Proposals for settlement: minding your p's and q's under rule 1.442.

• Author: Littky-Rubin, Julie H.
• Position: Florida Rule of Civil Procedure; attorneys' fees

It's over. After four years of hard-fought litigation and two weeks of trial, you successfully convinced a group of six people to find in favor of your client. Your client is elated. Not only has she won, but she rejoices in the knowledge that she will recover her attorneys' fees, thanks to your foresight in filing an offer of judgment three years ago. As you happily lose yourself in the memory of one of your more crafty cross examinations, your euphoria turns to panic. Your heart races as you quickly procure the file and begin tearing through the pleadings to review the offer you filed. Your mind is filled with vague recollections about rule changes in 1997 and innumerable cases you have recently read where some poor attorney's offer was declared invalid for failing to comply with Rule 1.442. As you review the offer you filed, you realize its shortcomings. Will it be enforced? Will you have to alert your carrier? How can you avoid having to live this nightmare again?

The offer of judgment statute, F.S. [sections] 768.79 (1999), creates a substantive right to collect reasonable attorneys' fees and costs as "penalties" for a declining party's failure to accept an offer and terminate the litigation.(1) Florida Rule of Civil Procedure 1.442, "Proposals for Settlement," provides the mechanism to assert those rights and delineates the proper procedure necessary for implementing the substantive statute. The rule applies to all proposals for settlement, regardless of the terms used to refer to such offers. Apropos of the plain language of Rule 1.442, offers or demands for judgment are now uniformly termed "proposals for settlement."

In 1996, the Florida Supreme Court overhauled Rule 1.442. Those amendments, effective January 1, 1997, were designed to create a coherent framework for reconciling Florida's offer of judgment law, and to end the proliferation of litigation sabotaging the statute's goal of ending claims and disputes.(2) One court articulated hope that the amendments to Rule 1.442 would provide an easy guide for attorneys and litigants to follow in filing proposals for settlement, stating: "Perhaps the amendments to Florida Rule of Civil Procedure 1.442, effective January 1, 1997, which require far more detail than a settlement proposal, will help ensure that there are no misunderstandings between an offeror and an offeree about the terms of the settlement proposal."

Unfortunately, the court may have been prematurely sanguine. As evidenced by the swelling body of recent case law, the changes in the rule seem to have resulted in even more litigation by creating confusion in the transition between the old law and the new. Each provision of the rule is outlined below with a discussion of the recent cases interpreting it. The only way parties can ensure sustainable offers and avoid becoming the next "So. 2d cite" is to follow carefully the specific prescriptions of Rule 1.442.

Anatomy of the Rule

* Time Requirements: 1.442(b)(3)

Rule 1.442(b) requires that a proposal to a defendant be served no earlier than 90 days after service of process, and a proposal to a plaintiff no earlier than 90 days after the action has been commenced.(4) These time limits are rigid. Serving an offer on the 87th day, for example, simply does not comply with the rule.(5)

No proposal shall be served later than 45 days before the date set for trial, or the first day of the docket on which the case will be tried, whichever is earlier.(6) One court rejected the defendant's offer of judgment as untimely and unenforceable because the defendant made the offer less than 45 days before the first day of the docket on which the case would be tried, even though the case actually went to trial almost six months after first being set.(7) Notwithstanding the grant of a continuance to the defendant, the court refused to hold that the continuance operated to "breathe" life back into an otherwise untimely offer.(8)

If an offeror makes an offer at a point when it appears that the offeror has intended to direct the offer to a subsequent, unscheduled trial period, then the offer may be valid.(9) In one instance, a case was scheduled to go to trial during the docket period beginning October 27, 1997, and concluding on October 31, 1997.(10) As of October 30, 1997, the case had not been reached. When it became apparent that the case would not go to trial within that trial period, the defendant filed an offer of judgment. The case was reset and ultimately tried in September 1998. While the court acknowledged that Rule 1.442 mandated that no proposal for settlement shall be served less than 45 days before the trial date or first day of the docket, it held that a single exception existed if the offer was made at a point in time when it appeared from the facts of the individual case that the offeror intended to direct the offer not to the current trial period, but rather to the next unscheduled time period.(11) The court found that only in that situation will the offer be considered timely.(12) The Fourth District took that exception one step further when it declared an offer of judgment valid even though it was made during the last week of a docket, because the parties had previously been excused from trial for that week.(13)

* Form and Content of the Proposal--1.442(c)

Rule 1.442(c)(1) requires that a proposal be in writing and that it identify the applicable Florida law under which the offer has been made. At one time, the Florida statutes had numerous provisions governing offers to settle pending litigation. Now that only one statute governs such offers, as implemented by Rule of Civil Procedure 1.442, an offer will comply when either the rule or the statute is cited.(14) It is always safest, however, to reference both Rule 1.442 and [sections] 768.79 to avoid any confusion or problems.

Rule 1.442(c)(2) provides a checklist of the seven elements necessary for a valid proposal for settlement. Rule 1.442(c)(2)(A) requires that the offeror "name the party or parties making the proposal and the party or parties to whom the proposal is being made." Rule 1.442(c)(3) further explains that a proposal may be made to any party or parties and that a joint proposal shall state the amount and terms attributable to each party. This provision was enacted to conform with the law set forth in Fabre v. Marin, 623 So. 2d 1182 (Fla. 1993).(15)

When a single plaintiff files a proposal for settlement to multiple defendants in a case involving separate issues of liability, the proposal must set forth the specific amount directed to each defendant to settle the case. Otherwise, the proposal will lack the particularity needed to comply with the rule.(16) The offer must be specific enough to enable separate tortfeasors to evaluate the proposal independently.(17) However, when only one act of negligence is involved, and the named defendants are all either actively or vicariously...