Starboard Cruise Services v. Deprince

Third District Court of Appeal
State of Florida
Opinion filed November 21, 2018.
Not final until disposition of timely filed motion for rehearing.
________________
No. 3D16-2009
Lower Tribunal No. 13-16523
________________
Starboard Cruise Services, Inc.,
Appellant,
vs.
Thomas DePrince,
Appellee.
An Appeal from the Circuit Court for Miami-Dade County, Michael A.
Hanzman, Judge.
Isicoff, Ragatz & Koenigsberg, and Eric D. Isicoff and Carolina A. Latour,
for appellant.
McDonald Hopkins, LLC, and Mario M. Ruiz and Joelle H. Dvir, for
appellee.
Before ROTHENBERG, C.J., and SALTER and LUCK, JJ.
ROTHENBERG, C.J.
INTRODUCTION
The defendant below, Starboard Cruise Services, Inc. (“Starboard”), appeals
from the trial court’s July 29, 2016 order denying its motion for attorney’s fees,
which was based on Starboard’s proposal for settlement filed pursuant to section
768.79, Florida Statutes (2015), as implemented by rule 1.442, Florida Rules of
Civil Procedure (2015). Because Starboard’s offer to settle was conditioned on the
plaintiff, Thomas DePrince (“DePrince”), releasing all claims asserted and
dismissal with prejudice of all counts of the amended complaint, and DePrince’s
amended complaint contained both claims for monetary damages and equitable
relief, the offer was not valid. Accordingly, we affirm the trial court’s order
denying Starboard’s motion for attorney’s fees.
BACKGROUND
Starboard operates retail concessions on cruise liners. On February 11,
2013, DePrince was a passenger onboard a cruise ship where Starboard operated a
jewelry boutique. While on the ship, DePrince visited the shipboard jewelry
boutique and requested a quote for a 15 to 20 carat loose diamond. Because the
jewelry store did not keep such large diamonds in stock, the store manager
contacted its corporate office to request information regarding pricing and the
availability of such a large diamond. The corporate office reached out to its
diamond vendor, who responded via email and provided pricing for two diamonds:
2
(1) a 20.64 carat diamond which it priced at $235,000; and (2) a 20.73 carat
diamond which it priced at $245,000.
DePrince’s sister, a certified gemologist, warned DePrince that “something
[was] not right” because a diamond of that size should be priced “in the millions.”
DePrince, however, agreed to purchase the 20.64 carat diamond, and paid for the
diamond with a credit card. When Starboard submitted the order, the vendor
clarified that its $235,000 quote was per carat, for a total of $4,850,400. Starboard
immediately notified DePrince of the mistake and reversed the charge on his credit
card. Shortly thereafter, DePrince filed the instant lawsuit against Starboard.
The amended complaint included the following counts: count I: specific
performance, count II: breach of contract, and count III: conversion. In October
2015, Starboard served DePrince with a proposal for settlement pursuant to section
768.79 and rule 1.442, offering to settle counts II and III for $75,000. However,
the proposal required a release and dismissal with prejudice as to all of DePrince’s
claims. Specifically, the proposal provided, in relevant part, as follows:
2. This proposal for settlement is to resolve all claims for damages
that were asserted by DePrince against Starboard in this action,
specifically, Counts II and III of the Amended Complaint.
3. There are no relevant conditions to this offer other than: (a)
formal acceptance within the time period required by law; (b)
the execution by DePrince of a release of the claims asserted
by DePrince against Starboard in this action, in the form
attached hereto as Exhibit “A”[;] and (c) execution and filing by
DePrince of a notice of voluntary dismissal with prejudice of
3
all counts of the Amended Complaint, with DePrince and
Starboard each to bear its own attorneys’ fees and costs.
4. Starboard proposes to settle Counts II and III in exchange for a
payment by Starboard to DePrince in the amount of
SEVENTY-FIVE THOUSAND DOLLARS AND NO CENTS
(U.S. $75,000).
(emphasis added).
