By Charles S. Davant, Sedgwick Fort Lauderdale
Insurers with marine risks in Florida should be wary of an evolving conflict among Florida’s lower appellate courts regarding the applicability of Florida’s Offer of Judgment Statute (ch. 768.79) to claims governed by admiralty law. Compare Nicoll v. Magical Cruise Co., Ltd., No. 5D11-1039, 38 Fla. L. Weekly D624b, 2013 WL 1007679 (Fla. 5th DCA Mar. 15, 2013) with Royal Caribbean Corp. v. Modesto, 614 So. 2d 517 (Fla. 3d DCA 1992).
In Nicoll, plaintiff Fay Nicoll slipped and fell aboard a cruise ship owned by Magical Cruise Company. During the course of litigation, Magical served an Offer of Judgment in accordance with Florida Statute 768.79. The statute allows a party in a civil action to serve an offer of judgment for a specific dollar amount. If rejected or not accepted within 30 days, the serving party is entitled to recover costs and attorney’s fees from the date of service if the serving party beats their offer of judgment by more than 25 percent. For defendants, this means obtaining a judgment of no liability or one that is 25 percent less than its offer; for plaintiffs, this means recovering a judgment for more than 25 percent of its offer.
Nicoll rejected Magical’s offer. Magical subsequently prevailed on a motion for summary judgment and moved for fees according to the statute. The trial court denied Magical’s motion for attorney’s fees and Florida’s Fifth District Court of Appeal affirmed. In so holding, the Court found that entitlement to attorney’s fees under Florida’s statute is a substantive right; thus, the Court must apply federal maritime law to substantive issues arising under admiralty jurisdiction. Under federal admiralty law, a prevailing party is generally not entitled to attorney’s fees, even when a state statute establishes entitlement to such fees. Thus, the Court rejected Magical’s claim for fees.
The opinion recognized a conflict with the Third District Court of Appeal’s decision in Royal Caribbean Corp. v. Modesto, 614 So. 2d 517 (Fla. 3d DCA 1992). The Modesto Court found no conflict between Florida’s rules of law regarding offers of judgment and federal maritime law, stating the rules relating to offers of judgment are an integral part of the state’s management of its courts’ proceedings. The continued validity of Modesto was recently questioned by the Third District Court in Royal Caribbean Corp. v. Cox, No. 3D09-2712, 29 Fla. L. Weekly D2029, 2012 WL 3587008 (Fla. 3d DCA Aug. 22, 2012). However, Modesto remains good law in the Third District Court of Appeal and its conflict with the Fifth District’s decision in Nicoll remains.