Navigating Proposals for Settlement When a Complaint Seeks Monetary & Non-Monetary Relief
As most Florida litigators are aware, prevailing party fees are only recoverable when there is a statutory or contractual basis for those fees. A tactful litigator will often consider serving a proposal for settlement—also referred to as an “offer of judgment” or “demand for judgment”—under Florida Rule of Civil Procedure 1.442 and section 768.79, Florida Statutes, to position his or her client to recover prevailing party attorneys’ fees. However, Florida law is unsettled on if a proposal for settlement can be used when a complaint includes claims for equitable or declaratory relief (non-monetary relief) and claims for breach of contract or tortious interference (monetary relief).
This article summarizes the current state of the law in Florida on whether a proposal for settlement can be used when a complaint seeks both monetary and non-monetary relief.
A. Proposal for Settlement Cannot be Directed at a Complaint That Seeks Non-Monetary Relief
The proposal for settlement statute is strictly construed because it is in derogation of the common law rule that each party pays its own fees. See Palm Beach Polo Hldgs., Inc. v. Equestrian Club Estates Property Owners Ass’n, Inc., 22 So. 3d 140, 144 (Fla. 4th DCA 2009). “Courts have routinely held that the phrase in section 768.79(1) which states ‘in any civil action for damages’ is applicable to a claim in a civil action in which a party seeks only damages, i.e., monetary relief.” Diamond Aircraft Industries, Inc. v. Horowitch, 107 So. 3d 362, 373 (Fla. 2013).
Therefore, Florida courts are in agreement on two concepts concerning proposals for settlement. First, Florida courts agree that a proposal for settlement cannot be used when a complaint solely seeks only non-monetary damages because the applicable statute provides that an offer of judgment can be used “in any civil action for damages[.]” See § 768.79(1), Fla. Stat. (emphasis added); see also Winter Park Imports, Inc. etc. v. JM Family Enter., 66 So. 3d 336, 340 (Fla. 5th DCA 2011) (opining “a party can serve an offer or demand for judgment directed to a claim for monetary damages, it cannot avail itself of the statute where a claim is seeking non-monetary relief only.”). Second, Florida courts are in agreement that when a complaint seeks both monetary and nonmonetary relief, a general proposal for settlement seeking to resolve “all claims” or “all damages” is insufficient. See Diamond Aircraft Industries, Inc. v. Horowitch, 107 So. 3d 362, 373 (Fla. 2013); see also Highland Hldgs., Inc. v. Mid-Continent Casual Co., No. 8:14–cv–1334–T–23TBM, 2017 WL 3877609, at *1 (M.D. Fla. Sept. 5, 2017) (“Because the request for a declaratory judgment constitutes ‘equitable’ relief under Diamond Aircraft and National Indemnity and because Mid–Continent proposed a ‘general offer of judgment,’ Mid–Continent cannot recover an attorney's fee under Section 768.79.”) (emphasis added), affirmed No. 17-14455, 2018 WL 1251690 (11th Cir. Mar. 12, 2018).
B. The Gap in Florida Law on Whether a Particularized Offer of Judgment Directed at Only Monetary Claims in a Complaint for Monetary & Non-Monetary Relief is Viable
Florida courts have not yet addressed whether a proposal for settlement may be utilized when a complaint includes claims for monetary and non-monetary relief and the proposal is specifically directed only at the monetary claims. Florida’s Fifth District Court of Appeal hinted such a particularized proposal for settlement would be acceptable, as it stated in Winter Park that it was not willing to opine that such a particularized proposal can never be utilized. See Winter Park Imports, Inc. etc. v. JM Family Enter., 66 So. 3d 336, 341 (Fla. 5th DCA 2011).
