Are Proposals for Settlement Enforceable in FCCPA Cases?
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The Florida Consumer Collection Practices Act (FCCPA) is a pro-consumer statute. As such, businesses need to be aware of the statute and the risk and liability of the statute. Given the pro-consumer nature of the statute, one big consideration for defending against FCCPA claims is how to shift risk to the plaintiff.
Generally, one option for shifting risk is serving a proposal for settlement under Section 768.79, Florida Statutes, and Rule 1.442, Florida Rules of Civil Procedure (“Proposal for Settlement”). However, one issue that arises when litigating cases under the FCCPA is whether a Proposal for Settlement is enforceable in an FCCPA case. The case law is currently unsettled as to whether Proposals for Settlement are enforceable in FCCPA cases. As such, parties and practitioners alike need to perform their own review of the case law at the time this issue arises for them because the case law discussed in this article will continue to evolve.
Proposals for Settlement.
“The purpose of Section 768.79 is to reduce litigation costs and conserve judicial resources by encouraging the settlement of legal actions.” Kuhajda v. Borden Dairy Co. of Alabama, LLC, 202 So. 3d 391 (Fla. 2016) (citation omitted). As specifically set forth in the unambiguous language of Section 768.79, proposals for settlement apply “in any civil action for damages[.]” §768.79, Fla. Stat. (2021). The right to recover reasonable costs and attorneys’ fees when a party has satisfied the terms of Section 768.79 is a substantive right. Attorney’s Title Ins. Fund, Inc. v. Gorka, 36 So. 3d 646, 649 (Fla. 2010); Central Florida Med. And Chiro. Cntr. v. Progressive Am. Ins. Co., 328 So. 3d 1111 (Fla. 5th DCA).
Moreover, there are many cases rejecting arguments that the applicability of Section 768.79 should be excluded from certain claims or in certain situations. See, e.g., State Farm Mut. Auto. Ins. Co. v. Nichols, 932 So. 2d 1067 (Fla. 2006) (rejecting the argument that the attorneys’ fees provision in the PIP statute conflicted with Section 768.79 and that the PIP statute precluded application of Section 768.79 because the attorneys’ fees provision only permitted the recovery of attorneys’ fees by insureds and not insurers); Davis v. Clark, 326 So. 3d 781 (Fla. 2d DCA) (rejecting the argument that a proposal for settlement does not apply to small claims cases and reiterating that proposals for settlement apply in all civil actions for damages and that if the legislature wanted to limit the scope or applicability of Section 768.79 it would have included such limitation in the statute); Central Florida Med. And Chiro. Cntr. v. Progressive Am. Ins. Co., 328 So. 3d 1111 (Fla. 5th DCA) (rejecting the argument that a proposal for settlement does not apply to PIP claims or in small claims cases and reiterating that Section 768.79 applies to all civil actions for damages).
Challenging Proposals for Settlement in FCCPA cases.
In my experience, when plaintiffs’ lawyers challenge Proposal for Settlement, they principally rely upon Clayton v. Bryan, which was a split-decision from the Fifth District Court of Appeal in 2000. See Clayton v. Bryan, 753 So. 2d 632 (Fla. 5th DCA 2000). Plaintiffs’ lawyers also cite several trial court decisions which rely upon Clayton and are generally flawed for the same reasons that Clayton is flawed, namely because Clayton did not involve a claim brought solely for a violation of the FCCPA. Such argument that a defendant cannot serve a Proposal for Settlement in an FCCPA case is misplaced and essentially asks court to ignore the Florida legislature and defendants’ substantive right to serve a proposal for settlement under Section 768.79 in an effort to encourage settlement of disputes.
Clayton v. Bryan, 753 So. 2d 632 (Fla. 5th DCA 2000).
The Clayton Court was asked to decide the question of “whether Florida’s offer of judgment statute is preempted by [the federal Fair Debt Collection Practices Act (“FDCPA”)].” Id. At 633. The Clayton Court concluded that the Proposal for Settlement in that case was preempted by the FDCPA and denied the defendant’s request for attorneys’ fees.
Critically, the FDCPA is different from the FCCPA and Clayton did not determine whether a proposal for settlement under Section 768.79 is invalid and unenforceable in a case involving only an FCCPA violation (as opposed to both an FCCPA and FDCPA violation).
Rivera v. West Florida – PPH, LLC, 2020 WL 4380955 (6th Jud. Dist., June 24, 2020).
The argument that Clayton is binding precedent on all FCCPA cases was outright rejected in Rivera, which such court highlighted the key distinction between Clayton and other FCCPA cases, to wit: Clayton was limited to the question of whether Florida’s proposal for settlement statute is preempted by the FDCPA. The Rivera decision identifies a key distinction with the Clayton decision and held that Clayton did not apply where a plaintiff alleges only a violation of the FCCPA and not a violation of the FDCPA.
Specifically, in Rivera, the plaintiff brought a single cause of action for violation of the FCCPA and did not include a cause of action for violation of the FDCPA. The Rivera Court acknowledged that the case was “limited to the FCCPA by the plaintiff (to the exclusion of the FDCPA), and the Clayton decision related to the FDCPA preemption of an offer of judgment is inapplicable as a matter of law.” Id. at *1. As a result, the Rivera Court denied the plaintiff’s motion to strike the proposal for settlement.
Similar to Rivera, in the case of James Fisher v. Borland-Groover Clinic, P.A., Case Number 2020-CC-10977, Fourth Judicial Circuit, Duval County, the Court denied plaintiff’s motion to strike the defendant’s Proposal for Settlement where the case only involved an alleged FCCPA violation and did not also include an alleged FDCPA violation.
Constantly Evolving Area of the Law.
The precise question of whether a Proposal for Settlement is enforceable in an FCCPA case is uncertain and will be subject to challenge going forward. There are likely additional trial court decisions favoring both sides. However, to date, there does not appear to be an appellate court decision settling this important question.
In defending against FCCPA claims, defendants need to evaluate all options and attempt to shift risk to a plaintiff. Given the pro-consumer nature of the FCCPA, it is a lose-lose situation for the defendant if the defendant cannot shift risk to the plaintiff. Considering whether to serve a Proposal for Settlement to the plaintiff is important and should be evaluated in every case.
About the Author: Austin T. Hamilton, Esq. is board certified in business litigation by the Florida Bar and practices in the firm’s banking and financial services industry team. Austin advises businesses regarding potential consumer violations under various Florida and federal consumer protection statutes and is experienced in defending businesses against alleged violations of consumer protection statutes.
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Florida’s Consumer Collection Practices Act (FCCPA) Part 1: Understanding the FCCPA (jimersonfirm.com)
Florida’s Consumer Collection Practices Act (FCCPA) Part 2: Implementing safeguards and internal procedures to establish a bona fide error defense to violations of the FCCPA (jimersonfirm.com)