United States District Court, S.D. Florida
REPORT AND RECOMMENDATION
LEE BRANNON U.S. MAGISTRATE JUDGE
CAUSE is before the Court on Defendant's Motion for Its
Attorneys' Fees and Costs (“Motion”) [DE
160], Plaintiff's response in opposition [DE 162], and
Defendant's reply [DE 165], which has been referred to
the undersigned for appropriate disposition [DE 175]. Being
fully advised, the Court RECOMMENDS that
Defendant's Motion [DE 160] be GRANTED IN
PART and DENIED IN PART, and that
Defendant be awarded $205, 946.80 in attorneys' fees and
Defendant's request for costs be denied.
case arises from Defendant's, Inspired Products Group,
LLC (“IPG”/“Defendant”), alleged
breach of its promise to pay $3 million to Plaintiff,
Inspired Development Group
(“IDG”/“Plaintiff”), in exchange for
using IDG's character car seat concept and licensing its
patents. On December 5, 2016, IPG served on IDG a Proposal
for Settlement for $300, 000 pursuant to Fla. Stat. §
768.79 (the “Offer”) [DE 160-1], which IDG never
accepted. Thereafter, the parties engaged in mediation and
filed briefs on motions for summary judgment and motions
in limine. On January 25, 2017, the Court granted
summary judgment to IPG on Counts II (breach of contract),
III (unjust enrichment), and IV (promissory estoppel) of the
February 2, 2017, the remaining count, Count I for breach of
contract, was dismissed with prejudice after the parties
entered into a stipulated settlement agreement of $50, 000,
with IPG to make payment upon conclusion of the appeal or
other proceedings in this case. The settlement agreement
contains a provision regarding IDG's right to
appeal the summary judgment order and IPG's
right to seek recovery of fees and costs pursuant to Fla.
Stat. § 768.79 [DE 153-1]. The parties further agreed
that the settlement amount of $50, 000 shall be satisfied as
an offset from any award of attorney's fees or costs. [DE
153-1 at ¶ 2.3].
seeks $257, 433.50 in attorneys' fees
and $15, 675.59 in costs pursuant to Fla.
Stat. § 768.79 [DE 165]. IDG disputes both IPG's
entitlement and the amount of fees and costs sought for a
period spanning less than two months [DE 162].
Entitlement to Fees under Fla. Stat. §
Court must first determine whether IPG is entitled to
attorneys' fees and costs under Fla. Stat. § 768.79.
“Where the Court has both a federal question and
supplemental or diversity jurisdiction over Florida claims,
§ 768.79 applies only to the Florida claims.”
Design Pallets, Inc. v. Gray Robinson, P.A., 583
F.Supp.2d 1282, 1287 (M.D. Fla. 2008). Here, the Court
determined that, although diversity jurisdiction is lacking,
it has subject matter jurisdiction over the action under 28
U.S.C. § 1338(a) because IDG's claims arose under
patent law. [DE 172]. Although the claims arose under federal
patent law, they were “based on state law” and
framed as state law causes of action. [Id. at 4].
Indeed, the Court applied Florida law when resolving
Plaintiff's claims for breach of contract, unjust
enrichment, and promissory estoppel. [DE 130]. See
Menchise v. Akerman Senterfitt, 532 F.3d 1146, 1150
(11th Cir. 2008) (applying § 768.79 where the underlying
legal malpractice action was governed by Florida law but
filed in federal court). The Court further determined it has
original jurisdiction over Plaintiff's claims and,
alternatively, “through its supplemental
jurisdiction.” [DE 172 at 8]. As such, the Court's
lack of diversity jurisdiction over IDG's claims is not a
bar to IPG's request for relief under § 768.79.
Court applies the substantive law set forth in Fla. Stat.
§ 768.79 and the rule implementing it, Florida Rule of
Civil Procedure 1.442. See Menchise, 532 F.3d at
1150; Safranek v. Wal-Mart Stores, Inc., 2011 WL
766218, *2 (S.D. Fla. Feb. 25, 2011). Section 768.79 provides
in relevant part that
In any civil action for damages filed in the courts of this
state, if a defendant files an offer of judgment which is not
accepted by the plaintiff within 30 days, the defendant shall
be entitled to recover reasonable costs and attorney's
fees incurred by her or him or on the defendant's behalf
pursuant to a policy of liability insurance or other contract
from the date of filing of the offer if the judgment is one
of no liability or the judgment obtained by the plaintiff is
at least 25 percent less than such offer, and the court shall
set off such costs and attorney's fees against the award.
Stat. § 768.79(1). An offer of settlement must be in
writing, state that it is being made pursuant to this
section, name the party making it and to whom it is being
made, state the amount offered to settle a claim for punitive
damages, if any, and state the offer's total amount. Fla.
Stat. § 768.79(2).
1.442 also requires that the offer state that the proposal
resolves all damages that would otherwise be awarded in a
final judgment in the action, state with particularity any
relevant conditions, state the total amount of the proposal
and state with particularity all nonmonetary terms, state
whether the proposal includes attorneys' fees, and
include a certificate of service. Fla. R. Civ. P. 1442(c).
With respect to the particularity requirement, Rule 1.442
“merely requires that the settlement proposal be
sufficiently clear and definite to allow the offeree to make
an informed decision without needing clarification. If
ambiguity within the proposal could reasonably affect the
offeree's decision, the proposal will not satisfy the
particularity requirement.” State Farm Mut. Auto.
Inc. Co. v. Nichols, 932 So.2d 1067, 1079 (Fla. 2006).
