Arbitration & Mediation

Fourth DCA Opines on Proposal for Settlement As Simply a Settlement Agreement

By Christopher B. Hopkins, Esq.

An unusual set of facts and a potential appellate issue leads to a ruling in Joseph Baratta v. Bradford Electric, Inc. and Elcon Electrical Contractors Corp. which may crowd, rather than clarify, the morass of case law surrounding Proposals for Settlement. It's kind of thoughtful however in the broader scheme of enforcing settlement agreements.

In this personal injury case, the defendant serves a Proposal for Settlement. The requisite thirty days pass. Around the 40th day, plaintiff's counsel asks for an extension, which is given. The plaintiff then "accepts" the deal but add additional terms. Defendant declined the added terms. The plaintiff then "accepts" the Proposal as is, without the proposed added terms -- outside of even the extended period. Defendant agrees and sends the release and check. Plaintiff signs. A few days later, after second thoughts, he sends the check back, marked "void."

Defendant moves to compel settlement. The trial court and Panel (Hazouri, Warner, and Shahood) agree that settlement should be compelled.

Strip away the concept of "Proposal for Settlement" for a moment in this fact pattern and look at this as simply a series of offers, rejections, and acceptance. It's a mess but the bottom line is that the plaintiff "accepted" the deal, signed the release, received the check and THEN tried to back out. On that basis, settlement was compelled.

Now turn back on the rules regarding Proposals. Florida Rule of Civil Procedure 1.442(f)(1) says that a proposal "shall" be accepted within 30 days or else it is deemed rejected. Now, periods get extended all the time but recall that the Florida courts have repeatedly been strict (too strict?) in interpreting Rule 1.442 and Florida Statute 768.79. Does the precedent allow an informal extension of the 30 day period? Why suddenly so lenient on interpreting "shall" in this context? The Panel claims that "the statute and the rule implementing the statute apply only when there has been a rejection of a proposal for settlement..."

We also note that the Proposal for Settlement in this case reportedly had a release and hold harmless agreement attached. As previously discussed, that's an unpopular practice if the Proposal gets reviewed by an appellate court for enforceability if it was not accepted. Case law suggests attaching releases is a unwise practice. If the Proposal was NOT accepted and the plaintiff didn't beat it at trial, he could have attacked the Proposal because of the attachment. Here, however, the tables are turned since it was accepted.

In short, a deal-is-a-deal, since the court was stripping away the "Proposal" title and just looking at whether there was offer/acceptance of a settlement agreement.

Full post as published by Florida Arbitration Law on April 19, 2009 (boomark / email).