Supreme Court Clarifies the Construction of the Apportionment Rule for Joint Proposals for Settlement
In a pair of recent rulings, the Florida Supreme Court has again clarified the apportionment requirement in Florida Rule of Civil Procedure 1.442(c)(3) for proposals for settlement. In both recent cases – Audiffred v. Arnold, No. SC12-2377, and Pratt v. Weiss, No. SC12-1783 – the court invalidated the proposal at issue as an improper and undifferentiated “joint proposal.”
Genesis of the Apportionment Rule
The apportionment rule has its genesis in the Supreme Court’s strict construction of Rule 1.442. In Willis Shaw Express, Inc. v. Hilyer Sod, Inc., 849 So. 2d 276, 278-79 (Fla. 2003), the Court made clear that the rule “requires that offers of judgment made by multiple offerors must apportion the amounts attributable to each offeror.” The same rule applies to proposals for settlement made by a single offeror to multiple offerees – the offeror must state the amount attributable to each offeree. Lamb v. Matetzschk, 906 So. 2d 1037 (Fla. 2005). This same authority also led the Supreme Court to conclude that a joint proposal made to multiple offerees could not be conditioned on the mutual acceptance of all of the joint offerees. Attorneys’ Title Ins. Fund, Inc. v. Gorka, 36 So. 3d 646 (Fla. 2010).
Audiffred v. Arnold, No. SC 12-2377, 2015 WL 1724250 (Fla. Apr. 16, 2015).
Audiffred involved a frequent work-around of the apportionment requirement. The plaintiffs, husband and wife, sued an individual defendant. The wife alone made a proposal for settlement to the defendant, conditioned on the dismissal of the entire action by both plaintiffs. This tactic avoided Rule 1.442(c)(3)’s apportionment requirement by making dismissal of the entire action – not just dismissal of the claims between the offeror and offeree – a non-monetary condition. Such proposals have been common in this district in light of cases like Alioto-Alexander v. Toll Bros., Inc. 12 So. 3d 915, 917 (Fla. 4th DCA 2009), whereby “dismissal of the entire suit” could be made a “condition of the proposal” from one offeror to another without “transform[ing] the proposal for settlement into one made by multiple offerors.”
The Supreme Court disagreed, concluding that “when a single offeror submits a settlement proposal to a single offerree . . . and the offer resolves pending claims by or against additional parties who are neither offerors nor offerees, it constitutes a joint proposal that is subject to the apportionment requirement.” 2015 WL 1724250, at *5. The court disapproved of the rationale of Alioto-Alexander, finding that “the required strict construction of the rule and statute” compelled the court to treat these proposals as joint proposals. Id.
Pratt v. Weiss, No. SC12-1783, 2015 WL 1724574 (Fla. Apr. 16, 2015).
Pratt examined a proposal made by two parties that were, in form, two separate legal entities but, in substance, a single operation. In Pratt, the plaintiff filed a medical malpractice action against two defendants who jointly owned and operated a hospital. The defendants served a single proposal for settlement on the plaintiff, without apportioning the amount between each defendant. After prevailing at trial, the defendants sought fees on their proposal, and the plaintiff claimed it was unenforceable for, among other reasons, lack of apportionment. On appeal, the Fourth DCA concluded that the proposal was made “on behalf of the single hospital entity,” and because of the “singular nature of the entity,” apportionment was not required. Pratt v. Weiss, 92 So. 3d 851, 854 (Fla. 4th DCA 2012). In other words, even though the plaintiff sued two separate entities as defendants, they were, in substance, a single hospital. For Rule 1.442(c)(3) purposes, the Fourth DCA held that apportionment was not required in that circumstance.
The Supreme Court disagreed, finding that the proposal served by the hospital “unambiguously” referred to two separate defendants “in the plural.” 2015 WL 1724574, at *3. Both entities were treated as separate defendants in the complaint, and both entities sought separate awards of attorney’s fees. In an effort to eliminate any ambiguity, the court further noted that even in situations where liability of two parties “could be viewed as coextensive, this does not constitute an exception to the apportionment requirement.” 2015 WL 1724574, at *4. Rule 1.442(c)(3) requires the apportionment by the offeror or offerors, “[e]ven where no logical apportionment can be made.” Id. Difficulty in apportioning the settlement amount is not a ground “to disregard or circumvent the rule that requires apportionment of a settlement amount where a proposal is presented by multiple parties.” Id.
In sum, these rulings reaffirm the Supreme Court’s strong adherence to the apportionment requirement when serving joint proposals for settlement. Notwithstanding, these opinions may have the effect of invalidating outstanding proposals for settlement in pending cases and practitioners would be wise to re-evaluate previous proposals served in pending cases for compliance and, if necessary, re-service.