Published on:

The Consequences of Rejecting a Settlement Offer in Your Florida Commercial Litigation Case

Legal News GavelIn any commercial dispute, there are many vital decisions that you’ll need to make. You may have to decide whether to file suit, whether to offer a settlement, whether to accept an opponent’s settlement offer, or whether to take your case to trial. All of these decisions carry with them significant implications; some may even involve your paying your opponent’s attorneys’ fees if you choose incorrectly. With all that is on the line, it is essential to make sure that you have an experienced Florida commercial litigation attorney on your side.

Rejecting an opponent’s settlement offer can potentially carry with it substantial financial implications. One case in which the rejection of a settlement offer was at the center of the dispute was a lawsuit between a railroad and rail-transit contractor and an asphalt production company. The rail company, which was the plaintiff in that lawsuit, decided at one point to pursue a settlement. The rail company sent the asphalt company a settlement offer via email. The defendant received the email but did not accept the offer. The case went to the jury, and they returned a verdict for the plaintiff and awarded damages that were more than 25% greater than what the rail contractor offered in the email to settle the case.

The size of that damages award in relation to the settlement offer was potentially very significant. Florida has a statute, Section 768.79, that says that, if you receive and reject a settlement offer, and the courts award a judgment that is more than 25% greater than the settlement offer (in the case of offers made by the plaintiff, or more than 25% less than the settlement offer in the case of a defense offer), the side that offered the settlement is entitled to demand that the opposing party pay its attorneys’ fees incurred from the date of the settlement offer forward.

This outcome at trial, then, potentially placed the asphalt company on the hook for a portion of the rail contractor’s attorneys’ fees. The trial court, in fact, sided with the rail contractor on this point and issued an award of attorneys’ fees.

The asphalt company appealed that decision. The asphalt company based its appeal on a technical procedural challenge. It argued that the settlement offer email that the rail company sent did not comply with the rules of procedure, and, as a result, the asphalt company could not possibly be liable for the plaintiff’s attorneys’ fees under Section 768.79 because it never received a valid qualifying offer.

The basis of that argument was very specific. The asphalt company pointed to a rule, Rule 2.516, that said that certain emails must have “a subject line beginning with the words ‘SERVICE OF COURT DOCUMENT’ in all capital letters, followed by the case number of the proceeding.” The rail company’s email’s subject line didn’t look like that. The First District Court of Appeal nevertheless upheld the trial court’s award of fees. The appeals court ruled that the settlement proposal did not have to be submitted in accordance with Rule 2.516.

This case is a clear illustration of just how vitally important even small details can be in commercial litigation. It’s also an illustration of how the outcome of a case can vary depending on where in Florida you’re litigating. The rail contractor and asphalt company’s case originated in Duval County. Had such a case arisen in Palm Beach or Broward County, the outcome likely would have been the same based upon existing Fourth District decisions. If the case had been litigated in Miami-Dade County, the asphalt company likely would have won its appeal, since the Third District has ruled that these types of settlement proposal emails must comply with Rule 2.516.

Whenever you are dealing with a commercial litigation case in Florida, you need dependable and determined representation. Consult the skilled South Florida commercial litigation attorneys at Stok Folk + Kon. Our team has been helping businesses, both plaintiffs and defendants, deal with their commercial litigation issues for many years.

Contact us online or by calling (305) 935-4440 to schedule your consultation and find out how this firm can help you protect your interests.

More blog posts:

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

When You Do (or Don’t) Have a Valid Settlement in Your Florida Commercial Dispute, Florida Business Lawyers Blog, March 18, 2016