Imagine this scenario: You represent a plaintiff in an auto accident case against the owner of the other vehicle in the accident and the driver of that vehicle. You serve a proposal for settlement on the owner of the vehicle offering to voluntarily dismiss the case and provide a full release of liability in favor of the owner of the vehicle and his insurance company in exchange for payment in the amount of $40,000. You do not, however, attach a copy of the release or describe its terms. The proposal for settlement is not timely accepted and is, therefore, deemed rejected. You try the case and the jury returns a verdict in your client’s favor in the amount of $186,796.20. You then file your Motion to Tax Attorneys’ Fees pursuant to the proposal for settlement, but the vehicle’s owner moves to strike the proposal for settlement, arguing that it failed to comply with Fla. Stat. §768.79 and Fla. R. Civ. P. 1.442, because it did not state the relevant conditions and non-monetary terms with particularity. The trial judge denies the vehicle’s owner’s motion to strike the proposal for settlement and awards you attorneys’ fees in the amount of $141,475 with interest. You’ve obtained a great result for your client (significantly more than your client would have received had the proposal for settlement been accepted) and for yourself (an attorneys’ fee award in an amount approximately 75% of the damages awarded to your client).
This is exactly what happened in the case of Scott Lyons and Bradley Drake v. Tanois Chamoun, in which the Fourth District Court of Appeal recently issued its opinion on a motion for rehearing in the consolidated cases numbered 4D10-872 and 4D10-2171. The owner of the vehicle and the driver of the vehicle appealed the trial court’s ruling and the Fourth District Court of Appeal analyzed the validity of the plaintiff’s proposal for settlement. The appellate court first noted that, when a proposed release is not attached to a proposal for settlement, the terms of the release must be described with sufficient particularity such that any reasonable ambiguity about the scope of the release is eliminated. In this case, the Fourth District Court of Appeal determined that there was a “critical ambiguity” in that, by not stating whether the driver of the vehicle was covered by the release, the proposal for settlement failed to define the parties included in the release. The Court determined that this was “essential for the owner because he is responsible for the driver’s negligence under the dangerous instrumentality doctrine.” Based upon this lack of particularity, the appellate court reversed the trial court and remanded for the attorneys’ fee award to be vacated.
The Fourth District’s ruling was clearly a significant blow to the plaintiff’s attorney. It is also another cautionary tale about the use of proposals for settlement, particularly when releases are involved. It can easily be seen how this ruling could have implications beyond auto accident cases, such as cases wherein an employer may be vicariously liable for the acts of a co-defendant employee. Proposals for settlement can be very effective tools in litigation. However, attorneys must remain vigilant in following and complying with the rules governing them. Based upon the Fourth District’s ruling in this case, it would appear that it would behoove attorneys who serve proposals for settlement that require execution of a release to attach the proposed release to the proposal for settlement when it is first served. Of course, crafting a release that doesn’t invalidate the proposal for settlement is a topic to be covered by its own blog entry!
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David Greene is a partner with the law firm of Fox Rothschild LLP. David represents clients in a variety of commercial litigation matters in State and Federal Courts throughout Florida. David can be contacted at (561) 804-4441 or dgreene@foxrothschild.com.