We're traditionally quite comfortable straying a bit from the topics of ADR and have braved issues like 57.105 and Proposals for Settlement since they are, indeed, alternative forms of relief. So let's stretch our reach a little further. This post helps the practice of law both in arbitration and litigation. You still need to take depositions in arbitration. Likewise, you still have litigation files on your desk, right? So know the rules, including this potentially critical case.

In Proskauer Rose v. Boca Airport d/b/a Boca Aviation, the parties battled out a legal malpractice claim and took up an issue regarding production of documents used to prepare a deponent. The party-deponent reviewed records with his lawyer in advance of deposition. The documents were selected, highlighted, and summarized by counsel and were helpful to refresh the deponent's memory in advance of deposition.

After the deposition, the questioning-lawyer sought to have the "refreshing" documents produced, arguing they were necessary to be inspected and used for cross-exam under the Florida Evidence Code, 90.613.

The per curiam panel determined that the general rules regarding handing over documents used to refresh a witness' memory while testifying did not apply to documents used BEFORE testimony. A 1985 case confirmed that a trial court could, but was not required, to order production but, here, the documents were privileged and that was not overcome.

Of note, based upon the opinion, I don't readily see any references which might warrant Supreme Court review for direct/express conflict. Not sure this is an issue of great public importance here either. So this case might be the controlling precedent for a while.

A passing note, there are some quality West Palm judges, lawyers, and firms involved in this case: Judge Diana Lewis, Beasley Hauser law firm, Edna Caruso, and Jack Scarola at Searcy Denney.

Exculpatory clauses (or "liability waivers") cannot be in a new home construction contract, says the Fifth District in Sue and Warren Loewe v. Seagate Homes, Inc. Not that people are building new homes these days anyhow. I suspect many of us have these clauses in our construction contracts. This could be a precedent-setting case.

In 2004, the plaintiffs hired the defendant to build a home. A week after moving in, one of the plaintiffs allegedly was struck by an improperly hung closet door. The plaintiffs sued. The court noted that the new house construction contract had both a seller's warranty (good quality; met acceptable professional standards) and an exculpatory clause which released the defendant from, well, every form of civil liability. Trial court said the exculpatory clause was unambiguous and enforceable.

The Fifth District (Evander, Pleus, and Cohen) reversed, noting that the exculpatory clause violated public policy in that "a party cannot contract away its responsibility to comply with a building code when the person with whom the contract is made is one of those whom the code is designed to protect." Of note, the court acknowledged that there was no PROVEN violation of the code but, regardless of whether they can establish that, this clause would absolve that liability and was therefore unenforceable.

Of note, the public policy at issue involves construction practices and standards under Florida Statute section 489.101 regarding regulation for public wellbeing and construction accountability under section 553.781.

Also of note, the clause below must fail because it excuses intentional torts. According to the panel, it is "obviously unenforceable to the extent it attempts to release Seagate of liability for an intentional tort." No other comments about the rest, if those of you who draft contracts want to salvage portions of this liability waiver:

Release. The Buyer hereby acquits, releases, exonerates, and discharges Seller, its officers, directors, owners, employees, their successors, legal representatives and assigns from any amount of damages, including but not limited to medical expense, lost wages, pain and suffering and disability resulting directly or indirectly from bodily injury, personal injury, or property damage, that may be or is caused, suffered or incurred by the Buyer, the Buyer's guests, employees, agents, suppliers, contractors or subcontractors at any time as the result in part or in whole from the construction process, the constructed dwelling or the lot on which it is constructed, the materials and supplies used in or incorporated into the dwelling or the lot on which it is constructed and the components therein. This Release shall apply and be effective regardless of the cause of the injury or damage, including but not limited to negligence, gross negligence, strict liability or the intentional conduct of any of the foregoing releasees

Don't you hate it when you find out that your friends have been out having fun without you? Such is the case with this local West Palm Beach appeal involving colleagues Bard Rockenbach and Robert Saylor before Judge Diana Lewis dealing with procedural arbitration questions. (we kid, of course)

In Sheila Paige v. American Security Insurance Company, the parties went to arbitration and the plaintiff won. She then move the circuit court to confirm the award and enter an award granting fees and costs. The defendant moved to strike plaintiff's motion for fees as untimely. Specifically, in April 2007, the circuit court entered an order confirming the award and reserving on fees and costs. Two months later, the plaintiff filed a motion for fees. Defendant claimed it was too late and that the confirmation of the arbitration award was tantamount to a final judgment.

