A recent Law 360 story by Carolina Bolado, “Fla. High Court Weights Atty Fee Calculation in Settlement Law,” reports that a condominium association that won a legal battle with a pest control company asked the Florida Supreme Court to buck precedent and include prejudgment interest when determining if a judgment triggers a party's entitlement to attorney fees under the state's proposal-for-settlement statute.
In videoconferenced oral arguments, CCM Condominium Association Inc. attorney Shea Moxon told the high court that prejudgment interest accrued after the association made a settlement offer to Petri Positive Pest Control Inc. should be included in the "net judgment" for the purposes of calculating whether it can be awarded attorney fees under the statute.
The Fourth District Court of Appeal ruled that this interest should not be included in the judgment, but the appeals court said it based its decision on language in Florida Supreme Court precedent, 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.
Those previous opinions, particularly the 2002 decision in White v. Steak & Ale of Florida, have "turned into a judicial rewriting of the statute," according to Moxon. "There is nothing in the statute that suggests 'net' is going to be referring to a deduction of costs or prejudgment interest," Moxon said. "Net judgment means the real judgment, the judgment entered at the end of the case."
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 after Petri tented the complex for termites. CCM offered to settle all of its claims for $500,000, but Petri rejected the offer, according to court documents. At trial in November 2016, a jury awarded CCM $551,881 in damages. The trial court entered a judgment of $636,327, which included the jury's damages award plus $84,446 in prejudgment interest.
CCM then 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 to attorney fees. 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.
But the trial court disagreed and awarded CCM $73,579 in post-offer attorney fees and costs. At oral arguments, Petri's attorney, Thomas Hunker, said the formula that the Supreme Court set out in the White case is the "backbone for how this statute has worked for the last 18 years" and is an important tool.
It is unfair and unreasonable, he said, to impose upon a party potential sanctions for failing to predict how long a case will take or what the interest rate, which fluctuates with the market, will be in the months or years after an offer of settlement. "But the problem is we have to apply the statute, not ourselves determine what's fair, do we not?" asked Justice Ricky Polston.