Amendments to Florida Law Limit Use of Proposals for Settlement and Offers of Judgment

The Florida Supreme Court has dramatically changed the law regarding Proposals for Settlement and Offers of Judgment pursuant to Florida Rule of Civil Procedure 1.442 and Section 768.79, Florida Statutes.  An Amendment effective July 1, 2022, revises Rule 1.442 to expressly exclude “non-monetary terms” from any Proposal for Settlement, thereby limiting the device to an offer of money in exchange for a voluntary dismissal with prejudice of the claims asserted in the pending lawsuit only.

The Amendment was precipitated by the decision from the Second District Court of Appeal in Diecidue v. Lewis, 223 So. 3d 1015 (Fla. 2d DCA 2017). In Diecidue, the Second District found that the release attached to a Proposal for Settlement was ambiguous because it required the plaintiff to misrepresent that he had no children eligible to file a claim for loss of consortium. The Second District held: “When an offer contains as a condition a ‘general release,’ care should be taken to insure that the proposed release does not seek to extinguish claims that are extrinsic to the litigation.”  In a concurring opinion, Judge Casanueva expressed disfavor with the use of releases, which are not specifically required under Section 768.79.  Judge Casanueva argued that a release with a hold harmless and indemnification requirement is more than a release and has the effect of discouraging rather than encouraging settlement.  Judge Casanueva suggested that parties desiring a release engage in private settlement negotiations rather than serving a Proposal for Settlement.

In adopting Judge Casanueva’s concurrence, the Florida Supreme Court amended Rule 1.442 to remove the requirements that the Proposal for Settlement state with particularity any “relevant conditions” and all “nonmonetary terms.”  The Amendment expressly prohibits all non-monetary terms except a voluntary dismissal with prejudice of the current claims in the lawsuit or non-monetary terms permitted by Statute.  Under this Amendment, a release can no longer be included with a Proposal for Settlement.  The Amendment essentially removes any incentive for the use of a Proposal for Settlement because the offer cannot extend to any other entity, person, carrier, officer, agent, or future claim arising out of the same set of facts.  As a result, the effect of the Amendment eliminates the finality and protection from future claims generally expected from a settlement.

With respect to construction defect and design professional claims, a Proposal for Settlement can no longer include any release of the individual professional, related or successor entities, or latent defects.  Consequently, under the amended Rule 1.442, if a Proposal for Settlement is accepted on behalf of a design firm for existing construction defect claims, the plaintiff could immediately re-file claims against the same entity for newly discovered defects, or file the same claims in the same lawsuit against the individual professional.

In summary, the Amendment to Florida Rule of Civil Procedure 1.442 is a significant change in the law and is likely to have an effect on the litigation strategy because it eliminates an effective tool utilized to either settle matters during the early stages of litigation or incentivize claimants to enter into more favorable defense settlements with a risk of potential liability for attorney’s fees.

If you have any questions or would like more information, please contact Starkey DeSoto in our Boca Raton office [(561) 994-7310 ext. 325;] or Crystal Arocha in our Miami office [(786) 261-0502;].