DePrince never responded to the proposal for settlement. Shortly before
trial, DePrince voluntarily dismissed his claims for specific performance and
conversion, leaving only his breach of contract claim. The case proceeded to trial
and the jury returned a verdict in Starboard’s favor. Thereafter, as the prevailing
party, Starboard filed a motion for attorney’s fees pursuant to section 768.79.
The trial court denied Starboard’s motion and issued a very detailed order.
Specifically, the trial court concluded that: (1) Starboard’s proposal for settlement
was unambiguous; (2) the acceptance of the proposal was conditioned on DePrince
signing a release of all claims asserted in the lawsuit and dismissing all claims
(monetary and nonmonetary) with prejudice; and (3) thus, the proposal was invalid
under Diamond Aircraft Industries, Inc. v. Horowitch, 107 So. 3d 362 (Fla. 2013).
We agree with the trial court’s findings and, therefore, we affirm.
STANDARD OF REVIEW
Our standard of review is de novo because: (1) when determining
entitlement to fees based on the interpretation of a statute, the standard of review is
4
de novo, see Allstate Ins. Co. v. Regar, 942 So. 2d 969, 971 (Fla 2d DCA 2006);
and (2) the standard of review for proposals for settlement is also de novo. See
Jamieson v. Kurland, 819 So. 2d 267, 268 (Fla. 2d DCA 2002).
ANALYSIS
I. Starboard’s Offer Was Unambiguous
DePrince’s amended complaint asserted claims for specific performance,
breach of contract, and conversion. Although Starboard’s proposal for settlement
offered to settle only the breach of contract and conversion claims for $75,000, the
offer was contingent upon DePrince executing a release and dismissing with
prejudice all of his claims. The trial court found that:
The offer proposed that DePrince would be paid $75,000 in
satisfaction of his damage claims. In exchange[,] DePrince would
release – and dismiss with prejudice – all claims asserted in the case.
There were no conflicting terms; the proposal clearly articulated the
claims that would be settled and the claims which would have to be
released; it specified the precise amount to be paid; and it identified
the proposed releaser and releasee. It was as simple and unambiguous
as a proposal for settlement could possibly be.
The trial court, therefore, found that the offer of settlement was unambiguous and
“capable of implementation without the need for any clarification.” We agree.
II. Section 768.79 and Rule 1.442 Must Be Strictly Construed
Section 768.79 creates a substantive right to attorney’s fees when, among
other things, a plaintiff refuses to accept an offer of judgment from the defendant,
and the resulting judgment is either one of no liability, MYD Marine Distrib., Inc.
5
v. Int’l Paint Ltd., 187 So. 3d 1285, 1286 (Fla. 4th DCA 2016), or if the judgment
obtained by the plaintiff is at least twenty-five percent less than the amount of the
offer. § 768.79. Rule 1.442 provides the procedural mechanism for application of
section 768.79. Saenz v. Campos, 967 So. 2d 1114, 1116 (Fla. 4th DCA 2007).
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.
Campbell v. Goldman, 959 So. 2d 223, 226 (Fla. 2007).
Section 768.79 provides that offers of judgment apply only to “any civil
action for damages.” Courts have consistently interpreted this phrase as being
applicable to a claim in a civil action in which a party seeks only money damages.
See Winter Park Imports, Inc. v. JM Family Enters., 66 So. 3d 336, 340 (Fla. 5th
DCA 2011); Beyel Bros. Crane & Rigging Co. of S. Fla., Inc. v. Ace Transp., Inc.,
664 So. 2d 62, 64-65 (Fla. 4th DCA 1995).
Although the Fifth District Court of Appeal in Winter Park held that strict
construction of the phrase “in any action for damages” cannot include claims for
equitable relief or claims that seek both monetary and nonmonetary relief, id. at
338-42, it left the door open for offers of judgment (proposals for settlement)1 that
only offer to settle the monetary claims. Specifically, the Fifth District stated that
1 The terms “proposal for settlement” and “offers of judgment” are used
interchangeably, however section 768.79 uses the term “offers of judgment.”
