Court Opinion

ID: 4420847
Source: CourtListenerOpinion
Date Created: 2019-07-29 13:03:51.848659+00
Date Added: 2024-06-11T14:52:36.135744
License: Public Domain

FIRST DISTRICT COURT OF APPEAL
                 STATE OF FLORIDA
                  _____________________________

                          No. 1D17-2330
                  _____________________________

PALMENTERE BROS. CARTAGE
SERVICE, INC., RANDY JONES,
and CHEROKEE INSURANCE
COMPANY,

    Appellants,

    v.

HEATHER COPELAND and
PHILLIP COPELAND, her
husband,

    Appellees.
                  _____________________________

On appeal from the Circuit Court for Duval County.
Thomas M. Beverly, Judge.

                           July 29, 2019

PER CURIAM.

     On September 21, 2010, a tractor-trailer truck owned by
Palmentere Brothers Cartage Service, Inc., and operated by its
employee, Randy Jones (“Appellants” or “PBCS”), collided with a
vehicle being driven by Heather Copeland. Copeland successfully
sued for damages. Appellants now raise five points urging reversal
of the verdict and post-verdict rulings by the trial court. We affirm,
except as to the order finding entitlement to section 768.79-based
fees and expenses.
                                 I.

     Prior to trial, Copeland served PBCS with a proposal for
settlement in the amount of $345,000 pursuant to section 768.79,
Florida Statutes (2010), and Florida Rule of Civil Procedure 1.442.
In paragraph 2, the proposal stated:

    This proposal is attempting to resolve Plaintiff’s claim
    against Defendant PALMENTERE BROS. CARTAGE
    SERVICE, INC. and, if accepted, resolves all damages
    that would otherwise be awarded in a final judgment in
    the action as to PALMENTERE BROS. CARTAGE
    SERVICE, INC. only.

Two additional documents were served with the proposal—one
entitled “Release of Claims” and the other, “Voluntary Dismissal
with Prejudice.” In paragraph 3 of the proposal, Copeland
promised that in exchange for the above payment, she would
execute the “Release of Claims” against PBCS, and file the
“Voluntary Dismissal with Prejudice” as to all claims against
PBCS. Then, in paragraph 5, the proposal stated: “There are no
claims for punitive damages in the case and none of the proposed
settlement amount is for punitive damages.” The “Release of
Claims” provided that Copeland “releases and forever discharges
[PBCS], from all claims and causes of action which [Copeland] ever
had or now has against [PBCS], arising out of the accident of which
is the subject of the above styled case.” In its turn, the “Voluntary
Dismissal with Prejudice” stated: “[T]he above-styled cause is
dismissed, with prejudice as to only [PBCS].”

     PBCS rejected the proposal and successfully moved for a
continuance of the approaching trial. In the interim, Copeland
filed a Fourth Amended Complaint that asserted, for the first time,
a claim for punitive damages against PBCS. The jury returned a
verdict awarding Heather Copeland $400,000 in compensatory
damages—reduced by ten percent based on comparative fault—but
zero damages in favor of her husband, Phillip Copeland, on his loss
of consortium claim. Additionally, the jury found PBCS
individually liable for $1 million in punitive damages.

    Post-verdict, Copeland filed her “Motion for Taxation of
Attorney’s Fees and Investigation Expenses” predicated on the
                                 2
unaccepted proposal for settlement. Two hearings were held on the
motion during which the trial court heard lengthy legal argument
as to whether PBCS “beat” the proposal for settlement because,
given the reduction in the compensatory damages due to her ten
percent comparative fault, Copeland only recovered $360,000—
clearly not twenty-five percent more than the amount of the offer—
and because Copeland had disclaimed punitive damages in her
proposal—which disclaimer, according to PBCS, rendered the
proposal for settlement ambiguous. The judge was not persuaded.
In its ensuing order, the court announced that given the award of
punitive damages, Copeland had recovered $1,360,000, an amount
“significantly more tha[n] 25% greater than her proposal for
settlement of $345,000.” Accordingly, it found Copeland was
entitled to recover her attorney’s fees and investigative costs
pursuant to section 768.79(1) and (6)(b), Florida Statutes.

                                 II.