Not so fast. The Fourth District (Stone, Farmer, and Klein -- nice panel for this case, by the way) noted that Florida Statutes 682.15 (Florida Arbitration Code) says that, "[u]pon the granting of an order comfirming, modifying or correcting an award, judgment or decre shall be entered in conformity therewith..." Florida Rule of Civil Procedure 1.525 days that the motion for fees/costs is due within 30 days after filing the final judgment.

Hence, there is still judicial labor after confirmation of the arbitration award which means there is no final judgment yet. Indeed, the Code sets out that confirmation and final judgment are different legal animals. Rule 1.525 indicates, here, that the order of confirmation "did not trigger the thirty-day cap..."

In an early summer post, we mentioned a May 2008 decision where the Fifth DCA refused to enforce an exculpatory clause / liability waiver for a 5-year old camper. A large number of gyms, camps, and other recreation activities include the consumer signing a waiver. Is it enforceable? Perhaps this Second DCA case -- which voided the YMCA's exculpatory clause -- will be of some interest.

In Elizabeth Anne Murphy v. Young Men's Christian Association of Lake Wales, Inc., a central Florida YMCA required a member to sign an exclupatory clause before using gym equipment. We'll reprint the clause below, but essentially the drafters tried to use "user friendly" language and got burned. In one sentence, the clause suggests that the YMCA will use "reasonable precautions" but, later on, all claims for negligence are waived. See the difference? In one instance, the "reasonable precaution" sentence suggests that YMCA will, indeed, use reasonable precautions -- then and only then will they be off the hook. But, the clause then says all claims are waived, presumably even if reasonable precautions are not used.

Read the clause below and make up your own mind. Quite frankly, it seems splitting hairs but, alas, that is the lesson of these cases. ANY suggestion of the slightest mulitple equivocation or multiple interpretation is going to unwind an exculpatory clause. Indeed, the provision below may be simply too long. That many words leads to the communication of a lot of ideas, some of which can be construed as being in conflict. Bottom line, exculpatory clauses need to be clear. Reference to "reasonable precautions" may be its un-doing. Best to be short and emphasized, right above the signature block.

The 2nd DCA (Canady, Whatley, Salcines) cited an old Third DCA (Miami area) case involving a camp liability waiver. That provision is included below. Quick test, was it enforced?

CLAUSE FROM OLDER CAMP CASE:

"It is further agreed that reasonable precautions will be taken by Camp to assure the safety and good health of said boy/girl but that Camp is not to be held liable in the event of injury, illness or death of said boy/girl, and the undersigned does fully release the Camp and any and all persons concerned therewith, for any such liability."

Enforced? Nope. That clause was "ineffective because it did not explicitly state that the camp would be absolved from liability for injuries resulting from its negligence." Indeed, we again see this "reasonable precaution" language rear its head. Note, all things being equal, if there is a duty and reasonable precautions are undertaken to meet it, a would-be defendant likely would not be found negligent anyhow. That's one of the standards of negligence. So such a "reasonable precautions" release is worthless.

Here's the YMCA clause:

"I am an adult over 18 years of age and wish to participate in Lakes Wales Family YMCA activities. In addition I give my children permission to participate... I understand that even when every reasonable precaution is taken, accidents can sometimes still happen. Therefore, in exchange for the YMCA allowing me to participate in YMCA activities, I understand and expressly acknowledge that I release the Lake Wales YMCA and its staff members from all liability for any injury, loss or damage connected in any way whatsoever to my (or my children's) participation in YMCA activities, whether on or off the YMCA's premises. I understand this release includes any claims based upon negligence, action or inaction of the Lake Wales Family YMCA, its staff, directors, members and guests. I have read and am voluntarily signing this authorization and release."

About a year ago, the First Circuit (federal court) held that General Dynamics' attempt to implement an arbitration program -- distributed to employees by email only -- was not enforceable. Some took this opinion to mean that binding arbitration could not be enforced if simply sent via email; but that wasn't the court's opinion. The method of delivery (email) was fine -- just the wording of that particularly agreement was faulty. Follow the link for a clear discussion and summary of Campbell v. General Dynamics Government Systems Corp.

