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What Does — and Does Not — Go in the ‘25%’ Calculation in a Motion for Attorneys’ Fees Under the Florida Offer of Judgment Statute

When your commercial contractual relationship ends up in dispute, there are many intricate details involved in the commercial litigation that follows. There are multiple nuanced elements or decisions that may, on the surface, seem small but could have enormous impacts on the success of your case. The difference between winning and losing may be a single sentence or word in your contract… or it could be the difference between bringing your lawsuit in Broward County as opposed to Miami-Dade County. An experienced South Florida commercial litigation attorney can show how to consider all these nuances and best position yourself for success.

A very recent lawsuit was a case in point. The action was a breach of contract case between a Broward County property management firm and the South Florida pest control service provider it retained to eradicate a termite problem the management company was having at its property. During the litigation, the management firm, who was the plaintiff, submitted to the pest control company an offer of judgment of $500,000. That offer represented a settlement amount to cover all “claims for damages, including punitive damages, attorney’s fees, costs, and interest.” The exterminator, however, declined the offer.

The case eventually went to a jury, and they found that the exterminator had breached the contract and that the management firm had suffered $551,000 in damages.

The importance of an award of fees to go with an award of damages

Obtaining a damages award, of course, is not the end of your successful breach of contract case. You’ve suffered more harm than just what the damages award represents. You have also had to incur all the costs of litigating your case to a jury verdict. There are costs, attorneys’ fees and interest on the damages award that are involved when you have to litigate all the way to judgment as opposed to settling.

In the management firm’s case, the trial judge awarded the plaintiff $73,000 in costs and $84,000 in interest. That $157,000 mattered a great deal because of the $500,000 settlement offer the plaintiff made. The Florida offer of judgment statute says that if you, as a plaintiff, make a valid offer of judgment that the defense declines and if you eventually win an award of damages that is at least 25% more than your offer amount, you can recover an extra amount of fees. The overall cost of litigating your breach of contract case can be substantial, so succeeding on this motion can be a major benefit to you.

If the $157,000 counted toward the total, then the plaintiff was entitled to the award of attorneys’ fees. If those sums didn’t count, then it wasn’t. Without those added sums, the amount was $551,000, which is obviously less than 25% more than $500,000 (10.2%). If the interest and costs were included, then the total dollar figure was $708,000, which was well over the 25% threshold (41.6%).

The Fourth District Court of Appeal ruled for the exterminator, but reluctantly so. While the Florida Supreme Court had never resolved this issue directly, the appeals court concluded that some opinions left the clear impression that, in the view of the high court, costs and interest aren’t included in the 25% calculation under the offer of judgment statute. As a result, the court said that it had no choice but to rule for the pest control firm.

The difference between success and defeat: a margin of one county

Not all Florida appeals courts agree with this decision. The First and Third District Courts of Appeal have both issued rulings that say that costs and interest are included. In other words, winning an award of attorneys’ fees based on the offer of judgment statute is potentially much easier if you litigate your case in Miami-Dade County, which is in the Third District, as opposed to Broward or Palm Beach counties, which are in the Fourth District.

This may all sound like a great deal of legal minutia and mathematical calculations. What you should be sure to take away from this, though, is that any one aspect of that minutia (going right down to the county where you file) can make a huge difference in the outcome of your commercial litigation case.

To make sure you are getting maximum benefit that the law allows you, and best protecting your business’s interests, make certain you have experienced counsel on your side. The skilled South Florida commercial litigation attorneys at Stok Kon + Braverman are here to help, having handled a wide range of commercial contract breach cases here in Florida.

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

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