Friday Florida Law Update

Welcome back to my blog!  It’s Florida law Friday.   On Fridays, I will report on a recent Florida appellate decision.

One issue that always has Florida litigators scratching their heads is Florida’s offer of judgment statute, Fla. Stat. Sec. 768.79.  In Arrowood Indemnity Co. v. Acosta, Inc., 2011 WL 522795 (Fla. 1st DCA Feb. 16, 2011), the First District Court of Appeal reviewed a trial court ruling that Defendant Arrowood’s $1000 offer of judgment failed to meet the good faith requirement.  Despite prevailing on summary judgment, the trial court denied Arrowood’s petition for attorney’s fees.

The underlying claim was based on Arrowood’s denial of insurance coverage.  After Arrowood issued a $1000 offer of judgment, the trial court awarded Arrowood summary judgment two months later.  Denying Arrowood’s post-judgment motion for attorney’s fees, the trial court applied a purely objective standard to determine whether the offer of judgment was made in good faith.  Based on the $10 million in potential liability and “complex legal issues” involved in the case, the Court determined that the offer was not made in good faith.

The First DCA reversed, holding that the trial court was incorrect to apply a wholly objective standard.  The First DCA held that “whether the offeror has a reasonable basis to support the offer is determined solely by the subjective motivations and beliefs of the offeror.”  However, the court may properly consider objective evidence of facts and circumstances that suggest whether the offeror made the offer with subjective good faith.  The trial court erred in not giving any consideration to Arrowood’s justification for its offer and by basing its ruling exclusively on the objective factors.

The case was remanded to the trial court to reassess the offer of judgment by applying the proper standard.

Hopefully this peels away one layer of confusion relating to proposals for settlement!  Have a great weekend and see you again on Monday!!

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