2024-06-11T12:18:38.122178
License: Public Domain

IN THE DISTRICT COURT OF APPEAL
                                    FIRST DISTRICT, STATE OF FLORIDA

SARITHA REDDY PADURU                NOT FINAL UNTIL TIME EXPIRES TO
and RAVI ANUGU,                     FILE MOTION FOR REHEARING AND
                                    DISPOSITION THEREOF IF FILED
      Appellants/Cross-
      Appellees,                    CASE NO. 1D12-5712, 13-2562, 13-4597

v.

ALLISON W. KLINKENBERG,

      Appellee/Cross-Appellant.

_____________________________/

Opinion filed December 17, 2014.

An appeal from the Circuit Court for Duval County.
W. Gregg McCaulie, Judge.

Michael C. Clarke and Betsy E. Gallagher of Kubicki Draper, P.A., Tampa, for
Appellants/Cross-Appellees.

John S. Mills and Courtney Brewer of The Mills Firm, P.A., Tallahassee, for
Appellee/Cross-Appellant.

PER CURIAM.

      In these consolidated appeals, Saritha Reddy Paduru and Ravi Anugu,

appellants, challenge the second amended final judgment awarding Allison
Klinkenberg, appellee, attorney’s fees and costs pursuant to the offer of judgment

statute. Because we find that Klinkenberg’s offer of judgment failed to satisfy the

exacting requirements of the statute and implementing rule, we reverse and

remand, without reaching the other issues raised on appeal.

      Following a traffic accident between Klinkenberg and Paduru, Klinkenberg

sought damages from Paduru, as the negligent driver, and Anugu, Paduru’s

husband and the owner of the vehicle Paduru was driving.            Prior to trial,

Klinkenberg served Paduru with a proposal for settlement pursuant to section

768.79, Florida Statutes, and rule 1.442, Florida Rules of Civil Procedure. The

proposal identified Klinkenberg as the party making the proposal; identified

Paduru as the party to whom the proposal was made; offered to settle any and all of

Klinkenberg’s claims against Paduru arising out of the accident which formed the

basis of Klinkenberg’s lawsuit; and stated $50,000 was the total amount of the

proposal. In paragraph 5, the proposal stated there were no relevant conditions for

acceptance, other than those provided in the applicable statute and rule. Paragraph

6, entitled “Non-monetary terms of proposal,” stated, “[t]he Plaintiff will dismiss

with prejudice the above-styled action against Defendants Saritha Reddy Paduru

and Ravi Anugu after the defendant Anugu (or his agents) tenders the proposed

settlement amount.” Paduru did not respond to the proposal.

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      Immediately before trial, Paduru and Anugu conceded negligence, so the

trial focused on the issues of causation and the apportionment of liability for

Klinkenberg’s damages.       Following trial, the jury returned a verdict for

Klinkenberg in the amount of $498,822.55. The trial court entered judgment on

the verdict, which we affirmed on appeal.

      Thereafter, Klinkenberg moved for an award of attorney’s fees and costs

pursuant to section 768.79 and rule 1.442. Paduru argued the proposal was invalid

because it was unclear who would be released from liability as to what claims, and

the proposal contained a settlement condition over which Paduru had no control.

The trial court granted Klinkenberg’s motion for attorney’s fees and costs, finding

that, “the offer is clear and understandable when considered in its totality in light

of the issues in the case and the nature of the action.” After a hearing on the

reasonable number of hours and reasonable hourly rate, the trial court entered the

fee and cost judgment currently under review.

      Appellate courts apply the de novo standard to “review a trial court’s ruling

on a motion to tax attorney’s fees and costs pursuant to the offer of judgment

statute . . . .” Ambeca, Inc. v. Marina Cove Village Townhome Ass'n, Inc., 880 So.

2d 811, 812 (Fla. 1st DCA 2004). Generally, section 768.79(1), Florida Statutes

(2011), otherwise known as the offer of judgment statute, entitles a plaintiff to

reasonable costs and attorney’s fees when the plaintiff files a demand for judgment

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that is rejected by the defendant and the plaintiff ultimately recovers a judgment

that is at least twenty-five percent greater than the settlement offered in the demand

for judgment. Jacksonville Golfair, Inc. v. Grover, 988 So. 2d 1225, 1227 (Fla. 1st

DCA 2008). The statute further instructs:

      An offer must:

      (a) Be in writing and state that it is being made pursuant to this
      section.
      (b) Name the party making it and the party to whom it is being made.
      (c) State with particularity the amount offered to settle a claim for
      punitive damages, if any.
      (d) State its total amount.

§ 768.79(2).

      Rule 1.442, Florida Rules of Civil Procedure (2011), sets forth the

appropriate procedure for making a proposal under the offer of judgment statute:

      (c) Form and Content of Proposal for Settlement.
      (1) A proposal shall be in writing and shall identify the applicable
      Florida law under which it is being made.
      (2) A proposal shall:
            (A) name the party or parties making the proposal and the party
             or parties to whom the proposal is being made;
            (B) identify the claim or claims the proposal is attempting to
             resolve;
            (C) state with particularity any relevant conditions;
            (D) state the total amount of the proposal and state with
             particularity all nonmonetary terms of the proposal;
            (E) state with particularity the amount proposed to settle a
            claim for punitive damages, if any;
            (F) state whether the proposal includes attorneys' fees and
            whether attorneys' fees are part of the legal claim; and
            (G) include a certificate of service in the form required by rule
            1.080(f).
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Fla. R. Civ. P. 1.442(c)(1)-(2).

      We recently observed that the statutory and rule language must be strictly

construed because they are in derogation of the common law custom that each

party pay its own fees and costs, and because the statute creates a sanction against

the party which unreasonably rejects an offer for settlement.         R.J. Reynolds

Tobacco v. Ward, 141 So. 3d 236, 238-39 (Fla. 1st DCA 2014).

