Significant Ruling on Offer of Judgment and Strict Construction

A potentially landmark ruling was issued recently on the issue of the strictness of construction of offers of judgment and/or proposals for settlement under Florida Statutes § 768.79 and Florida Rule of Civil Procedure 1.442.  Though, perhaps the ruling itself further makes murkier the already tricky offer of judgment waters. 

Previous to the certified conflict between the First District in Borden Dairy Co. of Alabama, LLC v. Kuhajda, 171 So. 3d 242 (Fla. 1st DCA 2015) and the Fourth District in Bennett v. American Learning Systems of Boca Delray, Inc., 857 So. 2d 986 (Fla. 4th DCA 2003), as discussed in Kuhajda v. Borden Dairy Co., 41 Fla. L. Weekly S471 (Fla. October 20, 2016), the landscape was clear, if not laden with traps for prospective offerees. 

The previous clarity was lent by the Supreme Court of Florida in Diamond Aircraft Industries, Inc. v. Horowitch, where the Court made it clear (seemingly) that any deficiency—even if only a technicality and even (again, seemingly) despite the relative irrelevance of the deficiency to the action—would render the offer invalid.  107 So. 3d 362 (Fla. 2013).  For instance, under the holdings which were embossed by Horowitch, even the arguable deficiency of failure to mention attorneys’ fees in an offer where no attorneys’ fees have been sought in the case renders the offer invalid (e.g., Borden Dairy Co. of Alabama, LLC v. Kuhajda).  

To show even more the “strictness” of interpretation afforded before Bennett, courts had invalidated offers on the basis of failure to state both whether attorneys’ fees were included in the offer and whether they were sought in the claim (i.e., simply stating one or the other would not suffice).  Deer Valley Realty, Inc. v. SB Hotel Assocs. LLC, 190 So. 3d 203, 205 (Fla. 4th DCA 2016).

However, the Court recently held in Kuhajda v. Borden Dairy Co. that an offer is not invalid simply because it fails to address whether the proposal includes fees and whether the fees were sought in the action if the action did not, in fact, seek attorneys’ fees as part of the claims therein.  41 Fla. L. Weekly S471 (Fla. October 20, 2016).  It would have been arguably a major departure and loosening of the “strict” standard for interpretation of the statute and rule to simply state that the offer in question need not address whether attorneys’ fees were included in the offer if it stated that fees were not sought in the case.  However, to state that neither was required seems to fly fully and firmly in the face of the long-held (and what could fairly be described as ‘hyper-technical’) strict construction mantra used to strike down innumerable offers on what often amounted to insubstantial technical deficiencies. 

It will be interesting to track how far district courts are willing to go in loosening standards under § 768.79 and Rule 1.442 following Kuhajda.  Offers of judgment now potentially move from the realm of clear law with many known traps, to unclear law and unknown traps.  Such rulings often keep litigators very busy in the time after reconsidering their position in cases where offers of judgment are in play and remind litigants that the expertise of an experienced litigation attorney is more valuable now than ever.   If you have questions about your case or need help in a dispute, turn to the trusted litigation attorneys of Icard Merrill today.