Alan Horowitch v. Diamond Aircraft Industries, Inc. ( 2011 )

[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
JULY 7, 2011
No. 10-12931
JOHN LEY
________________________
CLERK
D. C. Docket No. 6:06-cv-01703-PCF-KRS
ALAN HOROWITCH,
Plaintiff – Appellee,
versus
DIAMOND AIRCRAFT INDUSTRIES, INC., a foreign corporation,
Defendant – Appellant.
________________________
Appeal from the United States District Court
for the Middle District of Florida
_________________________
(July 7, 2011)
Before CARNES, ANDERSON, and FARRIS,* Circuit Judges.
ANDERSON, Circuit Judge:
In this diversity case, we certify four questions to the Florida Supreme Court,
*
Honorable Jerome Farris, United States Circuit Judge for the Ninth Circuit, sitting
by designation.
seeking guidance as to the application of Florida’s offer of judgment statute, Fla.
Stat. § 768.79, Florida Rule of Civil Procedure 1.442, and the fee-shifting
provision of the Florida Deceptive and Unfair Trade Practices Act (“FDUTPA”),
Fla. Stat. § 501.2105.
First, we ask whether an offer of judgment may be viable when it purports to
settle “all claims,” even though it does not explicitly “state whether the proposal
includes attorneys’ fees and whether attorneys’ fees are part of the legal claim” as
required by Rule 1.442(c)(2)(F). Second, we ask whether the offer of judgment
statute, which applies in “any civil action for damages” but generally does not
apply to a case seeking both damages and non-monetary relief, applies to a lawsuit
seeking damages or, in the alternative, specific performance. Third, we ask
whether the FDUTPA’s fee-shifting provision applies to an action with the
following procedural history: the plaintiff filed an action alleging a FDUTPA claim
and prosecuted that claim for seven months; the district court ruled at summary
judgment that he could not pursue the FDUTPA claim because Florida law did not
apply, but allowed him to prosecute the action under Arizona’s unfair trade
practices law instead; then he lost on the Arizona unfair trade practices claim at
trial. Finally, if the FDUTPA’s fee-shifting provision does apply, we ask whether
it applies only to fees incurred during the seven months before the plaintiff’s
2
FDUTPA claim was defeated at summary judgment, or also to fees incurred during
the subsequent litigation.
We certify these questions because we are unable to find definitive answers
in clearly established Florida law as set forth in case law or statutes. “Where there
is doubt in the interpretation of state law, a federal court may certify the question to
the state supreme court to avoid making unnecessary Erie guesses and to offer the
state court the opportunity to interpret or change existing law.” Auto-Owners Ins.
Co. v. Southeast Floating Docks, Inc., 632 F.3d 1195, 1197 (11th Cir. 2011)
(quoting Tobin v. Mich. Mut. Ins. Co., 398 F.3d 1267, 1274 (11th Cir. 2005) (per
curiam)).
I. FACTS AND PROCEDURAL HISTORY
The Plaintiff, Alan Horowitch, sued the Defendant, Diamond Aircraft
Industries (“Diamond”), alleging that he had a contractual right to purchase a D-Jet
aircraft for $850,000 but that Diamond refused to sell the aircraft for less than
$1,380,000. In his amended complaint, Horowitch asserted four specific claims
arising out of this pricing dispute: (1) specific performance; and, in the alternative,
(2) breach of contract; (3) breach of the covenants of good faith and fair dealing;
3
and (4) deceptive trade practices.1 Notably, all these claims seek damages; even
the specific performance count includes a demand for not only specific
performance, but also “damages, costs of this action, interest, and such other relief
as this Court deems just and proper.” Amended Complaint at 8, Horowitch v.
Diamond Aircraft Indus., Inc., No. 6:06-cv-01703-PCF-KRS (M.D. Fla. May 27,
2010).
While the deceptive trade practices claim was not captioned as a FDUTPA
claim, it is clear that Horowitch pursued it as a FDUTPA claim for the following
reasons: (1) the count itself invoked, by section number of the Florida Statutes, the
definitions for “consumer” and “consumer transaction” from the FDUTPA; (2) the
count demanded attorney’s fees, as allowed under the FDUTPA but not under
Arizona law, whereas no other count demanded attorney’s fees; and (3) Horowitch
described his own claim as a FDUTPA claim in his response to Diamond’s motion
to dismiss.
Diamond moved to dismiss the FDUTPA claim, arguing that the FDUTPA
1
We construe the amended complaint to have alleged the specific performance
claim as being in the alternative to the three claims for money damages. Even though the
complaint is more explicit in this regard with respect to the breach of contract claim, the same
intent is amply evident in light of the same damage allegations in the other two claims.
Moreover, this reading is confirmed because Diamond asserts it on appeal, and Horowitch does
not contest it. Thus, for purposes of this case, it is established that Plaintiff’s specific
performance claim is only in the alternative to the damages claim, not in addition thereto.