The offeror may attach to the settlement proposal a copy of a
general release that includes expansive language, as long as
the release does not extinguish other outstanding claims.
at 1079, 1080.
it is undisputed that IPG served IDG the Offer on December 5,
2016 that IDG never accepted, that the Court granted summary
judgment to IPG on three of the four counts, and that the
Court entered an order on February 2, 2017 dismissing with
prejudice IDG's final count after the parties entered
into a settlement agreement of $50, 000. IDG's $50,
000 recovery is at least 25% less than IPG's $300, 000
proposal for settlement. IDG does not dispute that §
768.79 and Rule 1.442 apply in this case. What IDG disputes
is IPG's entitlement to fees and costs because IDG argues
the Offer contains ambiguities as to which claims would be
resolved, which parties are releasing whom, and the
settlement amount. The Court considers IDG's arguments
The Offer is clear as to which claims IPG seeks to resolve
and which parties are releasing whom.
argues that IPG's Offer is ambiguous as to which claims
IPG attemps to resolve because paragraph 2 of the Offer
states it intends to resolve “IDG's claims against
IPG for breach of contract (Counts I and II), unjust
enrichment (Count III), and promissory estoppel (Count IV),
” but the attached release indicates that it applies to
IPG, its successors, assigns, employees, agents and related
individuals, and IPG seeks to resolve “[a]ny and all
liabilities, claims, actions, losses or any other damages
relating to the claims asserted in the action” . . .
and applies “to all claims whether or not claimed,
known or suspected.” [DE 160-1]. IPG counters that the
Offer unambiguously stated that the claims brought by IDG
would be settled in exchange for a $300, 000 payment to IDG
and mutual general releases. Additionally, IPG maintains that
nothing in the releases suggest that a corporation signing
its release would also release claims of its owners or
employees, individually. This Court agrees with IPG.
should not “nitpick” proposals for settlement in
searching for ambiguities. Anderson v. Hilton Hotels
Corp., 202 So.3d 846, 853 (Fla. 2016); see also
Embroidme.com, Inc. v. Travelers Prop. Cas. Co. of Am.,
2015 WL 419879 (S.D. Fla. Jan. 22, 2015) (finding no
ambiguity between the language of the proposal for settlement
and language in the attached release where the release
contained expansive language); Costco Wholesale Corp. v.
Llanio-Gonzalez, 2017 WL 1076927 (Fla. 4th DCA Mar. 22,
2017) (same). The Florida Supreme Court has found that a
general release may include expansive language, as long as
the release does not extinguish other outstanding claims.
Nichols, 932 So.2d at 1079, 1080.
line of cases IDG cites is distinguishable because here there
are no other pending lawsuits or claims between the parties.
The instant releases are properly attached and referenced in
paragraph 5 of the Offer. Additionally, paragraph 2 of the
Offer indicates that the Offer is “intended to resolve
all claims . . . which IDG brought or could have
brought in the above-referenced action.” [DE
160-1] (emphasis added). Further, standard release language
that is attached to a proposal for settlement and identifies
a party as including “parent corporations,
subsidiaries, officers, directors, and employees” is
not ambiguous and has not been found to invalidate a proposal
for settlement. Alamo Financing, L.P. v. Mazoff, 112
So.3d 626, 631 (Fla. 4th DCA 2013). Accordingly, the Offer is
clear as to which claims IPG seeks to resolve and as to who
is releasing claims.
The Offer is clear as to the settlement amount.
argues that the Offer is ambiguous because there is a
discrepancy in the settlement amount listed in the Offer and
the settlement amount listed in the attached releases. While
the Offer indicates a $300, 000 settlement amount in
paragraph 4, the releases indicate that the parties are
releasing the claims “for and in consideration of TEN
DOLLARS ($10.00) and other good and valuable
consideration.” [DE 160-1]. IDG maintains that it is
unclear whether the Offer amount was $300, 000; $310, 000; or
$10. IPG counters that paragraphs 4 and 5 of the Offer make
clear that $300, 000 was the amount offered although the
releases included language of a nominal exchange of $10 as
consideration, and IPG cannot seriously suggest it was
confused by the amounts.
support of its argument, IDG cites to Stasio v.
McManaway, 936 So.2d 676, 677 (Fla. 5th DCA 2006) in
which the court found a patent ambiguity where the settlement
proposal offered $60, 000 and the attached release listed the
offer as “FIFTY NINE THOUSAND NO/100 DOLLARS ($60,
000).” However, the facts in Stasio are
distinguishable as a natural reading of the documents in
Stasio side by side may cause confusion. In
contrast, here the $300, 000 offer and the release language
indicating “TEN DOLLARS ($10.00) and other good and
valuable consideration” would not cause confusion to a
litigant, especially one experienced in business
transactions. Understanding the offer to be $10 would be akin
to believing Blackacre was actually sold for a peppercorn.
Accordingly, the Court finds no merit in IDG's argument
that the Offer was unclear as to the settlement amount.
this Court finds that IPG is entitled to attorneys' fees
and costs as the Offer complies with the requirements set
forth in Fla. Stat. § 768.79 and Florida Rule of Civil
Amount of Fees
found that IPG is entitled to fees and costs under §
768.79, the Court must determine the amount to which IPG is
entitled. In calculating an award of attorneys' fees,
federal courts use the lodestar method whereby a reasonable
fee award is “properly calculated by multiplying the
number of hours reasonably expended times a reasonable hourly
rate.” American Civil Liberties Union v.
Barnes, 168 F.3d 423, 427 (11th Cir. 1999) (citing
Blum v. Stenson, 465 U.S. 886, 888 (1984)). To
discern if a fee is reasonable, a court “is itself an
expert on the question and may consider its own knowledge and
experience concerning reasonable and proper fees and may form
an independent judgment either with or without the aid of
witnesses as to value.” Norman v. ...