CCM Condominium Association, Inc., etc. v. Petri Positive Pest Control, Inc., etc. ( 2021 )


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  •         Supreme Court of Florida
    ____________
    No. SC19-861
    ____________
    CCM CONDOMINIUM ASSOCIATION, INC., etc.,
    Petitioner,
    vs.
    PETRI POSITIVE PEST CONTROL, INC., etc.,
    Respondent.
    September 9, 2021
    POLSTON, J.
    We review the Fourth District Court of Appeal’s decision in
    Petri Positive Pest Control, Inc. v. CCM Condominium Ass’n, 
    271 So. 3d 1001
     (Fla. 4th DCA 2019), in which the Fourth District certified
    the following question of great public importance:
    FOR PURPOSES OF CALCULATING WHETHER A
    PLAINTIFF HAS MET THE THRESHOLD AMOUNT OF
    DIFFERENCE BETWEEN AN OFFER OF JUDGMENT
    AND THE JUDGMENT ENTERED FOR PURPOSES OF
    SECTION 768.79, FLORIDA STATUTES, MUST POST-
    OFFER PREJUDGMENT INTEREST BE EXCLUDED
    FROM THE AMOUNT OF THE “JUDGMENT OBTAINED”?
    
    Id. at 1007
    . In its decision, the Fourth District also certified conflict
    with the Third District Court of Appeal’s decision in Perez v. Circuit
    City Stores, Inc., 
    721 So. 2d 409
     (Fla. 3d DCA 1998), and the First
    District Court of Appeal’s decision in Phillips v. Parrish, 
    585 So. 2d 1038
     (Fla. 1st DCA 1991). Petri, 271 So. 3d at 1007. 1
    Based upon this Court’s precedent and as explained below, we
    answer the certified question in the affirmative, approve the Fourth
    District’s decision in Petri, and disapprove the Third District’s
    decision in Perez and the First District’s decision in Phillips to the
    extent they are inconsistent with our decision today.
    I. BACKGROUND
    The Fourth District described the background of this case as
    follows:
    In 2013, the appellee/plaintiff, CCM Condominium
    Association, Inc., sued the appellant/defendant, Petri
    Positive Pest Control, Inc., for negligence and breach of
    contract regarding the parties’ contract for Petri to
    address a termite problem at CCM’s property. Petri
    answered, denying the allegations. CCM served an
    amended offer of judgment in 2014, pursuant to section
    768.79, Florida Statutes. It offered to settle all of CCM’s
    claims for damages, including punitive damages,
    attorney’s fees, costs, and interest, for $500,000. Petri
    rejected the offer.
    1. We have jurisdiction. See art. V, § 3(b)(4), Fla. Const.
    -2-
    Following a trial in 2016, the jury found in favor of
    CCM on its breach of contract claim, and it awarded
    CCM $551,881 in damages. CCM submitted a proposed
    final judgment, requesting $551,881 in damages, and an
    additional $84,295.60 in prejudgment interest calculated
    by an accountant, with a per diem rate for each day.
    This amount included both pre-offer of settlement and
    post-offer of settlement interest. The court entered
    judgment based on those calculations for a total of
    $636,326.90. CCM then moved to tax costs, which the
    court granted in the amount of $73,579.21.
    CCM moved for attorney’s fees pursuant to section
    768.79, Florida Statutes, the offer of judgment statute,
    contending that its judgment of $636,326.90, inclusive of
    interest, exceeded the offer by more than 25%. Thus,
    CCM was entitled to an award of attorney’s fees incurred.
    Petri objected, contending that in accordance with White
    v. Steak & Ale of Florida, Inc., 
    816 So. 2d 546
     (Fla. 2002),
    the amount of the plaintiff’s total recovery included only
    its attorney’s fees, costs, and prejudgment interest
    accrued up to the date of the offer of judgment. Without
    the post-offer prejudgment interest and costs, CCM had
    not met the threshold amount of $625,000.
    The court granted CCM’s motion for attorney’s fees.
    It concluded that White addressed only pre-offer costs in
    relation to a plaintiff’s “judgment obtained,” not
    prejudgment interest. Relying on Perez v. Circuit City
    Stores, Inc., 
    721 So. 2d 409
     (Fla. 3d DCA 1998), the court
    ruled that prejudgment interest is included in the
    “judgment obtained” for section 768.79 purposes. The
    court held a hearing to determine the amount of
    attorney’s fees, and the parties ultimately agreed on the
    amount, leaving the issue of entitlement for this appeal.