4
did not apply, and that Arizona unfair trade practices law applied instead, because
Horowitch was an Arizona resident, Diamond was a corporation with its principal
place of business in Ontario, Canada, and the transactions in question took place
outside Florida. Horowitch resisted this motion and the court ultimately denied the
motion, stating that it could not make a ruling before receiving evidence to
establish where the events in the complaint had taken place. At the same time,
Horowitch requested that he be allowed to pursue the unfair trade practices claim
under the Arizona Consumer Fraud Act if he could not proceed under the
FDUTPA.
Both parties then filed for summary judgment and the court entered summary
judgment against Horowitch on all claims except on the unfair trade practices
claim. With respect to the unfair trade practices claim, the court held that Arizona
law applied and that Horowitch no longer could pursue the FDUTPA claim. It
allowed him to proceed, instead, with the Arizona Consumer Fraud Act claim as he
had requested. After a bench trial, the court ultimately entered judgment in favor
of Diamond.
Diamond then moved to recover its attorney’s fees and costs on the basis of
either of two Florida statutes. First, it claimed attorney’s fees under the FDUTPA,
arguing that a prevailing party in a FDUTPA suit is entitled to fees regardless of
5
the reason that the FDUTPA is found not to apply. Second, it claimed attorney’s
fees under Florida’s offer of judgment statute after filing with the court an offer of
judgment that Horowitch had refused. Diamond had offered $40,000 “to resolve
all claims that were or could have been asserted by Plaintiff against Diamond
Aircraft in the Amended Complaint.” It is important to note, for purposes of the
requirements of the offer of judgment statute, discussed in greater detail below, that
Diamond had made this offer of judgment while the specific performance claim
was still pending, and that the offer included neither a certificate of service, a
specific statement that attorney’s fees were included, nor a specification of whether
attorney’s fees were part of Horowitch’s legal claim.
The district court awarded no fees under either statute. It awarded no fees
under the FDUTPA because it found that the FDUTPA did not apply and,
moreover, because the applicable Arizona unfair trade practices law provided no
attorney’s fees. It awarded no fees under the offer of judgment statute because it
found that a suit for both damages and non-monetary relief—such as specific
performance—did not fall under the statute. Diamond now appeals both the
FDUTPA and offer of judgment rulings.
II. THE ERIE FRAMEWORK
As a federal court sitting in diversity jurisdiction, we apply the substantive
6
law of the forum state, in this case Florida, alongside federal procedural law. Erie
R.R. Co. v. Tompkins, 304 U.S. 64, 58 S. Ct. 817, 82 L. Ed. 1188 (1938); Burger
King Corp. v. E-Z Eating, 41 Corp., 572 F.3d 1306, 1313 n.9 (11th Cir. 2009).
Under this framework, the disputed provisions of Florida law—Florida’s offer of
judgment statute; Rule 1.442(c)(2)(F); Rule 1.442(c)(2)(G); and the FDUTPA and
its fee-shifting provision—apply only if they are substantive for Erie purposes.
Accordingly, we must determine the Erie status of these provisions before applying
them to the case at hand.
We make this determination using two tests. If the Florida law is in conflict
with a Federal Rule of Civil Procedure, then we apply the test set forth by Hanna v.
Plumer, 380 U.S. 460, 85 S. Ct. 1136, 14 L. Ed. 2d 8 (1965), under which we
follow the federal rule so long as it is valid under the Constitution and the Rules
Enabling Act. Id., 380 U.S. at 472-74, 85 S. Ct. at 1144-45. If no federal statute or
Federal Rule is on point, then we instead apply the “outcome determinative test”
set forth by Erie and its progeny, under which we apply the Florida law if its
application would be so important to the outcome “that failure to apply it would
unfairly discriminate against citizens of the forum State, or be likely to cause a
plaintiff to choose the federal court.” Esfeld v. Costa Crociere, S.P.A., 289 F.3d
1300, 1307 (11th Cir. 2002) (quoting Gasperini v. Ctr. for Humanities, Inc., 518
7
U.S. 415, 428, 116 S. Ct. 2211, 2220, 135 L. Ed. 2d 659 (1996)).
“This circuit has found [Fla. Stat.] § 768.79”—which is the offer of
judgment statute—“to be substantive law for Erie purposes.” Jones v. United
Space Alliance, L.L.C., 494 F.3d 1306, 1309 (11th Cir. 2007). “Under the prior
panel precedent rule, we are bound by earlier panel holdings . . . unless and until
they are overruled en banc or by the Supreme Court.” United States v. Smith, 122
F.3d 1355, 1359 (11th Cir. 1997). Accordingly, we conclude that the offer of
judgment statute is substantive as a matter of this Court’s precedent.
We also conclude that Florida Rule of Civil Procedure
1.442(c)(2)(F)—which requires an offer of judgment to “state whether the proposal
includes attorneys’ fees and whether attorneys’ fees are part of the legal claim”—is
substantive as a matter of precedent. “[T]he holding of a case is . . . comprised
both of the result of the case and ‘those portions of the opinion necessary to that
result by which we are bound.’ ” United States v. Kaley, 579 F.3d 1246, 1253 n.10
(11th Cir. 2009) (quoting Seminole Tribe of Fla. v. Florida, 517 U.S. 44, 67, 116 S.
Ct. 1114, 1129, 134 L. Ed. 2d. 252 (1996)). In a prior diversity case, McMahan v.