     Appellants’ first point on appeal challenges the trial court’s
order granting Copeland’s entitlement to fees and costs pursuant
to the rejected proposal for settlement. Appellants assert that the
proposal was unenforceable because it was ambiguous and not
made in good faith, as evidenced by its statement that no punitive
damages were being claimed. Appellants argue they were denied a
fair opportunity to ponder the potential impact of punitive
damages to their case in evaluating whether to accept the proposal,
when the proposal expressly advised that no punitive damages
were being claimed, yet on the heels of their rejection of the
proposal, Appellants amended their complaint to add a claim for
punitive damages. Essentially, Appellants have cried “foul” on
what they believe to be an improper end run around the rules
governing proposals for settlement.

     Section 768.79(2), Florida Statutes, provides the substantive
law concerning proposals for settlement and states in relevant part
that an “offer [of settlement] must . . . (c) State with particularity
the amount offered to settle a claim for punitive damages, if any
[and] (d) State its total amount.” Subsection (2) further provides
that “[t]he offer shall be construed as including all damages which
may be awarded in a final judgment,” and goes on to state in
subsection (6)(b): “If a plaintiff serves an offer which is not

                                  3
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 . . . .” Subsection (6)
continues: “For purposes of the determination required by
paragraph (b), the term ‘judgment obtained’ means the amount of
the net judgment entered, plus any post-offer settlement amounts
by which the verdict was reduced.” Section 768.79 “creates an
entitlement to attorneys’ fees when the statutory and procedural
requirements have been satisfied,” and “[t]he mandatory language
of section 768.79 reinforces the notion that a proper offer
automatically creates that entitlement, unless the offer is made in
bad faith.” Anderson v. Hilton Hotels Corp., 202 So. 3d 846, 856
(Fla. 2016).

     We accord proposals for settlement de novo review. Starboard
Cruise Servs., Inc. v. DePrince, 259 So. 3d 295, 298 (Fla. 3d DCA
2018). Florida Rule of Civil Procedure 1.442, entitled “Proposals
for Settlement,” provides the procedural mechanism for section
768.79. Paragraph (h)(1) of the rule declares: “If a party is entitled
to costs and fees pursuant to applicable Florida law, the court may,
in its discretion, determine that a proposal was not made in good
faith. In such case, the court may disallow an award of costs and
attorneys’ fees.” Rule 1.442 “requires that the settlement proposal
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). “When
construing the language of section 768.79 and rule 1.442, the law
is clear: both provisions must be strictly construed because they
are in derogation of the common law rule that each party is
responsible for its own attorney’s fees.” Id. (citing Campbell v.
Goldman, 959 So. 2d 223, 226 (Fla. 2007)).

     Appellants cannot be sanctioned under section 768.79 and
rule 1.442, based on the substantial punitive damages verdict
here, because Copeland explicitly disclaimed punitive damages in
her only settlement proposal. When Copeland made her section
768.79-based offer of judgment for $345,000 in April 2014, she
hadn’t yet added a punitive damages claim to her complaint. As to
punitive damages, her settlement proposal stated: “There are no
claims for punitive damages in the case and none of the proposed

                                  4
settlement amount is for punitive damages.” Appellants then
rejected the proposal.

     Three weeks after the statutory deadline for accepting the
proposal passed, Copeland added a punitive damages claim
against PBCS. The new complaint described all of the ways in
which PBCS had “blindly and illegally hired and employed [the] . .
. professional truck driver,” in “conscious and willful” disregard for
the law and “reckless and willful disregard for the safety of the
travelling public.” But after adding this claim, Copeland did not
make a settlement offer that included punitive damages. See
§ 768.79(3), Fla. Stat. (allowing subsequent offers and requiring
that they address punitive damages); Frosti v. Creel, 979 So. 2d
912 (Fla. 2008) (involving a second proposal with a punitive
damages-specific offer).

