{"id":891555,"date":"2017-01-24T11:52:05","date_gmt":"2017-01-24T18:52:05","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=891555"},"modified":"2017-01-24T11:52:05","modified_gmt":"2017-01-24T18:52:05","slug":"offer-judgement-can-really-lower-cost-shorten-litigation","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/offer-judgement-can-really-lower-cost-shorten-litigation\/","title":{"rendered":"What is an Offer Judgement and can it Really Lower the Cost of or Shorten Litigation?"},"content":{"rendered":"

Timothy R. Engelbrecht and T. Nicoholas Goanos | Butler Weihmuller Katz Craig<\/a> | January 11, 2017<\/p>\n

Insurance coverage litigation today is often time consuming and expensive.\u00a0 Many cases include claims for \u201cbad faith\u201d damages, and some cases seek punitive damages.\u00a0 To support their allegations, litigants will usually seek a wide-array of documents and testimony.\u00a0 Accordingly, litigating such matters can also become expensive.<\/p>\n

One potential method for combating these rising costs and risk is an expense-shifting tool called an \u201coffer judgment\u201d (\u201cOJ\u201d) (a\/k\/a \u201cproposal for settlement\u201d (\u201cPFS\u201d) in Florida).\u00a0 Typically, an OJ occurs when a defendant \u201coffers\u201d the plaintiff to have judgment taken against him, but only for a certain amount.\u00a0 If the plaintiff declines and obtains a judgment less favorable than the offer, then he must pay the defendant\u2019s costs and, possibly, his attorney\u2019s fees.\u00a0 In short, an OJ can cause the offeree to think long and hard about continuing the case.\u00a0 Because different States have different laws regarding an OJ, it may (or may not be) worthwhile to make (or accept) one. This blog post briefly discusses Offers of Judgment in Florida, Georgia, and North Carolina and South Carolina, as well as the considerations a party must contemplate before issuing or accepting one.<\/p>\n

FLORIDA<\/h2>\n

In Florida, Proposals for Settlement are complicated. Among other things, there are strict deadlines (e.g., 30 days to accept or reject a PFS); rigid requirements (i.e., a PFS can be made only when the \u201ctrue relief\u201d sought is money damages); and PFS\u2019s are carefully construed (i.e., a party must comply with both Florida Statute \u00a7 768.79 and Fla. R. Civ. P. 1.442 when making or accepting a PFS).<\/p>\n

There are, however, advantages. For example, while Florida Statute \u00a7 627.428 permits an insured who obtains a judgment against her insurer to recover her attorney\u2019s fees from that insurer, Florida law allows a successful insurer to recover his attorney\u2019s fees, depending on the level of his \u201csuccess.\u201d\u00a0 To explain this, the Florida Supreme Court created the following chart in Nichols v. State Farm Mut. Auto. Ins. Co., 932 So. 2d 1067 (Fla. 2008):<\/p>\n\n\n\n\n\n\n\n
If the Judgment is:<\/strong><\/td>\nThe Insured Receives:<\/strong><\/td>\nThe Insurer Receives:<\/strong><\/td>\n<\/tr>\n
No Liability<\/td>\nNo Fees<\/td>\nPost-offer attorney’s fees<\/td>\n<\/tr>\n
75% or less of insurer’s offer<\/td>\nPre-offer fees under\u00a0\u00a7 627.428<\/td>\nPost-offer attorney’s fees<\/td>\n<\/tr>\n
75% – 100% of insurer’s offer<\/td>\nPre-offer fees under\u00a0\u00a7 627.428<\/td>\nNo fees<\/td>\n<\/tr>\n
More than insurer’s offer<\/td>\nAll fees under\u00a0\u00a7 627.428<\/td>\nNo fees<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

As discussed below, Georgia allows a \u201csuccessful\u201d insurer to recover his attorneys\u2019 fees, but only with certain claims, while North Carolina and South Carolina do not allow a \u201csuccessful\u201d insurer to recover fees at all.<\/p>\n