Toto, 311 F.3d 1077 (11th Cir. 2002), this Court’s application of Rule
1.442(c)(2)(F) was necessary to the result of the case: the Court awarded attorney’s
fees on the basis of the offeror’s compliance with Rule 1.442(c)(2)(F) as well as
8
other requirements of Rule 1.442 and the offer of judgment statute. Id. at 1082-83.
The Court could apply Rule 1.442(c)(2)(F) in this manner only by implicitly
holding that this provision applied in federal court. Accordingly, Rule
1.442(c)(2)(F) applies in federal court as a matter of precedent.
Moreover, we would conclude that Rule 1.442(c)(2)(F) was substantive even
if precedent did not require this result. We would apply the outcome determinative
test, described above, because there is no federal statute or Federal Rule on point.
Rule 1.442(c)(2)(F) prescribes specific, substantive terms that an offer of judgment
must include, and these terms matter to the parties because the inclusion or
exclusion of attorney’s fees is material to an offeree’s ability to evaluate an offer.
The outcome determinative test yields the conclusion that it would be unfair not to
apply the rule in federal court, and that it is therefore substantive for Erie purposes.
However, we conclude that Rule 1.442(c)(2)(G)—which requires an offer to
“include a certificate of service in the form required by rule 1.080(f)”—is
procedural for Erie purposes and therefore does not apply in federal court. At the
outset, we note that Federal Rule of Civil Procedure 5(d)(1) specifies that “[a]ny
paper after the complaint that is required to be served—together with a certificate
of service—must be filed within a reasonable time after service.” Under the
Federal Rule, a party need not certify service until the time of filing, which occurs
9
after service to the other parties. By contrast, Florida courts have required strict,
technical compliance with Rule 1.442(c)(2)(G), invalidating an offer unless it
includes a certificate of service at the time it is served on an offeree. See Milton v.
Reyes, 22 So. 3d 624 (Fla. 3d DCA 2009). Accordingly, the Florida rules require
certification at the time the offer is tendered even though Florida Rule 1.442(d)
specifies that the offer “shall not be filed” at that time. In light of the foregoing, we
apply the Hanna test because a conflict is apparent between the Federal Rules and
the Florida rule: an offer would be valid under the Federal Rules even if it did not
include a certificate of service at the time of service on the opposing party, while
the same offer would be invalid under Rule 1.442(c)(2)(G).2 Cf. Hanna, 380 U.S.
at 470, 85 S. Ct. at 1143 (“Here, of course, the clash is unavoidable; Rule 4(d) (1)
says—implicitly, but with unmistakable clarity—that in-hand service is not
required in federal courts.”).
Under Hanna, because Federal Rule 5(d)(1) conflicts with Florida Rule
1.442(c)(2)(G), the Florida Rule does not apply in federal court so long as the
Federal Rule is valid. We readily conclude that Rule 5(d)(1) is valid under the
2
Rule 68, which sets forth a federal mechanism for tendering an offer of judgment,
further illustrates the conflict between the two sets of procedures. Like Rule 1.442, Rule 68
instructs the parties not to file an offer of judgment with the court at the time of service. Because
Rule 68 does not require filing of the offer at the time of service, however, neither Rule 5(d)(1)
nor Rule 68 requires the offering party to complete a certificate of service at that time.
10
Rules Enabling Act and the Constitution, and we therefore hold that Diamond need
not comply with Rule 1.442(c)(2)(G). Moreover, Horowitch asserts no lack of
compliance with the Federal Rules, and none is apparent to us. Accordingly, Rule
1.442(c)(2)(G) is not applicable in this case and we certify no questions relating to
this provision to the Florida Supreme Court.
Finally, we conclude that the FDUTPA and its fee-shifting provision are
substantive for Erie purposes. It is plain that the FDUTPA itself applies in federal
court, as substantive law, because it creates a cause of action. Furthermore, a
statute allowing for the recovery of attorney’s fees, like the FDUTPA fee-shifting
provision at issue in this case, generally applies in federal court so long as it does
not conflict with a valid federal statute or rule. See Alyeska Pipeline Serv. Co. v.
Wilderness Soc’y, 421 U.S. 240, 259 n.31, 95 S. Ct. 1612, 1622 n.31, 44 L. Ed. 2d
141 (1975) (“[I]n an ordinary diversity case where the state law does not run
counter to a valid federal statute or rule of court, and usually it will not, state law
denying the right to attorney’s fees or giving a right thereto, which reflects a
substantial policy of the state, should be followed.”) (alteration in original);
Schilling v. Belcher, 582 F.2d 995, 1003 (5th Cir. 1978) (“Because this is a
diversity case, the validity of the fee award must be tested under Florida law.”).
We find no conflict between this fee-shifting provision and any federal law.
11
Accordingly, we conclude that both the FDUTPA and its fee-shifting provision are
substantive for Erie purposes.
III. QUESTIONS FOR CERTIFICATION
A. Was Diamond’s offer of judgment rendered non-viable by Rule
1.442(c)(2)(F)’s requirement that an offer of judgment specify whether attorney’s
fees are included and whether attorney’s fees are part of the legal claim?
