Palmentere Bros. Cartage Service, Inc. v. Heather Copeland and Phillip Copeland, her husband ( 2019 )


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  •           FIRST DISTRICT COURT OF APPEAL
    STATE OF FLORIDA
    _____________________________
    No. 1D17-2330
    _____________________________
    PALMENTERE BROS. CARTAGE
    SERVICE, INC., RANDY JONES,
    and CHEROKEE INSURANCE
    COMPANY,
    Appellants,
    v.
    HEATHER COPELAND and
    PHILLIP COPELAND, her
    husband,
    Appellees.
    _____________________________
    On appeal from the Circuit Court for Duval County.
    Thomas M. Beverly, Judge.
    July 29, 2019
    PER CURIAM.
    On September 21, 2010, a tractor-trailer truck owned by
    Palmentere Brothers Cartage Service, Inc., and operated by its
    employee, Randy Jones (“Appellants” or “PBCS”), collided with a
    vehicle being driven by Heather Copeland. Copeland successfully
    sued for damages. Appellants now raise five points urging reversal
    of the verdict and post-verdict rulings by the trial court. We affirm,
    except as to the order finding entitlement to section 768.79-based
    fees and expenses.
    I.
    Prior to trial, Copeland served PBCS with a proposal for
    settlement in the amount of $345,000 pursuant to section 768.79,
    Florida Statutes (2010), and Florida Rule of Civil Procedure 1.442.
    In paragraph 2, the proposal stated:
    This proposal is attempting to resolve Plaintiff’s claim
    against Defendant PALMENTERE BROS. CARTAGE
    SERVICE, INC. and, if accepted, resolves all damages
    that would otherwise be awarded in a final judgment in
    the action as to PALMENTERE BROS. CARTAGE
    SERVICE, INC. only.
    Two additional documents were served with the proposal—one
    entitled “Release of Claims” and the other, “Voluntary Dismissal
    with Prejudice.” In paragraph 3 of the proposal, Copeland
    promised that in exchange for the above payment, she would
    execute the “Release of Claims” against PBCS, and file the
    “Voluntary Dismissal with Prejudice” as to all claims against
    PBCS. Then, in paragraph 5, the proposal stated: “There are no
    claims for punitive damages in the case and none of the proposed
    settlement amount is for punitive damages.” The “Release of
    Claims” provided that Copeland “releases and forever discharges
    [PBCS], from all claims and causes of action which [Copeland] ever
    had or now has against [PBCS], arising out of the accident of which
    is the subject of the above styled case.” In its turn, the “Voluntary
    Dismissal with Prejudice” stated: “[T]he above-styled cause is
    dismissed, with prejudice as to only [PBCS].”
    PBCS rejected the proposal and successfully moved for a
    continuance of the approaching trial. In the interim, Copeland
    filed a Fourth Amended Complaint that asserted, for the first time,
    a claim for punitive damages against PBCS. The jury returned a
    verdict awarding Heather Copeland $400,000 in compensatory
    damages—reduced by ten percent based on comparative fault—but
    zero damages in favor of her husband, Phillip Copeland, on his loss
    of consortium claim. Additionally, the jury found PBCS
    individually liable for $1 million in punitive damages.
    Post-verdict, Copeland filed her “Motion for Taxation of
    Attorney’s Fees and Investigation Expenses” predicated on the
    2
    unaccepted proposal for settlement. Two hearings were held on the
    motion during which the trial court heard lengthy legal argument
    as to whether PBCS “beat” the proposal for settlement because,
    given the reduction in the compensatory damages due to her ten
    percent comparative fault, Copeland only recovered $360,000—
    clearly not twenty-five percent more than the amount of the offer—
    and because Copeland had disclaimed punitive damages in her
    proposal—which disclaimer, according to PBCS, rendered the
    proposal for settlement ambiguous. The judge was not persuaded.
    In its ensuing order, the court announced that given the award of
    punitive damages, Copeland had recovered $1,360,000, an amount
    “significantly more tha[n] 25% greater than her proposal for
    settlement of $345,000.” Accordingly, it found Copeland was
    entitled to recover her attorney’s fees and investigative costs
    pursuant to section 768.79(1) and (6)(b), Florida Statutes.
    II.
