All posts by Sherry Schwartz

17JUL 2013

Florida law provides a conduit to obtain prevailing party fees where there is no other statutory or contractual basis to seek them.  This tool is generally referred to and recognized as an “Offer of Judgment” and/or “Proposal for Settlement”, as codified in Florida Statute §768.79 and Florida Rule of Civil Procedure 1.442(c)(3).  Both Plaintiffs and Defendants utilize these provisions to secure fee awards, the result of which can often exceed the underlying value of the case.

Given the implications in obtaining a fee award, Florida Courts have required extreme strict adherence to the black letter of §768.79 and Rule 1.442(c)(3).  Recently, on April 17, 2013, the Second District Court of Appeal followed the long standing premise that every “t” must be  crossed when seeking to enforce fee awards. Specifically, in Cobb v. Durando[1], the appellate Court overturned the lower court’s order granting prevailing party fees to two plaintiffs that failed to apportion their respective offers of judgment as required by Rule 1.442; the rule requires that a demand made by multiple parties serving a joint proposal “….shall state the amount and terms attributable to each party.” [2] A discussion of the case and the Court’s rationale is as follows:

Plaintiffs, a husband and wife, brought suit against their roofing contractor for breach of contract relating to work performed on a home they owned as tenants by the entirety.  During the course of the lawsuit, Plaintiffs jointly and timely served an offer of judgment on the contractor, and the contractor timely rejected same.  Upon prevailing on their underlying claim, Plaintiffs sought fees pursuant to their offer of judgment, and the trial court entered an order granting the requested relief.

The contractor appealed on the basis that the dual Plaintiffs, husband and wife, failed to apportion the offer of judgment in violation of the requirements codified in Rule 1.442(c)(3).  Plaintiffs defended the appeal in claiming that their mutual claim arose of out their ownership of their home that they held as tenants by the entirety, and hence, the offer was not required to be apportioned.

The Second District Court of Appeals agreed with the contractor and reversed the award.  The Court’s reasoning in reversing the order was two-fold: First, the Court disagreed that Plaintiffs’ claim directly arose out of the ownership of their home.  Conversely, the claim was for breach of contract, and accordingly, the fact that they owned the home as tenants by the entirety was not a relevant consideration.  Second, even if the claim did directly arise out of the ownership of the home, the Court applied strict construction to the interpretation of Rule 1.442: “…the rule requiring apportionment of proposals for settlement made by multiple plaintiffs does not recognize an exception for joint proposals made by tenants by the entireties.”[3]

The above decision represents a long standing trend of strict adherence to the fine letter of the law governing offers of judgments and/or proposals for settlement.  When defending an award, it is important to dissect every aspect of the offer that was served to determine whether any oversight can give rise to striking the claim.  On the other hand, perhaps the more important lesson is to ensure stringent compliance with the rules when situated as the party seeking to enforce the award.  In sum, although successfully opposing a fee award may be a victory, having your own award overturned can be costly.

[1] Cobb v. Durando, 111 So.2d 277 (Fla. 2nd DCA 2013)

[2] See Rule 1.442(c)(3), Fla.R.Civ.P: “(3) 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.”

[3] See Cobb, Id. at 278; citing Feldkamp v. Long Bay Partners, LLC., No.2:09-cv-253-FtM-29SPC, 2012 WL 3941773, at *2 (M.D.Fla. Sept. 10, 2012(affirming that a husband and wife should not necessarily be considered a single party when interpreting the rules governing offers of judgment).

24OCT 2012

In an increasingly digital and cost-conscious business environment, many companies in the construction industry may desire to provide its terms and conditions for dispute resolution in arbitration to its customer electronically by posting those terms on the Internet, rather than providing a hard copy of same. This practice may also enable businesses to achieve better consistency of terms across contracts and provide their constituents with easier access to key terms.  This article discusses the growing body of case law addressing whether parties can be bound by terms of an arbitration provision which were not incorporated in the written contract, but were made available on one party’s company website.

Among the courts that have addressed the issue in Florida, the Fourth District Court of Appeal has taken the most restrictive view of incorporation of online terms into written agreements. In Affinity Internet, Inc. v. Consolidated Credit Counseling Svcs., Inc., 920 So. 2d 1286 (Fla. 4th DCA  2006), the court refused to enforce an arbitration clause contained in a service provider’s online terms and conditions where the written agreement between the parties stated that it was “subject to all of [the service provider’s] terms, conditions, user and acceptable use policies located at [the service provider’s website].” Id. at 1287. In the court’s view, the “subject to” language of the contract did not constitute “clear language evidencing an intention of the parties to incorporate the terms of the collateral document.” Id. at 1288. The court further noted that the terms and conditions were not attached to the parties’ agreement and that the plaintiff “was never at any time subsequent to the signing of the contract given a copy of the collateral document or the information contained therein.” Id. at 1286.  The document provided to the other party should state specifically that the online terms and conditions are “incorporated by reference” into the document delivered to the other party. Id. at 1288.

Similarly, in General Impact Glass & Window Corp., v. Rollac Shutter of Texas, Inc., 8 so. 3d 1165 (Fla. 3d DCA 2009), throughout the course of the parties’ dealings, a separate document, Rollac’s terms and conditions, were only available on Rollac’s website, in Rollac’s catalog, but not incorporated in the contract.  The terms and conditions provide for dispute resolution in arbitration, and a Texas choice of law. Id. at 1166.  In reversing the trial court after it compelled arbitration, the appellate court emphasized that the terms and conditions were never signed by plaintiff and were never expressly incorporated into or attached to any of the documents that formed the contract between the parties Id. at 1167.  As the provisions relating to alternative dispute resolution were only found on Rollac’s website and in the Rollac catalog, the Court found that the terms were part of a separate document and not incorporated into the writings exchanged between the parties.  Because that separate document was not incorporated into the writings exchanged between the parties, General Impact was not bound by it. Id.

As arbitration continues to be a popular forum for resolving construction-related disputes, it is imperative that those in the construction industry heed the ever-evolving case law relating to construction contracts and disputes.  In an environment where the trend is moving towards paperless operation, it is important to remember that courts still tend to honor the classic pen-to-paper approach.  This line of reasoning, of course, may extend beyond arbitration clauses.  It may well apply to any material terms and conditions parties seek to incorporate by reference into agreements.