Opinion
Case No. 2D10-3228 Case No. 2D10-3670
02-29-2012
RICHARD O. WOLFE, II, and H. MICHELLE WOLFE, Appellants/Cross-Appellees v. CULPEPPER CONSTRUCTORS, INC., Appellee/Cross-Appellant. CULPEPPER CONSTRUCTORS, INC., Appellant, v. RICHARD O. WOLFE, II, and H. MICHELLE WOLFE, Appellees.
Carol M. Rooney and Shannon Tan of Butler Pappas Weihmuller Katz Craig LLP, Tampa, for Appellants/Cross-Appellees. Brian F. Stayton and Daryl E. Dykeman of Stayton Law Group, P.A., Valrico, for Appellee/Cross-Appellant.
NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING
MOTION AND, IF FILED, DETERMINED
CONSOLIDATED
Appeals from the Circuit Court for Hillsborough County; William P. Levens, Judge.
Carol M. Rooney and Shannon Tan of Butler Pappas Weihmuller Katz Craig LLP, Tampa, for Appellants/Cross-Appellees.
Brian F. Stayton and Daryl E. Dykeman of Stayton Law Group, P.A., Valrico, for Appellee/Cross-Appellant. CASANUEVA, Judge.
This appeal and cross-appeal arise from a contract dispute following the construction of a large addition to and remodeling of a historic residence owned by appellants/cross-appellees, Richard O. Wolfe, II, and his wife, H. Michelle Wolfe. The appellee/cross-appellant, Culpepper Constructors, Inc. (Culpepper), was the general contractor on the project. We affirm in part and reverse in part. We reverse, finding error in one of the two issues in the Wolfes' main appeal and in one of the five issues in Culpepper's cross-appeal; we affirm all other issues without further discussion.
I. The Case
Upon finishing the construction and remodeling project, Culpepper submitted a final invoice seeking payment of an outstanding balance of $91,261.65. The Wolfes refused to pay, claiming vast overcharges among other complaints, so Culpepper recorded a claim of lien against the property in the same amount as the final invoice. Culpepper then initiated a suit to foreclose the lien and also sought damages from the Wolfes for their alleged breach of the construction contract. The Wolfes counterclaimed, alleging various defenses including defective workmanship.
At trial, the jury determined that the reasonable value of the work due to Culpepper was $91,261.65, with prejudgment interest due since June 19, 2006. The jury also found for the Wolfes on some of their counterclaims. After recalculating the final judgment for set-offs and interest, Culpepper received an award of $9074.06.
II. Discussion
A. The Wolfes' Offer of Judgment
We first review whether the Wolfes were entitled to an award of attorney's fees and costs pursuant to their joint offer of judgment which Culpepper had rejected.
Section 768.79, Florida Statutes (2006), provides the basis for an award of attorney's fees and costs when an offer or demand for judgment is not accepted and the statutory calculation formula is met. Florida Rule of Civil Procedure 1.442 applies to all proposals of settlement authorized by Florida law; this term encompasses offers and demands for judgment, thereby providing the means for implementing the statutory right. Operating in tandem, the statute and the rule provide a sanction in the form of an award of attorney's fees against a party who unreasonably rejects a properly made settlement offer. Willis Shaw Express, Inc. v. Hilyer Sod, Inc., 849 So. 2d 276, 278 (Fla. 2003).
The relevant language of section 768.79(1) provides:
[I]f 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 or on the defendant's behalf pursuant to a . . . contract from the date of filing of the offer if the judgment is one of no liability or the judgment obtained by the plaintiff is at least 25 percent less than such offer . . . .
As the courts of this state have noted with dismay, the statute and rule have not had their desired effect.
The expected result of the attorneys' fee sanction was to reduce litigation costs and conserve judicial resources by encouraging the settlement of legal actions. See Sarkis v. Allstate Ins. Co., 863 So. 2d 210, 218 (Fla. 2003). The effect, however, has been in sharp contrast to the intended outcome because the statute and rule have seeminglyAttorneys' Title Ins. Fund, Inc. v. Gorka, 36 So. 3d 646, 650 (Fla. 2010). Although the intent of the statute and rule were "to end judicial labor, not create more," Lucas v. Calhoun, 813 So. 2d 971, 973 (Fla. 2d DCA 2002), this intent has once again been defeated as shown by the circumstances of the case presently before us.
increased litigation as parties dispute the respective validity and enforceability of these offers.
In denying the Wolfes' claim, the trial court concluded that the offer of judgment was invalid because it was a joint offer that could only be accepted by Culpepper were Culpepper to dismiss its then pending claims against both Mr. and Mrs. Wolfe. Entitlement to attorney's fees and costs under an offer of judgment is reviewed de novo. Jamieson v. Kurland, 819 So. 2d 267 (Fla. 2d DCA 2002).
Here, the Wolfes' joint offer specifically stated that it was made to resolve all claims and counterclaims pending in the instant litigation. The settlement amount was $25,000, of which $12,500 would be paid by Mr. Wolfe and $12,500 by Mrs. Wolfe. To accept the $25,000 as the full amount due, including attorney's fees and costs, Culpepper would have to dismiss all claims against both Mr. and Mrs. Wolfe with prejudice. Additionally, Culpepper would have to agree to discharge the claim of lien and notice of lis pendens filed against the real property. Culpepper rejected this offer of judgment and the final judgment in its favor was $9074.06, which is considerably less than $18,750, or twenty-five percent less than the $25,000 offer.