     Copeland’s post-verdict motion for section 768.79-based
sanctions rested on having the court compare the $1,360,000 final
judgment amount, inclusive of punitive damages, against her offer
of judgment that disclaimed punitive damages. But this apples-to-
oranges comparison of judgment amounts isn’t permitted because
the offer came and went before punitive damages were part of the
case. Appellants correctly argue that offers of judgment must be
evaluated as of the time of the offer: “[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.” White v. Steak & Ale of Fla., Inc., 816 So. 2d 546,
550-51 (Fla. 2002) (emphasis added) (quoting Danis Industries
Corp. v. Ground Improvement Techniques, Inc., 645 So. 2d 420,
421-22 (Fla. 1994)); see also § 768.79(2), Fla. Stat. (“The offer shall
be construed as including all damages which may be awarded in a
final judgment.”). Because punitive damages were not part of the
case on the date of the offer of settlement, the calculation of the
“net judgment” and “judgment obtained” required in section
768.79(6)(b), could not include the amount of the punitive damages
verdict. Id. at 551 (“[T]he ‘judgment obtained’ . . . includes the net
judgment for damages . . . that could have been included in a final
judgment if such final judgment was entered on the date of the
offer.”).

                                  5
     Other cases addressing section 768.79-based sanctions
support this conclusion. Sarkis v. Allstate Ins. Co., 863 So. 2d 210,
222 (Fla. 2003) (recognizing that attorney’s fees authorized by
section 768.79 are a sanction “for the refusal to accept what is
presumed to be a reasonable offer [and] for unnecessarily
continuing the litigation”). Because section 768.79 involves a
sanction, settlement proposals must be “as specific as possible,
leaving no ambiguities so that the recipient can fully evaluate its
terms and conditions.” Nichols, 932 So. 2d at 1079. According to
Nichols, if an ambiguity could reasonably affect the offeree’s
decision on whether to accept the proposal for settlement, then the
offer is invalid. Id. For offers to qualify under the statute, they
must “[s]tate with particularity the amount offered to settle a
claim for punitive damages, if any.” § 768.79(2)(c), Fla. Stat. For
Copeland’s case, this meant that she could not both direct
Appellants away from evaluating punitive damages by disclaiming
them in her settlement offer, and also have Appellants sanctioned
based upon her recovery of punitive damages.

     In Kuhajda v. Borden Dairy Co. of Alabama, LLC, 202 So. 3d
391 (Fla. 2016), a party didn’t address attorney’s fees in an offer of
judgment as required by rule 1.442. The court nevertheless
allowed a section 768.79-based recovery “because Kuhajda never
sought attorney’s fees in her complaint.” Id. at 396. See also id.
(noting that “[i]t would make no sense to require a defendant to
state in its offer of judgment that the offer does not include
attorney’s fees, when plaintiff . . . could not recover them because
of failure to plead”) (quoting Bennett v. Am. Learning Sys. of Boca
Delray, Inc., 857 So. 2d 986, 988-89 (Fla. 4th DCA 2003)). The
analysis in Kuhajda implies that the Court wouldn’t have allowed
a section 768.79-based recovery had the offeror both failed to
address attorney’s fees in her offer and sought to recover them.
Here, unlike Kuhajda, it isn’t true that Copeland “never sought”
punitive damages, or that she “could not recover them”; indeed,
Copeland both sought and recovered punitive damages. Because
section 768.79(2)(c) requires parties to “state with particularity the
amount offered to settle a claim for punitive damages,” Copeland
could not both disclaim them in her only settlement offer, then
seek them and have Appellants sanctioned based upon them. See
R.J. Reynolds Tobacco v. Ward, 141 So. 3d 236, 237 (Fla. 1st DCA
2014) (reversing a section 768.79 award because the offers of

                                  6
judgment did not “state with particularity the amount offered to
settle a claim for punitive damages”); cf. Segundo v. Reid, 20 So.
3d 933, 938 (Fla. 3d DCA 2009) (denying section 768.79 fees and
costs because the plaintiff’s offer would have penalized the
defendant for damages not pled until after the offer was rejected).

     Finally, we don’t read Frosti v. Creel, relied on by Copeland,
to contribute significantly to the analysis. 979 So. 2d 912. In that
case, Ms. Frosti served two valid settlement proposals of about
$18,000 and $24,000. Id. at 914. At least one of these offers
included an amount for punitive damages (the facts aren’t clear
about the other offer). Id. After the jury rendered a total verdict of
$94,471.66, $20,670.66 in compensatory damages and $73,800 in
punitive damages, the defendant argued. among other things, that
the punitive damages amount shouldn’t be part of the calculation
for purposes of determining section 768.79 sanctions. Id. at 916-
17. But the court upheld Ms. Frosti’s award of section 768.79-based
fees and costs because her motion was “predicated upon a valid,
rejected proposal for settlement.” Id. at 917. Here, unlike in Frosti,
there was never a valid, rejected offer that included punitive
damages; Copeland’s only proposal stated that “none of the
proposed settlement amount is for punitive damages.” Under these
different circumstances, where no punitive damages offer was ever
made, the punitive damages verdict amount could not be included
in the trial court’s calculation of the “judgment obtained.”