    Appellants’ first point on appeal challenges the trial court’s
    order granting Copeland’s entitlement to fees and costs pursuant
    to the rejected proposal for settlement. Appellants assert that the
    proposal was unenforceable because it was ambiguous and not
    made in good faith, as evidenced by its statement that no punitive
    damages were being claimed. Appellants argue they were denied a
    fair opportunity to ponder the potential impact of punitive
    damages to their case in evaluating whether to accept the proposal,
    when the proposal expressly advised that no punitive damages
    were being claimed, yet on the heels of their rejection of the
    proposal, Appellants amended their complaint to add a claim for
    punitive damages. Essentially, Appellants have cried “foul” on
    what they believe to be an improper end run around the rules
    governing proposals for settlement.
    Section 768.79(2), Florida Statutes, provides the substantive
    law concerning proposals for settlement and states in relevant part
    that an “offer [of settlement] must . . . (c) State with particularity
    the amount offered to settle a claim for punitive damages, if any
    [and] (d) State its total amount.” Subsection (2) further provides
    that “[t]he offer shall be construed as including all damages which
    may be awarded in a final judgment,” and goes on to state in
    subsection (6)(b): “If a plaintiff serves an offer which is not
    3
    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 expenses, and attorney’s fees . . . .” Subsection (6)
    continues: “For purposes of the determination required by
    paragraph (b), the term ‘judgment obtained’ means the amount of
    the net judgment entered, plus any post-offer settlement amounts
    by which the verdict was reduced.” Section 768.79 “creates an
    entitlement to attorneys’ fees when the statutory and procedural
    requirements have been satisfied,” and “[t]he mandatory language
    of section 768.79 reinforces the notion that a proper offer
    automatically creates that entitlement, unless the offer is made in
    bad faith.” Anderson v. Hilton Hotels Corp., 
    202 So. 3d 846
    , 856
    (Fla. 2016).
    We accord proposals for settlement de novo review. Starboard
    Cruise Servs., Inc. v. DePrince, 
    259 So. 3d 295
    , 298 (Fla. 3d DCA
    2018). Florida Rule of Civil Procedure 1.442, entitled “Proposals
    for Settlement,” provides the procedural mechanism for section
    768.79. Paragraph (h)(1) of the rule declares: “If a party is entitled
    to costs and fees pursuant to applicable Florida law, the court may,
    in its discretion, determine that a proposal was not made in good
    faith. In such case, the court may disallow an award of costs and
    attorneys’ fees.” Rule 1.442 “requires that the settlement proposal
    be sufficiently clear and definite to allow the offeree to make an
    informed decision without needing clarification.” State Farm Mut.
    Auto. Ins. Co. v. Nichols, 
    932 So. 2d 1067
    , 1079 (Fla. 2006). “When
    construing the language of section 768.79 and rule 1.442, the law
    is clear: both provisions must be strictly construed because they
    are in derogation of the common law rule that each party is
    responsible for its own attorney’s fees.” 
    Id. (citing Campbell
    v.
    Goldman, 
    959 So. 2d 223
    , 226 (Fla. 2007)).
    Appellants cannot be sanctioned under section 768.79 and
    rule 1.442, based on the substantial punitive damages verdict
    here, because Copeland explicitly disclaimed punitive damages in
    her only settlement proposal. When Copeland made her section
    768.79-based offer of judgment for $345,000 in April 2014, she
    hadn’t yet added a punitive damages claim to her complaint. As to
    punitive damages, her settlement proposal stated: “There are no
    claims for punitive damages in the case and none of the proposed
    4
    settlement amount is for punitive damages.” Appellants then
    rejected the proposal.
    Three weeks after the statutory deadline for accepting the
    proposal passed, Copeland added a punitive damages claim
    against PBCS. The new complaint described all of the ways in
    which PBCS had “blindly and illegally hired and employed [the] . .
    . professional truck driver,” in “conscious and willful” disregard for
    the law and “reckless and willful disregard for the safety of the
    travelling public.” But after adding this claim, Copeland did not
    make a settlement offer that included punitive damages. See
    § 768.79(3), Fla. Stat. (allowing subsequent offers and requiring
    that they address punitive damages); Frosti v. Creel, 
    979 So. 2d 912
    (Fla. 2008) (involving a second proposal with a punitive
    damages-specific offer).