Fast forward to a few weeks ago, and the 4th District took up a similar issue in Alexander Santos v. General Dynamics Aviation Services Corp. An employee claimed that General Dynamics violated the Florida Civil Rights Act (FCRA) and brought administrative complaints through the Palm Beach County Office of Equal Opportunity (OEO) and the Florida Commission on Human Relations (FCHR). He then filed suit. General Dynamics moved for arbitration, claiming that there was a long-standing Dispute Resolution Policy (DRP) which had been sent to all employees back in 2003. It stated that continued employment alone meant the employee agreed to the mandatory binding arbitration program.

As a practice pointer, General Dynamics moved to compel arbitration and enclosed (1) a mailing list of all employees who received the updated DRP and (2) an affidavit attesting these employees (including the plaintiff) received the DRP. This, by the way, is a consistent, proven method of establishing a valid arbitration agreement when one side has not signed -- much like we see in the amendments to credit card agreements which get served on customers by a mailing or billing insert.

The Fourth District (Polen, Warner, Taylor) confirmed that, under both Florida and federal law, arbitration can be enforced without a signature. Of note, the Third District came to the same conclusion back in 2002 in Integrated Health Services of Green Briar (IHS) v. Lopez-Silvero, but that case was not cited by the Fourth. Here, the Court found a valid and enforceable arbitration agreement because General Dynamics had given "sufficient proof" there had been an agreement.

Practitioner Question: note that in this discrimination case, the claimant first made administrative claims with county and state agencies. Let's presume for a moment the employer-defendant responded. If that's not waiver (and it shouldn't be), can we not also conclude that any participation in any "pre-suit" requirements for a statutory claim (say, Chapter 400 or 766) is also NOT waiver?

It is not uncommon for court opinions to take the time to really single out an attorney, or actions by an attorney, in order to press the court's own point. A lot of times those decisions involve sanctions or intentional behavior. This case, which we pick up from our brethren in Illinois, shows the appellate court taking advantage of (what the court decided was) poor strategy of one party's lawyer in order to avoid having to undo some deficient thinking by a trial judge. Indeed, along the way, the decision never discussed some potentially interesting issues.

In the case of Estate of Joyce Gott v. SSC Odin Operating Company d/b/a Odin Healthcare Center, the dispute centers around an elderly resident's two admissions to the same nursing home -- both times an arbitration agreement was signed, once by her daughter and the second time by the resident. Likely that issue was batted around quite a bit, but none of that made it to this decision. Indeed, also fascinating was an arbitration term that it ONLY applied to claims worth less than $200,000 while, at the same time, it was governed by the FAA. Note, fighting over the FAA can occur in state or federal court but, to be in the latter on diversity grounds, the claim would have to be worth more than $75k but less than $200k. Again, surely there was some effort to avoid arbitration based upon that "under $200k clause" -- but nothing mentioned in our fateful decision.

The trial court's decision was dealt with in two paragraphs. One explaining what the trial court did. The second paragraph said that the appellate court didn't have to review those issues based upon its ruling. Lucky trial court. It had said that these two nursing home admissions were not sufficient to trigger interstate commerce nor the FAA and that, even with the "dual" signatures, it wouldn't apply to this case. As to the interstate commerce issue, rarely have we seen a nursing home case NOT involve interstate commerce. As to the second issue, we'll assume there are some unique Illinois statutes at work but, in Florida, that ruling would make no sense (and it still defies common sense).

The heart of the decision is that the appellate court spends 2 pages on what the defense lawyer did not argue. The court said the defense lawyer waived the argument that public policy might not be able to unwind a private contract. That's odd to claim the lawyer "waived" the argument -- and then have the court set out a half dozen cases showing why that argument likely wouldn't have worked anyhow. How about just saying the argument wouldn't have worked, if raised, because of (whatever) precedent? Next, the court claimed the lawyer "waived" the argument that an anti-arbitration provision in the nursing home statute was NOT a statement of public policy. Again, the court then string-cited a bunch of cases showing that argument may not have worked anyhow. So, that foundation too could have been phrased in a way that doesn't take the position that some lawyer blew it by not raising the issue "in its brief or reply brief or at any time at oral argument." Nice. Perhaps the court should have included the name and phone number of the lawyer's malpractice carrier in the decision too, just to seal its (needless) point.