6
it was not willing to conclude that “an offer (or demand) for judgment can never
be utilized when a party has included separate claims for monetary and
nonmonetary relief in the same pleading, and the offer (or demand) is directed only
to the monetary claim.” Id. at 341 (emphasis added). However, citing Palm Beach
Polo Holdings, Inc. v. Equestrian Club Estates Property Owners Ass’n, 22 So. 3d
140 (Fla. 4th DCA 2009), the Fifth District found that “section 768.79 is
inapplicable where a party’s general offer of settlement is directed to a claim in
which both damages and non-monetary relief is sought.” Id. at 342.
III. Diamond Aircraft
After the Fifth District issued its opinion in Winter Park, the Florida
Supreme
Court decided Diamond Aircraft. In Diamond Aircraft, the plaintiff contracted to
purchase an airplane. Diamond Aircraft, 107 So. 3d at 365. A dispute arose and
the plaintiff filed an action for specific performance, breach of contract, breach of
the covenant of good faith and fair dealing, and deceptive trade practices under the
Florida Deceptive and Unfair Trade Practices Act (“FDUTPA”). Id. The action,
which was originally filed in state court, was subsequently removed to federal
court. Id. Thereafter, Diamond Aircraft served the plaintiff with an offer of
judgment in the amount of $40,000 “to resolve all claims that were or could have
been asserted by plaintiff against defendant” in exchange for a dismissal with
7
prejudice of all claims pending against Diamond Aircraft. Id. The offer was
rejected, and summary judgment was ultimately entered in favor of Diamond
Aircraft. Id. at 366. The remaining FDUTPA claim proceeded to trial and
Diamond Aircraft prevailed on that claim as well. Id.
As the prevailing party, Diamond Aircraft moved for attorney’s fees under
section 768.79. Id. at 365. The United States District Court denied the motion,
finding that section 768.79 was inapplicable because the plaintiff had asserted both
an equitable claim for nonmonetary relief (specific performance) and, in the
alternative, a claim for damages based on either breach of contract, breach of
implied covenants, or deceptive trade practices. Id. at 365. Diamond Aircraft
appealed to the Eleventh Circuit Court of Appeals. Id. at 364.
On appeal, the Eleventh Circuit examined Florida law with regard to
requests for attorney’s fees under FDUTPA and section 768.79. After concluding
that Florida law had not specifically addressed this issue, the court certified four
questions to the Florida Supreme Court. Id. The question certified which is at
issue here was:
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?
8
Answering both parts of the certified question in the negative, the Florida
Supreme Court found that section 768.79 does not apply to cases that seek both
equitable relief and damages, and that there exists no exception to the rule for
equitable claims that lack merit. Id. at 372. The Florida Supreme Court explained
that Florida courts have routinely held that the phrase in section 768.79 which
states “in any civil action for damages” is applicable to a claim in a civil action
where a party seeks only money damages. See e.g. Beyel Bros. Crane & Rigging
Co. of S. Fla. Ins. v. Ace Transp. Inc., 644 So. 2d 62, 64-65 (Fla. 4th DCA 1995);
Nelson v. Marine Grp. of Palm Beach, Inc., 677 So. 2d 998, 999 (Fla. 4th DCA
1996) (applying section 768.79 in a declaratory action where the only issue was
entitlement to money held in escrow).
Thus, the Florida Supreme Court concluded that section 768.79 does not
apply to an action in which a plaintiff seeks both damages and equitable relief, and
where the defendant has served a general offer of judgment that seeks the release
of all claims. Id. at 374.
IV. Application of Diamond Aircraft to Starboard’s Offer of Settlement
A. The Offer
Starboard insists that Diamond Aircraft does not apply here, because its
offer was not a general offer, as it was directed only to DePrince’s monetary
claims. We disagree. The trial court properly concluded that Starboard’s offer
9
was undeniably a general offer, as it required DePrince to release Starboard for all
of the claims that were asserted in the case, not just Starboard’s claims for breach
of contract and conversion, and to dismiss with prejudice all counts of the
amended complaint. In other words, the proposal for settlement was meant to
resolve all claims, no matter their nature, arising from the parties’ transaction.