    Petri, 271 So. 3d at 1002-03.
    On appeal, the Fourth District reversed the award of attorney’s
    fees based upon this Court’s precedent, although it concluded that
    -3-
    the plain meaning of section 768.79 did not support the precedent.
    The Fourth District held that this Court’s decisions in White and
    Shands Teaching Hospital & Clinics, Inc. v. Mercury Insurance Co. of
    Florida, 
    97 So. 3d 204
     (Fla. 2012), required the exclusion of post-
    offer prejudgment interest from the “judgment obtained” when
    determining entitlement to attorney’s fees pursuant to section
    768.79. The Fourth District explained that its conclusion, that only
    pre-offer prejudgment interest is included in the calculation,
    conflicts with the Third District’s decision in Perez and the First
    District’s decision in Phillips. Therefore, the Fourth District certified
    conflict with Perez and Phillips, both pre-White cases. It also
    certified the above question of great public importance.
    II. ANALYSIS
    CCM argues that the plain meaning of section 768.79 does not
    exclude post-offer prejudgment interest from the “judgment
    obtained” that is compared to a rejected settlement offer when
    determining whether to award attorneys’ fees under the offer of
    judgment statute. Petri counters that this Court in White already
    held that post-offer prejudgment interest is to be excluded and that
    the White formula has been consistently and workably applied and
    -4-
    reaffirmed for nearly two decades. Because this Court’s precedent
    is not clearly erroneous, we decline to recede from the White
    formula.
    This Court recently explained that “[i]n a case where we are
    bound by a higher legal authority—whether it be a constitutional
    provision, a statute, or a decision of the Supreme Court—our job is
    to apply that law correctly to the case before us.” State v. Poole,
    
    297 So. 3d 487
    , 507 (Fla. 2020). And “[w]hen we are convinced that
    a precedent clearly conflicts with the law we are sworn to uphold,
    precedent normally must yield.” 
    Id.
     “But once we have chosen to
    reassess a precedent and have come to the conclusion that it is
    clearly erroneous, the proper question becomes whether there is a
    valid reason why not to recede from that precedent.” 
    Id.
     When
    determining whether there is a valid reason not to recede, “[t]he
    critical consideration ordinarily will be reliance.” 
    Id.
    Section 768.79(1), Florida Statutes (2014) (emphasis added),
    provides that “[i]f a plaintiff files a demand for judgment which is
    not accepted by the defendant within 30 days and the plaintiff
    recovers a judgment in an amount at least 25 percent greater than
    the offer, she or he shall be entitled to recover reasonable costs and
    -5-
    attorney’s fees incurred from the date of the filing of the demand.”
    Similarly, section 768.79(6)(b), Florida Statutes (2014) (emphasis
    added), provides that “[i]f a plaintiff serves an offer which is not
    accepted by the defendant, and if the judgment obtained by the
    plaintiff is at least 25 percent more than the amount of the offer,
    the plaintiff shall be awarded reasonable costs, including
    investigative expense, and attorney’s fees . . . incurred from the date
    the offer was served.” Section 768.79(6), Florida Statutes (2014)
    (emphasis added), explains that “judgment obtained” in subsection
    (6)(b) “means the amount of the net judgment entered, plus any
    postoffer settlement amounts by which the verdict was reduced.”
    In White this Court concluded that, in determining whether
    attorney’s fees are to be awarded under section 768.79, settlement
    offers should be compared to what would be included in judgments
    if the judgments were entered on the date of the settlement offers
    because these amounts are the ones that are evaluated when
    determining the amount of offers and whether to accept offers. See
    
    816 So. 2d at 550-51
    . This Court in White reasoned as follows:
    In determining both the amount of the offer and whether
    to accept the offer, the party necessarily must evaluate
    not only the amount of the potential jury verdict, but also
    -6-
    any taxable costs, attorneys’ fees, and prejudgment
    interest to which the party would be entitled if the trial
    court entered the judgment at the time of the offer or
    demand. As we stated in Danis Industries Corp. v.
