Court Opinion

ID: 4245126
Source: CourtListenerOpinion
Date Created: 2018-02-14 21:00:36.842574+00
Date Added: 2024-06-11T14:43:33.555801
License: Public Domain

Case: 17-11491   Date Filed: 02/14/2018   Page: 1 of 9

                                                     [DO NOT PUBLISH]

            IN THE UNITED STATES COURT OF APPEALS

                    FOR THE ELEVENTH CIRCUIT
                      ________________________

                            No. 17-11491
                        Non-Argument Calendar
                      ________________________

                  D.C. Docket No. 1:11-cv-24142-PAS

FIVE FOR ENTERTAINMENT S.A.,
d.b.a. Five Live Entertainment,

                                               Plaintiff - Counter Defendant,

DIEGO HERNAN DE IRAOLA,

                                               Plaintiff - Counter Defendant -
                                               Appellant,

                                  versus

EL CARTEL RECORDS, INC.,
RAMON LUIS AYALA RODRIGUEZ,
a.k.a. Daddy Yankee,
ICARO SERVICES, INC.,
d.b.a. Icaro Booking Services,
EDGAR BALDIRI MARTINEZ,

                                               Defendants - Counter
                                               Claimants - Appellees.
                Case: 17-11491        Date Filed: 02/14/2018     Page: 2 of 9

                              ________________________

                      Appeal from the United States District Court
                          for the Southern District of Florida
                            ________________________

                                      (February 14, 2018)

Before WILSON, JILL PRYOR and HULL, Circuit Judges.

PER CURIAM:

       Diego Hernan De Iraola appeals from the district court’s order denying his

motion for attorney’s fees following an unaccepted offer of judgment made under

Florida law. He argues that the district court erred in concluding that the offer of

judgment was invalid under Florida law and thus that he was not entitled to

attorney’s fees. For the reasons set forth below, we disagree with De Iraola and

affirm the district court.

                                 I.      BACKGROUND 1

       Recording artist Ramon Luis Ayala Rodriguez, known as “Daddy Yankee,”

and his record company, El Cartel Records, Inc. (“El Cartel”), entered into an

agreement with Five for Entertainment S.A. (“Five Live”) under which Daddy

Yankee would perform several concerts in Argentina, which Five Live would

       1
         A number of opinions have set forth this case’s factual background, including one from
this Court. See Five For Entm’t S.A. v. El Cartel Records, Inc., 646 F. App’x 714 (11th Cir.
2016) (unpublished). Here, we review only the facts relevant to the issues in this appeal.

                                               2
                   Case: 17-11491        Date Filed: 02/14/2018         Page: 3 of 9

produce. Following a disagreement over the payment of fees, the concerts were

cancelled. Daddy Yankee publicly blamed the cancelled concerts on Five Live.

       Five Live and De Iraola, Five Live’s president and managing shareholder,

sued Daddy Yankee, El Cartel, his booking agent, and the booking agent’s

president (collectively, “Daddy Yankee”) in federal court. As relevant here, Five

Live and De Iraola alleged that Daddy Yankee had made defamatory statements

about them. Daddy Yankee moved for summary judgment on the defamation

claims.

       On August 9, 2013, when the summary judgment motion was pending, De

Iraola served Daddy Yankee with an offer of judgment pursuant to Florida law.2

The offer stated that De Iraola would “settle all claims . . . in the above styled

action” for $100,000. Demand for Judgment at 1 (Doc. 326-1 at 18).3 The offer

also included a general release, which discharged:

       [A]ny and all manner of action and actions . . . which said Releasor
       ever had, now has, or shall or may have against said Releasee for,
       upon, or by reason of any matter, cause, thing, event, occurrence
       or fact whatsoever, known or unknown, foreseen or unforeseen from
       the beginning of the world to the day of this Release, regarding or
       relating to any claims or cause of action asserted in, or which arises
       from any of the facts or transactions that form the basis for all claims
       asserted in the action[.]

       2
        De Iraola served a separate offer on each defendant, but the language of each offer was
the same.
       3
           Citations to “Doc.” refer to docket entries in the district court record in this case.

