STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

v.

SOUTH FLA MED HEALTH CTR INC., A/A/O PENTON LUIS

BLOCH, J.

The issue presented in this case is whether an acceptance of a proposal for settlement after the expiration of the 30-day time limitation set by statute and rule is binding. We reverse the trial court's ruling which enforced a settlement based on an untimely acceptance of the proposal for settlement.

Appellee South Florida Medical Center, Inc. (the "Medical Center"), a medical provider, filed suit against Appellant, State Farm Mutual Automobile Insurance Company ("State Farm"), based on a claim for personal injury protection benefits under the insured's policy for medical treatment. The Medical Center's claim arose from medical care rendered to the insured and an assignment of benefits in accordance with the insurance policy.

State Farm served a proposal for settlement, in the amount of $195.00 (inclusive of all fees and costs), pursuant to Rule 1.442 of the Rules of Civil Procedure and section 768.79 of the Florida Statutes, on February 20, 2013 (the "PFS"). On March 1, 2013, the Medical Center filed a motion for enlargement of time to respond to State Farm's PFS, but never set the motion for hearing.

On April 2, 2013, forty days after service of the PFS, the Medical Center filed a notice purportedly accepting the PFS. That same day State Farm filed a motion to strike the acceptance as untimely, in that it was beyond the 30-day acceptance period. Before the motions had been ruled upon, the Medical Center filed a voluntary dismissal of the lawsuit without prejudice, on April 26, 2013. See Fla.R.Civ.P. 1.420(a)(1).¹ State Farm then filed a motion to tax costs. For its part, the Medical Center filed a motion to enforce settlement, seeking to effectuate the purported settlement.

The trial court convened hearings on the State Farm's motion to tax costs and on the Medical Center's motion to enforce settlement, and ultimately issued an order granting the motion to enforce settlement, ratifying the Medical Center's acceptance. The lower court's rationale was that State Farm never withdrew the PFS and therefore the Medical Center was free to accept it. State Farm timely appealed here.

Both sides agree that our standard of review on appeal is de novo. E.g., Miami- Dade County v. Ferrer, 943 So. 2d 288, 290 (Fla. 3d DCA 2006) ("An appellate court N 1 We do not reach and therefore do not decide State Farm's alternative argument that the trial court was divested of jurisdiction to proceed as to the motion to enforce settlement once the voluntary dismissal was taken. N 2 See Fla.R.Civ.P. 1.525 ("Any party seeking a judgment taking costs, attorneys' fees, or both shall serve a motion not later than 30 days after filing of the judgment or the service of voluntary dismissal, which judgment or notice concludes the action as to that party."). [*2] applies the de novo standard of review in determining whether an offer of settlement comports with rule 1.442 and section 768.79 because a proposal for settlement is in the nature of a contract.") (citations and internal quotation marks omitted).

As noted, State Farm served the PFS pursuant to section 768.79 of the Florida Statutes and Rule 1.442 of the Florida Rules of Civil Procedure. Section 768.79 contains the statutory guidelines for offers of judgment. It provides that 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...if the judgment obtained by the plaintiff is at least 25 percent less than such offer. § 768.79(1), Fla. Stat. (emphasis added). The statute further requires that: "An offer shall be accepted by filing a written acceptance with the court within 30 days after service." § 768.79(4), Fla. Stat. (emphasis added). Similarly, Rule 1.442 (f)(1) of the Florida Rules of Civil Procedure provides that "a proposal shall be deemed rejected unless accepted by delivery of a written notice of acceptance within 30 days after service of the proposal." 4 The language of the statute, and of the rule, plainly require that a proposal for settlement be accepted within the 30-day period. The Florida Supreme Court has instructed that the statue and the rule must both be strictly construed. Diamond Aircraft Indus., Inc. v. Horowitch, 107 So. 3d 362, 376 (Fla. 2013) ("Both section 768.79 and rule 1.442 are in derogation of the common law rule that each party is responsible for its own attorney's fees which requires that we strictly construe both the statute and the rule.") (citing Wills Shaw Express Inc. v. Hilyer Sod, Inc., 849 So. 2d 276, 278 (Fla. 2003));