In the light most favorable to the appellate court, maybe they had some clever idea and interest on how to dodge the statute and public policy...

Ultimately, the state nursing home statute (right to bring claim cannot be waived; right to jury trial cannot be waived) was deemed to be a statement of public policy which could void the arbitration agreement and which could not be preempted by the FAA. While this issue was "properly preserved" by the court's least favorite lawyer in the case, the court nonetheless held that the statute need not specifically reference arbitration clauses for it to apply here. And that's probably true. However we have seen arbitration clauses enforced in Alabama using the federal provision where the state law prohibits them -- perhaps the Illinois lawyers may want to check the precedent for using federal arbitration provisions in an anti-arbitration state. There might be some ideas there.

There is a conundrum, particularly for insurance defense lawyers, regarding what it means to attend mediation with a client representative who has "full authority" to settle the case. Does that mean a reasonable sum in authority? Full authority under the policy? Something else? What if the demand is $1 million but your client only has $10 to his name. Is that full authority? My experience has been that rarely does one adjuster have authority in his or her pocket to pay out the entire policy -- even if that's the demand. Indeed, mediators are even taught in training that it is a delicate balancing act when it is discovered that someone doesn't have all of their ducks in a row as they sit in a mediation caucus.

The case of Ainsley Munroe v. U.S. Food Service and ACE American Insurance brings some of these questions to the forefront. Indeed, there is probably some interesting sub-arguments that never made their way into the final opinion. In this workers compensation case, the parties went to mediation and left with a settlement agreement which started with the phrase, "Contingent upon employer/carrier approval..."

A few days after settlement, the plaintiff changed lawyers and "opted out" of the mediation agreement. The defendant, meanwhile, obtained that approval and sought to enforce settlement, claiming that the contingency was timely met and that the plaintiff did not have the benefit of a contingency.

Resorting to contract law, the First District (Barfield, Van Bortwick, and Padovano) extolled that "conditioning a contract upon approval by one of the parties shows that a binding contract has not yet been formed." Indeed, it "constitutes no more than a solicitation..." For those who practice workers compensation, there was also a reference to Florida Statute 440.25(3)(b), relative to a statutory provision regarding mediation.

Nestled in the opinion was footnote 1 detailing the risk of sanctions for lawyers and parties who show up to mediation without full authority. Again, the court relied upon a workers comp-specific provision, Florida Administrative Code 60Q-6.110(5) and 60Q-6.110(6). That said, almost any court-ordered mediation will include similar "bring all your money" provisions for defendants. Such provisions are rarely challenged, in my mind, because the parties and mediators do their best not to bring these settlement road-blocks to light. Indeed, there is some grounds for what-happens-in-mediation-stays-there and I question how a mediator could even divulge that information without breaching confidentiality (merely showing up for mediation is "good faith" -- beyond that...). The idea that a defendant needs to bring more than subjective "reasonable" authority seems unworkable and favoring the plaintiff. Otherwise, a crafty plaintiff could make a $1 million dollar demand in a $15,000 car accident case and force the defendant (or defendant's insurer) to jump through all kinds of unnecessary hoops to be sure that they attend mediation with authority to match every demanded dime. Curious as to your thoughts, perspectives, and experiences...

We seem to have developed a bit of an internet following in the legal blogosphere, based upon your emails and discussions I've had with people at Bar conferences. In taking FloridaArbitrationLaw.com to the next stage, I am inviting readers to get a slightly altered version by way of Twitter. Found at www.Twitter.com, this is a way to get a short (almost haiku-sized) FAL.com update with a little more personality. Twitter allows you to receive bite-sized msgs on your phone or computer via text messaging -- you can get msgs from friends, colleagues or larger outfits like CNN, regional news, etc. That includes us: http://twitter.com/cbhopkins

Benefits: free. Sign up and you'll be surprised it will find people you know already signed in. Search for "cbhopkins" or "Florida Arbitration." Click "follow" and then set it up to push our twitters to your local device (phone). We'll do only a few a week but you'll get some Florida law regarding arbitration, mediation, Proposals for Settlement, 57.105, settlement enforcement, etc. just a bit faster than the website and with more zing. Likely to include some cases and commentary on twitter which we don't cover in the site.