      In Attorneys’ Title Ins. Fund v. Gorka, 36 So. 3d 646, 647 (Fla. 2010), the

supreme court reviewed whether a joint offer, requiring the mutual acceptance of

all offerees, was valid and enforceable under the offer of judgment statute and rule.

Reviewing its precedent on the question presented, the supreme court distilled the

following principle:

      [A]n offer of judgment 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.

      Applying that principle to the question before it, the supreme court found the

proposal at issue was invalid because it prevented “either party from independently

evaluating and accepting” the proposal. Id. at 651. The court specifically rejected

the contention, expressed by the dissent, “that a party could protect itself from

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future sanctions by filing a notice of acceptance of the offer that would never result

in settlement.” Id. The court reasoned that under that flawed interpretation of the

offer of judgment statute, the offeror could ensure its entitlement to fees by making

an offer “conditioned on an event entirely outside the independent control of the

offerees that would never occur . . . . An offer that cannot be unilaterally accepted

to create a binding settlement is an illusory offer.” Id. at 651-52.

      More recently, in Gonzalez v. Claywell, 82 So. 3d 1000 (Fla. 1st DCA

2011), we addressed the validity of a proposal for settlement which formed the

basis of an attorney’s fee award under section 768.79 and rule 1.442. The proposal

in that case was directed from the plaintiff, Claywell, to the defendant, Gonzalez,

and offered to settle Claywell’s personal injury claim for $240,000, “if Gonzalez's

insurance company, GEICO, tendered a check in the amount of $240,000 made

payable to her.” Id. at 1000. We determined that the proposal was “invalid and

unenforceable because it was impossible for Gonzalez to meet the conditions of the

proposal,” where settlement was predicated on a non-party insurance company

tendering payment well in excess of its policy limits. Id. at 1001. The proposal

was invalid and unenforceable because it deprived Gonzalez of the independent

control of the decision to settle by including a settlement condition he “could not

possibly perform.” Id. (quoting Gorka, 36 So. 3d at 649). We further concluded

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“[a]t a minimum, the proposal is ambiguous because Gonzalez could not

effectively evaluate the condition that GEICO tender the settlement check.” Id.

       Here, the trial court found that the offer was “brief, concise, and

straightforward” in that “for the sum of $50,000, [Klinkenberg] would settle the

claim and dismiss her case, with prejudice, against both Defendants upon receipt of

the payment. So what is the issue?”

       The issue is that pursuant to the plain language of paragraph 6, settlement

was predicated on payment of the settlement amount by Anugu or his agents,

presumably a reference to his insurance company.         Although Klinkenberg’s

proposal stated it was directed only to Paduru, the language in paragraph 6 could

reasonably lead one to believe that the offer also implicated Anugu or his agents.

Even though the proposal stated that the only relevant conditions of acceptance

were those provided in the offer of judgment statute and implementing rule, a

reasonable interpretation of the proposal could be that the claims against Paduru

would only be dismissed after Klinkenberg had received the settlement amount.

As evidenced by the trial court’s interpretation, payment of the settlement amount

by Anugu or his agents could logically be understood to be required in order to

settle the case.

       Klinkenberg urges us to interpret the proposal settlement’s paragraph 6 as

simply extending an alternative means for reaching settlement of the case as to

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both Paduru and Anugu. Paragraph 6, however, does not state that an alternative

means of obtaining dismissal of the case is for Anugu or his agents to tender the

settlement amount.     Instead, the non-monetary terms of the deal are that

Klinkenberg will dismiss the case against Paduru and Anugu, with prejudice, once

Anugu or his agents tender payment. Aside from paragraph 4, which sets forth the

settlement amount, paragraph 6 provides the only terms of the proposal. These

terms are distinct from the conditions of acceptance, provided in paragraph 5, that

merely refer to the acceptance procedures provided in the statute and rule.

      The only part of the proposal specifically referring to dismissal of the claim

against Paduru, therefore, is paragraph 6, which can be interpreted to link dismissal

to payment of the settlement amount by Anugu or his agents, with the result that

Paduru was unable to evaluate the terms of the proposal. Gonzalez, 82 So. 3d at

1001; Gorka, 36 So. 3d at 650. It is now a well settled principle, espoused in our

previous decisions as well as those from sister districts, that offers of judgment

must strictly comply with section 768.79 and rule 1.442, with any drafting

deficiencies being construed against the drafter. Ward, 141 So. 3d at 238-39;

Alamo Fin., L.P. v. Mazoff, 112 So. 3d 626, 628 (Fla. 4th DCA 2013); Tran v.

Anvil Iron Works, Inc., 110 So. 3d 923, 925 (Fla. 2d DCA 2013); Andrews v.

Frey, 66 So. 3d 376, 378 (Fla. 5th DCA 2011).

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      As did the trial court in this case, many 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. See, e.g., Schantz v. Sekine, 60 So. 3d 444, 446-47 (Fla. 1st

DCA 2011) (Thomas, J., specially concurring); Campbell v. Goldman, 959 So. 2d

223, 227-28 (Fla. 2007) (Pariente, J., specially concurring). Nevertheless, because

the proposal in this case deprived Paduru of the ability to evaluate and

independently act to resolve the case against her, we conclude that the proposal is

invalid, unenforceable, and may not form the basis of an award of attorney’s fees

and costs under section 768.79.

      Accordingly, we REVERSE the second amended final judgment awarding

attorney’s fees and costs, and REMAND for further proceedings consistent with

this opinion.

CLARK, WETHERELL, and MAKAR, JJ., CONCUR.

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