GEORGIA AND O.C.G.A \u00a7\u00a09-11-68<\/h2>\n

Georgia, much like Florida, has a complicated set of requirements by which an OJ litigant must abide.\u00a0 These include specifically referencing the OJ Statute, O.C.G.A. \u00a7 9-11-68; including a certificate of service with the OJ; and heeding certain time constraints. Perhaps most analogous to Florida, but unlike North Carolina and South Carolina, is that Georgia allows for the recovery of attorney\u2019s fees, but only in cases involving tort claims.<\/p>\n

Also like Florida, Georgia employs a sliding scale for successful defendants.\u00a0 For instance, if a defendant issues an OJ that a plaintiff rejects, the prevailing defendant can collect attorney\u2019s fees and expenses incurred from the date of the rejection through the entry of judgment, if the final judgment is less than 75% of the offer.\u00a0 Similarly, if the plaintiff makes an offer which the defendant rejects, a prevailing plaintiff can collect attorney\u2019s fees and expenses, but only if the final judgment is greater than 125% of the offer.<\/p>\n

NORTH CAROLINA AND SOUTH CAROLINA<\/h2>\n

Offers of Judgment in North and South Carolina are governed by their respective State\u2019s Civil Procedure Rule 68.\u00a0 Although each State\u2019s Rule contains different procedural requirements\u2014such as South Carolina permitting only defendants to issue an OJ\u2014both States permit OJ\u2019s in all civil cases; and both permit the recovery of only costs (e.g., witness fees, subpoena fees, and deposition transcripts). Because neither State permits the recovery of attorney\u2019s fees, OJ\u2019s in North and South Carolina are far less useful in facilitating settlement than they are in Georgia and Florida.<\/p>\n

CONCLUSION<\/h2>\n

Obviously, there are a number of considerations a litigant must examine before issuing (or accepting) an OJ or PFS.\u00a0 The following are three that should be given special consideration:<\/p>\n

1.\u00a0\u00a0 Understand the ramifications involved, including what is and is not recoverable.<\/p>\n

Because different States permit the recovery of different expenses, it is imperative to understand what is, and what is not, recoverable.<\/p>\n

2.\u00a0\u00a0 Craft a clear and timely offer (or acceptance).<\/p>\n

The last thing a litigant wants is to have made the right decision in making, accepting, or rejecting an offer, only to later learn that poor drafting or timing has rendered it ineffective.<\/p>\n

3.\u00a0\u00a0 Remember, in most cases, an acceptance is a judgment.<\/p>\n

Although settlement may curtail expensive litigation or permit the recovery of attorneys\u2019 fees, an accepted OJ\/PFS is a judgment.\u00a0 This can be exceptionally meaningful when extra-contractual claims are at issue.<\/p>\n

Ultimately, an OJ\/PFS may indeed shorten the length or lessen the cost of litigation.\u00a0 However, it is only after careful consideration of all of the consequences involved should a party make such a determination.<\/p>\n","protected":false},"excerpt":{"rendered":"

Timothy R. Engelbrecht and T. Nicoholas Goanos | Butler Weihmuller Katz Craig | January 11, 2017 Insurance coverage litigation today is often time consuming and expensive.\u00a0 Many cases include claims for \u201cbad faith\u201d damages, and some cases seek punitive damages.\u00a0 To support their allegations, litigants will usually seek a wide-array of documents and testimony.\u00a0 Accordingly,… Continue reading What is an Offer Judgement and can it Really Lower the Cost of or Shorten Litigation?<\/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":[3],"tags":[23,9893],"class_list":["post-891555","post","type-post","status-publish","format-standard","hentry","category-insurance-claims","tag-insurance-coverage","tag-offer-judgement","entry"],"jetpack_publicize_connections":[],"yoast_head":"\nWhat is an Offer Judgement and can it Really Lower the Cost of or Shorten Litigation? 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