Sign up, follow, and then send us an email or twitter.

Pick up a copy of the yellow pages and you'll see a number of ads dotting the cover, most of them personal injury lawyers. Not that there's anything wrong with that. Ever guessed what yellow page ads -- on the cover and elsewhere -- cost? This case addresses arbitration and gives some insight on the price of yellow page fame. We cannot tell if the claimant is a law firm or something else since neither a (momentary) search on Google nor the Florida Corporation website yielded much information. Perhaps those yellow page ads were more important.

In Idearc Media Corp. d/b/a Verizon Yeloow Page Directory v. M.R. Friedman and G.A. Friedman, P.A., a dispute involving directory advertisements lead to a lawsuit. Friedman agreed to pay nearly $7,000 per month for the listing. The opinion doesn't describe the size or location of the ad. The listing agreement says that both sides can bring collection cases in court -- with a jury waiver -- but "all other disputes... will be referred by the aggrieved party to arbitration under rules of the American Arbitration Association..."

We do not get much detail about the lawsuit other than the Panel (Gersten, Lagoa, and Damoorgian) remarking that Friedman "specifically tailored its amended complaint to seek amounts paid..." So, we could possibly interpret that to mean that the Complaint sought other relief which questionably triggered arbitration and the amended version solved that problem.

Anyhow, the Third District held that this came down to a difference of interpretation of a non-ambiguous but apparently conflicting contract provisions. Using general contract principles, a specific provision dealing with a particular subject will control over a different provision dealing only generally with that same subject. Hence, the "all other disputes" was deemed to be the subjacent provision and this case was deemed to be the type that could be litigated.

We note two "positives" in this arbitration provision. First, the waiver of jury trial was upfront and was apparently not contested. We're finding more of those to be effective in the current climate than full-on arbitration clauses. Second, we liked that the arbitration, should it happen, would be "under" the AAA rules and not necessarily "administered" by the AAA. Not that we are against the AAA; it just leaves more flexibility if the AAA is, for some reason, not available and you want other arbitrators to just follow those rules.

After a brief respite, we return to our regularly scheduled posting beginning with the interesting case of Gayle Shotts v. Tandem Health Care of Winter Haven, OP Winter Haven, Inc.; Tandem Regional Management of Florida, Inc.; et al.

Nursing home cases get our attention the most because of the frequency that they take the dispute over arbitration to the extreme. Issues arise questioning whether the elderly or infirm can contract. Questions of whether arbitration is a health care decision for proxies or surrogates or whether a power of attorney is authorized to sign also arise. And, of course, nursing home litigation created the public policy exception argument.

In this instance, a power of attorney signed the admission documents and arbitration agreement. Making no objection at the time of admission or thereafter, the hard feelings about arbitration arose once suit was filed and, then, it was claimed that the arbitration provision was both unconscionable and against public policy.

Unconscionability was dealt with swiftly by the court since both procedural and substantive forms are required but there was no procedural defects in this case. To wit, the court wrote that the events surrounding the signing of the arbitration agreements were essentially fair: the arbitration agreement was a separate document than the admission agreement, the signor was not rushed and she was not prevented from asking questions (despite pleas that she did not understand what she voluntarily signed). The court made a special note to claim that this was factually dissimilar to the recent Woebse v. Health Care & Retirement Corp. of America case.

The arbitration agreement referred the matter to the American Health Lawyers Association (AHLA, formerly the NHLA) which requires a heightened standard of proof and a prohibition on awarding punitive damages. The court noted that the Fourth and Fifth DCAs have each twice shot down such arbitration provisions in Place at Vero Beach v. Hanson, Fletcher v. Huntington Place, SA-PG-Ocala LLC v. Stokes, and Lacey v. Healthcare & Retirement Corp. In those cases, however, there was no severability clause. Thus the distinction.

We note that, unlike the Fourth DCA, the Second District felt, in this case, that severing these provisions was not so intrinsic to the agreement that cleaving them away would vitiate the original agreement. In Lacey, the Fourth District went to great pains to explain that it was not going to pay attention to title headings and other devices which divided the offensive arbitration agreement into sections. Here, the Panel (Salcines, Altenbernd and Kelly), apparently felt otherwise.