Although the structure of the proposal directed payment to only counts II and III
(breach of contract and conversion), the proposal was conditioned upon a release
and dismissal of DePrince’s equitable claim seeking specific performance as well
as his damages claims. See e.g., Palm Beach Polo Holdings, 22 So. 3d at 144
(finding that offers of settlement that are directed to all claims [monetary and
nonmonetary] contained in the complaint are general in nature).
B. True Relief
Starboard contends that its proposal for settlement was enforceable and that
an award of attorney’s fees is appropriate because the “true relief” sought by
DePrince was monetary damages. Although we recognize that the “true relief” test
is a valid and viable consideration in some cases, the record in the instant case does
not support its application to the offer of judgment made by Starboard in this case.
The following are some examples where appellate courts have applied the
“true relief” doctrine. In DiPompeo Constr. Corp. v. Kimmel & Assocs., Inc., 916
So. 2d 17, 17-18 (Fla. 4th DCA 2005), the Fourth District Court of Appeal
10
examined the validity of the plaintiff’s offer of judgment in a case wherein the
plaintiff had filed a declaratory action seeking a determination that no contract
existed and thus, no money was owed to the defendant under the subject contract.
The Fourth District looked at the nature of the claim and concluded that the
“plaintiff’s claim was in actuality an action in damages because the real issue
before the court was whether the plaintiff owed money to the defendant,” id. at 18-
19, and thus the offer of judgment was valid. Id.
The Fourth District Court of Appeal reached the opposite result in National
Indemnity Co. v. Consolidated Insurance Services, 778 So. 2d 404 (Fla. 4th DCA
2001). The plaintiff in that case also filed an action for declaratory relief, however
in that case the plaintiff had requested that the trial court declare whether an
insurance policy was in full force and effect on the day that the underlying tort
occurred. Id. at 406. The Fourth District concluded that the trial court had
correctly found that the offer of judgment under section 768.79 in that case was not
valid because the action was not a civil action for damages as contemplated by
section 768.79. The Fourth District found that the “real issue” in that case was
whether there was insurance coverage. Id. at 408. No money damages or payment
of money had been requested, the claim was solely for equitable relief, and thus,
section 768.79 was not applicable. Id.
11
The Florida Supreme Court specifically addressed: DiPompeo and National
Indemnity in Diamond Aircraft, and noted, without disapproval, that the Fourth
District had looked at the nature of the claims asserted and determined what the
“real issue” was when deciding the applicability of section 768.79. Diamond
Aircraft, 107 So. 3d at 373. Armed with the apparent approval of the Florida
Supreme Court in Diamond Aircraft, the Fourth District again applied the “true
relief” test in MYD Marine Distributor v. International Paint Ltd., 187 So. 3d 1285
(Fla. 4th DCA 2016).
In MYD, the plaintiff, consisting of several MYD entities (“MYD”), filed
suit alleging that the defendants violated state antitrust laws by conspiring to oust
MYD as a distributer of yacht products. Id. at 1286. Specifically, the complaint
alleged several causes of action for conspiracy in restraint of trade and breach of
contract. As to the conspiracy counts, MYD sought damages, costs and fees, as
well as a permanent injunction. Id. The defendant ultimately obtained summary
judgment and moved for attorney’s fees pursuant to an offer of judgment and
section 768.79. The trial court granted the defendants’ motion because, in its view,
MYD never really pursued its injunctive relief claim, and instead litigated only its
money damages claim. Id. The Fourth District Court of Appeal affirmed because
MYD never pursued nonmonetary relief during the course of the litigation. Id.
12
In Tower Hill Signature Insurance Co. v. Javellana, 238 So. 3d 372 (Fla. 3d
DCA 2014), this Court also applied the true relief test and concluded that the
defendant, Tower Hill, was entitled to its fees pursuant to its offer of judgment,
even though the complaint contained counts for both damages and equitable relief.
