A recent Law 360 story by Lynn LaRowe, “RJ Reynolds Faces Fees Bid Despite Beating $16M Fla. Verdict, reports that the Florida Supreme Court said that R.J. Reynolds Tobacco Co.'s rejection of a woman's prior settlement offers means it can't walk away from her bid for attorney fees in her wrongful death action even though the company has defeated a $16 million punitive damages award she won in the case.  More than five months after upholding a state appellate ruling nixing the punitive award, the Supreme Court provisionally granted Brinda Coates' motion for "reasonable appellate attorney's fees," finding that she didn't need to prevail on appeal to be entitled to fees under Florida's offer-of-judgment statute.

The statute "operates to penalize a party who refuses to accept a good-faith, reasonable proposal for settlement as reflected in the ensuing final judgment," the court said.  "The statute has this effect even if the party seeking fees does not prevail at trial or in appellate proceedings, but is otherwise entitled to fees pursuant to the offer-of-judgment statute," the court said.

Coates sued the company after her sister, Lois Stucky, died of lung cancer.  She had twice offered to settle the matter before trial — once for $75,000 and a second time for $749,000, according to the opinion.  R.J. Reynolds declined the offers, and a jury awarded Coates $300,000 in compensatory damages and $16 million in punitive damages.  The trial court reduced the compensatory damages by half because the jury had found that Stucky's negligence caused half of the damages, but left the punitive damages amount intact.

The state's Fifth District Court of Appeal found the punitive award to be excessive and, in January, the Florida Supreme Court affirmed that decision.  The high court agreed that the case should go back to the trial court for further proceedings in keeping with state law that says any award for punitive damages exceeding a 3-1 ratio with compensatory damages is presumed to be excessive, unless the claimant can show the award is not too high in light of the facts and circumstances of the case.  The high court said that the state's offer-of-judgment law is a "penalty statute" that "contemplates fee awards to non-prevailing litigants."

According to the opinion, a plaintiff who offers to settle a case in advance of trial is entitled to fees under the statute if that plaintiff is awarded at least 25% more than the offer.  A defendant is entitled to recover fees if found not liable or if the award to the plaintiff is at least 25% less than the offer, the opinion said.  "Thus, the text of the offer-of-judgment statute contemplates a situation where the defendant is entitled to fees even if the plaintiff prevails on the most significant issues at trial and ultimately recovers a substantial judgment," the high court said.  "It is not reasonable to hold that the Legislature created a prevailing-party requirement when the statute's text allows for awards to litigants who do not prevail."

The amount of fees awarded to Coates will be determined by the trial court "conditioned on its finding, at the end of the case, that Coates is entitled to attorney's fees under a valid proposal for settlement," the court said.