Florida Supreme Court Settles Conflict Between Districts Regarding “Offer of Judgment” Rules

In a split decision, the Supreme Court of Florida reversed a decision by the state’s Second District Court of Appeal and held that where a plaintiff tenders a written offer of settlement pursuant to § 768.79, Fla. Stat.—the state’s offer of judgment and demand for judgment statute—and the defendant files an unequivocal written acceptance, a settlement contract is formed and the contract could be enforced by either of the parties [Suarez Trucking FL Corp. v. Souders, 2022 Fla. LEXIS 1585 (Oct. 20, 2022)]. Using common law contract language, the majority stressed that acceptance of the offer of settlement did not involve a two-step process in which the defendant first accepted the offer and then, second, tendered payment. Accordingly, that the defendant tendered a check to the plaintiff payable not only to the plaintiff and his attorney, but payable also to the plaintiff’s employer’s workers’ compensation carrier, who had a lien on the settlement proceeds, did not negate the underlying settlement agreement.

Channeling the late Justice Holmes, the majority stressed that the making of a contract depends not so much upon the meeting of two minds, but rather upon the agreement of two sets of external signs—not on the parties having meant the same thing but on their having “said the same thing.”

Background

Souders filed a third-party tort action against Suarez Trucking, contending that it’s negligence had caused or contributed to Souders’ work-related injuries. Suarez Trucking filed a written notice accepting an offer of settlement made by Souders. in relevant part that Suarez Trucking’s negligence. Through counsel, Souders communicated a written offer of settlement to Suarez Trucking.

The offer of settlement referenced Florida’s offer of judgment and demand for judgment statute, § 768.79, Fla. Stat., and provided that Suarez Trucking should pay Souders the sum of $500,000 within ten days from the date of acceptance. The offer also contained the condition that “[u]pon acceptance and payment of the Proposal for Settlement,” Souders would enter dismissal with prejudice against Suarez Trucking.

One month later, Suarez Trucking filed a notice of acceptance stating simply that “pursuant to Florida Statutes 769.89 and Florida Rule 1.442 [notice is given] that Defendants accept Plaintiff’s Proposal for Settlement made to Defendants, dated February 25, 2015.” Within the ten-day time period, a settlement check was sent to Souders’ counsel. It included as a payee—along with Souders and his counsel—the carrier holding a workers’ compensation lien created by operation of § 440.39, Fla. Stat. The check was refused, and Suarez Trucking filed a motion with the trial court to enforce the settlement agreement.

In Suarez Trucking FL Corp. v. Souders, 311 So. 3d 263, 272 (Fla. 2d DCA 2020), the Second District Court of Appeal affirmed the trial court’s order denying Suarez Trucking’s motion to enforce the settlement agreement, holding that the written notice of acceptance was not sufficient to form a binding contract and that the settlement check tendered pursuant to the offer of settlement was deficient because it included as a payee—along with Souders and his counsel—the carrier holding a workers’ compensation lien created by operation of § 440.39, Fla. Stat.

Conflict with Fourth DCA

The Second District’s decision conflicted with that of the Fourth District Court of Appeal in Cirrus Design Corp. v. Sasso, 95 So. 3d 308, 312 (Fla. 4th DCA 2012), which held that the filed acceptance of an offer under the offer of judgment and demand for judgment statute, § 768.79, Fla. Stat., resulted in the formation of a substituted agreement and that performance thus was not necessary to the formation of the settlement contract.

The “Mirror Image” Rule

The majority of the Florida Supreme Court said the Second District had invoked and misapplied “the strict common-law rule applicable to offers generally—the so-called ‘mirror image’ rule that generally requires the acceptance to be in every respect identical to the offer” [Opinion, p. 5]. The majority added that the Second District had denigrated Suarez Trucking’s acceptance as ineffectual “boilerplate” that “lacked specificity,” holding that under the mirror-image rule, Suarez Trucking could only manifest its acceptance of the offer by reciting back the terms of the offer [Suarez Trucking, 311 So. 3d at 269]. The majority chided the Second District for failing to cite “a single case in which the mirror-image rule has been applied in a similar way [Opinion, p. 6].

It acknowledged that there must be mutual consent in order to form a contract, but quoting the late Justice Holmes in his oft-quoted article, “The Path of the Law,” 10 Harvard Law Review 457, observed:

The making of a contract depends not on the agreement of two minds in one intention, but on the agreement of two sets of external signs—not on the parties having meant the same thing but on their having said the same thing.

The majority stressed that to form a contract, there must be an objective manifestation by both parties of assent to the same terms. This was a rule of consistency. The majority added that it was not—as the Second District would have it—“a rule of regurgitation” [Opinion pp. 7-8].

Unqualified Acceptance of Settlement Offer

The majority continued that here, the promise made by Suarez Trucking in the filed notice of acceptance was “made absolutely and unqualifiedly,” and Suarez Trucking “agreed to make precisely the promise requested.” It was of no consequence that “the precise words of the requested promise” were not repeated. The filed acceptance constituted “a positive and unqualified assent to the proposal” of settlement. According to the majority, that’s what the law requires for an acceptance to be effective.

Communications Between Parties Not Relevant to Issue

The majority also stressed that the focus of the Second District and the dissent on communications between the parties here flowed from “a serious misconception regarding settlements pursuant to the statute” [Opinion, p. 10]. Finally, the majority said the Second District’s contention that the offer made by Souders contemplated that acceptance could only be effected by performance was refuted by the plain terms of the offer. According to the majority:

The Second District rests its position on this issue on the reference in the settlement offer to “acceptance and payment.” Suarez Trucking, 311 So. 3d at 270. But this language—understood in context—indicates exactly the opposite of what the Second District says it means. The settlement offer makes a clear distinction between acceptance and performance rather than equating acceptance with performance. This is shown most vividly in the specification that performance by payment must occur within ten days from the date of acceptance. The offer thus clearly contemplates a two-step process in which acceptance is followed by performance. This, of course, is consistent with the statute, which provides for acceptance by the filing of a notice of acceptance rather than acceptance by performance [Opinion, p. 12].

Based upon the foregoing, the majority said there was no basis to support the Second District’s conclusion that a settlement contract could only be formed by performance or that Suarez Trucking’s acceptance was otherwise defective. The court, therefore, quashed the decision on review. It specifically approved the Fourth Department’s decision in Cirrus to the extent that it was consistent with the majority’s analysis.

Justice Labarga dissented with an opinion.