Taylor Engineering, Inc. and Robert J. Wagner, P.E. v. Dickerson Florida, Inc., a Florida corporation , 221 So. 3d 719 ( 2017 )

IN THE DISTRICT COURT OF APPEAL
FIRST DISTRICT, STATE OF FLORIDA
TAYLOR ENGINEERING, INC.
& ROBERT J. WAGNER, P.E., NOT FINAL UNTIL TIME EXPIRES TO
FILE MOTION FOR REHEARING AND
Appellants, DISPOSITION THEREOF IF FILED
v. CASE NO. 1D15-4782
DICKERSON FLORIDA, INC., a
Florida corporation,
Appellee.
_____________________________/
Opinion filed May 31, 2017.
An appeal from the Circuit Court for Duval County.
Karen K. Cole, Judge.
George R. Truitt and Kathryn L. Ender of Cole, Scott & Kissane, P.A., Miami, for
Appellants.
Peter A. Robertson, Erin Rohan Smith, William Douglas Stanford, Thomas J.
Tollefsen, and William Collins Cooper of the Robertson Firm, St. Augustine; James
C. Hauser of Attorney’s Fees in Florida PL, Maitland, for Appellee.
WINOKUR, J.
Appellants (collectively “Taylor”) filed a post-trial motion for attorneys’ fees
and costs pursuant to section 768.79(1), Florida Statutes, and Florida Rule of Civil
Procedure 1.442. The trial court denied the motion on the authority of Borden Dairy
Co. of Alabama, LLC v. Kuhajda, 171 So. 3d 242 (Fla. 1st DCA 2015) (holding that
a proposal for settlement must strictly comply with the content requirements of rule
1.442(c)(2) in order to entitle the movant to attorneys’ fees and costs). Taylor
appealed. However, while this appeal was pending, the Florida Supreme Court
quashed our decision in Borden Dairy. Kuhajda v. Borden Dairy Co. of Alabama,
LLC, 202 So. 3d 391 (Fla. 2016). Based on the supreme court’s decision, Appellee
(“Dickerson”) concedes that the trial court erred in holding that Taylor’s proposal
for settlement was invalid for failing to strictly comply with the content requirements
of rule 1.442. Accordingly, we reverse and remand for the trial court to reconsider
Taylor’s motion in light of the supreme court’s decision in Kuhajda.
The Kuhajda decision does not, however, fully resolve this appeal. Dickerson
also argued that Taylor’s proposal for settlement was a nominal offer that was not
made in good faith, and for this reason the trial court should disallow an award of
costs and attorneys’ fees. § 768.79(7)(a), Fla. Stat. The parties contend that this
Court has made inconsistent rulings concerning the standard in determining whether
a nominal offer is made in good faith. While we find that the case law is not
inconsistent, we reiterate that, for purposes of the offer of judgment statute, a
nominal offer is made in good faith where the offeror has a reasonable basis to
believe that its exposure to liability is minimal.
2
The apparent inconsistency in the good-faith standard involves Arrowood
Indemnity Co. v. Acosta, Inc., 58 So. 3d 286 (Fla. 1st DCA 2011), and General
Mechanical Corp. v. Williams, 103 So. 3d 974 (Fla. 1st DCA 2012). The Arrowood
court noted “[i]n the context of a nominal offer of judgment, this court has held that
where the offeror has a reasonable basis to believe that exposure to liability is
minimal, a nominal offer is appropriate.” Arrowood, 58 So. 3d at 289 (emphasis
supplied). However, in the same context, we held in General Mechanical that “a
reasonable basis [for a nominal offer] exists only where the undisputed record
strongly indicates that the defendant had no exposure.” Gen. Mech., 103 So. 3d at
976 (emphasis supplied). At first glance, it appears that the General Mechanical
court would disqualify a nominal offer from the offer of judgment statute unless the
defendant had “no exposure” at all to liability, whereas the Arrowood court would
permit a nominal offer under the statute as long as the defendant’s exposure to
liability could be characterized as “minimal.” However, a review of the relevant case
law reveals no such inconsistency.
The offer of judgment statute provides in pertinent part as follows:
(1) In any civil action for damages filed in the courts
of this state, if a defendant files an offer of judgment which
is not accepted by the plaintiff within 30 days, the
defendant shall be entitled to recover reasonable costs and
attorney's fees incurred by her or him . . . from the date of
filing of the offer if the judgment is one of no liability[.]
....
3
(7)(a) If a party is entitled to costs and fees pursuant
to the provisions of this section, the court may, in its
discretion, determine that an offer was not made in good
faith. In such case, the court may disallow an award of
costs and attorney's fees.
§ 768.79(1) & (7)(a), Fla. Stat.1
In determining whether a nominal offer was made in good faith, we have
previously applied the standard articulated in Arrowood. See Zachem v. Paradigm
Prop. Mgmt. Team, Inc., 867 So. 2d 1263 (Fla. 1st DCA 2004) (“A nominal offer is
appropriate where the offeror has a reasonable basis to believe that exposure to
liability is minimal.”). See also Connell v. Floyd, 866 So. 2d 90, 94 (Fla. 1st DCA
2004) (Benton, J., dissenting) (stating that the rule is that “a minimal offer can be
made in good faith if the evidence demonstrates that, at the time it was made, the
offeror had a reasonable basis to conclude that its exposure was nominal”).2 The
apparently different standard used by this Court in General Mechanical cites for that
rule to Event Services America, Inc., v. Ragusa, 917 So. 2d 882 (Fla. 3d DCA 2005).
In fact, Event Services does not necessarily set a different standard.
