Florida's Proposals for Settlement in Dangerous Instrumentality Cases

Florida - Settlements

The Proposal for Settlement/Offer of Judgment can be a good tool to assist a plaintiff in becoming realistic about the value of his or her case. Florida Statute 768.79 is Florida's Offer of Judgment Statute which is implemented by Florida Rule of Civil Procedure 1.442. Because the statute and rule are derivations of the common law rule that parties are to be responsible for their own attorney's fees, the language must be strictly construed. Major League Baseball v. Morsani, 790 So. 2d 1071 (Fla. 2001).

Without question, one of the most important tasks that should be accomplished before issuing a proposal is the proper evaluation of a plaintiff's damages against the assessment of your client's degree of culpability. A true and proper assessment will result in a proposal that encourages the plaintiff to seriously consider accepting the proposal, which, if accepted, would eliminate the risk of an adverse verdict against your client and potential attorney's fees if the plaintiff has issued a proposal of his or her own to your client.

Allegations of vicarious liability further complicate matters with regard to whether and how to issue a proposal to a plaintiff. For instance, Florida's Dangerous Instrumentality Doctrine "imposes strict vicarious liability upon the owner of a motor vehicle who voluntarily entrusts that motor vehicle to an individual whose negligent operation causes damage to another." It was initially adopted based on public policy concerns. The premise is based upon the theory that the owner of the vehicle is in the best position to insure that adequate resources are in place to pay any damages caused by the negligent operation of the vehicle.

In recent years, there has been a shift in plaintiffs' lawyers' strategy with regard to issuing proposals for settlement in Dangerous Instrumentality cases. Lawyers have been issuing proposals for settlement to the owners of the vehicle without issuing a proposal to the alleged negligent operator. Certainly, they are well within their right to issue such a proposal as there is nothing in the statute or the rule which requires them to issue a proposal to both the alleged negligent driver and the owner simultaneously. Aside from the practical requirements set out in Florida Statute 768.79 and Florida Rule of Civil Procedure 1.442, all that is required is that the proposal be made in good faith. Estate of Villaneuva ex rel. Villanueva v. Youngblood, 927 So. 2d 955 (Fla. Dist. Ct. App. 2006). If the proposal is unambiguous, it will be enforceable.

Practically any case that comes out of an appellate court in Florida where the issue is the validity of a proposal for settlement will contain dicta espousing that the courts encourage settlement proposals and will without hesitation enforce proposals that are unambiguous because they have the potential to settle claims. In a situation where the plaintiff files suit against the owner of a vehicle based solely on the Dangerous Instrumentality Doctrine, a proposal for settlement from the plaintiff to the owner of the vehicle, if accepted, will settle the claim against the owner, but under most circumstances, the litigation of the case will continue long after that settlement check has cleared the insurance company's bank account.

Most claims professionals frown upon, will challenge, and might be inclined to outright refuse to follow legal advice that would lead to settlement of only a portion of a case. However, as legal counsel, extra care should be taken to explain the potential ramifications of the failure to accept a proposal for settlement in a Dangerous Instrumentality case where it was issued only to the owner of the vehicle. Based on the 'perfect storm' created by the collision of the abrogations of law - Florida Statute 768.69, Florida Rule of Civil Procedure 1.442 and the Dangerous Instrumentality Doctrine - there is real potential for disaster. The disaster could be as serious as an adverse verdict and an assessment of attorneys' fees against your client based on the rejection of the proposal for settlement.

One of the primary goals of a defense lawyer should be to do everything in your power to avoid your client having to pay the other side's attorneys' fees. The occasional plaintiff's verdict is something that is bound to happen, and unless you simply do not try cases, it should be expected; but an award of attorney's fees against your client is something that you should take every care to avoid.

As it relates to the Dangerous Instrumentality Doctrine and a proposal to the owner, a simple rule of thumb should be applied to lessen the possibility of your client having to pay plaintiff's attorneys' fees. When the issue of vicarious liability is undisputed, i.e. that permission/consent to operate the vehicle was in fact given by the owner to the alleged negligent driver and the proposal for settlement from the plaintiff is less than the established medical specials to date, advise your client and its representatives to accept the proposal.

Of course, as with everything else with the law, the facts of each individual case will dictate whether this rule of thumb should be adhered to. If the issue of liability is highly disputed and there is no witness who has the ability to sway the outcome of the case to your client's side, the safest bet is to accept the proposal to the owner.

The benefit is at least twofold. First, since the owner was sued based on strict vicarious liability, any money paid by the owner to settle that part of the case will be applied against any verdict that the plaintiff might receive against the driver. Second, if you have issued your own well thought out proposal to the plaintiff, there might be an increased opportunity to recover your client's attorneys' fee from the plaintiff.

It is not unusual for lawyers to be under the misconception that because the proposal was issued to the owner of the vehicle and not the driver, it is unenforceable. However, as discussed in the Lamb case, this is an incorrect position to take. Lamb v. Matetzschk, 906 So. 2d 1037, (Fla. 2005). In that case, the Florida Supreme Court strictly construed Florida Rule of Civil Procedure 1.442 (c), which describes the form and content of the Proposal for Settlement.

Specifically, subsection (c) (3) states that "[a] proposal may be made by or to any party or parties and by or to any combination of parties properly identified in the proposal. A joint proposal shall state the amount and terms attributable to each party." Fla. R. Civ. P. 1.442(c).

More importantly, neither the statute nor the rule makes a distinction based on any particular theory of liability. In its plain meaning, there is nothing in the statute or the rule that prevents plaintiff's counsel from issuing a proposal to the owner and not the driver.

Thus, be careful and on the lookout for proposals from the plaintiff in cases where the Dangerous Instrumentality Doctrine is involved. These cases are especially ripe for a potential award of attorneys' fees against your client owner. This can be avoided if the medical specials are carefully analyzed to determine if a settlement of the claim against the owner is warranted and in your client's best interest.

If the proposal is for an amount less than the stated medical specials and if there is no witness testimony that will increase the driver's chance of a favorable verdict, the best course is to accept the proposal to the owner and continue the defense of the driver, perhaps through to verdict, if you are confident that your proposal to the plaintiff is adequate.

* Michael, a shareholder who works in our Tampa, Florida, office, can be reached at (813) 472-7803 or mgarchibald@mdwcg.com.

Defense Digest, Vol. 16, No. 2, June 2010