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A Construction Company’s Failure to Craft a Settlement Offer that Complied with the Florida Offer of Judgment Statute Dooms Its Claim for Fees

When you initiate a commercial litigation action, or when you defend such a case, you’ll have to make several essential decisions, like choosing whether to settle or to continue to litigate. As part of that calculation, you’ll need to factor any settlement offers you receive and whether they may leave you on the hook for a portion of your opponent’s attorneys’ fees. Making that determination involves knowing how much your case is “worth” and knowing whether or not the settlement offer you’ve received meets all of the statute’s requirements for a qualifying offer. In other words, not only does success mean knowing the details of your case, but also the details of the law, which is why your case needs an experienced South Florida commercial litigation attorney.

One recent case from South Florida was something that focused prominently on this issue of settlement offers and attorneys’ fees. The case arose over a dispute about fill material. A Miami construction company, performing a contract it signed with the state Department of Transportation, temporarily stored fill material on land that a Key West real estate LLC owned. The LLC and the construction company encountered a dispute about who owned the fill material, which led the construction company to sue.

The construction company later proposed a settlement in which the construction company would drop the lawsuit in exchange for a payment of $50,000. The defendants declined and the case went to trial. At the conclusion, the construction company won on its claim of conversion and received a damages award of $86,000.

The construction company then went a step further, asking the court to award it its attorneys’ fees. Under the Florida offer of judgment statute, if you propose a settlement, the other side rejects it and you win at trial, you may be entitled to collect your attorneys’ fees from your opponent. The difference between the outcome and the amount in the proposal must be 25% or greater. So, if you’re a plaintiff, then your damages award must be 125% or more of your settlement offer. If you are a defendant who makes a settlement proposal, the court must enter a defense judgment or award the plaintiff damages that are 75% or less of what you proposed in your settlement.

In the construction company’s case, $86,000 was obviously well more than 125% of the $50,000 it offered in settlement, which would have equated to $62,500.

A successful litigant may still be unable to collect your attorneys’ fees if the settlement offer did not comply with the requirements of the statute. That was the basis for the defense argument in this case. The dispute included two defendants and the settlement offer required both defendants to accept. This denied each defendant “independent control of his or its decision to settle,” which is a requirement of the law.

The appeals agreed with the defense. By requiring the two defendants to pay $25,000 each for a total of $50,000 in order to resolve the case, the settlement offer conditioned settlement on “mutual acceptance of the offer and joint action in accordance with its terms,” which illegally denied each defendant the chance to “independently evaluate or settle his or her respective claim by accepting the proposal.” The offer was not a qualifying one under the statute, so the construction company’s request for fees failed.

For reliable commercial litigation representation to get you positive results, contact the skilled South Florida commercial litigation attorneys at Stok Kon + Braverman. Our experienced team has been helping clients protect their business interests for many years.

Contact us online or by calling (954) 237-1777 to schedule your consultation and find out how this firm can help you.

More blog posts:

The Consequences of Rejecting a Settlement Offer in Your Florida Commercial Litigation Case, Florida Business Lawyers Blog, March 23, 2018

Ambiguity in Settlement Offer Defeats Florida Commercial Tenant’s Claim for Attorneys’ Fees in Lease Breach Case, Florida Business Lawyers Blog, Feb. 14, 2017