Florida courts continue to issue interesting and informative opinions about awards of costs and attorney’s fees in construction lien cases. Most recently, Florida’s Second District Court of Appeal issued an en banc opinion in the consolidated cases of Richard O. Wolfe, II and H. Michelle Wolfe v. Culpepper Constructors, Inc., Case No. 2D10-3228 and Culpepper Constructors, Inc. v. Richard O. Wolfe, II and Michelle Wolfe, Case No. 2D10-3670, 37 FLW D2708. This post will discuss the Second District Court of Appeal’s analysis of a joint Offer of Judgment served on a general contractor by the property owners in a construction lien case.
The dispute in the Wolfe case arose from Culpepper Constructor’s construction of an addition to and remodeling of a residence owned by Mr. and Mrs. Wolfe. Culpepper, the general contractor on the project, issued its final invoice to Mr. and Mrs. Wolfe in the amount of $91,261.65. Mr. and Mrs. Wolfe refused to pay, claiming that Culpepper had overcharged them for work performed. In response, Culpepper recorded a claim of lien against the property and initiated a construction lien foreclosure action. Mr. and Mrs. Wolfe, in turn, filed a Counterclaim against Culpepper. Prior to trial, Mr. and Mrs. Wolfe served a joint Offer of Judgment or Proposal for Settlement on Culpepper in the amount of $25,000.00 pursuant to Fla. Stat. §768.79 and Fla. R. Civ. P. 1.442. The Offer of Judgment provided that it was made for purposes of resolving all claims and counterclaims in the case, with Mr. and Mrs. Wolfe each paying $12,500.00. The Offer required Culpepper to dismiss all claims against Mr. and Mrs. Wolfe with prejudice and to discharge its claim of lien and notice of lis pendens.. The Offer was not accepted by Culpepper and the case proceeded to trial. The jury found that Culpepper had provided work to Mr. and Mrs. Wolfe with a value of $97,261.65, but also found for Mr. and Mrs. Wolfe on some of their counterclaims, resulting in a net judgment to Culpepper in the amount of $9,074.06.
Since Culpepper’s net judgment ($9,074.06) was less than 25% of the amount of Mr. and Mrs. Wolfe’s $25,000 Offer of Judgment, Mr. and Mrs. Wolfe requested an award of their attorneys’ fees and costs pursuant to Fla. Stat. §768.79 and Fla. R. Civ. P. 1.442. The trial court denied this request, determining that the Offer of Judgment was invalid because it was a joint offer that required Culpepper to dismiss its claims against both Mr. and Mrs. Wolfe.
The Second District Court of Appeal began its analysis by noting that:
- The Offer of Judgment was intended to resolve all claims and counterclaims pending in the case;
- Mr. Wolfe and Mrs. Wolfe would each pay $12,500; Culpepper would have to dismiss all claims against Mr. and Mrs. Wolfe with prejudice; and
- Culpepper would have to discharge its claim of lien and its notice of lis pendens.
The appellate court, citing to Attorneys’ Title Ins. Fund, Inc. v. Gorka, 36 So.3d 646 (Fla. 2010), noted that joint offers of judgment are permitted, as long as they comply with the requirements of the Fla. Stat. §768.79 and Fla. R. Civ. P. 1.442. The Court went on to note that Mr. and Mrs. Wolfe’ Offer of Judgment to Culpepper stated the amount and the terms attributable to each party ($12,500 to be paid by each of them) and that the Offer of Judgment was made to one offeree, Culpepper, which alone had to decide whether or not to accept the Offer of Judgment. Citing to the case of Rossmore v. Smith, 55 So.3d 680 (Fla. 5th DCA 2011), the Court determined that Mr. and Mrs. Wolfe’s Offer of Judgment met all of the requirements of the statute and the rule and was, therefore, valid. As such, the Court found that Mr. and Mrs. Wolfe were entitled to an award of their attorney’s fees related to Culpepper’s claim of lien. In concluding its analysis, the Court, quoting from Andrews v. Frye, 66 So.3d 376 (Fla. 5th DCA 2011), observed:
Culpepper ‘miscalculated the value of [its] claims in rejecting the proposal for settlement and must now pay the [Wolfes’] attorney’s fees and costs.’
In Wolfe v. Culpepper Constructors, Inc., the Second District Court of Appeal has confirmed that joint offers of judgment or proposals for settlement under Fla. Stat. §768.79 and Fla. R. Civ. P. 1.442 may, in fact, be valid and, if not accepted, may form the basis for an award of attorney’s fees. In the next post, I will discuss Culpepper’s request for an award of costs as the prevailing party pursuant to Fla. Stat. §57.041.