N 3 That same provision allows plaintiffs to make offers of judgment as well, and to recover costs and attorneys' fees in the event of recovery "at least 25 percent greater than the offer." Id. N 4 The rule speaks of "proposals for settlement" while the statute refers to "offers of judgment." Without getting into too much history or analysis, for all intents and purposes in this case, and in many cases of modern vintage, we can use these terms interchangeably. [*3] Diamond Aircraft, 107 So. 3d at 376 ("Because the overall subject is in derogation of the common law, all portions must be strictly construed.") (quoting Campbell v. Goldman, 959 So. 2d 223, 227 (Fla. 2007)) (emphasis added by Diamond Aircraft court). It would thus seem apparent that the Medical Center's attempt to accept the PFS after the 30-day deadline was simply too late.

But the Medical Center contends that the filing of its motion for enlargement of time tolled the time in which to respond to the offer of judgment. Very recently, the Third District Court of Appeal addressed a nearly identical issue in Three Lions Construction, Inc. v. Namm Group, Inc., 40 Fla. L. Weekly D1703 (Fla. 3d DCA July 22, 2015). The court opined that the motion for extension of time to accept the settlement proposal was "ineffective to toll the time for acceptance of the proposal, where Three Lions did not agree to the extension and Namm did not obtain a hearing on the motion prior to the expiration of the time for acceptance." Id. (citing e.g., Donohue v. Starmed Staffing, Inc., 743 So. 2d 623 (Fla. 2d DCA 1999) (accord)).

Similarly, in the present case, the Medical Center did not secure an agreement for additional time, and though it filed a motion for enlargement, it failed to set the motion for hearing, much less obtain an order granting an enlargement. As such, the time in which to accept the offer of judgment was not extended or tolled, and by the time of the acceptance it had already expired.5 N 5 We are skeptical, but need not decide, whether absent agreement from the other party one may obtain an enlargement of time by court order under the rule or especially under the statute, in light of the Florida Supreme Court's requirement of strict compliance, see e.g., Diamond Aircraft. Although Goldy v. Corbett Cranes Services, Inc., 692 So. 2d 225, 228 (Fla. 5th DCA 1997) (citing Fla.R.Civ.P. 1.090(b)(1995) and Schmidt v. Fortner, 629 So. 2d 1036, 1038 (Fla. 4th DCA 1993), suggest that an offeree could seek an enlargement of the period within which to respond to an Offer of Judgment made pursuant to former Rule 1.442, it is questionable whether this reasoning survives Diamond Aircraft, et. al.

For similar reasons, we are unpersuaded by the Medical Center's assertion that numerous Florida County Courts and Circuit Courts have allowed for extensions of time to respond to proposals for settlement. Answer Br. at 12-13 (citing Coast Chiropractic Center v. State Farm Mut. Auto. Ins. Co., 21 Fla. L. Weekly Supp. 700b (Fla. Broward Cnty. Ct. 2014); Coast Chiropractic Center v. State Farm Mut. Auto. Ins. Co., 20 Fla. L. [*4] Weekly Supp. 446c (Fla. Broward Cnty. Ct. 2014); Complete Care and Rehab. Center, Inc. v. State Farm Mut. Auto. Ins. Co., 19 Fla. L. Weekly Supp. 377a (Fla. Broward Cnty. Ct. 2012); Nat'l Medical Imaging Group, LLC. a/a/o Hope Diedlecki v. Liberty Mut. Ins. Co., 18 Fla. L. Weekly Supp. 1192c (Fla. Broward Cnty. Ct. 2011); Hess Spinal & Medical Centers, PA a/a/o Blanca Mola v. State Farm Mut. Auto. Ins. Co. 18 Fla. L. Weekly Supp. 307c (Fla. Hillsborough Cnty. Ct. 2010)). Of course, such rulings would have no precedential value, but more fundamentally, we have read these terse orders, and as State Farm correctly points out, there is no way to determine whether those extensions were agreed, as in Barrata. Reply Br. at 6-7.