    Ground Improvement Techniques, Inc., 
    645 So. 2d 420
    ,
    421–22 (Fla. 1994):
    [A]ny offer of settlement shall be construed to
    include all damages, attorney fees, taxable
    costs, and prejudgment interest which would
    be included in a final judgment if the final
    judgment was entered on the date of the offer
    of settlement.
    
    Id. at 421
    –22. We reaffirmed this principle in our recent
    decision in Scottsdale Insurance. Co. v. DeSalvo, 
    748 So. 2d 941
    , 944 n.3 (Fla. 1999), where we explained that the
    plaintiff’s “recovery” must be added to its “attorney fees,
    costs, and prejudgment interest” accrued up to the date
    of the “offer” to determine the total “judgment.” It is this
    judgment to which the offer must be compared in
    determining whether to award fees and costs. 
    Id.
    In summary, we conclude that the “judgment
    obtained” pursuant to section 768.79 includes the net
    judgment for damages and any attorneys’ fees and
    taxable costs that could have been included in a final
    judgment if such final judgment was entered on the date
    of the offer. Thus, in calculating the “judgment obtained”
    for purposes of determining whether the party who made
    the offer is entitled to attorneys’ fees, the court must
    determine the total net judgment, which includes the
    plaintiff’s taxable costs up to the date of the offer and,
    where applicable, the plaintiff’s attorneys’ fees up to the
    date of the offer.
    
    Id.
     (footnotes omitted).
    -7-
    Then, in State Farm Mutual Automobile Insurance Co. v.
    Nichols, 
    932 So. 2d 1067
    , 1074 (Fla. 2006), this Court reaffirmed
    the White formula, which we described as follows:
    In White v. Steak & Ale of Florida, Inc., 
    816 So. 2d 546
    (Fla. 2002), we held that the term “judgment” under the
    offer of judgment statute must be defined—as it is under
    section 627.428—to include not only the plaintiff’s
    damages award, but also any attorney’s fees, taxable
    costs, and prejudgment interest to which the plaintiff
    would have been entitled when the offer was made. 
    Id. at 551
    . “It is this judgment to which the offer must be
    compared in determining whether to award fees and
    costs” under both the offer of judgment statute and
    section 627.428. 
    Id.
     (citing DeSalvo, 
    748 So. 2d at 944 n.3
    ).
    Additionally, in Shands, 
    97 So. 3d at 213,
     this Court held that a
    trial court properly calculated the “judgment obtained” as including
    pre-offer prejudgment interest pursuant to the White formula.
    Following the formula that this Court first set forth in White,
    the district courts have consistently excluded amounts that were
    not present on the date of the offer, including damages for claims
    that had not yet been added. See Palmentere Bros. Cartage Serv. v.
    Copeland, 
    277 So. 3d 729
    , 733 (Fla. 1st DCA 2019) (“Because
    punitive damages were not part of the case on the date of the offer
    of settlement, the calculation of the ‘net judgment’ and ‘judgment
    -8-
    obtained’ required in section 768.79(6)(b), could not include the
    amount of the punitive damages verdict.”); R.J. Reynolds Tobacco
    Co. v. Lewis, 
    275 So. 3d 747
    , 749 (Fla. 5th DCA 2019) (explaining
    that “it is clear that under White, a court may only properly
    consider those costs that were already taxable on the date the PFS
    was filed,” and holding that the experts’ costs were not taxable
    because they had not been deposed and did not testify); Diecidue v.
