47 Fla. L. Weekly D1121a

STATE FARM AUTOMOBILE INSURANCE COMPANY, Appellant, v. JAMES LIGHTFOOT and MARILYN ROSEANNE HUNT, Appellees. 1st District. Case No. 1D20-2285. MARILYN ROSEANNE HUNT, Appellant, v. JAMES LIGHTFOOT and STATE FARM AUTOMOBILE INSURANCE COMPANY, Appellees. Case No. 1D20-2303. May 25, 2022. On appeal from the Circuit Court for Duval County. Katie L. Dearing, Judge. Counsel: Michael B. Wedner and Brian Bellavia of Quintairos, Prieto, Wood & Boyer, P.A., Jacksonville; Dennis P. Dore and Samantha D. Dunlap-Smart of Dutton Law Group, Jacksonville; Warren B. Kwavnick of Cooney Trybus Kwavnick Peets PLC, Fort Lauderdale; Brent G. Steinberg and Daniel L. Greene of Swope, Rodante P.A., Tampa, for Marilyn Roseanne Hunt. Howard C. Coker of Coker Law, Jacksonville; Rebecca B. Creed and Dimitrios A. Peteves of Creed & Gowdy, P.A., Jacksonville; Joseph V. Camerlengo of The Truck Accident Law Firm, Jacksonville, for James Lightfoot. Anthony J. Russo, John Walter Weihmuller, and James Michael Shaw of Butler Weihmuller Katz Craig LLP, Tampa, for State Farm Automobile Insurance Company.

(ROBERTS, J.) Marilyn Hunt, defendant in an automobile negligence action, seeks to reverse a final judgment awarding over $1 million in attorney’s fees and taxable costs to plaintiff, James Lightfoot, under section 768.79, Florida Statutes. Ms. Hunt asserts the rejected proposal for settlement (PFS), the basis for the award, was not made in good faith because it required her to pay $1.3 million in cash within thirty days to accept it. We agree and reverse the fee award.I.

In 2011, Ms. Hunt rear-ended Mr. Lightfoot. Mr. Lightfoot walked away from the accident with minor knee and neck pain, believing he was “going to be okay.” In 2012, he sued Ms. Hunt for injuries he claimed to have sustained in the accident. Ms. Hunt held a $50,000 bodily injury liability insurance policy with appellee State Farm Automobile Insurance Company, which undertook her defense.

In 2015, Mr. Lightfoot served a PFS to Ms. Hunt that offered to dismiss his claims against her if she paid him $1.3 million in cash. Ms. Hunt did not accept the PFS within thirty days, rendering it rejected. See § 768.79(1), Fla. Stat.; Fla. R. Civ. P. 1.442(f)(1). After multiple continuances, the case proceeded to trial in 2019, wherein the jury found Ms. Hunt solely negligent and awarded Mr. Lightfoot over $11 million in damages — $10 million of which represented non-economic damages. Ms. Hunt unsuccessfully appealed the final judgment, which was affirmed by this Court in Hunt v. Lightfoot, 313 So. 3d 142 (Fla. 1st DCA 2020).

Mr. Lightfoot then sought attorney’s fees and costs pursuant to section 768.79 and Florida Rule of Civil Procedure 1.442. Ms. Hunt initially conceded entitlement, but later moved for reconsideration, arguing the PFS was invalid and unenforceable because it was impossible to accept and illusory because it was not made in good faith. The trial court held a hearing in which Mr. Lightfoot’s counsel argued Ms. Hunt’s inability to pay $1.3 million was irrelevant and unknowable, conjecturing Ms. Hunt could have won the Powerball recently. In reality, no one at the hearing doubted Ms. Hunt’s inability to produce $1.3 million cash within thirty days to accept the PFS. Nonetheless, the trial court upheld the PFS, concluding Ms. Hunt’s inability to pay was not determinative of the offer’s validity.¹ The court entered a final judgment assessing $1,415,254.55 in attorney’s fees and taxable costs against Ms. Hunt.² Ms. Hunt does not challenge the award of costs, which we affirm. The appeal of the fee award follows.II.

The legislature enacted section 768.79 to “deter parties from rejecting presumably reasonable settlement offers by imposing sanctions through costs and attorney’s fees.” Se. Floating Docks, Inc. v. Auto-Owners Ins. Co., 82 So. 3d 73, 79 (Fla. 2012). Section 768.79 and the implementing rule 1.442 must be strictly construed because they are in derogation of the common law rule that each party pays its own fees. Attorneys’ Title Ins. Fund, Inc. v. Gorka, 36 So. 3d 646, 649 (Fla. 2010). The penal nature of this type of fee award also means strict construction is applied in favor of the party against whom the penalty is imposed. Tierra Holdings, Ltd. v. Mercantile Bank, 78 So. 3d 558, 563 (Fla. 1st DCA 2011).

