Deal or No Deal: The Florida Supreme Court clarifies what it takes for an offer of judgment to be deemed accepted

November 10, 2022

Recently, the Florida Supreme Court resolved an interdistrict conflict between the decision of the Second District Court of Appeal in Suarez Trucking FL Corp. v. Souders, 311 So. 3d 263, 272 (Fla. 2d DCA 2020) and the decision of the Fourth District Court of Appeal in Cirrus Design Corp. v. Sasso, 95 So. 3d 308, 312 (Fla. 4th DCA 2012), approving the latter. Suarez Trucking FL Corp. v. Souders, 47 Fla. L. Weekly S263 (Fla. Oct. 20, 2022).

The conflict concerned whether there was a binding settlement agreement under the provisions of Florida’s offer of judgment and demand for judgment statute, i.e., section 768.79, Florida Statutes. The Second DCA found that defendant Suarez Trucking’s filed written notice accepting the plaintiff’s offer of judgment was insufficient 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, in addition to the plaintiff and his counsel, the carrier holding a workers’ compensation lien. By contrast, the Fourth DCA held that the filed acceptance of an offer of judgment under section 768.79 led to the formation of a substituted agreement, and performance was not necessary to the formation of the settlement.

The Supreme Court found that the Second DCA’s majority opinion erroneously conflated acceptance with performance and misunderstood what is required to manifest acceptance of an offer that invites a promissory acceptance. The court noted that the statute sets forth a simple and straightforward framework for accepting a written offer: “[B]y filing a written acceptance with the court within 30 days after service. Upon filing of both the offer and acceptance, the court has full jurisdiction to enforce the settlement agreement.” Id. at *1. (citing § 768.79(4), Fla. Stat.). The statute also sets forth a similarly simple mechanism for withdrawing an offer by doing so in writing and serving the withdrawal before a written acceptance is filed. “Once withdrawn, an offer is void.” Id. The court noted that oral discussions surrounding the offer and acceptance are irrelevant to the formation of the settlement contract. Once an unqualified acceptance is filed as required under the statute, there is a settlement contract to resolve the litigation.

The offer of settlement made by the plaintiff in the Suarez Trucking case was pursuant to section 768.79 and rule 1.442, and it required the defendants to “pay $500,000.00 to the Plaintiff … within ten (10) days from the date of acceptance.” Id. at *2. The offer also contained the condition that once the proposal was accepted and the payment was made, the plaintiff had to dismiss the case with prejudice. Suarez Trucking filed a notice of acceptance stating 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.” Id. (emphasis in original.) The Supreme Court found this notice of acceptance created a binding settlement, unequivocally and fully assenting to the terms of the offer. The court noted that it would be hard to imagine a clearer or more effective form of acceptance.

The court went on to criticize the Second DCA’s use of the “mirror image” rule applicable to offers in general, which requires the acceptance to be identical to the offer in every respect. The court explained that the “mirror image” rule was not a rule of regurgitation, but one of consistency. Thus, Suarez Trucking was not required to regurgitate back the terms of the offer as ruled by the Second DCA. Rather, all that is required for a binding settlement is an objective manifestation of assent to the same terms by both parties. This is exactly what happened when Suarez Trucking filed its notice of acceptance pursuant to section 768.79 and rule 1.442.

The court also rejected the Second DCA’s interpretation of the offer made by plaintiff to require acceptance by performance. The court found that the offer clearly contemplated a two-step process in which acceptance was followed by performance. This process was consistent with the statutory requirement of accepting an offer by filing a notice of acceptance rather than by performance. For these reasons, the court quashed the Second DCA’s decision and approved the Fourth DCA’s decision in Cirrus.

Although Justice Labarga agreed with the majority that the Second DCA misapplied the “mirror image” rule, he wrote a dissenting opinion, because he ultimately agreed with the Second DCA’s finding that the parties’ failure to reach a meeting of the minds as to a material term rendered the settlement unenforceable.

This case presents a good example of why the Florida Supreme Court’s exercise of discretionary jurisdiction to resolve interdistrict conflicts is essential to a coherent and predictable system of justice. As the Florida Supreme Court explained, “the statute [section 768.79]—as implemented by the rule [1.442]—specifies a particular mode for the offer and acceptance: both must be written. Accepting the position that a valid offer and acceptance under the statute do not necessarily result in an enforceable settlement contract would unnecessarily inject incoherence into the law.” Id. at *3.

For any further questions, please contact Mihaela Cabulea.