Finally, we have seen cases where litigants and appellants seeking to avoid arbitration harp that the Second DCA's comments about public policy in the Bland case were simply dicta. Apparently the concern was that Bland was pretty pro-arbitration in its public policy discussion and those seeking to escape arbitration wanted to label those comments "dicta." Well, the Second District confirmed it was dicta... and then confirmed its sentiment in that case.

In the April 2008 of the publication, "For the Defense," the Texas representative to the Defense Research Institute claims that arbitation and ADR "meant simply ambush your adversary and steal his cattle, wife and daughters, and be done with it." This anachronistic sentence is probably meant to be more Texan than misogenistic, but it is an interesting viewpoint coming from a DRI representative.

"For the Record" is a publication directed towards DRI members, who are primarily insurance defense counsel. Thus, it is not widely available for lawyers whose practice is not focused on defense work. But we can summarize "The Best Alternative Dispute Resolution" to be an article referencing John Adams (recent movie and the historical person) and concluding that, "[w]e ought to be outraged about this [perceived criticism of the jury system], if for no other reason, the jury is composed of hard working, civic-minded American people." ADR is then suggested to be one method to "curtail or do away with the jury system..."

Without question, the author is entitled to his opinion, which is a popular one as we've seen in pending legislation and in recent publications. Indeed, it is well expressed in the article. It seems odd, however, to be the opening piece in a DRI publication giving that (a) the DRI has an ADR section which is a proponent of alternative dispute resolution, (b) defendants typically are the ones enforcing arbitration, and (c) "For the Record" has run several pieces given advice about how to enforce arbitration. As an example, last year I gave a presentation to the Florida Defense Lawyers Association explaining why plaintiffs fight against arbitration and how the court battles over enforcement tend to work.

The pendulum may be swinging towards the concern of arbitration over-use however I am unaware of any serious suggestion that arbitration was intended "curtail or do away with the jury system." The complaints about the use of arbitration in consumer contracts is something worth considering. That said, arbitration is used all the time in major league sports and financial investment disputes without a whiff of disapproval. To view ADR as an attack, rather than just an alternative, to the jury system oversells the position. It's also odd to hear coming from the lawyers (and their clients) who write and enforce those contracts. I'm guessing the article ran to represent different viewpoints within the organization.

As a side note, I've been recommending to clients for nearly two years to re-consider their arbitration clauses to instead require early mediation and, if they so choose, a jury-waiver clause so that disputes are heard by the trial judge. This is not so much for an anti-populist reasoning as it is for other practical reasons: (a) enforcing arbitration can cost $15,000 or more, (b) arbitration clauses need to be regularly revised and updated, (c) non-jury trial settings are easier to come by, (d) predicting the outcome with a judge (i.e., assessing risk) may be easier than with jurors who are unseen until the end of the case, and (e) most judges won't allow endless discovery if the matter is going to be heard by the bench.

General releases, by their nature, are intended to be broad. Ironically, they can be quite dangerous in that respect. No law school that I know of teaches how to write releases nor the interplay between contracts and torts. So lawyers must either get on-the-job training or, worse still, fall into the unacceptable habit of robotically using the firm's standard form without further thought.

Be careful who you are releasing, especially when there is a potential contribution claim out there. That's the message in Soncoast Community Church of Boca Raton, Inc. v. Travis Boating Center of Florida, Inc. While that suit has all of the signs of one that should be settled, it does provide some guidance to the rest of us when we craft settlement agreements.

The underlying dispute is not well-described but is also not all that relevant. Essentially, an unnamed set of plaintiffs sued Soncoast and settled. In the general release at issue, the plaintiffs extinguished all claims against any and all persons, firms, corporations and legal entities of any type whatsoever. THEN, the release went on to say that the plaintiffs had to cooperate with Soncoast's to-be-filed contribution claim against Travis. Oops. The question became whether the general release (releasing the world) actually was broad enough to release Travis (and you and me) thus leaving no basis for a contribution claim.

While the Panel's opinion (Polen, Warner, and Taylor) did not say so, our own exegesis suggests that one of the lawyers used a form general release and then tacked on the custom-tailored contribution savings clause without releasing that the form released the world.

Regardless, the conflict between the "releasing the world" provision and the "contribution savings" clause was enough for the Fourth District to hold that there was a contractual ambiguity, and thus a question of fact, which was not appropriately resolved by summary judgment.