Section 768.79(1) provides in relevant part:

If a plaintiff files a demand for judgment which is not accepted by the defendant within 30 days and the plaintiff recovers a judgment in an amount at least 25 percent greater than the offer, she or he shall be entitled to recover reasonable costs and attorney’s fees incurred from the date of the filing of the demand.

The statute automatically creates an entitlement or “mandatory right” to attorney’s fees when a PFS satisfies the statutory and procedural requirements. See Anderson v. Hilton Hotels Corp., Inc., 202 So. 3d 846, 856 (Fla. 2016). The entitlement translates to a fee award so long as the plaintiff recovers a judgment that is 25% greater than the offer amount. Mr. Lightfoot satisfied all these conditions.III.

Ms. Hunt argues the fee award should be reversed because the PFS was not made in good faith. Section 768.79(7)(a) and rule 1.442(h)(1) allow a trial court to reject fees if it determines that a proposal was not made in good faith. We review the trial court’s decision on good faith for an abuse of discretion. Hayes Robertson Grp., Inc. v. Cherry, 260 So. 3d 1126, 1133 (Fla. 3d DCA 2018).

The offeree has the burden of showing a PFS was not made in good faith. Gawtrey v. Hayward, 50 So. 3d 739, 743 (Fla. 2d DCA 2010) (citing TGI Friday’s, Inc. v. Dvorak, 663 So. 2d 606, 613 (Fla. 1995)). The reasonableness of an offeree’s decision to reject a proposal is irrelevant to the issue of good faith. TGI Friday’s, 743 So. 2d at 611. Good faith turns on whether the offeror “had a reasonable foundation to make [his] offer and made it with intent to settle the claim made against [him by the offeree] if the offer had been accepted.” Id.

The trial court abused its discretion because it is clear to us that this PFS was not made with an intent to settle the case. By conditioning acceptance upon payment of $1.3 million in cash, the offer was illusory as there was no real possibility Ms. Hunt could accept. Mr. Lightfoot did not have to require actual payment and could have allowed for acceptance followed by a judgment entered against Ms. Hunt. See Alexandre v. Meyer, 732 So. 2d 44, 45 (Fla. 4th DCA 1999). By requiring Ms. Hunt to tender $1.3 million in cash within thirty days to accept, Mr. Lightfoot chose to include an impossible condition that was designed to fail.

We understand the trial court’s hesitance to consider Ms. Hunt’s particular finances and ability to pay. See id. (“Section 768.79 does not require either ability to pay or payment in order to accept a demand for judgment.”). But this case does not require an evaluation specific to Ms. Hunt. We are confident very few Americans could come up with $1.3 million cash within thirty days. Even very wealthy individuals diversify their assets, and very few would have that amount of expeditiously accessible liquidity.

To be clear, we are not holding an offeror must consider an offeree’s finances and ability to pay before tendering a PFS. Nor do we take issue with the amount alone or the condition of actual payment alone. Rather, it is the specific combination of $1.3 million “cash on the barrelhead” that renders this PFS illusory. If, for instance, the PFS could have been accepted by signing a promissory note for $1.3 million or by agreeing to have a judgment entered for $1.3 million, it would be perfectly valid.

It is contrary to the purpose of section 768.79 to sanction Ms. Hunt with over $1 million in attorney’s fees for an offer she could not have possibly accepted. Cf. Gorka, 36 So. 3d at 651 (“A party wishing to accept an offer should not be prohibited from doing so and then subjected to costly litigation and possible sanctions under rule 1.442 merely because a condition cannot occur[.]”). The PFS was an illusory offer made without intent to fully settle the case. The trial court abused its discretion in awarding fees where the PFS was not made in good faith.IV.

We REVERSE the judgment for attorney’s fees and costs in case number 1D20-2303 and REMAND for proceedings not inconsistent with this opinion.

As a result of our disposition in case number 1D20-2303, State Farm’s appeal in 1D20-2285 is DISMISSED as moot. (B.L. THOMAS and M.K. THOMAS, JJ., concur.)

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¹The court implicitly found the offer was made in good faith. See Stofman v. World Marine Underwriters, Inc., 729 So. 2d 959, 960 (Fla. 4th DCA 1999) (recognizing an express finding is only required when a court finds an offer was not made in good faith).

²The court joined State Farm in the final judgment on attorney’s fees and costs. In case number 1D20-2285, State Farm argued it was improperly joined, its policy did not provide indemnity for Ms. Hunt’s attorney fee liability, and the PFS was unenforceable.* * *