In Gorka, our supreme court gave litigants guidance in making a proposal for settlement by saying:
[W]e have drawn from the plain language of rule 1.442 the principle that to be valid and enforceable a joint offer must (1) state the amount and terms attributable to each party,36 So. 3d at 650. Although Gorka does not control because it is factually distinguishable—it involved a single offeror and joint offerees—it does approve of joint offers that comply with the strictures of the statute and the rule.
and (2) state with particularity any relevant conditions. See Fla. R. Civ. P. 1.442(c)(3). A review of our precedent reveals that this principle inherently requires that an offer of judgment must be structured such that either offeree can independently evaluate and settle his or her respective claim by accepting the proposal irrespective of the other parties' decisions. Otherwise, a party's exposure to potential consequences from the litigation would be dependently interlocked with the decision of the other offerees.
"A proposal may be made by or to any party or parties and by or to any combination of parties properly identified in the proposal. A joint proposal shall state the amount and terms attributable to each party." Fla. R. Civ. P. 1.442(c)(3). The Wolfes' proposal for settlement was such a joint offer—$12,500 from each of them. See Willis Shaw, 849 So. 2d at 278-79 ("A strict construction of the plain language of rule 1.442(c)(3) requires that offers of judgment made by multiple offerors must apportion the amounts attributable to each offeror."). And the Wolfes' joint offer was made to but one offeree—Culpepper. It is Culpepper and Culpepper alone which had to decide whether to accept the joint offerors' proposal for settlement. The trial court erred in concluding that the Wolfes' offer was invalid per se because it was a joint offer conditioned on dismissing charges against both offerors. The Wolfes' joint offer met all statutory and rule requirements to be valid. Cf. Andrews v. Frey, 66 So. 3d 376, 378-79 (Fla. 5th DCA 2011) (holding that although only one offeror made two proposals separately to the two offerees but included another offeror in each proposal, the offer was not ambiguous and did not transform the proposals into joint offers and thus the offers were valid).
We find further support for our conclusion in Rossmore v. Smith, 55 So. 3d 680 (Fla. 5th DCA 2011), which is factually indistinguishable. After being sued by Mr. Rossmore, the two defendants twice made offers of judgment to him. Each offer contained identical terms: each defendant agreed to contribute $50 toward a total settlement offer of $100. Upon acceptance, Mr. Rossmore was to voluntarily dismiss the lawsuit with prejudice. Mr. Rossmore did not accept either offer.
The Fifth District noted, "Rossmore was the sole plaintiff. The proposal was directed to him, and his decision to reject or accept the offer was not dependent on any other person." Id. at 681. Thus, the Fifth District concluded that neither offer was an improper joint undifferentiated offer because "[t]he amount attributable to [each defendant] individually was clearly set forth in the offer of judgment." Id.
Like the defendants' offer in Rossmore, the Wolfes' offer was not an undifferentiated offer of settlement or otherwise improper. Like Mr. Rossmore, Culpepper had an ample opportunity to evaluate the joint offer as it related to him alone, and it elected not to accept this valid offer. Therefore, the Wolfes are entitled to their attorney's fees as it related to Culpepper's invalid claim of lien that was dismissed early in the proceedings. Like the offerees in Andrews, 66 So. 3d at 380, Culpepper "miscalculated the value of [its] claims in rejecting the proposal[ ] for settlement and must now pay the [Wolfes'] attorney's fees and costs."
B. Recovering Costs From The Nonprevailing Party Pursuant to Section 57.041
Culpepper contends that the trial court should have awarded it attorney's fees and costs pursuant to either section 713.29, Florida Statutes (2006), its demands for judgment, or section 57.041.(1), Florida Statutes (2006). We find merit only in the argument that the trial court erred in denying Culpepper costs pursuant to section 57.041. Section 57.041(1) provides that "[t]he party recovering judgment shall recover all his or her legal costs and charges which shall be included in the judgment . . . ."
Section 713.29 provides:
In any action brought to enforce a lien or to enforce a claim against a bond under this part, the prevailing party is entitled to recover a reasonable fee for the services of her or his attorney for trial and appeal or for arbitration, in an amount to be determined by the court, which fee must be taxed as part of the prevailing party's costs, as allowed in equitable actions.
As mentioned above, Culpepper recovered a net judgment against the Wolfes' for the sum of $9074.06. Under the plain reading of section 57.041, and despite Culpepper's contention that the trial court erred in determining that it was not the prevailing party in this litigation, Culpepper is entitled to an award of costs under section 57.041.
The trial court found, and we do not disturb this finding, that neither party was the "prevailing party" in this litigation.
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III. Conclusion
The trial court erred in denying an award of fees to the Wolfes under their offer of judgment and an award of costs to Culpepper under section 57.041. In all other respects, we affirm the final judgment. Upon remand, the trial court shall hold the necessary hearing to determine the respective amounts due, if any.
Affirmed in part, reversed in part, and remanded for further proceedings in accord with this opinion. DAVIS and KELLY, JJ., Concur.