    Lewis, 
    223 So. 3d 1015
    , 1017 n.2 (Fla. 2d DCA 2017) (“The majority
    of this cost award was not considered when calculating the
    necessary twenty-five percent margin in section 768.79(1) because
    the costs were not incurred on [the date of the offer].”); UCF
    Athletics Ass’n v. Plancher, 
    121 So. 3d 616
    , 618-19 (Fla. 5th DCA
    2013) (explaining that “[f]or the purpose of the offer of judgment
    statute, the judgment obtained includes the net judgment for
    damages and any attorney’s fees and taxable costs that could have
    been included in a final judgment if such final judgment was
    entered on the day of the offer,” and reversing the award of
    attorneys’ fees because “[h]ad the trial court properly ruled [on the
    issue of sovereign immunity], on the day the offer was made, the
    most Appellee would have been entitled to recover from UCFAA was
    -9-
    $200,000, an amount much less than the offer Appellee made to
    settle the case”); Nilo v. Fugate, 
    30 So. 3d 623
    , 625 (Fla. 1st DCA
    2010) (“Only those costs incurred pre-demand may be considered in
    determining whether the total judgment meets the statutory
    threshold.”); Segundo v. Reid, 
    20 So. 3d 933
    , 938 (Fla. 3d DCA
    2009) (“[T]o require the defendant to pay attorney’s fees as a
    sanction for ‘unreasonably’ rejecting the plaintiff’s proposal for
    settlement would penalize the defendant for damages not pled nor
    proven until after the proposal for settlement was rejected and
    permit the plaintiff to benefit from the changing nature of his claim
    after the proposal for settlement expired.”); Segui v. Margill, 
    864 So. 2d 518
    , 518 (Fla. 5th DCA 2004) (“[White] do[es] not support the
    award of attorney’s fees in the instant case because no attorney’s
    fees had accrued as of the date of the offer of settlement.”); Amador
    v. Walker, 
    862 So. 2d 729
    , 731 (Fla. 5th DCA 2003) (rejecting the
    argument that “[t]he lesson and holding of White is that all taxable
    costs, pre-offer and post-offer, are to be included in determining the
    ‘judgment obtained’ ”).
    In fact, as Petri notes, CCM does not cite a decision after White
    that stands for the proposition that post-offer prejudgment interest
    - 10 -
    is included in the “judgment obtained.” Even the two decisions with
    which the Fourth District certified conflict are pre-White decisions.
    See Petri, 271 So. 3d at 1007 (certifying conflict with Perez, which
    was decided by the Third District in 1998, and Phillips, which was
    decided by the First District in 1991). Moreover, as Petri argued
    during oral argument, the White formula appears somewhat
    uniquely clear and consistently applied in Florida’s related
    jurisprudence.
    When considering the text of section 768.79 as a whole and in
    context, we cannot conclude that this Court’s precedent setting
    forth the White formula is “clearly erroneous.” Poole, 297 So. 3d at
    507. We simply do not have a definite and firm conviction that this
    Court’s prior interpretation of the offer of judgment statute and the
    terms “judgment,” “judgment obtained,” and “net judgment entered”
    is wrong. Cf. United States v. U.S. Gypsum Co., 
    333 U.S. 364
    , 395
    (1948) (“A finding [in an action tried without a jury] is ‘clearly
    erroneous’ when although there is evidence to support it, the
    reviewing court on the entire evidence is left with the definite and
    firm conviction that a mistake has been committed.”); Branch v.
    Sec’y, Fla. Dep’t of Corr., 
    638 F.3d 1353
    , 1356 (11th Cir. 2011) (“A
    - 11 -
    finding is clearly erroneous when we are left with the definite and
    firm conviction that it is wrong.”); Tropical Jewelers Inc. v. Bank of
    Am., N.A., 
    19 So. 3d 424
    , 426 (Fla. 3d DCA 2009) (same).
    CCM claims that the language of section 768.79(6) defining
    “judgment obtained” as the “net judgment entered,” means that all
    amounts awarded in any judgment in the case are to be used for
    comparison to the offer, including all prejudgment interest, all
    costs, and all attorney’s fees. However, the term “net judgment
    entered” does not automatically include attorney’s fees, interest, or
    costs. Further, section 768.79(2) provides that “[t]he offer shall be
    construed as including all damages which may be awarded in a
    final judgment.” Attorney’s fees and costs are not damages. See
    First Specialty Ins. Co. v. Caliber One Indem. Co., 
    988 So. 2d 708
    ,
    714 (Fla. 2d DCA 2008); Golub v. Golub, 
    336 So. 2d 693
    , 694 (Fla.
    2d DCA 1976). It was only by interpreting the phrase “net
    judgment entered,” which is not defined in the statute, that this
    Court determined that pre-offer attorneys’ fees, pre-offer costs, and
    pre-offer prejudgment interest should be included in the “judgment
    obtained.”
    - 12 -
    Accordingly, because we cannot conclude that this Court’s
    prior interpretation of section 768.79 is clearly erroneous, we
    decline to recede from the formula this Court set forth in White.