The issue here is whether Diamond’s offer of judgment, which was intended
to “resolve all claims” but made no mention of attorney’s fees, was nonetheless
viable. Rule 1.442(c)(2)(F) requires an offer of judgment to
state whether the proposal includes attorneys’ fees and whether
attorney’s fees are part of the legal claim.
Fla. R. Civ. P. 1.442(c)(2)(F).
We faced the same issue when we decided McMahan v. Toto, 311 F.3d 1077
(11th Cir. 2002). In McMahan, we held that, when an offer was made to resolve
“all claims,” it encompassed the plaintiffs’ demand for attorney’s fees, despite the
fact that the offer did not explicitly state whether the proposal included attorney’s
fees. Id. at 1082. We therefore rejected the plaintiffs’ claim that Rule
1.442(c)(2)(F) barred the application of the offer of judgment statute. Id. We
found support for this conclusion in two earlier Florida Rule 1.442 cases. First,
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Unicare Health Facilities Inc. v. Mort, 553 So. 2d 159, 161 (Fla. 1989), held that a
plaintiff’s acceptance of an offer of judgment made pursuant to Rule 1.442 that
made no specific mention of attorney’s fees nonetheless precluded that plaintiff
from moving for postjudgment attorney’s fees because those claims were
terminated. Second, George v. Northcraft, 476 So. 2d 758, 759 (Fla. 5th DCA
1985), held that attorney’s fees are “encompassed in an offer of judgment made
pursuant to Rule 1.442 which fails to mention them specifically or reserve the right
to seek them later.”3
We also found support in an earlier Florida opinion issued outside the
context of Rule 1.442. Liberty Mutual Fire Insurance Co. v. Ramos, 565 So. 2d
798 (Fla. 4th DCA 1990), held that where an offer does not specifically mention
attorney’s fees, it will be read to include attorney’s fees because to hold otherwise
would thwart the policy purposes behind a settlement statute by not terminating the
litigation.
Our conclusion in McMahan also finds some confirmation in a Florida case
3
It is important to note, however, that Rule 1.442(c)(2)(F) was not introduced until
the Florida Supreme Court’s order in In re Amendments to Florida Rules of Civil Procedure, 682
So. 2d 105, 124-26 (Fla. 1996), meaning that Unicare and George were decided under a different
version of Rule 1.442 with no explicit requirement that a party state whether attorney’s fees were
included.
13
decided after McMahan, Bennett v. American Learning Systems of Boca Delray,
Inc., 857 So. 2d 986 (Fla. 4th DCA 2003), which specifically held that a settlement
offer need not mention attorney’s fees under Rule 1.442(c)(2)(F) if no attorney’s
fees are claimed in the complaint. However, Bennett is distinguishable because the
plaintiffs in both McMahan and the instant case explicitly demanded attorney’s
fees.
We seek guidance from the Florida Supreme Court on this issue because it
may be that, despite our McMahan decision, a different result is indicated by
Campbell v. Goldman, 959 So. 2d 223 (Fla. 2007), which strictly construed the
offer of judgment statute and Rule 1.442 even with respect to purely technical
error. The Campbell court was presented with the argument that an offer of
judgment was invalid for failure to specify that the offer was being made under the
offer of judgment statute. The Florida Supreme Court noted that the offer of
judgment statute itself requires that a settlement offer “state that it is being made
pursuant to this section,” Fla. Stat. § 768.79(2)(c), and that Rule 1.442(c)(1) also
requires that a settlement offer “shall identify the applicable Florida law under
which it is being made.” Campbell, 959 So. 2d at 226. Significantly, the failure to
identify § 768.79 was a purely technical error: at the time of Campbell, § 768.79
14
was the only applicable offer of judgment statute implemented by Rule 1.442,
Campbell, 959 So. 2d at 227 (Pariente, J., concurring); the offer of judgment
clearly stated that it was being made pursuant to Rule 1.442, id. at 224 (maj.
opinion); and the omission created no ambiguities, see id. at 227 (Pariente, J.,
concurring). It was clear that a technical error of this type would not prejudice the
other party with respect to its ability to evaluate the terms of the offer. The Florida
Supreme Court nonetheless held that fee-shifting was in derogation of the common
law, that both the rule and statute must be strictly construed, and that the failure of
the offer to identify § 768.79 therefore invalidated the offer. Id. at 227.
Campbell dealt with a requirement that was present in both the statute and
the rule. Accordingly, it does not directly control a situation like the one in the
instant case, in which the requirement is present only in the rule. However,
Campbell relied upon two cases that required strict construction of a requirement
present only in the rule; these cases were also decided subsequent to our McMahan
decision. See Lamb v. Matetzschk, 906 So. 2d 1037 (Fla. 2005); Willis Shaw
Express, Inc. v. Hilyer Sod, Inc., 849 So. 2d 276 (Fla. 2003). Both Lamb and
Willis Shaw held that an offer of judgment was invalid for failure to strictly comply
with Rule 1.442’s requirement that a joint proposal “state the amount and terms
15
attributable to each party.” There is no comparable requirement in the statute.
