Travis Halstead, with Baker Donelson in Orlando.

Imagine you handled the defense of a case for your client perfectly. You serve a proposal for settlement early in the proceedings that that the plaintiff receives, but does not accept. You obtain a judgment in your client's favor and timely file a motion for attorney fees. In addition to the judgment, you and your client anticipate recovering all fees and costs expended in the litigation from the date you served the proposal. This was undoubtedly your finest legal work and a moment of triumph in your career. Then the trial court incredulously denies your motion for fees, citing technical defects in the service of the proposal for settlement, even though the plaintiff's attorney actually received it.

These are the facts behind Wheaton v. Wheaton, 217 So. 3d 125 (Fla. 3d DCA 2017), where the Third District affirmed the trial court's denial of the defendant's motion for attorney fees. Wheaton is a not-so-subtle reminder that statutes providing for a party's recovery of attorney fees are in derogation of Florida law, and such statutes are strictly construed, see Campbell v. Goldman, 959 So. 2d 223, 226 (Fla. 2007).

Absent a particular statute or contract provision, parties to litigation in Florida are responsible for their own attorney fees. Statutes that provide for a basis to recover attorney fees are tools often used by litigants to provide a strategic advantage in litigation, in addition to the recovery of fees. Used appropriately, these statutes may dissuade a party from maintaining a frivolous claim or defense, or may encourage early settlement in lieu of protracted litigation.

Under Fla. Stat. Section 57.105(1), a party may move for an award of attorney fees against another party for asserting a claim or defense that it knew, or should have known “was not supported by the material facts necessary to establish the claim or defense; or would not be supported by the application of then-existing law to those material facts,” Fla. Stat. Section 57.105(1)(a) and (b). Receiving such a motion may cause the nonmoving party to reconsider and withdraw an unsupported claim or defense, or else risk exposure to an award of reasonable attorney's fees against the party and its attorney.

Fla. Stat. Section 768.79 and its implementing rule 1.442 provide for a procedure to recover fees where a party does not accept a settlement offer. Failure to timely accept the Section 768.79 offer subjects the declining party to an award of fees and costs where the offering party plaintiff obtains a judgment for at least 25 percent of the amount offered. Conversely, a plaintiff is on the hook where it obtains a judgment at least 25 percent less than an offering party defendant's offer, or where it obtains no judgment at all. The appropriate use of Fla. Stat. Section 768.79 offers, especially in the early stages of litigation, can often stimulate settlement discussions or resolve the litigation entirely.

The common element to both of these statutes is that, in order for attorney fee liability to attach, the party seeking fees must first serve notice upon its adversary before filing the motion or offer with the court. A Fla. Stat. Section 57.105(1) motion must be served at least 21 days before the motion may be filed. A Fla. Stat. Section 768.79 offer may be accepted within 30 days of service and may not be filed with the court unless it is accepted, or until after the entry of judgment if it is not accepted. In effect, both statutes provide the receiving party with a safe harbor period following service to consider its options and to take appropriate action.

Florida courts, however, are very conflicted on exactly how that service should occur. Recent opinions declining to award fees due to technical service violations are having devastating impacts upon litigants who would otherwise be entitled to an award of fees.

Florida Rule of Judicial Administration Rule 2.516 prescribes the method for service of pleadings and documents. According to the rule, all documents required or permitted to be served on another party represented by an attorney must be served by email to all emails designated for service by that attorney. The rule further specifies the precise formatting for service emails. The formatting requirements include: that a copy of the document being served is attached in PDF form or the email must contain a link to the document on a website maintained by the clerk; the subject line of the email must begin with “SERVICE OF COURT DOCUMENT” followed by the case number and case style; the body of the email must identify the court, the case number, the name of the first party on either side, the title of every document being served, and the name and phone number of the person serving the document.

Rule 2.516's requirements are fairly straightforward in the context of filing a court document and contemporaneously serving all parties. However, as in the case with Section 57.105 and Section 768.79, the rule is not entirely clear with respect to service of safe harbor motions or offers that are not contemporaneously filed, but which may be filed at a later date.

Florida's Fourth and Fifth District Courts of Appeal have decided that that service of a Section 57.105(4)'s safe harbor motion requires strict compliance with rule 2.516, see Matte v. Caplan, 140 So. 3d 686 (Fla. 4th DCA 2014); Estimable v. Prophete, 219 So. 3d 1001 (Fla. 4th DCA 2017); Goersch v. City of Satellite Beach, 2018 WL 3479249 (Fla. 5th DCA Jul. 20, 2018). Consequently, parties seeking an award of attorney fees recover nothing if their safe harbor motion did not strictly comply with rule 2.516. The Second District holds otherwise. See Isla Blue Development, v. Moore, 223 So. 3d 1097 (Fla. 2d DCA 2017); Denino v. Abbate, 2018 WL 2073488 (Fla. 2d DCA May 4, 2018).  In the proposal for settlement context, the First and Fourth Districts hold that rule 2.516 does not apply to service of settlement offers. Oldcastle Southern Group v. Railworks Track Systems, 235 So. 3d 993 (Fla. 1st DCA 2017); McCoy v. R.J. Reynolds Tobacco, 229 So. 3d 827 (Fla. 4th DCA 2017). Conversely, the Third District in Wheaton concluded that the rule does apply to Section 768.79.  Wheaton v. Wheaton, 217 So. 3d 125 (Fla. 3d DCA 2017), cert. granted (2017 WL 4785810 Oct. 24, 2017).

The good news is that, despite the current conflict between the districts, each has weighed in on the subject and local practitioners should have a better understanding of the requirements within their district.  The other good news is that Florida's Supreme Court may soon decide these issues once and for all.  The Court accepted jurisdiction in October to resolve the conflict between the First and Third Districts' opinions concerning service of proposals for settlement.  With respect to the issue of serving Section 57.105(4)'s safe harbor motions, the Fifth District certified conflict with the Second District, who certified conflict with the Fourth District, as to whether rule 2.516 applies. See Goersch, 2018 WL 3479249 at *3; Isla Blue Development, 223 So. 3d at 1097. The court is likely to grant review to resolve the conflicting opinions concerning service of Section 57.105 motions unless it feels that its opinion in Wheaton will be dispositive for both statutes.

Until these issue are resolved by Florida's Supreme Court, litigants seeking to serve Section 57.105(4) motions and Section 768.79 offers should strongly consider serving them in accordance with rule 2.516's procedures. Litigants with pending sanctions motions and proposals for settlement that were not served in compliance with rule 2.516 might also consider re-serving the motion or offer in accordance with the rule. Re-serving settlement proposals would likely bear consequence, as liability for fees and costs incurs on the date the proposal for settlement was served. Fla. Stat. Section 768.79(6).

Travis Halstead is an associate in the Orlando office of Baker Donelson. He is a member of the financial services practice and focuses on mortgage litigation. Contact him at [email protected].