                                                    3
               Case: 17-11491     Date Filed: 02/14/2018    Page: 4 of 9

Id. at 5 (Doc. 326-1 at 22). The offer indicated that it would remain open for thirty

days.

        While the offer was pending, the district court issued an order on Daddy

Yankee’s motion for summary judgment as to nine statements Five Live and De

Iraola had alleged were defamatory. The district court granted the motion as to

two of the statements, concluding they were not defamatory as a matter of law, and

denied it as to the others. On the same day, Five Live and De Iraola sought leave

to supplement the record with newly-discovered evidence of a 2011 radio

interview in which Daddy Yankee had made additional defamatory statements. On

September 4, 2013, days before the offer of judgment would expire, the district

court granted Five Live and De Iraola’s motion, permitting them to use the newly-

discovered recording at trial.

        Daddy Yankee never responded to the offer of judgment and the case

proceeded to trial. In the pretrial order, the district court listed the defamatory

statements on which De Iraola intended to proceed at trial. That list included three

statements contained in the 2011 radio interview. At trial, the jury’s verdict form

required it to make findings as to specific defamatory statements made by Daddy

Yankee, including three for which the newly-discovered recording was the sole

source. The jury found for De Iraola on all of the defamation claims and awarded

him $2,000,000 in compensatory damages.

                                           4
               Case: 17-11491     Date Filed: 02/14/2018   Page: 5 of 9

      Following trial, De Iraola moved for his attorney’s fees based on the

unaccepted offer of judgment. The magistrate judge determined that the offer of

judgment was valid under Florida law and recommended that the relevant portion

of the motion be granted. Daddy Yankee objected to the recommendation, arguing

that the offer of judgment was invalid under Florida law. The district court agreed,

concluding that the changing circumstances of the case while the offer was

pending rendered it ambiguous. De Iraola appealed.

                                II.    DISCUSSION

      We review the district court’s determinations of state law in a diversity case

de novo. McMahan v. Toto, 311 F.3d 1077, 1081 (11th Cir. 2002). Here, De

Iraola argues that the offer of judgment was valid under Florida law and thus that

the district court erred in determining that he was not entitled to attorney’s fees

following the lapsed offer. We disagree.

      Under Florida law, a plaintiff who makes an offer of judgment that is not

accepted by the defendant within thirty days is entitled to recover his attorney’s

fees and costs if he ultimately recovers a judgment at least twenty-five percent

greater than the offer. Fla. Stat. § 768.79. The specific requirements for such an

offer are set forth in Florida Statutes § 768.79, the Florida offer of judgment

                                           5
                Case: 17-11491        Date Filed: 02/14/2018       Page: 6 of 9

statute.4 Because the statute is “a sanction for an unreasonable rejection of a good

faith offer of settlement,” Segundo v. Reid, 20 So. 3d 933, 936 (Fla. Dist. Ct. App.

2009), displacing the general rule that each party pays its own fees, its

requirements “should be construed in favor of the party to be sanctioned,”

Hibbard ex rel. Carr v. McGraw, 918 So. 2d 967, 971 (Fla. Dist. Ct. App. 2005).

       As the statute imposes a sanction, Florida courts have held that settlement

proposals under the offer of judgment statute must be “as specific as possible,

leaving no ambiguities so that the recipient can fully evaluate its terms and

conditions.” State Farm Mut. Auto. Ins. Co. v. Nichols, 932 So. 2d 1067, 1079

(Fla. 2006) (internal quotation marks omitted). Therefore, if an “ambiguity could

reasonably affect the offeree’s decision on whether to accept the proposal for

settlement,” the offer is invalid. Carey-All Transp., Inc. v. Newby, 989 So. 2d

1201, 1206 (Fla. Dist. Ct. App. 2008) (internal quotation marks omitted).

       Here, as the district court determined, the offer of judgment was invalid

because it was ambiguous in light of the changing circumstances of the case while

the offer was pending. The offer stated that it would settle “all claims . . . in the

above styled action.” The attached release, meanwhile, contained broader

language, releasing:

       4
          “This circuit has found § 768.79 to be substantive law for Erie purposes.” Jones v. U.S.
All., L.L.C., 494 F.3d 1306, 1309 (11th Cir. 2007). Because we are sitting in diversity, we apply
Florida law governing offers of judgment.