The Event Services court held as follows:
1
Similarly, Florida Rule of Civil Procedure 1.442(h)(1) provides that the
court may “determine that a proposal [for settlement] was not made in good faith”
and “disallow an award of costs and attorneys’ fees.”
2
While this observation was made in a dissenting opinion, the majority based
its ruling on the lack of particularity of the settlement offer, not the lack of exposure
to liability.
4
A reasonable basis for a nominal offer exists only where
“the undisputed record strongly indicate[s] that [the
defendant] had no exposure” in the case. Therefore, a
nominal offer should be stricken unless the offeror had a
reasonable basis to conclude that its exposure was
nominal.
Id. at 884 (citations omitted; emphasis supplied) (citing Peoples Gas Sys., Inc. v.
Acme Gas Corp., 689 So. 2d 292, 300 (Fla. 3d DCA 1997)). In other words, Event
Services appears to utilize both the no-exposure and the minimal-exposure standard.
However, we find that Event Services can be reasonably read as using the phrase “no
exposure” as synonymous with “nominal exposure.” This conclusion is bolstered by
the fact that, aside from Event Services and Peoples Gas, the Third District has
consistently held that the standard is whether there is a reasonable basis to indicate
that a defendant’s exposure was nominal. See, e.g., Key West Seaside, LLC v.
Certified Lower Keys Plumbing, Inc., 208 So. 3d 718 (Fla. 3d DCA 2015) (holding
that good faith exists as a matter of law where at the time an offer was made the
offeror had a reasonable basis to conclude that its exposure was nominal); Isaias v.
H.T. Hackney Co., 159 So. 3d 1002, 1004-05 (Fla. 3d DCA 2015) (footnote omitted)
(“The determination of whether a ‘nominal’ offer is in good faith requires the trial
court to consider whether the offeror had a reasonable basis to conclude, at the time
of making the offer, that its exposure was nominal.”); Downs v. Coastal Sys. Int’l,
Inc., 972 So. 2d 258 (Fla. 3d DCA 2008) (applying standard requiring a reasonable
belief of nominal exposure); Dep’t of Highway Safety & Motor Vehicles, Fla.
5
Highway Patrol v. Weinstein, 747 So. 2d 1019, 1020 (Fla. 3d DCA 1999) (applying
standard requiring reasonable belief of nominal exposure). Moreover, the fact that
the Third District has not seen fit to address the seeming discrepancy supports the
proposition that it does not consider Event Services or Peoples Gas to be inconsistent
with its other cases.
Even if Event Services did set a “no exposure” standard, we continue to follow
the “minimal exposure” standard. The Fourth District has suggested that Event
Services did specifically establish a no-exposure standard for a good-faith offer, but
has rejected that standard. In Citizens Property Insurance Corp. v. Perez, the Fourth
District distinguished Event Services and clarified that it had consistently held that
“[t]he rule is that a minimal offer can be made in good faith if the evidence
demonstrates that, at the time it was made, the offeror had a reasonable basis to
conclude that its exposure was nominal.” 164 So. 3d 1, 3 (Fla. 4th DCA 2014)
(quoting State Farm. Mut. Auto. Ins. Co. v. Sharkley, 928 So. 2d 1263, 1264 (Fla.
4th DCA 2006) (emphasis original)). The Fourth District opined that the no-
exposure standard is “too onerous.” Id. at 3; see also Sharaby v. KLV Gems Co., 45
So. 3d 560, 564 (Fla. 4th DCA 2010) (Warner, J., concurring) (disagreeing with the
Event Services standard and also stating she did not “think that Peoples Gas intended
to set a rule that requires an undisputed record, showing no liability, in order to prove
that a minimal offer was made in good faith”).
6
The Second and Fifth District Courts of Appeal also apply the standard
articulated in Arrowood. See, e.g., Gawtrey v. Hayward, 50 So. 3d 739, 743 (Fla. 2d
DCA 2010) (“In assessing whether Ms. Gawtrey’s nominal offer was made in good
faith, the trial court was required to look at whether Ms. Gawtrey had a reasonable
basis when the offer was made to conclude that her exposure in the case was
nominal.”); Gurney v. State Farm Mut. Auto. Ins. Co., 889 So. 2d 97, 99 (Fla. 5th
DCA 2004) (explaining that a nominal offer can be made in good faith if the
evidence demonstrates that, at the time it was made, the offeror had a reasonable
basis to conclude that its exposure was nominal).
In summary, it appears that the no-exposure standard articulated in General
Mechanical originated from language in Peoples Gas, which was then adopted in
Event Services—but neither opinion clearly adopts this standard. In turn, this Court
cited Event Services in explaining the appropriate standard to determine whether a
nominal offer is made in good faith. Because this Court and other district courts have
generally applied the Arrowood minimal-exposure standard, and because Event
Services—the case on which General Mechanical relies—appears to be a deviation
from the standard generally used in the Third District, the appropriate standard is
whether the offeror had a reasonable basis to conclude that his/her exposure was
nominal or minimal. 3 This is the standard the trial court should apply on remand to
3
We also note the well-established rule that “a three-judge panel of a district
7
determine whether Taylor’s offer of judgment was made in good faith, pursuant to
section 768.79(7)(a).
REVERSED AND REMANDED.
OSTERHAUS and BILBREY, JJ., CONCUR.
court should not overrule or recede from a prior panel’s ruling on an identical point
of the law.” In re Rule 9.331, 416 So. 2d 1127, 1128 (Fla. 1982). The General
Mechanical panel would not have been authorized to overrule Arrowood without an
en banc proceeding. See Adams v. State, 188 So. 3d 849 (Fla. 1st DCA 2012).
8