On February 17, 2012, Florida’s Second District Court of Appeal issued its opinion in McGregor v. Molnar, mandating that Commercial Carrier Corporation (CCC) pay attorneys’ fees based upon a rejected Proposal for Settlement made by the Plaintiff to a CCC driver who injured the Plaintiff. A Proposal for Settlement is a statutory offer pursuant to Section 768.79, Florida Statutes, which can be made to a party during litigation.
If a Plaintiff makes such an offer which is not accepted, and the jury returns a net verdict at least 25% in excess of the offer, the Defendant may be held responsible for attorneys fees. Absent such a proposal, or some other contractual or statutory basis, plaintiffs and defendants typically bear there own attorneys fees regardless of who wins.
While Proposals for Settlement are not uncommonly used tools in litigation, the McGregor case focused on the unique circumstance presented when a case is filed against both a negligent driver and that driver’s employer, but a Proposal for Settlement is made only to the driver.
The Plaintiff in McGregor made such a proposal in the amount of $200,000 to Valerie Molnar, the CCC driver, but preserved in that Proposal, all claims for CCC’s vicarious liability arising from the alleged negligent driving of Molnar. The offer was not accepted by Molnar and the jury returned a verdict resulting in a net judgment of $876,190.42 in favor of the Plaintiff.
After the trial, CCC opposed the Plaintiff’s Motion for Attorneys’ Fees, and the lower Court rejected the Plaintiff’s claim, finding the Proposal was not made in ”good faith.” The reasons the lower court gave were that the offer was not intended to conclude the litigation because the claims against CCC would remain even if the offer were accepted and that Molnar’s failure to accept the offer caused no additional delay or cost.
The Second District Court of Appeal disagreed with the lower court and found the fact that acceptance of the offer would not conclude litigation against CCC to be irrelevant. The McGregor Court also found that the offer which if accepted, would provide additional funds to pursue the ongoing litigation against CCC to be a valid strategic reason behind an offer to settle. Finally, the Court found the fact that Molnar’s failure to accept the offer caused no additional delay or litigation costs to be an insufficient basis on its own to deny the Plaintiff’s right to recover fees.
Attorneys handling cases involving claims arising from an employees negligent conduct, whether or not the case relates to the negligent operation of a motor vehicle, should be aware of the Mcgregor holding. In accordance with that holding, the decision makers on behalf of the Defense receiving a Proposal for Settlement directed only at a Defendant employee will find themselves in a difficult situation.
Accepting the Proposal will do nothing to limit the vicarious liability of the Defendant employer and will provide funds to the Plaintiff without ending the litigation. Rejecting the Proposal, on the other hand, may result in a large fee award at the end of the case.
In addition, such a Proposal has significant ethical implications to Defense attorneys representing both the Defendant employer and the Defendant employee which is often the case. Such an attorney may find himself or herself being asked to render advice as to whether a Proposal directed to just the employee should be accepted. In certain situations, acceptance of that Proposal would clearly be in the best interest of the employee, but not necessarily in the interest of the employer.