Offer of Judgment & Settlement Statute

In the case of Leapai v. Milton, 17 F.L.W. S61 (Fla. 1992), the Supreme Court held that all of the offer of judgment/settlement statutes are constitutional and valid. The Supreme Court found that Fla.Stat. §§45.061 and 768.79 were not inconsistent with the rule making authority of the Florida Supreme Court. Any conflict between those Statutes and Rule 1.442 Fla.R.Civ.Pro., should be resolved by following the procedural requirements set out in Rule 1.442. Prior to the Milton decision, the Florida Supreme Court in The Florida Bar Re: Amendment to Rules of Civil Procedure, 557 So.2d 442 (Fla. 1985), had attempted to eliminate the confusion created by the different statutes by expanding Rule 1.442’s application. The Supreme Court did not eliminate any of the statutes. It instead, made it clear that if the procedural aspects of the offer of judgment statutes conflicted with the “new and improved” version of Rule 1.442, then the procedures set forth in Rule 1.422 would supersede and control. Id. The following is a summary of the significant portions of Rule 1.442 and the “Offer Statutes,” Fla.Stat. §§45.061 and 768.79:

Applicability

All of the “Offer Statutes and Rule” apply to civil actions for damages whether in tort or contract. The Statutes and Rule do not apply in cases involving class actions, derivative shareholder claims, marital and domestic matters or eminent domain cases. See, Fla.Stat §§45.061; 768.79 and Rule 1.442, Fla.R.Civ.Pro.

Time for Making Offer

Rule 1.442 – The offer to settle must be made at least sixty (60) days after the date of the written appearance of the party to whom the offer is being made. The offer may not be made later than sixty (60) days before trial. A counter-offer may be made within fifteen (15) days from the date that the initial offer was served. Florida Statute §45.061 – The demand for judgment/settlement cannot be made earlier than sixty (60) days after the service of the complaint and may not be made after sixty (60) days before trial. A counter-offer may be made within forty-five (45) days before trial. Florida Statute §768.79 – The offer judgment may not be made earlier than sixty (60) days after the filing of the complaint.

How the Offer is Made

Rule 1.442 – The offer is served on the opposing party but not filed with the Court. The offer must be very specific stating clearly that it is made pursuant to Rule 1.442, Fla.R.Civ.Pro. The written offer must also state to whom it is made, the exact dollar amount offered and whether it is inclusive or exclusive of attorney’s fees and costs. Florida Statute §45.061 – The offer must be served on the party to whom it is being made, but it may not be filed with the Court. The body of the offer must state that it is made pursuant to Fla.Stat. §45.061. Florida Statute §768.79 – Unlike Rule 1.442 and Fla.Stat. §45.061, the offer of judgment/demand for judgment under Fla.Stat. §768.79 must be filed with the Court and served upon the non-offering party.

Time to Accept

Rule 1.442 – The offer must be accepted within thirty (30) days or it will be deemed rejected. Florida Statute §45.061 – The offer must be accepted within forty-five (45) days or it will be deemed rejected. Florida Statute §768.79 – The offer must be accepted within thirty (30) days or it will be deemed rejected. Both statutes and the rule allow the offer to be withdrawn, in writing, before it is accepted by the party to whom it was sent.

How to Accept

Rule 1.442 – If an offer is accepted pursuant to Rule 1.442, the party accepting shall file with the Court both the written offer and written acceptance. The Court shall then enter judgment based upon the acceptance of the offer. The language of the notice accepting the offer should mirror the language of the offer being made. Florida Statute §45.061 – This statute does not specifically state how the offer of settlement should be accepted, but the procedures stated above for Rule 1.442 should be followed. See Leapai v. Milton, 17 F.L.W. S61 (Fla. 1992). Florida Statute §768.79 – This statute does not specifically state how the offer of judgment/demand for judgment should be accepted. Nevertheless, it should be accepted in substantially the same manner as stated in Rule 1.442. See Leapai v. Milton, 17 F.L.W. S61 (Fla. 1992). Once the offer is accepted, either party may submit a proposed final judgment to the Trial Court for entry consistent with the accepted offer.

Sanctions

Rule 1.442 – If the Trial Court determines that the offer of settlement was unreasonably rejected, and resulted in unnecessary delay or in the increase of costs, and if the Trial Court determines that the damages awarded by the jury were twenty-five (25%) percent less than that which was offered by the defendant to the plaintiff, or twenty-five (25%) percent more than that which the plaintiff demanded from the defendant, then the Trial Court may sanction the party that unreasonably rejected the offer. The Court may award as sanctions an amount equal to the reasonable attorney’s fees and costs incurred by the offering party after the offer was made. Florida Statute §45.061 – Sanctions may be awarded by the Court if the offer was unreasonably rejected. The offer is presumed to have been unreasonably rejected by a defendant if the judgment entered is at least twenty-five (25%) percent greater than the offer rejected. The offer is presumed to have been unreasonably rejected by the plaintiff if the judgment entered is at least twenty-five (25%) percent less than the offer rejected. In determining the amount of the sanction, the Trial Court shall award the amount of the offering party’s costs and expenses including reasonable attorney’s fees incurred after the making of the offer. In accordance with Fla.Stat. §45.061, a Trial Court has no discretion in setting sanctions. The Court must enter sanctions if the requirements of Fla.Stat. §45.061 are met. Florida Statute §768.79 – The Trial Court may sanction a party unreasonably rejecting an offer when the judgment entered is at least twenty-five (25%) percent less than the offer made by the defendant, or twenty-five (25%) more than the offer made by the plaintiff. The party sanctioned shall be required to pay reasonable costs and attorney’s fees incurred by the offering party from the date the offer was made. If in the Court’s discretion, the offer of judgment/demand for judgment under Fla.Stat. §768.79 was not made in good faith, the Trial Court may not sanction the non-offering party.

Admissibility of Offer

None of the “Offer Statutes or Rule” allow the offer to be mentioned, discussed or admitted into evidence during trial. If sanctions are sought or enforcement of the settlement is being requested, then the offer and/or acceptance is admissible in a post trial proceeding. The actual offer and acceptance should be filed with the Court and a motion seeking sanctions or enforcement should be filed and a hearing set. The purpose of the “Offer Statutes and Rule” is to encourage settlement among litigants by punishing those that unreasonably refuse a fair offer and by rewarding those that make reasonable offers by providing them with the chance to recover attorney’s fees and costs. There is no bar against filing more than one offer of judgment or demand for settlement. A trial lawyer is not limited in the number of offers that may be made, nor the amount that may be offered. An offer may be filed for a certain amount and when the time for acceptance expires, another offer may be filed offering a different amount. Now that we know that the “Offer Statutes and Rule” are constitutional, they should be used to promote the fair resolution of civil cases. If used reasonably and strategically, the “Offer Statutes and Rule” can be very useful tools in civil litigation.