    See Poole, 297 So. 3d at 507.
    III. CONCLUSION
    Based upon this Court’s precedent from which we decline to
    recede, we hold that post-offer prejudgment interest is excluded
    from the “judgment obtained” that is compared to a rejected
    settlement offer when determining entitlement to attorneys’ fees
    under section 768.79. Accordingly, we answer the certified
    question in the affirmative, approve the Fourth District’s decision in
    Petri, and disapprove the Third District’s decision in Perez and the
    First District’s decision in Phillips to the extent they are
    inconsistent with this decision.
    It is so ordered.
    LABARGA, MUÑIZ, COURIEL, and GROSSHANS, JJ., concur.
    CANADY, C.J., dissents with an opinion, in which LAWSON, J.,
    concurs.
    NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION
    AND, IF FILED, DETERMINED.
    - 13 -
    CANADY, C.J., dissenting.
    The majority rest its decision on the conclusion that the
    question presented is settled by our precedents and there is not an
    adequate basis for disturbing those precedents. But as the Fourth
    District correctly acknowledged, this Court “has never squarely
    addressed [the] issue” presented for decision here. Petri Positive
    Pest Control, Inc. v. CCM Condo. Ass’n, 
    271 So. 3d 1001
    , 1002 (Fla.
    4th DCA 2019). Because we have no applicable precedent and the
    result reached by the majority is detached from the text of the
    statute, I dissent. I would conclude that post-offer prejudgment
    interest must be included in calculating the “judgment obtained”
    under section 768.79, answer the certified question in the negative,
    and quash the decision on review.
    “Not all text within a judicial decision serves as precedent.
    That’s a role generally reserved only for holdings: the parts of a
    decision that focus on the legal questions actually presented to and
    decided by the court.” Bryan A. Garner et al., The Law of Judicial
    Precedent 44 (2016). “A decision’s authority as precedent is limited
    to the points of law raised by the record, considered by the court,
    and determined by the outcome. The assumptions a court uses to
    - 14 -
    reach a particular result do not themselves create a new precedent
    or strengthen existing precedent.” 
    Id. at 84
    .
    Here, the primary authority on which the majority relies, White
    v. Steak & Ale of Florida, Inc., 
    816 So. 2d 546
     (Fla. 2002), stated
    that the “question presented” was “whether a prevailing party’s pre-
    offer taxable costs are included for purposes of calculating the
    ‘judgment obtained.’ ” 
    Id. at 549
     (emphasis added). The framing of
    the issue by the petitioner and the Court in White left aside the
    issue of post-offer taxable costs. So the Court had no occasion to
    decide whether post-offer taxable costs—much less post-offer
    prejudgment interest—should be included in the calculation of the
    amount of the judgment obtained. Of course, in White any
    argument over post-offer costs would have been meaningless, since
    the 25%-of-offer threshold was crossed once pre-offer costs were
    included in the calculation of the judgment obtained. In White, the
    holding of the Court turned on its rejection of decisions that had
    excluded all costs from the calculation of the judgment obtained.
    
    Id. at 550
    . The Court reasoned that costs were properly considered
    in “determining the judgment threshold because a prevailing party
    - 15 -
    is entitled to a judgment for taxable costs.” 
    Id.
     That resolved the
    issue presented to the Court for decision in White.
    What White went on to say about costs, fees and interest “to
    which the party would be entitled if the trial court entered the
    judgment at the time of the offer or demand,” 
    id.,
     was not necessary
    to decide the issue presented. See 
    id. at 550-51
    . Indeed, the issue
    presented effectively assumed at least that post-offer costs would
    not be included in the calculation of the judgment obtained. But
    such an assumption that is not necessary to the resolution of the
    issue actually presented is not transformed into a holding even if
    the court adopts the assumption.
    The majority’s reliance on Shands Teaching Hospital & Clinics,
    Inc. v. Mercury Insurance Co. of Florida, 
    97 So. 3d 204
     (Fla. 2012), is
    similarly misplaced. There is no indication in the Shands opinion
    that any argument was presented to the Court regarding post-offer
    costs and post-offer prejudgment interest. In any event, the award
    of fees sought under section 768.79 was defeated without any need
    to consider post-offer costs or post-offer prejudgment interest. See
    
    id. at 214
    . So—just as in White—that issue was irrelevant to the
    disposition of the section 768.79 issue in the case.