These cases appear to be distinguishable from Campbell and the instant appeal
because the omission in these cases was not a purely technical failing—the
attribution of the settlement funds may be material to the parties’ evaluation of the
settlement offer. See Lamb, 906 So. 2d at 1040 (“Each defendant should be able to
settle the suit knowing the extent of his or her financial responsibility.”). However,
it is possible to read Lamb and Willis Shaw as establishing strict construction even
for requirements present only in the rule, and to read Campbell as clarifying that
the strict construction principal extends even to purely technical matters. This
reading casts some doubt on our earlier McMahan decision.
The foregoing discussion has focused principally on Rule 1.442(c)(2)(F)’s
first requirement, that a party “state whether the proposal includes attorneys’ fees.”
We now turn briefly to Rule 1.442(c)(2)(F)’s second requirement, that a party state
“whether attorneys’ fees are part of the legal claim.” As Horowitch points out in
his brief—albeit with minimal discussion—Diamond’s failure to comply with the
second requirement may be an additional reason to refuse an award under the offer
of judgment statute. We have found no cases discussing this point, and the parties
make no relevant arguments. Furthermore, the function of this requirement is not
16
clear to us.
We believe it was clear to Horowitch that acceptance of Diamond’s offer
would extinguish any claim to attorney’s fees, and that Diamond’s failure to
discuss attorney’s fees in the offer was therefore not prejudicial. However, there
appears to be a conflict between earlier Florida cases, which hold that an offer of
judgment that does not explicitly reference attorney’s fees is viable, and more
recent cases, which hold that the statute and the rule must be strictly construed even
in the face of purely technical requirements. Even though we have found no
Florida cases that conclusively state how the offer of judgment statute and Rule
1.442 should be applied in this situation, the recent Campbell decision has cast
doubt on our earlier McMahan decision. Accordingly, we respectfully certify to
the Florida Supreme Court the following question:
UNDER FLA. STAT. § 768.79 AND RULE 1.442, IS A DEFENDANT’S OFFER
OF JUDGMENT VALID IF, IN A CASE IN WHICH THE PLAINTIFF
DEMANDS ATTORNEY’S FEES, THE OFFER PURPORTS TO SATISFY ALL
CLAIMS BUT FAILS TO SPECIFY WHETHER ATTORNEY’S FEES ARE
INCLUDED AND FAILS TO SPECIFY WHETHER ATTORNEY’S FEES ARE
PART OF THE LEGAL CLAIM?
17
B. Was Diamond’s offer of judgment rendered non-viable because Horowitch
claimed specific performance—a non-monetary remedy—in the alternative to
damages?
The offer of judgment statute applies only “[i]n any civil action for
damages.” Fla. Stat. § 769.79(1). Applying this requirement, Florida intermediate
courts have refused to apply the statute in cases in which both money damages and
non-monetary relief were sought. In Palm Beach Polo Holdings, Inc. v. Equestrian
Club Estates Property Owners Association, Inc., 22 So. 3d 140 (Fla. 4th DCA
2009), a landlocked plaintiff sued for both non-monetary relief, in the form of
declaratory and injunctive relief to gain use of a private road by “way of necessity,”
and monetary relief, in the form of tortious interference damages due to the prior
denial of access to the road. The court characterized this case as one that
“contained two independent, significant claims, such that it could be characterized
only as an action for both damages and non-monetary, declaratory relief.” Id. at
143.
The defendant in Palm Beach Polo made an offer of judgment in the amount
of $1001 “as complete and final resolution and settlement of all claims.” However,
the court held that the offer of judgment statute did not apply to this offer. As a
18
principle of law, it stated that strict construction, as required by Campbell, “should
not allow application of a general offer of settlement, sought to be applied to claims
seeking non-monetary relief as well as actions for damages.” Id. at 144. Applying
this principle to the facts of the case, the court found that:
In this case, each offer of settlement filed was general, such that it
applied to all claims contained within the complaint which, of course,
included both a claim for damages and non-economic claims. Strict
construction of the statute leads to the conclusion that when an action
seeks non-monetary relief, such as a pure declaration of rights or
injunctive relief, then the fact that it also seeks damages does not bring
it within the offer of judgment statute.
Id.
Palm Beach Polo further explains its rationale through its discussion of a
second relevant case, Di Paola Beach Terrace Association, Inc., 718 So. 2d 1275
(Fla. 2d DCA 1998). Di Paola rejected an offer of judgment in a case in which
both injunctive relief and damages were sought because “the offer was ambiguous
in that it failed to state whether the defendant . . . was agreeing to the entry of
injunctions in addition to the settlement of the plaintiffs’ damages claim.” Palm
Beach Polo, 22 So. 3d at 144 (discussing Di Paola); see Di Paola, 718 So. 2d at
1277. The Palm Beach Polo court found the settlement before it similarly lacking
because “the proposals for settlement did not state whether the association was
19
agreeing to entry of any injunctions.” Palm Beach Polo, 22 So. 3d at 145. It went
further to say that:
If the statute were read to permit a proposal for settlement to apply to a
case in which there were claims for non-economic relief as well as for
damages, the offeree would be forced either to accept the proposal and
continue to litigate the request for injunctive and non-economic relief
or to give up their non-damage claims. The purposes of section
768.79 include the early termination of litigation. A proposal for
settlement in a case such as this one does not satisfy that purpose, as
its acceptance would not terminate the litigation nor resolve those
claims not seeking damages.
