Attorney's Fees, the Florida Deceptive and Unfair Trade Practices Act, and Offers of Judgment

In Diamond Aircraft Industries, Inc. v. Horowitch (SC11-1371), the Florida Supreme Court addressed a number of questions relating to awards of attorney’s fees, certified to the Supreme Court by the U.S. Eleventh Circuit Court of Appeals. Two questions related to a prevailing party’s entitlement to attorney’s fees under the Florida Deceptive and Unfair Trade Practices Act (FDUTPA), Section 501.201, Florida Statutes, et seq. The other two questions addressed the applicability and adequacy of offers of judgment made under Section 768.79, Florida Statutes and Rule 1.442, Fla.R.Civ.P. where a suit seeks attorney’s fees and non-monetary relief. As a reminder, Section 768.79, Fla. Stat., provides for attorney’s fees for a defendant where an offer of judgment is rejected and there is ultimately a finding of no liability.
Diamond Aircraft v. Horowitch arose out of a contract dispute. Horowitch, an Arizona resident and the plaintiff below, entered into a contract with Diamond Aircraft to purchase an airplane. Subsequently, Diamond Aircraft refused to deliver the plane unless Horowitch paid a substantially larger sum of money than the contracted for amount. As the contract provided that Florida would be the venue for any dispute arising out of the contract, Horowitch filed suit in Florida on four claims; seeking specific performance, and alleging breach of contract, breach of the covenant of good faith and fair dealing, and for engaging in deceptive trade practices under FDUTPA.
Diamond Aircraft filed an offer of judgment, proposing a monetary payment in resolution of “all claims that were or could be” asserted by Plaintiff Horowitch. Horowitch rejected the offer, and the court entered summary judgment in favor of Diamond Aircraft on the first three claims. The trial court also held that the FDUTPA was not applicable as most business contacts between the parties occurred in Arizona. After a non-jury trial, the trial court applied Arizona law and found in favor of Diamond Aircraft. Diamond Aircraft sought attorney’s fees under FDUTPA, which provides for attorney’s fees for prevailing parties, and under Section 768.79, Fla. Stat., as its offer of judgment was rejected and Diamond Aircraft was found to not be liable.
The Florida Supreme Court held that where, as here, a lawsuit puts forward a claim for relief under the FDUTPA, and the FDUPTA is found to be inapplicable, the defendant is considered a prevailing party under the act for the purpose of awarding attorney’s fees. This is true even where FDUTPA is inapplicable based on choice of law concerns (i.e., the law of another jurisdiction applies to the claim), not just on whether the underlying facts fail to support a claim of a deceptive or unfair trade act. The Supremes went on to hold that attorney’s fees recoverable under FDUTPA are limited those fees that were incurred in defending the FDUTPA claim. Practitioners will now be well advised to be careful in raising FDUTPA claims where the choice of law may be disputed.
The Court also addressed the offer of judgment provision in Section 768.79, Florida Statutes. Specifically, the Court held that as that statute only applies to “actions for damages”, any offer of judgment that purports to settle monetary and non-monetary claims raised in a lawsuit (such as the demand for specific performance here) would not be subject to this section. As Florida’s common law provides that each side is responsible for its own fees, any statutory departure from that scheme must be strictly construed. The court held that as on its face the offer for judgment would resolve the claim for specific performance as well (i.e. “all claims that were or could be” raised), the offer of settlement was not limited to “actions for damages”. The Court declined to state whether Section 768.79, Fla. Stat. covers offers for judgments that are restricted to claims for monetary damages but explicitly exclude other relief requested in the underlying action. Nevertheless, it would appear to be better practice to specifically exclude such non-monetary claims if they are applicable when serving an offer of judgment.
In any case, the Court concluded that the offer of judgment was insufficient as it did not specifically address whether it was resolving any claim for attorney’s fees. Rule 1.442, Fla. R. Civ. P. requires any proposed settlement to state whether it includes attorney’s fees, and once again, as attorney’s fees statutes are construed strictly, an offer to settle “all” claims would not be sufficient to bring the offer of judgment under Section 768.79, Fla. Stat. and trigger its potential attorney’s fees provision.
In sum, FDUTPA claims should be carefully considered where choice of law questions are likely to be disputed, and any offer for judgment should be explicit in addressing only the monetary claims at issue, and should explicitly mention attorney’s fees.