                                                6
              Case: 17-11491     Date Filed: 02/14/2018    Page: 7 of 9

      [A]ny and all . . . actions . . . which said Releasor ever had, now has or
      shall or may have . . . regarding or relating to any claims or cause of
      action asserted in, or which arises from any of the facts or transactions
      that form the basis for all claims asserted in the action[.]

At the time the offer was served, it was clear that the claims “asserted in the

action” referred to those defamation claims included in the original complaint. But

when the district court allowed Five Live and De Iraola to rely on the newly-

discovered recording at trial, days before the offer of judgment would expire, it

became ambiguous as to whether the release included those newly-added claims.

Indeed, at the time the offer was served, no facts had been alleged in the complaint

about any statements made in the 2011 recording.

      De Iraola argues that the language of the release was not ambiguous because

the newly-discovered defamatory statements were not new claims. Therefore, he

argues, the added statements were included in the initial offer’s release of “all

claims.” According to De Iraola, even the district court acknowledged that the

added statements constituted the same claim when it allowed De Iraola and Five

Live to rely on the recording after determining Daddy Yankee would not suffer

prejudice from the addition of that evidence days before trial. However, whether

the addition of the new evidence would prejudice Daddy Yankee and whether

those statements constituted new claims are distinct inquiries. Allowing evidence

of the new recording did not prejudice Daddy Yankee because the statements made

in the recording were substantively similar to the previously-alleged statements, so
                                          7
              Case: 17-11491      Date Filed: 02/14/2018    Page: 8 of 9

Daddy Yankee would not need to prepare defenses specific to the new statements.

That is not to say, though, that all of the statements constituted a single claim and

thus that they were contemplated by the original release.

      As the district court explained, under Florida law, “each communication of

the same defamatory matter by the same defamer . . . is a separate and distinct

publication, for which a separate cause of action arises.” Ashraf v. Adventist

Health Sys./Sunbelt, Inc., 200 So. 3d 173, 174 (Fla. Dist. Ct. App. 2016) (quoting

Restatement (Second) of Torts § 577A cmt. a (1977)). Therefore, each statement

made in the recording was the basis for an additional defamation cause of action.

Indeed, the jury made individual determinations as to three statements that derived

solely from the 2011 recording, any one of which could have independently

supported a defamation claim. The district court properly determined that the

original offer’s reference to “all claims” did not include the statements from the

2011 recording.

      De Iraola argues that even if the added claims were distinct from those

asserted in the original complaint, the release encompassed future claims, and thus

the newly-added claims were still released by the original offer. Specifically, De

Iraola points to the language releasing any claims: “Releasor ever had, now has, or

shall or may have . . . relating to any claims or cause of action asserted in, or which

arises from any of the facts or transactions that form the basis for all claims

                                           8
                 Case: 17-11491        Date Filed: 02/14/2018       Page: 9 of 9

asserted in the action.” This language, however, limits the claims released to those

that arise from the facts underlying the claims asserted in the action. As we

explained above, the claims asserted in the action changed while the offer was

pending. Accordingly, after the district court permitted Five Live and De Iraola to

add new claims, the release became ambiguous as to whether those newly-added

claims would be released by the offer of judgment.5 Certainly, ambiguity as to

whether multiple claims would be released by a settlement “could reasonably

affect the offeree’s decision on whether to accept the proposal.” Carey-All

Transp., Inc., 989 So. 2d at 1206 (internal quotation marks omitted). Therefore,

the district court was correct in determining that the offer was invalid and that De

Iraola was not entitled to attorney’s fees under the Florida offer of judgment

statute.

                                    III.    CONCLUSION

       For these reasons, we affirm the district court’s order denying De Iraola’s

motion for attorney’s fees.

       AFFIRMED.

       5
          As the district court also noted, De Iraola could have written the release more clearly to
cover pending claims as well those that might arise later, rather than limiting the included claims
to those arising from or related to those pled in the original complaint. Given that De Iraola
decided to limit the release to those claims arising from or related to the claims asserted in the
action, the release was ambiguous for purposes of the offer of judgment statute.

                                                 9