Take away lesson: if you are going to revise a form, make sure the custom tailored additions still sync with the rest of the document.

Can a pre-dispute contract define the "prevailing party" based upon whether someone wins 75% or more of its claim? Apparently not, according to the Fourth DCA.

It is not uncommon for contracts to indicate that the prevailing party is entitled to fees and costs. In Port-A-Weld, Inc. v. Padula & Wadsworth Construction, Inc., the contract was more specific, indicating: "a party shall not be considered as a 'prevailing party' if its recovery shall be less than 75% of its claim amount." Unique idea, yes. But don't scribble that clause down, at least if you have disputes in the Fourth District.

The case involved a dispute between contractor (Padula) and subcontractor (Port A Weld) where the subcontractor sued for payment and the contractor countersued for delays and expenses. Discussions of underlying claims, change orders, delay costs per day, and interest complicate the factual picture. Suffice it to say, the appellate court determined that the subcontractor won about 60-80% of its claim.

The Panel (Taylor, Shahood and Levin) confirmed that the counterclaim was compulsory and that, while other districts have recognized there can be "ties" in such situations, the Fourt District maintains that, in breach of contract cases, only one party can prevail (those other districts appear to be the Second, Third and Fifth). That said, the Panel held this was not even close to being a tie since the subcontractor was entitled to most of its contract price claim. If the Panel is right, then, this decision is not grounds for Supreme Court review.

The Florida Supreme Court, in 1992, held that the "fairest test to determine who is the prevailing party is to allow the trial judge to determine from the record which party has in fact prevailed on the significant issues tried before the court." Using that test, the subcontractor won the day but this does not factor in the contractual "75% or more" definition of prevailing party.

As a matter of first impression, the Fourth DCA held that the "significant issues" test cannot be modified by contract due to public policy, case law, and statutory interpretation. Again, if it is true that this is an issue of first impression, this case likely does not have grounds to travel to the Supreme Court. Yet.

We previously reported on the case of Jeremias Atunez v. Deborah Whitfield inwhich the Fourth DCA ruled that the "old" version of Florida Stattue 44.103(6) applied and that taxable costs should be considered part of the judgment when determining whether a party who was sent to non-binding arbitration and then trial is entitled to attorney's fees.

The clarified opinion, here, comes to the same conclusion but sets out the pre- and post-October 2007 statute and confirms the change is a substantive one and that costs charged shall be included in the judgment.

Again, it is worth pointing out that an arbitrator's award is essentially just a jury verdict. It typically does not include charged costs. However, under this statute, the court compares the award (essentially the "verdict") to judgment [verdict + costs]. Thus, since we are not comparing apples-to-apples, it is fairly easy to "beat" the award since you also get to factor in costs.

Proposals for Settlement are tricky little creatures. Designed to create a simple method to trigger settlement, the Proposal is mired in various procedural requirements for monetary and non-monetary terms and is a slave to both a Rule of Civil Procedure and a Florida Statute. Plus, they're strictly construed. So much for encouraging settlement!

In James Clements v. Bobby B. and Maudeanna Rose, the Plaintiff was bitten by the Defendants dog, sued, served a joint proposal for settlement ($75k total, half from each defendant husband and wife), and then won $120k at trial. Upon seeking to enforce the Proposal, the trial court denied claiming it was ambiguous. The question posed was whether the Proposal required both defendants to agree or whether only one could accept.

According to the majority of the Panel (Thomas and Benton), the paragraph offering settlement for $75k and then delineating that it was split equally between the husband and wife was sufficiently clear and definite that the intent was that both defendants had to accept.

The dissent, meanwhile (Davis), felt that the true controversy on appeal was the preceding paragraph in the Proposal which required execution of a release. Said release was broad enough to include any and all claims that arose as a result of the subject incident as set forth in the lawsuit. There have been a line of cases suggesting the Proposing party should either (a) attach a release or (b) set out the exact language.

Odd, isn't it, that the panel judges couldn't agree what the appeal was about?

Takeaway lesson: when serving a joint proposal, include a sentence saying all receiving defendants must accept and pay their respective portions. Also, a best (or at least better) practice is to not ask for execution of a release. It provides too much ammunition to the other side to escape a strictly construed document.