A recent Law 360 story by Nathan Hale, “Fla. High Court Asked to Clarify Atty Fee Award Calculation,” reports that a Florida appeals court suggested that a clash between case law and its own judgment means the state's high court needs to clarify whether to include certain prejudgment interest when determining if a judgment triggers a party's entitlement to attorney fees under a state statute. In its opinion, the Fourth District reversed a trial court's awarding of attorney fees to CCM Condominium Association Inc. in its negligence and breach of contract case against Petri Positive Pest Control Inc., saying the lower court improperly included prejudgment interest accrued after the association made a settlement offer.
The panel said it based its decision on language in Florida Supreme Court opinions, including White v. Steak & Ale of Florida, which suggests post-offer prejudgment interest should be excluded, even though it would reach the opposite conclusion based on its own interpretation of the term "judgment entered" in the offer-of-judgment statute, found in Section 768.79 of the Florida Statutes. "[W]e are troubled by how far the formula created in White strays from what we believe is the plain meaning of the statute," the judges said.
They certified a question of great public importance to the Supreme Court, asking it to clarify whether to exclude post-offer prejudgment interest and noting that the law is widely used and is an important tool for settling cases. The Fourth District also certified that its decision conflicts with two other appeals court decisions.
"We're obviously disappointed to lose, but we are very pleased that the court recognized the conflict and recognized that it is an issue of great public importance, and we are optimistic that the Supreme Court will accept review so it can clear up an area of law that affects many litigants across the state," CCM counsel Maegen P. Luka of Brannock & Humphries told Law360. The appeal arose from a 2013 lawsuit that CCM, which does business as Country Club Manor Condominium Association, filed against Petri for negligence and breach of contract.
According to the opinion, CCM offered to settle all of its claims for $500,000, but Petri rejected the proposal. After a trial in 2016, a jury awarded CCM more $551,881 in damages, and the trial court entered a judgment of $636,327, including prejudgment interest. CCM moved to recover attorney fees based on that figure, which exceeded its settlement offer by more than 25%, the statutory threshold to trigger its entitlement.
Petri objected, pointing to the 2002 White decision, which it said defined the plaintiff's total recovery as including only attorney fees, costs and prejudgment interest accrued up to the date of its settlement offer. That would push CCM's recovery below the 25% threshold. Looking first at the statute itself, the Fourth District said the meaning of "judgment entered" is "easily understood."
"It is easy to calculate. Included in that judgment are all of the elements of damages recovered in a case. This includes prejudgment interest where applicable," the panel said, citing state court decisions that hold prejudgment interest is just another element of pecuniary damages. But looking to the case law, the panel agreed with Petri that the Supreme Court appears to have gone beyond the text of the statute to create a different threshold.
In White, the high court found that the plaintiff's preoffer taxable costs should be included in calculating the "judgment obtained" for the purpose of entitlement to attorney fees, and said that "total net judgment" "includes 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."
"Thus, the court did not use the judgment actually entered or recovered in accordance with the statutory language, but it directed the calculation of a different amount based upon what might have been a final judgment at the time that the offer was made," the Fourth District said. "However, the court did not include in this calculation any direction regarding prejudgment interest."
For an answer on prejudgment interest, the appeals panel pointed to the Supreme Court's 2012 decision in Shands Teaching Hospital and Clinics v. Mercury Insurance Co. of Florida, in which the justices approved a lower court's denial of fees based on "adding to the amount of damages recovered the attorney's fees, costs and pre-judgment interest accrued up to the date of the proposal for settlement."