    Copeland’s post-verdict motion for section 768.79-based
    sanctions rested on having the court compare the $1,360,000 final
    judgment amount, inclusive of punitive damages, against her offer
    of judgment that disclaimed punitive damages. But this apples-to-
    oranges comparison of judgment amounts isn’t permitted because
    the offer came and went before punitive damages were part of the
    case. Appellants correctly argue that offers of judgment must be
    evaluated as of the time of the offer: “[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.” White v. Steak & Ale of Fla., Inc., 
    816 So. 2d 546
    ,
    550-51 (Fla. 2002) (emphasis added) (quoting Danis Industries
    Corp. v. Ground Improvement Techniques, Inc., 
    645 So. 2d 420
    ,
    421-22 (Fla. 1994)); see also § 768.79(2), Fla. Stat. (“The offer shall
    be construed as including all damages which may be awarded in a
    final judgment.”). 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 obtained” required in section
    768.79(6)(b), could not include the amount of the punitive damages
    verdict. 
    Id. at 551
    (“[T]he ‘judgment obtained’ . . . includes the net
    judgment for damages . . . that could have been included in a final
    judgment if such final judgment was entered on the date of the
    offer.”).
    5
    Other cases addressing section 768.79-based sanctions
    support this conclusion. Sarkis v. Allstate Ins. Co., 
    863 So. 2d 210
    ,
    222 (Fla. 2003) (recognizing that attorney’s fees authorized by
    section 768.79 are a sanction “for the refusal to accept what is
    presumed to be a reasonable offer [and] for unnecessarily
    continuing the litigation”). Because section 768.79 involves a
    sanction, settlement proposals must be “as specific as possible,
    leaving no ambiguities so that the recipient can fully evaluate its
    terms and conditions.” 
    Nichols, 932 So. 2d at 1079
    . According to
    Nichols, if an ambiguity could reasonably affect the offeree’s
    decision on whether to accept the proposal for settlement, then the
    offer is invalid. 
    Id. For offers
    to qualify under the statute, they
    must “[s]tate with particularity the amount offered to settle a
    claim for punitive damages, if any.” § 768.79(2)(c), Fla. Stat. For
    Copeland’s case, this meant that she could not both direct
    Appellants away from evaluating punitive damages by disclaiming
    them in her settlement offer, and also have Appellants sanctioned
    based upon her recovery of punitive damages.
    In Kuhajda v. Borden Dairy Co. of Alabama, LLC, 
    202 So. 3d 391
    (Fla. 2016), a party didn’t address attorney’s fees in an offer of
    judgment as required by rule 1.442. The court nevertheless
    allowed a section 768.79-based recovery “because Kuhajda never
    sought attorney’s fees in her complaint.” 
    Id. at 396.
    See also 
    id. (noting that
    “[i]t would make no sense to require a defendant to
    state in its offer of judgment that the offer does not include
    attorney’s fees, when plaintiff . . . could not recover them because
    of failure to plead”) (quoting Bennett v. Am. Learning Sys. of Boca
    Delray, Inc., 
    857 So. 2d 986
    , 988-89 (Fla. 4th DCA 2003)). The
    analysis in Kuhajda implies that the Court wouldn’t have allowed
    a section 768.79-based recovery had the offeror both failed to
    address attorney’s fees in her offer and sought to recover them.
    Here, unlike Kuhajda, it isn’t true that Copeland “never sought”
    punitive damages, or that she “could not recover them”; indeed,
    Copeland both sought and recovered punitive damages. Because
    section 768.79(2)(c) requires parties to “state with particularity the
    amount offered to settle a claim for punitive damages,” Copeland
    could not both disclaim them in her only settlement offer, then
    seek them and have Appellants sanctioned based upon them. See
    R.J. Reynolds Tobacco v. Ward, 
    141 So. 3d 236
    , 237 (Fla. 1st DCA
    2014) (reversing a section 768.79 award because the offers of
    6
    judgment did not “state with particularity the amount offered to
    settle a claim for punitive damages”); cf. Segundo v. Reid, 
    20 So. 3d
    933, 938 (Fla. 3d DCA 2009) (denying section 768.79 fees and
    costs because the plaintiff’s offer would have penalized the
    defendant for damages not pled until after the offer was rejected).
    Finally, we don’t read Frosti v. Creel, relied on by Copeland,
    to contribute significantly to the analysis. 
    979 So. 2d 912
    . In that
    case, Ms. Frosti served two valid settlement proposals of about
    $18,000 and $24,000. 
    Id. at 914.
    At least one of these offers
    included an amount for punitive damages (the facts aren’t clear
    about the other offer). 
    Id. After the
    jury rendered a total verdict of
    $94,471.66, $20,670.66 in compensatory damages and $73,800 in
    punitive damages, the defendant argued. among other things, that
    the punitive damages amount shouldn’t be part of the calculation
    for purposes of determining section 768.79 sanctions. 
