Friday, February 28, 2014

The Proposal For Settlement - An All-Or-Nothing Proposition?

By Jaret J. Fuente

Effective January 1, 2014, Rule 1.442(c)(2)(B), Florida Rules of Civil Procedure, has been amended. The rule, which previously required that a proposal for settlement “identify the claim or claims the proposal is attempting to resolve,” now will require instead that a proposal for settlement “state that the proposal resolves all damages that would otherwise be awarded in a final judgment in the action in which the proposal is served, subject to subdivision (F).” In re Amendments to the Fla. Rules of Civil Procedure, No. SC13-74, ― So. 3d ―, 2013 WL 6164572, at *1 (Fla. Nov. 14, 2013) (emphasis added). The amendment makes the rule consistent with section 768.79(2), Florida Statutes, which states that “[t]he offer [to settle] shall be construed as including all damages which could be awarded in a final judgment.” Fla. Stat. § 768.79(2) (emphasis added).

The amendment is significant because it eliminates partial proposals for settlement, which, although popular because they allow litigants to cherry-pick claims, are tricky and oftentimes complicate cases pre- and post-judgment.  However, it also raises an interesting issue: Will proposals for settlement be valid in actions in which plaintiffs seek both damages and equitable relief, and if so, will such proposals be deemed to implicitly carve out the equitable claims if they are drafted in accordance with amended Rule 1.442 to resolve “all damages” that would otherwise be awarded in a final judgment?

The offer of judgment statute states that it applies to “civil actions for damages.” Fla. Stat. § 768.79(1). It does not state that it applies to actions for equitable relief, or even to actions for both equitable relief and damages. Before the amendment, the Florida Supreme Court held that Section 768.79 “does not apply to an action in which the plaintiff seeks both damages and equitable relief, and in which the defendant has served a general offer of judgment that seeks release of all claims.” Diamond Aircraft Indus., Inc. v. Horowich, 107 So. 3d 362, 374 (Fla. 2013). But what about proposals in such cases that attempt to resolve “all damages” instead of all claims? The result is unclear.

Proposals for settlement in damages-only cases will be all-or-nothing propositions under the amended Rule 1.442.  Their interpretation remains to be seen, however, in cases with both damages and equitable claims.