The Nitty Gritty of Proposals for Settlement from a Plaintiff’s Perspective
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Proposals for settlement are a very effective tool to bring contested litigation to a mutually agreeable resolution. If utilized by a Plaintiff, it can create a fee mechanism where a basis may not otherwise exist. When a plaintiff is considering a proposal for settlement, there are specific procedures which must be followed in order for the proposal to be valid and enforceable if accepted. If the proposal is not accepted by the defendant and the procedure is followed correctly, a plaintiff may still be able to secure attorneys’ fees and costs associated with the litigation thereafter.
In accordance with Fla. R. Civ. Pro. 1.442(c), the form and content of the proposal for settlement is very specific and must be strictly followed. Pursuant to Fla. R. Civ. Pro. 1.442(c)(1)-(2):
(1) A proposal shall be in writing and shall identify the applicable Florida law under which it is being made.
(2) A proposal shall:
(A) name the party or parties making the proposal and the party or parties to whom the proposal is being made;
(B) identify the claim or claims the proposal is attempting to resolve;
(C) state with particularity any relevant conditions;
(D) state the total amount of the proposal and state with particularity all nonmonetary terms of the proposal;
(E) state with particularity the amount proposed to settle a claim for punitive damages, if any;
(F) state whether the proposal includes attorneys’ fees and whether attorneys’ fees are part of the legal claim; and
(G) include a certificate of service in the form required by rule 1.080(f).
After drafting a proposal in accordance with the above rule, Fla. R. Civ. Pro. 1.442(b) addresses service of the proposal. A proposal from the plaintiff to the defendant “shall be served no earlier than 90 days after service of process on that defendant…. No proposal shall be served later than forty-five (45) days before the date set for trial or the first day of the docket on which the case is set for trial, whichever is earlier.” In other words, a plaintiff cannot serve the defendant with a proposal for settlement until at least 90 days after the defendant was served with the complaint. Additionally, the plaintiff cannot serve the defendant with a proposal for settlement later than 45 days before the date set for trial.
A plaintiff need not file the proposal with the court unless filing is necessary to enforce provisions of the law. See Fla. R. Civ. Pro. 1.442(d) (Emphasis added). The proposal is valid for thirty (30) days after service of the proposal. A defendant may deliver a written notice of acceptance within the 30-day period. If no acceptance is delivered, the proposal is deemed rejected. See Fla. R. Civ. Pro. 1.442(f)(1). If the plaintiff chooses to withdraw the proposal within the 30-day period, he may do so provided the written withdrawal is delivered before a written acceptance is delivered. See Fla. R. Civ. Pro. 1.442(e). Once withdrawn, the proposal is void.
Fla. Stat. §768.79 provides additional information regarding an offer or demand for judgment. In order to invoke this section, it must be stated in the proposal. Section 768.79(4) re-iterates that the offer shall not be filed, and further adds that if the proposal is accepted, a written acceptance should be filed with the court, and the filing of both the offer and the judgment gives the court full jurisdiction to enforce the settlement agreement.
If the proposal is rejected by the defendant, the plaintiff may have a fee recovery mechanism. Section 768.79(6)(b) provides:
If a plaintiff serves an offer which is not accepted by the defendant, and if the judgment obtained by the plaintiff is at least 25 percent more than the amount of the offer, the plaintiff shall be awarded reasonable costs, including investigative expenses, and attorney’s fees, calculated in accordance with the guidelines promulgated by the Supreme Court, incurred from the date the offer was served.
Therefore, if the plaintiff submits a proposal for settlement to the defendant, the defendant rejects the offer, and thereafter the plaintiff obtains a judgment of 25% more than the offer (i.e., offer of $10,000 and subsequent judgment of $12,500), then the plaintiff may recover attorney’s fees and costs from the date the defendant was served with the proposal going forward, so long as the proposal was made in good faith. This fee mechanism can be very beneficial when claims do not include a provision in which recovery for such fees is provided.
In sum, if a plaintiff chooses to serve a proposal for settlement on the defendant, he must strictly adhere to both Fla. R. Civ. Pro. 1.442 and Fla. Stat. §768.79. In the event the defendant does not accept the proposal, plaintiff’s adherence to these rules will ultimately provide him with a fee recovery mechanism if he subsequently recovers more than 25% more of the proposal in the absence of statutory provisions awarding such fees. The Florida Bar Journal has several articles in recent years discussing issues pertaining to Proposals to Settlement that we encourage you to review as part of your continuing education – one of which is linked here: