Proposals for Settlement: A Valuable Tool in a Litigant's Arsenal
Proposals for Settlement: A Valuable Tool in a Litigant's Arsenal
Proposals for Settlement have become valuable tools in a litigant’s arsenal. When they are accepted, they formally resolve a dispute between the parties. When they are rejected, they potentially expose the non-settling party to the risk of paying their opponent’s attorney’s fees and costs. This very risk has spurred parties to realistically evaluate their claims and cooperate with each other to resolve their disputes outside the court house.
While a party can propose any kind of settlement it wishes, in order for the proposal to have the legal effect of triggering liability for an opponent’s attorney’s fees and costs, the Proposal for Settlement must:
- Name the party or parties making the proposal and the party or parties to whom the proposal is being made;
- Identify the claim or claims the proposal is attempting to resolve;
- State with particularity any relevant conditions;
- State the total amount of the proposal and state with particularity all nonmonetary terms of the proposal;
- State with particularity the amount proposed to settle a claim for punitive damages, if any; and
- State whether the proposal includes attorneys’ fees and whether attorneys’ fees are part of the legal claim.
The express terms of Florida Rule of Civil Procedure 1.442 provide that a party may make a joint Proposal for Settlement as long as the proposal states the amount and terms attributable to each party. However, there is conflict between the District Courts of Appeal as to the conditions that may be required in a joint Proposal for Settlement.
In Clements v. Rose, 982 So. 2d 731 (Fla. 1st DCA 2008), the First District Court of Appeal found that a Proposal for Settlement was not ambiguous simply because it was conditioned upon both a husband and wife accepting it. The court noted: “Although it is conditional, the offer is as definite as it is within Appellant’s power to make, because the condition depends not on Appellant’s election, but on each Appellee’s election.”
On the other hand, the Second District Court of Appeal has held that a Proposal for Settlement is not valid if it is made to more than one person and requires that all persons accept the proposal in order to settle the case. See Attorneys’ Title Insurance Fund, Inc. v. Gorka, Case No. 2D07-3369, 2008 Fla. App. LEXIS 13449 (Fla. 2d DCA Sept. 3, 2008). According to the court in Attorneys’ Title Insurance Fund, each person must be able to independently accept the proposal. Thus, a Proposal for Settlement that is conditioned upon more than one person accepting it is invalid, according to the Second District Court of Appeal.
The Second District Court of Appeal recognized that its decision in Attorneys’ Title Insurance Fund is in conflict with First District Court of Appeal’s decision in Clements. However, unless and until the Florida Supreme Court resolves the conflict, the validity of a Proposal for Settlement may depend upon the location of your case, with those Circuit Courts falling under the jurisdiction of the First District Court of Appeal allowing for conditional Proposals for Settlement and those falling under the Second District Court of Appeal’s jurisdiction refusing to enforce the same.
UPDATE: On April 1, 2010, the Florida Supreme Court issued a decision resolving the conflict between Clements v. Rose, 982 So. 2d 731 (Fla. 1st DCA 2008), and Attorneys’ Title Insurance Fund, Inc. v. Gorka, 989 So. 2d 1210 (Fla. 2d DCA 2008). The court approved of the Second District Court of Appeal’s reasoning in Attorneys’ Title Insurance Fund and held a proposal for settlement served upon two or more parties that is conditioned upon each party accepting the proposal is invalid and unenforceable because it deprives the parties of the opportunity to independently evaluate or settle their individual claims.
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