                                 III.

    For these reasons, the judgment is AFFIRMED in part,
REVERSED in part, and REMANDED for additional proceedings
consistent with this opinion.

WOLF and OSTERHAUS, JJ., concur; JAY, J., concurs and dissents
in part with opinion.

                                  7
                  _____________________________

    Not final until disposition of any timely and
    authorized motion under Fla. R. App. P. 9.330 or
    9.331.
               _____________________________

JAY, J., concurring in part, dissenting in part.

     If we were painting on a blank canvas, the majority opinion
would have merit. However, the Florida Supreme Court’s decision
in Frosti v. Creel controls the resolution of the proposal of
settlement issue. Accordingly, I respectfully dissent.

     In Frosti, the plaintiff filed a complaint against the defendant
seeking damages from an automobile accident. A year later, the
plaintiff served a proposal for settlement in the amount of $17,999.
Three years after that, she served a second proposal specifying
“that $1 was demanded to settle the punitive damages claim and
that the $1 punitive damage offer was contingent upon acceptance
of the total offer of $24,999 to settle all claims.” Id. at 914. Neither
proposal was accepted and, following trial, the jury returned a
verdict in favor of the plaintiff—awarding $20,670.66 in
compensatory damages and $73,800 in punitive damages—for a
total verdict of $94,470.66. Following entry of the verdict, the
plaintiff filed both proposals for settlement in the trial court, and
then filed a motion for judgment in accordance with the verdict
and a motion for attorney’s fees and costs. Ultimately, the trial
court denied the plaintiff’s motion for fees, accepting the
defendant’s argument that the proposals of settlement and the
motion for fees were filed prematurely. Id. at 915.

     After rejecting the prematurity argument, the Florida
Supreme Court addressed the defendant’s second argument, that
the plaintiff did not obtain a judgment sufficiently large to merit
an award of fees and costs because the portion of her judgment
attributable to compensatory damages was not “twenty-five
percent greater than either of her offers to settle the compensatory
damages claim.” Id. (emphasis added). The supreme court rejected
this argument. Id.

                                   8
     Emphasizing the well-established rule that “a party’s
entitlement to fees turns on the total judgment obtained,” id., and
because the total award “far exceed[ed]” one hundred twenty-five
percent “of the amount offered in either” of the plaintiff’s proposals
for settlement, id. at 917, the supreme court held that the plaintiff
had satisfied the statutory requirement and was entitled to
attorney’s fees and costs. Significantly, the supreme court made no
distinction between the first proposal for settlement—which did
not seek punitive damages—and the second proposal—which
sought a nominal amount of punitive damages. Either proposal
was adequate to entitle the plaintiff to fees and costs.

      Because Frosti controls the disposition of the section 768.79
question, Copeland was entitled to recover her attorney’s fees and
costs pursuant to her proposal of settlement. Therefore, I would
affirm the trial court’s order finding entitlement to section 768.79
fees.

                  _____________________________

E. T. Fernandez, III and Austin Brown of Fernandez Trial
Lawyers, P.A., Jacksonville, for Appellants.

Kansas R. Gooden of Boyd & Jenerette, PA, Jacksonville; Robert
M. Klein and Andrew M. Feldman of Klein Glasser Park & Lowe,
P.L., Miami, for Florida Defense Lawyers Association, Amicus
Curiae in support of Appellants Palmentere Bros. Cartage Service,
Inc. and Cherokee Insurance Company.

Benjamin E. Richard, Curry Gary Pajcic, and William A. Bald of
Pajcic & Pajcic, P.A., Jacksonville, for Appellee Heather Copeland.

Philip M. Burlington and Adam Richardson of Burlington &
Rockenbach, P.A., West Palm Beach, for Florida Justice
Association, Amicus Curiae in support of Appellees Heather
Copeland and Phillip Copeland.

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