Id.
Horowitch argues that Palm Beach Polo and Di Paola stand for the
proposition that, under the strict construction required by Campbell, the offer of
judgment statute cannot apply when a complaint seeks both damages and equitable
relief. By this logic, Horowitch urges, his claim for specific performance, or
alternatively damages, would be beyond the scope of the offer of judgment statute.
To justify this outcome, Horowitch further reasons that it would be impossible to
calculate the monetary value of an equitable remedy won at judgment for purposes
of determining whether the award was 25% less than the judgment offered, as
required to trigger the offer of judgment statute’s fee-shifting provision.
Diamond argues that Palm Beach Polo and Di Paola are distinguishable
20
because they involved claims for both equitable relief and money damages. For
example, in Palm Beach Polo, the plaintiff sought an injunction to permit future
access to the private road, and also sought damages for the past denial of access.
By contrast, in the instant case, Horowitch claims equitable relief only in the
alternative to money damages. This argument is persuasive to us because, in any
case in which the two types of relief are set in the alternative, it is clear that the
satisfaction of the claim for money damages would preclude any further litigation
on the matter of equitable relief. Addressing the concern underlying Palm Beach
Polo and Di Paola, there is no possibility in this case that the litigation would not
be terminated by the offer of judgment.
Diamond also argues that the continued workability of the offer of judgment
statute counsels in favor of applying the statute to these facts. If a plaintiff could
simply “tack on” an equitable claim in the alternative to his claims for damages and
thereby preclude the application of the statute, then he could avoid the application
of the statute through artful pleading. This risk is particularly acute in a case like
this one, in which the equitable claim is so lacking in merit: the jet in question is
not a unique good and Horowitch therefore cannot obtain specific performance to
force its sale. See Fla. Stat. § 672.716(1) (adopting the Uniform Commercial Code
21
position that “[s]pecific performance may be decreed where the goods are unique
or in other proper circumstances”); George Vining & Sons, Inc. v. Jones, 498 So.
2d 695, 697 (Fla. 5th DCA 1986) (“[S]pecific performance of a contract is limited
to those involving a unique subject matter such as an agreement to convey land.”);
see also Klein v. PepsiCo, Inc., 845 F.2d 76, 80 (4th Cir. 1988) (refusing to award
specific performance for the delivery of a jet because, among other reasons, the
aircraft was not unique within the meaning of the Virginia Commercial Code).
In light of the lack of controlling Florida law, and because we are in any
event certifying the offer of judgment issue discussed above, in Section III.A, we
certify the following question:
DOES FLA. STAT. § 768.79 APPLY TO CASES THAT SEEK EQUITABLE
RELIEF IN THE ALTERNATIVE TO MONEY DAMAGES; AND, EVEN IF IT
DOES NOT GENERALLY APPLY TO SUCH CASES, IS THERE ANY
EXCEPTION FOR CIRCUMSTANCES IN WHICH THE CLAIM FOR
EQUITABLE RELIEF IS SERIOUSLY LACKING IN MERIT?
C. Does the FDUTPA fee-shifting provision apply in a case in which a plaintiff’s
FDUTPA claim fails because the law of another jurisdiction governs the issue?
Unless Diamond is entitled to recover its full attorney’s fees pursuant to the
22
offer of judgment statute, it will be necessary to address its claim for attorney’s fees
under the FDUTPA.
The FDUTPA states, in relevant part, that:
In any civil litigation resulting from an act or practice involving a
violation of this part, . . . the prevailing party, after judgment in the
trial court and exhaustion of all appeals, if any, may receive his or her
reasonable attorney’s fees and costs from the nonprevailing party.
Fla. Stat. § 501.2105(1). Florida’s courts have interpreted this fee-shifting
provision to apply under circumstances in which a plaintiff has sued under the
FDUTPA and lost, even when the plaintiff has lost because the court concluded
that the alleged violation was not one that actually fell under the statute,
notwithstanding the fact that such an act is by definition not “a violation of this
part” in the most literal sense. See Rustic Village v. Friedman, 417 So. 2d 305, 305
(Fla. 3d DCA 1982) (“[W]here a plaintiff brings a claim under the Act, an
attorney’s fee is to be allowed a prevailing defendant even though the trial judge
holds that the action is not one contemplated by the Act.”); see also M.G.B. Homes,
Inc. v. Ameron Homes, Inc., 30 F.3d 113, 115 (11th Cir. 1994) (awarding
attorney’s fees to a prevailing defendant in a suit between competitors after finding
that the FDUTPA does not apply to suits between competitors, stating that if it
were Florida law to deny attorney’s fees under these circumstances then “no
23
prevailing defendant would ever be entitled to attorney’s fees under the DTPA, for
by definition defendants prevail by demonstrating the inapplicability of the DTPA
to their actions”); Brown v. Gardens by the Sea South Condominium Assoc., 424
So. 2d 181, 184 (Fla. 4th DCA 1983) (awarding attorney’s fees to a prevailing
defendant even though the transaction did not qualify as a “consumer transaction”
and the FDUTPA therefore did not apply).4
However, the instant case is distinguishable—in none of these cases was the
FDUTPA found not to apply because the law of a foreign jurisdiction governed the
unfair trade practices claim. Moreover, Rustic Village recognized, in dicta, that
there might be a distinction if the FDUTPA did not actually “apply”:
The plaintiff [argues] that once the trial court had found the Act
“inapplicable,” it could not then utilize the Act for the purpose of
granting the prevailing defendant an attorney’s fee. It is apparent that
4
Diamond cites to specific language in Rustic Village, 417 So. 2d at 306 (“The
plaintiff, having invoked the Act, is liable for an attorney’s fee because he did not prevail.”), and
Leitman v. Boone, 439 So. 2d 318, 322 (Fla. 3d DCA 1983) (“[B]y invoking an existing and
valid statute which calls for an award of attorneys’ fees, one may subject himself to having
attorneys’ fees asserted against him if he does not prevail.”), to argue that a plaintiff is liable for
attorney’s fees whenever he “invokes” the FDUTPA and then loses the case. However, this
language does not dispose of the instant case because neither of those cases presents a situation
in which the FDUTPA does not apply because another state’s substantive law governs.
