New Rule on Florida Post-Offer Prejudgment Interest

 

Florida Rule 769.78 generally dictates rules on offers and demands as they pertain to judgments.[i]  However, this area of law is not well-settled.  In a recent case, Florida’s courts dove into the impact of post-offer prejudgment interest on the “judgment obtained.”[ii]  The ruling in CCM Condominium Association, Inc. v. Petri Positive Pest Control, Inc. expands the complicated web of rules stemming from Rule 768.79.

 

CCM v. Petri

CCM Condominium Association, Inc. v. Petri Positive Pest Control, Inc started in 2013 after CCM sued Petri for negligence and breach of contract regarding the parties’ contract for Petri to address a termite problem at CCM’s property.[iii]  After some back and forth, CCM made an offer to settle for $500,000, but Petri did not accept.  The case went to trial.

A jury awarded CCM $551,811.  CCM then “submitted a proposed final judgment, requesting $551,881 in damages, and an additional $84,295.60 in prejudgment interest calculated by an accountant, with a per diem rate for each day.”  The total judgment was set at $636,326.90, plus interest.  With regards to the case at bar, it is important to note the fiscal specifics.  According to the court, the “amount included both pre-offer of settlement and post-offer of settlement interest.  The court entered judgment based on those calculations for a total of $636,326.90.  CCM then moved to tax costs, which the court granted in the amount of $73,579.21.”

 

The Law

According to Rule 768.79(6)(b), “[i]f a plaintiff serves an offer which is not accepted by the defendant, and if the judgment obtained by the plaintiff is at least 25 percent more than the amount of the offer, the plaintiff shall be awarded reasonable costs, including investigative expenses, and attorney’s fees, calculated in accordance with the guidelines promulgated by the Supreme Court, incurred from the date the offer was served.”iv

CCM argued the total amount was greater than 25% of the initial settlement and it should therefore receive attorney’s fees.  However, CCM only met that 25% threshold with inclusion of the “post-offer prejudgment interests and costs.”  As this case rose through appellate courts, there were conflicts and issues with past rulings and statutes the courts looked to the Supreme Court to decide.

 

“Judgment Obtained” in This Context

The Fourth District Court of Appeals certified the following question to the Florida Supreme Court:  “FOR PURPOSES OF CALCULATING WHETHER A PLAINTIFF HAS MET THE THRESHOLD AMOUNT OF DIFFERENCE BETWEEN AN OFFER OF JUDGMENT AND THE JUDGMENT ENTERED FOR PURPOSES OF SECTION 768.79, FLORIDA STATUTES, MUST POST-OFFER PREJUDGMENT INTEREST BE EXCLUDED FROM THE AMOUNT OF THE “JUDGMENT OBTAINED”?

In essence, the court asked for a determination on the impact of post-offer prejudgment interest – is it part of the judgment obtained when running those calculations, or should it be excluded?

The Supreme Court determined it should be excluded.

 

Post-CCM Litigation

This litigation may impact future settlements.  Attorneys should be aware post-offer prejudgment interest is excluded from the “judgment obtained” compared to a rejected settlement offer when determining entitlement to attorneys’ fees under section 768.79.  Defense attorneys should take note of this in their settlement negotiations plans and ensure they understand the impact the law may have if a similar situation arises.

 

 

 



[i] Fla. Stat. Ann. § 768.79 (West).

[ii] CCM Condo. Ass’n, Inc. v. Petri Positive Pest Control, Inc., No. SC19-861, 2021 WL 4096926 (Fla. Sept. 9, 2021).

[iii] CCM Condo. Ass’n, Inc. v. Petri Positive Pest Control, Inc., No. SC19-861, 2021 WL 4096926 (Fla. Sept. 9, 2021).

iv Fla. Stat. Ann. § 768.79 (West).

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