    Id. at 916-
    17. But the court upheld Ms. Frosti’s award of section 768.79-based
    fees and costs because her motion was “predicated upon a valid,
    rejected proposal for settlement.” 
    Id. at 917.
    Here, unlike in Frosti,
    there was never a valid, rejected offer that included punitive
    damages; Copeland’s only proposal stated that “none of the
    proposed settlement amount is for punitive damages.” Under these
    different circumstances, where no punitive damages offer was ever
    made, the punitive damages verdict amount could not be included
    in the trial court’s calculation of the “judgment obtained.”
    III.
    For these reasons, the judgment is AFFIRMED in part,
    REVERSED in part, and REMANDED for additional proceedings
    consistent with this opinion.
    WOLF and OSTERHAUS, JJ., concur; JAY, J., concurs and dissents
    in part with opinion.
    7
    _____________________________
    Not final until disposition of any timely and
    authorized motion under Fla. R. App. P. 9.330 or
    9.331.
    _____________________________
    JAY, J., concurring in part, dissenting in part.
    If we were painting on a blank canvas, the majority opinion
    would have merit. However, the Florida Supreme Court’s decision
    in Frosti v. Creel controls the resolution of the proposal of
    settlement issue. Accordingly, I respectfully dissent.
    In Frosti, the plaintiff filed a complaint against the defendant
    seeking damages from an automobile accident. A year later, the
    plaintiff served a proposal for settlement in the amount of $17,999.
    Three years after that, she served a second proposal specifying
    “that $1 was demanded to settle the punitive damages claim and
    that the $1 punitive damage offer was contingent upon acceptance
    of the total offer of $24,999 to settle all claims.” 
    Id. at 914.
    Neither
    proposal was accepted and, following trial, the jury returned a
    verdict in favor of the plaintiff—awarding $20,670.66 in
    compensatory damages and $73,800 in punitive damages—for a
    total verdict of $94,470.66. Following entry of the verdict, the
    plaintiff filed both proposals for settlement in the trial court, and
    then filed a motion for judgment in accordance with the verdict
    and a motion for attorney’s fees and costs. Ultimately, the trial
    court denied the plaintiff’s motion for fees, accepting the
    defendant’s argument that the proposals of settlement and the
    motion for fees were filed prematurely. 
    Id. at 915.
    After rejecting the prematurity argument, the Florida
    Supreme Court addressed the defendant’s second argument, that
    the plaintiff did not obtain a judgment sufficiently large to merit
    an award of fees and costs because the portion of her judgment
    attributable to compensatory damages was not “twenty-five
    percent greater than either of her offers to settle the compensatory
    damages claim.” 
    Id. (emphasis added).
    The supreme court rejected
    this argument. 
    Id. 8 Emphasizing
    the well-established rule that “a party’s
    entitlement to fees turns on the total judgment obtained,” 
    id., and because
    the total award “far exceed[ed]” one hundred twenty-five
    percent “of the amount offered in either” of the plaintiff’s proposals
    for settlement, 
    id. at 917,
    the supreme court held that the plaintiff
    had satisfied the statutory requirement and was entitled to
    attorney’s fees and costs. Significantly, the supreme court made no
    distinction between the first proposal for settlement—which did
    not seek punitive damages—and the second proposal—which
    sought a nominal amount of punitive damages. Either proposal
    was adequate to entitle the plaintiff to fees and costs.
    Because Frosti controls the disposition of the section 768.79
    question, Copeland was entitled to recover her attorney’s fees and
    costs pursuant to her proposal of settlement. Therefore, I would
    affirm the trial court’s order finding entitlement to section 768.79
    fees.
    _____________________________
    E. T. Fernandez, III and Austin Brown of Fernandez Trial
    Lawyers, P.A., Jacksonville, for Appellants.
    Kansas R. Gooden of Boyd & Jenerette, PA, Jacksonville; Robert
    M. Klein and Andrew M. Feldman of Klein Glasser Park & Lowe,
    P.L., Miami, for Florida Defense Lawyers Association, Amicus
    Curiae in support of Appellants Palmentere Bros. Cartage Service,
    Inc. and Cherokee Insurance Company.
    Benjamin E. Richard, Curry Gary Pajcic, and William A. Bald of
    Pajcic & Pajcic, P.A., Jacksonville, for Appellee Heather Copeland.
    Philip M. Burlington and Adam Richardson of Burlington &
    Rockenbach, P.A., West Palm Beach, for Florida Justice
    Association, Amicus Curiae in support of Appellees Heather
    Copeland and Phillip Copeland.
    9