The Medical Center advances another argument: that it was entitled to accept the PFS outside of the 30-day statutory and rule window because the offer was never withdrawn. It relies on Baratta v. Bradford Electric, Inc., 9 So. 3d 694 (Fla. 4th DCA 2009), as did the lower court. But the Medical Center completely misconstrues the holding of the Baratta.

In contrast to the present case, defense counsel in Baratta agreed to an extension of time. The plaintiff then accepted the proposal within the extension period. He later attempted to renege on his own acceptance, arguing that because he did not accept the proposal within the original 30-day statutory/rule window, the proposal had expired. The trial court disagreed, granted the defendant's motion to enforce the settlement, and was affirmed on appeal. The plaintiff there, like the Medical Center here, conflates two separate issues.

The first is whether a party may recover costs and attorneys' fees at the conclusion of the case "if the final judgment is either twenty-five percent less or twentyfive percent more than the proposal for settlement," for defendants and plaintiffs, respectively. Baratta, 9 So. 3d at 696. As noted above, to enjoy that recovery, the subject proposal must be in compliance with the statute and the rule; if not, the recovery may very likely be unavailable. E.g., Diamond Aircraft, 107 So. 3d at 376; Baratta, 9 So. 3d at 696 (Fla. 4th DCA 2009) ("the plain meaning of the statute and the rule of procedure clearly contemplate strict compliance").

Quite apart from that is the question of whether, outside the ambit of the statute and rule, the parties may nevertheless agree to settle their case. No doubt aware that [*5] parties are almost always allowed to do so, the Fourth District held, rather unremarkably, that they could:

As noted in Wright v. Caruana, 640 So. 2d 197 (Fla. 3d DCA 1994), neither section 768.79 nor rule 1.442 prevents [a party] from actually accepting an untimely offer and avoiding trial. Rather, it merely prevents the offer from later serving as a basis for an award of costs and attorney's fees under the statute. Id. at 198-99; accord Hanzelik v. Grottoli & Hudon Inv. of Am., Inc., 687 So. 2d 1363, 1366 (Fla. 4th DCA 1997).... An offer and acceptance took place and, therefore, the settlement should be enforced.

Baratta, 9 So. 3d at 696-97. The import of Baratta is that an offeror may hold an offer open for acceptance even though the offer might otherwise be untimely under the statue or the rule. If so, and it the offer is accepted, the parties have reached an agreement. In the instant case, however, State Farm did not agree to an extension of time, and thus the offer had already expired by the time the Medical Center attempted to accept it. Simply stated, and unlike in Barrata, there was no longer any offer to accept. Consequently, the parties never reached an agreement to settle.

The Medical Center's untimely acceptance of the PFS without State Farm's agreement was not permitted by Section 768.79 of the Florida Statutes or Rule 1.442 of the Florida Rules of Civil Procedure. Therefore, this Court REVERSES the lower court's August 21, 2013, order, and REMANDS this matter for proceedings consistent with this opinion. We further deny the Medical Center's motion for appellate attorneys' fees. We grant State Farm's motion for appellate attorneys' fees contingent upon State Farm becoming entitled to attorneys' fees in the trial court.

N 6 ""Settlements ... are governed by the rules for interpretation of contracts. As with any contract, a settlement agreement is formed...when one party makes an offer and another party accepts it." Hanson v. Maxfield, 23 So. 3d 736, 739 (Fla. 1st DCA 2009) (quoting Robbie v. City of Miami, 469 So. 2d 1384, 1385 (Fla. 1985). "Additionally, settlements are highly favored and will be enforced whenever possible." Antar v. Seamiles, LLC, 994 So. 2d 439, 442 (Fla. 3d DCA 2008) (citing, e.g., Robbie). [*6] (WALSH & COLODNY, JJ., CONCUR) Done and Ordered in Miami-Dade County this 26th day of January, 2016.

Jason Bloch Circuit Court Judge

Yvonne Colodny Circuit Court Judge

Lisa Walsh Circuit Court Judge