CITY OF NEPTUNE BEACH, APPELLANT,
v.
JANICE M. SMITH AND DARRELL G. SMITH, APPELLEES
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City of Neptune Beach sought attorney's fees after obtaining a defense verdict, relying on Florida's offer of judgment statute. The trial court denied the fees, finding the offers were not made in good faith because the defendant could not reasonably have expected acceptance. The appellate court reversed, holding that good faith requires only a reasonable foundation for the offer, not that acceptance be reasonably expected.
The trial judge applied the wrong test in evaluating good faith. Good faith under section 768.79 does not require that the offeror reasonably believe the offer will be accepted; rather, it requires only that the offeror have a reasonable foundation for the offer. The proper test requires examining whether each offer had a reasonable foundation in light of the potential damages and risk of liability at the time the offer was made.
[1] A trial court abuses its discretion when it applies an incorrect legal test to determine whether an offer of judgment was made in good faith.
[2] Good faith under the offer of judgment statute requires that the offeror have some reasonable foundation on which to base the offer.
Previewing 2 of 5 headnotes on this case. FLexlaw’s editorially structured points of law — every proposition, pinpointed — are reserved for members.
Join FLexlaw to unlock all legal intelligence“Entitlement to an award of costs and attorney's fees under section 768.79 does not depend upon 'the reasonableness of an offeree's rejection of an offer of judgment.'”
Establishes that the offeree's acceptance is not the standard for determining good faith.
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Join FLexlaw to unlock all legal intelligenceThe City of Neptune Beach filed offers of judgment in a civil damages action that were not accepted by the plaintiffs Janice M. Smith and Darrell G. S…
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ALLEN, J.
The appellant challenges an order by which its motion for attorney’s fees pursuant to section 768.79, Florida Statutes, was denied following a defense verdict of no liability in favor of the appellant. Because the trial judge employed the wrong test in determining that offers of judgment served by the appellant pursuant to the statute were not made in good faith, we reverse the order. Section 768.79 provides in relevant part as follows:
768.79 Offer of judgment and demand for judgment.— (1) In any civil action for damages filed in the courts of this state, if a defendant files an offer of judgment which is not accepted by the plaintiff within 30 days, the defendant shall be entitled to recover reasonable costs and attorney’s fees incurred by her or him ... from the date of the filing of the offer if the judgment is one of no liability ...
(7)(a) If a party is entitled to costs and fees pursuant to the provisions of this section, the court may, in its discretion, determine that an offer was not made in good faith. In such case, the court may disallow an award of costs and attorney’s fees.
The parties agree that the appellant satisfied the requirements of subsection (1) of the statute. The issue for our decision is whether the trial judge erred in his ruling pursuant to paragraph (7)(a) that the offers of judgment were not made in good faith.
In denying the motion, the trial judge indicated that he found an absence of good faith because the appellant could not reasonably have expected the appellee to accept any of the offers. As the appellant properly argues, this test applied by the trial judge conflicts with the relevant deci-sional law under the statute.
Entitlement to an award of costs and attorney’s fees under section 768.79 does not depend upon “the reasonableness of an offeree’s rejection of an offer of judgment.” See TGI Friday’s, Inc. v. Dvorak, 663 So. 2d 606 (Fla.1995); see also Jordan v. Food Lion, Inc., 670 So. 2d 138 (Fla. 1st DCA 1996). And good faith may be present even though the offeror does not believe its offer will be accepted. See Peoples Gas System v. Acme Gas Corp., 689 So. 2d 292 (Fla. 3d DCA 1997); Schmidt v. Fortner, 629 So. 2d 1036 (Fla. 4th DCA 1993). Indeed, application of such a requirement would not comport with the widely accepted view that even a nominal offer may be made in good faith, see Evans v. Piotraczk, 23 Fla. L. Weekly D2725, 724 So. 2d 1210 (Fla. 5th DCA 1998); Fox v. McCaw Cellular Comm. of Fla., 23 Fla. L. Weekly D2687, — So. 2d -, 1998 WL 870859 (Fla. 4th DCA Dec.9, 1998); Allstate Ins. Co. v. Silow, 714 So. 2d 647 (Fla. 4th DCA 1998); Weesner v. United Services Auto. Ass’n, 711 So. 2d 1192 (Fla. 5th DCA 1998); State Farm Mut. Auto. Ins. Co. v. Marko, 695 So. 2d 874 (Fla. 2d DCA 1997); Peoples Gas, because an offeror seldom would expect an offeree to accept a nominal offer. Rather, “[t]he obligation of good faith merely insists that the offeror have some reasonable foundation on which to base an offer.” See Schmidt v. Fortner, 629 So. 2d 1036 (Fla. 4th DCA 1993); Weesner; Peoples Gas.