Moreover, Leitman carries little weight: it spoke on the issue only in dicta, see id. (finding that
attorney fees were improper as “a consequence of the non-existence of a contract,”
notwithstanding the plaintiff’s invocation of the FDUTPA), and the Florida Supreme Court
subsequently disagreed with Leitman on other grounds in Gibson v. Courtois, 539 So. 2d 459
(Fla. 1989). Accordingly, we conclude that no Florida court has held that the mere invocation of
the FDUTPA is sufficient to trigger its fee-shifting provision.
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this is not the case since the Act was applied in the action. It is simply
that after being applied, it did not produce a remedy for this plaintiff.
Because the instant case is distinguishable, no Florida cases provide clear guidance
on whether the FDUTPA should apply on the facts of this case.
We nonetheless find some guidance on how to proceed in this situation by
examining how the offer of judgment statute has been applied in disputes governed
by the substantive law of other states. In BDO Seidman v. British Car Auctions,
802 So. 2d 366 (Fla. 4th DCA 2001), a Florida court was presented with the
question of whether it was obliged to apply a choice of law analysis to determine
whether the offer of judgment statute would apply in a case brought in Florida but
governed by Tennessee law. It ultimately held that the legislature was clear in
stating that the statute applies to “any” civil action for damages filed in a Florida
court, that it was unnecessary to conduct a choice of law analysis in the face of
such a clear legislative statement, and that the offer of judgment statute therefore
applied. Id. at 368-69. In a concurrence, Judge Gross asserted that the statute
would have applied even under choice of law analysis, because the statute is a
procedural mechanism for choice of law purposes and Florida procedural law still
applies even when another state’s substantive law governs. Id. at 370 (Gross., J.,
concurring). On the basis of BDO Seidman, this Court has also explicitly held that
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the offer of judgment statute “is applicable to cases . . . that are tried in the State of
Florida even though the substantive law that governs that case is that of another
state.” McMahan v. Toto, 311 F.3d 1077, 1081 (11th Cir. 2002). The application
of the offer of judgment statute to these cases provides support for the argument
that Florida courts might likewise apply the fee-shifting provisions of the FDUTPA
under circumstances in which the substantive law of another state applied so long
as a plaintiff nonetheless triggered the procedural provisions of the FDUTPA by
suing under it.5
Applying the fee-shifting provision in these circumstances also advances
Florida’s interest in preventing unfair trade practices claims from being brought
needlessly. As one Florida court has recognized:
[I]t is not uncommon for litigants to inject claims of fraud and
deceptive trade practices into a contractual dispute. This tactic
complicates a lawsuit, raises the stakes, and increases the litigation
expenses. We have encountered few cases where such claims were
successful.
Mandel v. Decorator’s Mart, Inc. of Deerfield Beach, 965 So. 2d 311, 313 n.1 (Fla.
5
A law may be substantive for Erie purposes (meaning it applies in federal court)
yet procedural for other purposes, such as a choice of law analysis. Sun Oil Co. v. Wortman, 486
U.S. 716, 726-28, 108 S. Ct. 2117, 2124-25, 100 L. Ed. 2d 743 (1988); BDO Seidman, 802 So.
2d at 370-71 (Gross, J., concurring). Accordingly, the prospect that the FDUTPA’s fee-shifting
provision might be thought of as procedural for choice of law purposes does not place at risk its
status as substantive for Erie purposes.
26
4th DCA 2007). A plaintiff introduces the same complications, and the same strain
on the Florida court system, whenever he raises a FDUTPA claim, regardless of
which state’s substantive law is ultimately found to govern. Accordingly, it is
plausible that the Florida courts would wish to curb this behavior by holding such a
plaintiff accountable under the fee-shifting provision.