Specifically Javellana’s complaint contained three counts: one count alleging
breach of contract and two counts seeking declaratory relief. However, this Court
determined that the “true relief” sought by the plaintiff was monetary damages and
thus Tower Hill’s offer of judgment was valid. Id. at 373. In that case, the
plaintiffs sustained water damage to their home and initiated a claim with Tower
Hill, their homeowner’s insurer. Id. After conducting an investigation and
inspection, Tower Hill tendered payment in an amount that it deemed was the
“actual cash value” of the loss. Id. The plaintiffs disagreed with the amount and
argued that the claim was grossly underpaid. Thereafter, they sued to recover
monetary damages under the insurance policy. Although the plaintiffs also sought
declaratory relief, this Court held that “the count for declaratory relief was
subsumed within the true relief sought in this case: whether Tower Hill breached
the policy by failing to pay actual cash value and if so, the amount of damages for
the breach.” Id. at 377. That was clearly not the case here.
MYD, DiPompeo, and Tower Hill are clearly distinguishable from the
instant case. In DiPompeo, the sole relief sought was in actuality a request for
13
monetary relief; in MYD, the proposal specifically stated that the offer of
judgment was directed solely to the plaintiffs’ claim for money damages; and in
Tower Hill, the count for declaratory relief was subsumed in the breach of contract
claim. However, in the instant case, although Starboard’s “proposal for
settlement” under section 768.79 initially stated that the proposal was to resolve all
claims for damages and specifically directed the proposal to counts II and III of the
amended complaint (claims for breach of contract and conversion), the proposal
also required DePrince to release all of the claims asserted by DePrince against
Starboard in this action and to dismiss with prejudice all counts of the amended
complaint. Additionally, the proposed release attached to the proposal for
settlement contained similar language requiring DePrince to “release and forever
discharge Starboard … of and from all claims that were asserted by [DePrince]
against [Starboard]” in the instant action, with prejudice as to counts I, II, and III.
As count I was DePrince’s claim for specific performance, the proposed release
clearly required DePrince to also release and discharge DePrince’s equitable claim
against Starboard as a condition of the proposal for settlement.
Additionally, the record does not reflect, as Starboard claims, that despite
DePrince’s nonmonetary equitable claim for specific performance, the “true relief”
being requested was for monetary damages. The record reflects that DePrince
actively litigated his claim for specific performance. Starboard sought and
14
obtained summary judgment of DePrince’s specific performance claim, arguing
that the diamond was not unique, Starboard did not have possession of the
diamond, and therefore it could not deliver the diamond to DePrince. This Court
reversed the summary judgment granted in Starboard’s favor based on: DePrince’s
argument that Starboard had possession of the diamond by way of its consignment
with its supplier; DePrince had submitted an unrebutted affidavit from his expert
gemologist averring that the gem was unique; and whether the diamond was in fact
unique was a factual issue not properly resolved on summary judgment. DePrince
v. Starboard Cruise Servs., Inc., 163 So. 3d 586, 598 (Fla. 3d DCA 2015). The
record also reflects that: (1) DePrince was ready, willing, and able to pay for the
quoted purchase price of the diamond; and (2) DePrince did not abandon his
specific performance claim until just before trial, which was well after the proposal
for settlement had been rejected by DePrince, and after DePrince had deposed
Starboard’s supplier, who testified, contrary to Starboard’s representations, that it
also never had possession of the diamond.
CONCLUSION
We conclude that Starboard’s proposal for settlement was unambiguous,
and the proposal was conditioned on DePrince releasing all of his claims asserted
in the lawsuit and dismissal of all of his claims with prejudice. Because DePrince
was seeking both monetary and nonmonetary relief, Starboard’s proposal for
15
settlement under section 768.79 was invalid. We, therefore, affirm the trial court’s
order denying Starboard’s motion for attorney’s fees based on its proposal for
settlement.
Affirmed.
16