Accordingly, the trial court in the present case should have applied this “reasonable foundation” test in determining whether the offers of judgment were made in good faith. And in applying this test, the trial court should have considered the amount of each of the offers in light of the amount of potential damage and risk of liability at the time each of the offers of judgment was made. See Evans.
We accordingly reverse the order under review and remand this case for the trial judge to reconsider the appellant’s motion for costs and attorney’s fees pursuant to the proper test.
WEBSTER and VAN NORTWICK, JJ., CONCUR.
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Dep't of Hwy. Safety & Motor Vehicles v. Weinstein, 747 So. 2d 1019 (Fla. 3d DCA 1999)…r v. United Servs. Auto. Ass’n, 711 So. 2d 1192 (Fla. 5th DCA 1998), review denied, 727 So. 2d 914 (Fla.1999); Eagleman v. Eagleman, 673 So. 2d at 946; Schmidt v. Fortner, 629 So. 2d 1036 (Fla. 4th DCA 1993); see also City of Neptune Beach v. Smith, 740 So. 2d 25 (Fla. 1st DCA 1999); State Farm Mut. Auto. Ins. Co. v. Marko, 695 So. 2d 874 (Fla. 2d DCA 1997); Peoples Gas Sys., Inc. v. Acme Gas Corp., 689 So. 2d 292 (Fla. 3d DCA 1997); Lennar Corp. v. Muskat, 595 So. 2d 968 (Fla. 3d DCA 1992), review denied, 6…
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Wagner v. Brandeberry, 761 So. 2d 443 (Fla. 2d DCA 2000)…3d DCA 1999) (“This factual conclusion — that there was a ‘reasonable foundation,’ or a ‘reasonable explanation’ for the offer— equates to the legal conclusion that it was made in good faith under the statute. ...”); City of Neptune Beach v. Smith, 740 So. 2d 25, 27 (Fla. 1st DCA 1999); Schmidt v. Fortner, 629 So. 2d 1036, 1039 (Fla. 4th DCA 1993). Thus, the issue of good faith is determined solely by the subjective motivations and beliefs of the offeror, Wagner, see Weinstein, 747 So. 2d at 1021, not the r…
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Connell v. Floyd, 866 So. 2d 90 (Fla. 1st DCA 2004)…the litigation); Lieff v. Sandoval, 726 So. 2d 335, 336 (Fla. 3d DCA 1999). The majority opinion finds no fault with the amount of the monetary offer, nor does rule or statute require more than a nominal amount. See City of Neptune Beach v. Smith, 740 So. 2d 25, 26-27 (Fla. 1st DCA 1999). -The rule is that a minimal offer can be made in good faith if the evidence demonstrates that, at the time it was made, the offeror had a reasonable basis to conclude that its exposure was nominal. See [Evans v. Piotracz…
Previewing 3 of 8 citing cases — full citator treatment, depth of discussion, and citing context are member features.
Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- TGI Friday's, Inc. v. Dvorak, 663 So. 2d 606 (Fla. 1995)
- Susanne Rae Schmidt v. Fortner, 629 So. 2d 1036 (Fla. 4th DCA 1993)
- State Farm Mut. Auto. Ins. Co. v. Marko, 695 So. 2d 874 (Fla. 2d DCA 1997)
- Martinez v. Irwin Lichter and Lourdes Pons, 689 So. 2d 292 (Fla. 3d DCA 1997)
- Weesner v. United Servs. Auto. Ass'n, 711 So. 2d 1192 (Fla. 5th DCA 1998)
- Jordan v. Food Lion, Inc., 670 So. 2d 138 (Fla. 1st DCA 1996)
- Evans v. Piotraczk, 724 So. 2d 1210 (Fla. 5th DCA 1998)
- Allstate Ins. Co. v. Silow, 714 So. 2d 647 (Fla. 4th DCA 1998)