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How a Single Flaw in a Seller’s Offer of Judgment Torpedoed its Claim for Attorneys’ Fees in its Florida Commercial Litigation Case

In commercial litigation, as with commercial contracts, no detail is too insignificant. Any one piece of the “small stuff” can be the one thing that triggers success–or disaster. This is especially true if you are attempting to resolve your commercial litigation action through a statutory offer of judgment. Even if the court ultimately rules in your favor on the underlying case, your offer of judgment won’t allow you to recover your attorneys’ fees unless it is completely compliant with law. Any flaw can be the flaw that dooms your claim for attorneys’ fees. When it comes to your commercial contracts or commercial litigation, be sure to rely upon skilled South Florida business counsel to meet your needs.

A recent case from South Florida highlights the above truths. The underlying commercial relationship that spawned the litigation was one regarding tomatoes. A Palm Beach County grower of heirloom tomatoes began selling its tomatoes to a Pompano Beach-based distributor of specialty fruits and vegetables. The distributor loaned the grower money to use in growing its tomatoes. Eventually, the relationship went south and the distributor demanded payment. The grower didn’t pay and the distributor sued.

Just a few months before the trial started, the grower submitted a settlement offer to the distributor, offering to settle all claims for $50,000. The distributor did not accept. The case went to trial, where the distributor lost all of its claims. (The grower won on its counterclaim and received an award of $28,000 in damages.)

The grower took an additional step, however. It asked the court to award it a portion of the attorneys’ fees it racked up litigating the case. The grower contended that, because it offered $50,000 to settle and the court’s award was a judgment in favor of the defense, Section 768.79 of the Florida Statutes allowed it to recover those fees.

Section 768.79 is Florida’s offer of judgment statute. Florida, like many states, has a statute designed to encourage parties to settle their disputes out of court. The statute says that if the plaintiff’s award exceeds 25% less than the defense’s offer of judgment, then the defense is entitled to recover its attorneys’ fees from the date of the offer forward. (There is a companion 25% standard for plaintiffs’ offers of judgment in the statute, too.)

So, in a case where the defense makes a $50,000 offer of judgment, the plaintiff must recover more than $37,500 in order to avoid owing attorneys’ fees if the offer met the statute’s standards for qualifying offers. In this tomato case, the plaintiff fell far below a $37,500 award, instead actually being ordered to pay the defense $28,000 in damages.

Therefore, all the grower needed to recover its attorneys’ fees was proof that its offer met the statute’s requirements. Unfortunately for the grower, it did not. The distributor’s petition stated that it sought money damages and also sought an injunction that would bar the grower from using the distributor’s customer contact lists. This meant that the petition sought both monetary and equitable relief. That was very important because the offer the grower sent to the distributor was $50,000 in exchange for the settlement of all claims. In other words, the offer sought the dismissal of both monetary and equitable claims in exchange for the payment.

Why did that matter so much? Because the offer of judgment statute says that, to be a valid offer, the offer must seek to settle monetary claims only. This offer sought to settle monetary and equitable claims, so it was invalid under the statute. As a result, the grower wasn’t entitled to its attorneys’ fees under that statute, regardless of the outcome of the trial.

To recap, details in commercial lawsuits matter–sometimes a great deal. For reliable and detail-oriented representation in your ‘case, contact the diligent South Florida commercial litigation attorneys at Stok Kon + Braverman. Our experienced team has been helping clients protect their 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