{"id":891539,"date":"2017-01-10T10:24:32","date_gmt":"2017-01-10T17:24:32","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=891539"},"modified":"2017-01-10T10:24:32","modified_gmt":"2017-01-10T17:24:32","slug":"application-set-off-defendant-settles-multiparty-construction-dispute","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/application-set-off-defendant-settles-multiparty-construction-dispute\/","title":{"rendered":"Application of Set-Off when a Defendant Settles in Multiparty Construction Dispute"},"content":{"rendered":"<p>David Adelstein | <a href=\"http:\/\/www.floridaconstructionlegalupdates.com\/application-of-set-off-when-a-defendant-settles-in-multiparty-construction-dispute\/\" target=\"_blank\">Florida Construction Legal Updates<\/a> | December 23, 2016<\/p>\n<p>The defense of <strong>set-off<\/strong> is an important defense in <strong>construction disputes<\/strong>, particularly multiparty disputes.\u00a0 For more information on this defense, please check out this <a href=\"http:\/\/provemyfloridacase.com\/?s=set-off\" target=\"_blank\">article<\/a> as it explains the application of set-off in civil disputes in detail.<\/p>\n<p>The issue of set-off will come up in a <strong>multiparty dispute<\/strong> when a plaintiff settles with one or more of the defendants.\u00a0 The remaining defendant(s) wants the benefit of that settlement to set-off and reduce any judgment against it.\u00a0 An example of this scenario can be found in <i>Escadote I Corp. v. Ocean Three Limited Partnership<\/i>, 42 Fla. L. Weekly D23a (Fla. 3d DCA 2016).<\/p>\n<p>In this case, an owner of a condominium unit sued the condominium association, the developer, and the general contractor for water intrusion and mold infestation. The claim against the condominium association was the only claim that entitled the owner to attorney\u2019s fees pursuant to its lawsuit (thus, attorney\u2019s fees were isolated to only that claim against the association).\u00a0 During trial, the owner settled with the association. In entering a settlement, the owner smartly <strong>allocated<\/strong> the settlement amount such that $500 was allocated to its principal damages and $374,500 was allocated to its attorney\u2019s fees.\u00a0 The owner then obtained a jury verdict against the contractor and developer for approximately $2M, jointly and severally, and the contractor and developer wanted the entire $375,000 settlement amount with the association to be set-off from the $2M verdict.\u00a0 The trial court set-off the entire $375,000 from the jury verdict when entering judgment.\u00a0 The appellate court reversed.<\/p>\n<p>Because $374,500 in the settlement agreement was smartly allocated to attorney\u2019s fees, even if self-serving, this was not a proper set-off that the contractor or developer could benefit from.\u00a0 The reason being was that attorney\u2019s fees were only sought against the association, not the developer or contractor, so they could not benefit from these separately allocable damages.\u00a0 They could only benefit from the $500 allocated in principal damages since that was a principal damages component that applied to all of the defendants.\u00a0 <i>See Escadote I Corp., supra<\/i> (\u201c<strong>If the settlement funds are applicable to a claim asserted only against the settling co-defendant, the non-settling co-defendants are not eligible for a set-off in the amount of the settlement. Expressed another way, the [set-off] statutes presuppose the existence of multiple defendants jointly and severally liable for the <i>same<\/i> damages<\/strong>.\u201d) (internal quotations and citations omitted).<\/p>\n<p>The apportionment \/ allocation in the settlement between the owner and association was very smart and the correct thing to do, again, even if the allocation was self-serving to the plaintiff.\u00a0 If the owner did not include this allocation, then the developer and contractor would have reaped the benefit of the entire $375,000 as a set-off against the jury\u2019s verdict.\u00a0 <i>See Escadote I Corp., supra<\/i> (\u201c[<strong>I]n a case in which a settlement recovery is not apportioned between (a) claims for which co-defendants are jointly and severally liable with the settling co-defendant, and (b) claims which were only asserted against the settling co-defendant, the entire amount of the undifferentiated recovery is allowable as a set-off.<\/strong>\u201d).<\/p>\n","protected":false},"excerpt":{"rendered":"<p>David Adelstein | Florida Construction Legal Updates | December 23, 2016 The defense of set-off is an important defense in construction disputes, particularly multiparty disputes.\u00a0 For more information on this defense, please check out this article as it explains the application of set-off in civil disputes in detail. The issue of set-off will come up&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/application-set-off-defendant-settles-multiparty-construction-dispute\/\">Continue reading <span class=\"screen-reader-text\">Application of Set-Off when a Defendant Settles in Multiparty Construction Dispute<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[164,172],"tags":[164,94,9890,9891],"class_list":["post-891539","post","type-post","status-publish","format-standard","hentry","category-construction-dispute","category-construction-law-2","tag-construction-dispute","tag-florida","tag-multiparty-dispute","tag-set-off","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Application of Set-Off when a Defendant Settles in Multiparty Construction Dispute - Advise &amp; 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