It appears to us that Florida law would likely treat the FDUTPA’s fee-
shifting provision much like it would the offer of judgment statute, applying it even
in actions in which the law of another state was ultimately found to govern the
substantive claims. However, because we are in any event certifying questions
related to the offer of judgment statute, because there is room to distinguish the
FDUTPA’s fee-shifting provision and the offer of judgment statute, and because
we have found no Florida cases directly addressing whether the FDUTPA would
apply to circumstances like these, we certify the following question:
DOES FLA. STAT. § 501.2105 ENTITLE A PREVAILING DEFENDANT TO
AN ATTORNEY’S FEE AWARD IN A CASE IN WHICH A PLAINTIFF
BRINGS AN UNFAIR TRADE PRACTICES CLAIM UNDER THE FDUTPA,
BUT THE DISTRICT COURT DECIDES THAT THE SUBSTANTIVE LAW OF
A DIFFERENT STATE GOVERNS THE UNFAIR TRADE PRACTICES
27
CLAIM, AND THE DEFENDANT ULTIMATELY PREVAILS ON THAT
CLAIM?
D. Would the FDUTPA fee-shifting provision support an award of fees for the
entire litigation, or only for the seven-month period before the court held that
Arizona law, rather than Florida law, applied?
If the FDUTPA fee-shifting provision applies to this case, we are left with
the question of whether it applies to the entire case or only to the seven months
between the time Horowitch raised his FDUTPA claim and the time the district
court found that he could not proceed under the FDUTPA.
One plausible reading of the statute’s requirement, that the “civil litigation
result[] from an act or practice involving a violation of [the FDUTPA],” is that the
statute applies only to litigation in which a plaintiff at least alleges a violation of
the FDUTPA. At the point that Horowitch ceased litigating his FDUTPA claim to
pursue an Arizona Consumer Fraud Act claim, he was no longer asserting a
violation of the FDUTPA, so perhaps the fee-shifting provision should not apply
from that point onward. On the other hand, the FDUTPA does not award fees until
after “exhaustion of all appeals.” Because Horowitch could have appealed the
district court’s decision that the FDUTPA did not apply, and because any such
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appeal would have taken place after the seven month period under discussion, it is
also possible that the fee-shifting provision would cover the entire case.
Florida’s cases addressing the applicability of the FDUTPA fee-shifting
provision do not reach this issue. In Rustic Village, Brown, and MGB, discussed
above, no claims were left unresolved after the disposal of the FDUTPA claim.
Accordingly, there was no period of litigation during which only non-FDUTPA
claims were at issue.
Another set of Florida cases establishes that an attorney may recover for time
spent defending claims related to a FDUTPA claim, but these cases are also of little
help because none of them reaches this problem. These cases tell us that:
[I]n actions containing a deceptive trade practices count and one or
more alternative theories of recovery, all based on the same
transaction, no allocation of attorney’s services need be made except
to the extent counsel admits that a portion of the services was totally
unrelated to the 501 claim or it is shown that the service related to
issues, such as punitive damages, which were clearly beyond the scope
of a 501 proceeding.
Heindel v. Southside Chrysler-Plymouth, Inc., 476 So. 2d 266, 272 (Fla. 1st DCA
1985); see also LaFerney v. Scott Smith Oldsmobile, Inc., 410 So. 2d 534, 536
(Fla. 5th DCA 1982) (“[T]here was really only one transaction or set of facts which
gave rise to all five ‘theories’ in the complaint . . . . As appellant points out, proof
29
of a deceptive trade practice under Chapter 501 may well, and frequently does,
involve proof of breach of contract and fraud or misrepresentation.”). However,
these cases are distinguishable because none of these cases involve circumstances
in which the case was still live after the FDUTPA claim was disposed of. The
immediate question is not whether Horowitch’s other claims were cognizable as
alternative claims arising out of the same consumer transaction as the FDUTPA
claim, but whether the FDUTPA fee-shifting provisions applied after the FDUTPA
claim had been extinguished.
Because there is little guidance in Florida law on the question of whether the
FDUTPA fee-shifting provision extends to the period after which the FDUTPA
claim was eliminated, and because we are already certifying the question of
whether the FDUTPA applies to this case at all, we certify the following question:
IF FLA. STAT. § 501.2105 APPLIES UNDER THE CIRCUMSTANCES
DESCRIBED IN THE PREVIOUS QUESTION, DOES IT APPLY ONLY TO
THE PERIOD OF LITIGATION UP TO THE POINT THAT THE DISTRICT
COURT HELD THAT THE PLAINTIFF COULD NOT PURSUE THE FDUTPA
CLAIM BECAUSE FLORIDA LAW DID NOT APPLY TO HIS UNFAIR
TRADE PRACTICES CLAIM, OR DOES IT APPLY TO THE ENTIRETY OF
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THE LITIGATION?
IV. CONCLUSION
“The phrasing of these [four] questions is not intended to limit the Florida
Supreme Court’s consideration of the issues involved or the manner in which it
gives its answers.” MCI WorldCom Network Servs. v. Mastec, Inc., 370 F.3d
1074, 1079 (11th Cir. 2004). In order to assist in the resolution of these questions,
the record in this case and the briefs of the parties shall be transmitted to the
Florida Supreme Court.
QUESTIONS CERTIFIED.
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