Some Florida courts have sidestepped the question of whether a particularized proposal directed only at monetary claims is acceptable by limiting their analysis to whether the complaint seeking both monetary and non-monetary relief in reality only truly seeks monetary relief. Those courts have reasoned that some complaints seeking monetary and non-monetary relief should be treated as only seeking monetary relief when the “true relief” sought is monetary. See, e.g., Polk Cnty. v. Highlands-in-the-Woods, LLC, 227 So. 3d 161 (Fla. 2d DCA 2017) (“When determining whether a complaint alleges an action for damages or one for equitable relief, Florida courts ‘look[ ] to whether the ‘real issue’ is one for damages’ or equitable relief.”). Florida’s Third District Court of Appeal held that when a plaintiff’s complaint contained a passing reference to “equitable relief,” the complaint was in reality an action for damages because the “real issue” before the court was whether the plaintiff owed compensation, thus, the proposal for settlement statute applied. Faith Freight Forwarding Corp. v. Anias, 206 So. 3d 753, 755 (Fla. 3d DCA 2016); see also Tower Hill Signature Ins. Co. v. Javellana, 238 So. 3d 372 (Fla. 3d DCA 2017) (finding that the offer of judgment statute applied to a complaint seeking monetary and non-monetary relief because the true relief sought was for monetary damages).
There is a glaring gap in Florida law as to whether a particularized proposal for settlement can be used when a complaint seeks both monetary and non-monetary relief and the complaint cannot be construed as in reality only seeking monetary relief. The Florida Supreme Court held in Diamond Aircraft that the proposal for settlement statute “does not apply to an action in which a plaintiff seeks both damages and equitable relief, and in which the defendant has served a general offer of judgment that seeks release of all claims.” Diamond Aircraft Industries, Inc. v. Horowitch, 107 So. 3d 362, 374 (Fla. 2013) (emphasis added). The Diamond Aircraft opinion did not address whether the proposal for settlement statute would apply if the defendant had served a proposal for settlement directed at only monetary claims as opposed to a generalized proposal for settlement. See also MYD Marine Distrib., Inc. v. Int’l Paint Ltd., 187 So. 3d 1285, 1285 (Fla. 4th DCA 2016) (“What is less clear, however, is whether an offer purporting to resolve only monetary claims in a suit also containing a nonmonetary cause of action is valid.”); South Florida Pool & Spa Corp. v. Sharpe Inv. Land Trust Number J, 207 So. 3d 301, 304 n.7 (Fla. 3d DCA 2016) (“Given our holding, we need not, and do not, reach the issue of whether a proposal for settlement that purports to carve out and settle monetary claims contained within equitable claims is enforceable.”).
The Southern District of Florida has weighed in on this gap in Florida law in MDS (Canada) Inc. v. Rad Source Tech., Inc., No. 09-CIV-61652-BLOOM/Valle, 2016 WL 8738281 (S.D. Fla. Jan. 8, 2016). In MDS, the express language of the particularized proposal for settlement sought to resolve only plaintiff’s “damages claims” and the Southern District of Florida explained that Florida courts have expressly declined to determine whether the proposal for settlement statute would apply under those circumstances. See id. at 6. Thus, in the absence of controlling Florida law, the Southern District opined that the proposal for settlement statute did not apply even when a proposal for settlement was specifically directed only at the monetary claims. Id. The court explained, “[b]ecause the non-monetary claims had independent, significant value, this case was not solely about damages and § 768.79 does not apply.” Id. The MDS magistrate judge’s report and recommendation was adopted. See MDS (Canada) Inc. v. Rad Source Tech., Inc., No. 09-CIV-61652-BLOOM/Valle, 2016 WL 8738282 (S.D. Fla. Jan. 27, 2016) (denying defendant’s motion for attorneys’ fees despite noting that the proposals were undeniably specifically directed only at the damages claims).
C. Conclusion: Take a Side & Shape Florida Law
The gap in Florida law leaves room for litigators to do what they do best: take a side, argue it, and shape Florida law. While the Southern District of Florida has opined that a particularized proposal for settlement aimed solely at monetary claims would not be appropriate, no Florida state court has weighed in yet and there are supportable legal arguments on both sides of this issue. Therefore, if arguing against the viability of a particularized proposal for settlement, the text of the offer of judgment statute and the Southern District of Florida’s MDS opinion supports that a proposal for settlement cannot be used at all once a complaint seeks both monetary and non-monetary relief. On the flip side of the coin, if arguing for the propriety of a particularized proposal for settlement directed solely at the monetary claims, Florida’s Fifth District Court of Appeal has indicated in Winter Park that such a proposal might be appropriate and the Florida Supreme Court has only weighed in on the issue of generalized proposals aimed at resolving “all claims.” The absence of controlling Florida law on this issue presents an exciting opportunity for Florida litigators to fill in the gap and shape the law.