    - 16 -
    In State Farm Mutual Automobile Insurance Co. v. Nichols, 
    932 So. 2d 1067
    , 1074 (Fla. 2006), the Court did refer to the pre-offer
    language of White in providing background, but the reference had
    no bearing on the issues actually presented and decided. Nichols
    held “that the offer of judgment statute applies to PIP suits” but
    that the offer at issue was invalid because it “was too ambiguous.”
    
    Id. at 1080
    . Given the invalidity of the offer, there was no need for
    the Court to consider the question presented in this case or any
    other question concerning the calculation of the judgment obtained.
    Nichols by no means established or reaffirmed any precedent
    relevant to the issue in this case.
    A fair reading of the text of the statute cannot support the
    interpretation articulated in the statements from White relied on by
    the majority. As the Fourth District explains, the authorities cited
    in White to support its discussion that is relevant to post-offer fees,
    costs and interest are cases interpreting a different statute, section
    627.428, Florida Statutes, which provides for the award of
    prevailing party fees to an insured in litigation against an insurer.
    That statute is structured in an entirely different manner than
    section 768.79. There is no relevant textual similarity and thus no
    - 17 -
    basis for applying the interpretation of one statute to the other
    statute. The pertinent statements from White thus are of very
    dubious provenance. In issuing those statements, the White
    opinion simply did not engage the relevant provisions of section
    768.79.
    There is no path from the statutory language of section
    768.79—“net judgment entered”—to the meaning adopted by the
    majority—a hypothetical judgment equivalent to “what would be
    included in judgments if the judgments were entered on the date of
    the settlement offers.” Majority op. at 6. The legislature certainly
    could have enacted a statute with such a meaning. Indeed, the
    legislature has enacted a statute containing a very similar
    provision. Section 45.061, Florida Statutes (2020), which applies to
    offers of settlement for causes of action that accrued on or before
    the effective date of the statute in 1990, contains a provision
    defining “the amount of the judgment” as “the total amount of
    money damages awarded plus the amount of costs and expenses
    reasonably incurred by the plaintiff or counter-plaintiff prior to the
    making of the offer.” § 45.061(2)(b), Fla. Stat. So the legislature
    certainly knows how to clearly exclude post-offer costs and
    - 18 -
    expenses from the definition of the amount of judgment used to
    determine whether an award is to be made under an offer of
    judgment statute.
    In previously rejecting particular statutory interpretations, “we
    have pointed to language in other statutes to show that the
    Legislature ‘knows how to’ accomplish what it has omitted in the
    statute in question.” Cason v. Fla. Dep’t of Mgmt. Servs., 
    944 So. 2d 306
    , 315 (Fla. 2006). “[W]here the legislature has inserted a
    provision in only one of two statutes that deal with closely related
    subject matter, it is reasonable to infer that the failure to include
    that provision in the other statute was deliberate rather than
    inadvertent.” Olmstead v. F.T.C., 
    44 So. 3d 76
    , 82 (Fla. 2010)
    (alteration in original) (quoting 2B Norman J. Singer & J.D.
    Shambie Singer, Statutes and Statutory Construction § 51:2 (7th ed.
    2008)). The omission from section 768.79 of a provision similar to
    the pre-offer provision of section 45.061 strongly militates against
    the result reached by the majority.
    LAWSON, J., concurs.
    Application for Review of the Decision of the District Court of Appeal
    Certified Great Public Importance/Certified Direct Conflict of
    Decisions
    - 19 -
    Fourth District - Case No. 4D18-1290
    (Broward County)
    Steven J. Hammer and Zane Berg of Schlesinger Law Offices, P.A.,
    Fort Lauderdale, Florida; Shea T. Moxon, Celene H. Humphries, and
    Joseph T. Eagleton of Brannock, Humphries & Berman, Tampa,
    Florida; and Thomas P. Angelo and James W. Carpenter of Angelo &
    Banta, P.A., Fort Lauderdale, Florida,
    for Petitioners
    Mark D. Tinker, Tampa, Florida, and Sanaz Alempour of Cole, Scott
    & Kissane, P.A., Fort Lauderdale, Florida,
    for Respondents
    - 20 -