Court mulls over amendments to the settlement rules
Some of the Supreme Court’s proposed changes to Florida Rule of Civil Procedure 1.442 (Proposals for Settlement), including joint proposals for settlement, are confusing, conflict with existing law, and might do more harm than good, attorneys warned justices.
During April 6 oral arguments, Tallahassee attorney Bailey Howard, arguing for the Florida Justice Association, said some of the proposed amendments would require “minor tweaks” to avoid conflicting with statutes.
“The real heart of the comment is to make sure that there is consistency with the statutes, and that should be the court’s first concern,” Howard said.
Civil Procedure Rules Committee Chair Jason Stearns argued some changes are necessary to fix a flawed system — but the rule serves a vital function.
“I suppose I have 15 minutes to try to explain why we should fix a broken system,” Stearns said. “The comments that we provided really strive to give the court some guidance.”
On September 10, 2021, the Supreme Court, on its own motion, ordered an official notice published with proposed amendments to Civil Procedure Rule 1.422.
The notice also said, “the amendments under consideration would set forth procedures for employing joint proposals for settlements.”
The court invited the Civil Procedure Rules Committee “and all interested persons” to comment by November 1, 2021.
One proposed amendment would add a new subsection (5) to Rule 1.442(c): “A party may make two or more other parties a joint proposal that requires acceptance by all the parties to whom the proposal is made.”
It continues, in part, “If any party rejects such a joint proposal, the action must proceed as to all parties to whom such a joint proposal was made, whether or not the other parties accepted or rejected it; and the sanctions pursuant to applicable Florida law, based on the failure to accept a proposal, apply to each party who rejected such a joint proposal but do not apply to any party who accepted it.”
The proposed language will deter settlements, Howard argued.
“So, this doesn’t encourage settlement, in fact, it prevents settlement, because this party that is willing to settle is kept in the case,” he said.
The Supreme Court’s proposal would also add language to 1.442(a) that would ease interpretation of the rule provisions: “The procedural requirements of this rule shall be applied according to their plain meaning; but if the procedural requirements of this rule are ambiguous, they shall be construed pursuant to the standard set forth in Florida Rule of Civil Procedure 1.010, not strictly.”
(Rule 1.010 provides, in part: “These rules shall be construed to secure the just, speedy, and inexpensive determination of every action.”)
But in its comment, the Civil Procedure Rules Committee argued that Rule 1.010 is generally understood to have “global application.”
“The CPRC believes that inclusion of this language in rule 1.442 may unintentionally create more litigation in cases involving interpretation of the rules of civil procedure — especially with respect to rules of civil procedure where this language is not specifically incorporated into the rule.”
Much of the oral argument time was dedicated to amendments that would change 1.442(c)(2).
That provision now requires a settlement offer to say whether it includes attorneys fees — while the amendment would provide that a settlement offer “resolves all damages, attorneys fees, taxable costs, and prejudgment interest,” and that the damages would be tallied “as if the final judgments were entered on the date of the proposal.”
According to the court’s notice, that comports with the court’s decision in White v. Steak & Ale of Fla., Inc., 816 So. 2d 546 (Fla. 2002), as spelled out in its September 9, 2021, opinion in CCM Condo Ass’n v. Petri Positive Pest Control, Inc., SC19-861.
The notice instructed parties commenting on the joint settlement provisions to consider Justice Ricky Polston’s dissent in Attorneys Title Ins. Fund, Inc. v. Gorka, 36 So. 3d 646, 654, (Fla. 2010), “that the majority’s ruling ‘effectively eliminates the ability to make joint offers,’” and the Third District Court of Appeal opinion in Atl. Civil, Inc. v. Swift, 271 So. 3d 21, 26 (Fla. 3d DCA 2018), that “although expressly permitted under rule 1.422 (c)(3), ‘joint proposals have become a trap for the wary and unwary alike’ under the principle set forth in Gorka.”
But Howard argued that requiring a settlement offer to resolve attorneys fees would conflict with provisions of F.S. §768.79.
Justice Alan Lawson asked Howard to clarify.
“So, your position would be with 768.79, because it does provide for damages as the offer, and not attorney fees and costs, that if we had a rule that required inclusion of attorney fees and costs, that it would be substantively inconsistent with the statute?” Justice Lawson asked.
“Yes, your honor,” Howard said.
Lawson acknowledged the requirement might be difficult to implement.
“It would be really hard, I think, to anticipate the attorney fees the other side might get, and those kinds of things, wouldn’t you agree…it makes it unworkable as well,” Justice Lawson said.
Justice Jorge Labarga questioned whether justices should reconsider the proposal altogether.
“This is just adding more complications it seems to me…to an already confusing area of the law,” he said. “I would just say leave what’s broken alone. We’ll figure out how to put the pieces back together, we’ll get that Gorilla Glue.”
Another portion of the Supreme Court’s original notice said the amendments, in addition to eliminating strict construction of Rule 1.422, also exclude nonmonetary terms in settlement offers except for a voluntary dismissal with prejudice.
But leaving out non-monetary terms would also discourage settlements, Stearns argued.
“As a practical matter, if you don’t include non-monetary terms, which was something the committee felt strongly should remain in the rule…a lot of defendants are not going to use them,” he said.
Stearns stressed that the committee, which is made up of judges and lawyers from a wide variety of practice areas, was uncharacteristically united in its support of the comment.
The committee vote, according to the comment, was 34-2-1.
“We have lawyers and judges from all walks, from all areas of practice, and I think the consensus is, you need this vehicle, you need proposals for settlements,” Stearns said.
Some of the comments warned that the Supreme Court’s proposed amendments are substantive and would be more properly addressed by the Legislature.
Chief Justice Charles Canady indicated that he would welcome the Legislature’s help.
“Given the way all these things interact, all the complexities, the questions about what’s substantive, what’s procedural, couldn’t the case be made for it being time for the Legislature to look at this and address these questions, and try to come up with changes that would address the problems that have arisen?” Justice Canady said. “Substance is their arena….”
Stearns said he agreed, for the most part.
“If we had a magic button, absolutely, Chief Justice,” Stearns said. “I certainly think that’s an appropriate vehicle…but right now, we as the rules committee think we should work with the rule we have.”
The oral arguments were made in In re: Amendments to Florida Rule of Civil Procedure 1.442, Case No. SC21-277.
