CCM Condominium Association, Inc., etc. v. Petri Positive Pest Control, Inc., etc.

• Court: Supreme Court of Florida
• Decided: September 9, 2021
• Docket: SC19-861
• Status: Published

Opinion

Supreme Court of Florida ____________

No. SC19-861 ____________

CCM CONDOMINIUM ASSOCIATION, INC., etc., Petitioner,

vs.

PETRI POSITIVE PEST CONTROL, INC., etc., Respondent.

September 9, 2021

POLSTON, J.

We review the Fourth District Court of Appeal’s decision in

Petri Positive Pest Control, Inc. v. CCM Condominium Ass’n, 271 So.

3d 1001 (Fla. 4th DCA 2019), in which the Fourth District certified

the following question of great public importance:

FOR PURPOSES OF CALCULATING WHETHER A PLAINTIFF HAS MET THE THRESHOLD AMOUNT OF DIFFERENCE BETWEEN AN OFFER OF JUDGMENT AND THE JUDGMENT ENTERED FOR PURPOSES OF SECTION 768.79, FLORIDA STATUTES, MUST POST- OFFER PREJUDGMENT INTEREST BE EXCLUDED FROM THE AMOUNT OF THE “JUDGMENT OBTAINED”? Id. at 1007. In its decision, the Fourth District also certified conflict

with the Third District Court of Appeal’s decision in Perez v. Circuit

City Stores, Inc., 721 So. 2d 409 (Fla. 3d DCA 1998), and the First

District Court of Appeal’s decision in Phillips v. Parrish, 585 So. 2d

1038 (Fla. 1st DCA 1991). Petri, 271 So. 3d at 1007. 1

Based upon this Court’s precedent and as explained below, we

answer the certified question in the affirmative, approve the Fourth

District’s decision in Petri, and disapprove the Third District’s

decision in Perez and the First District’s decision in Phillips to the

extent they are inconsistent with our decision today.

I. BACKGROUND

The Fourth District described the background of this case as follows:

In 2013, the appellee/plaintiff, CCM Condominium Association, Inc., sued the appellant/defendant, Petri Positive Pest Control, Inc., for negligence and breach of contract regarding the parties’ contract for Petri to address a termite problem at CCM’s property. Petri answered, denying the allegations. CCM served an amended offer of judgment in 2014, pursuant to section 768.79, Florida Statutes. It offered to settle all of CCM’s claims for damages, including punitive damages, attorney’s fees, costs, and interest, for $500,000. Petri rejected the offer.

1. We have jurisdiction. See art. V, § 3(b)(4), Fla. Const.

-2- Following a trial in 2016, the jury found in favor of CCM on its breach of contract claim, and it awarded CCM $551,881 in damages. CCM submitted a proposed final judgment, requesting $551,881 in damages, and an additional $84,295.60 in prejudgment interest calculated by an accountant, with a per diem rate for each day. This amount included both pre-offer of settlement and post-offer of settlement interest. The court entered judgment based on those calculations for a total of $636,326.90. CCM then moved to tax costs, which the court granted in the amount of $73,579.21. CCM moved for attorney’s fees pursuant to section 768.79, Florida Statutes, the offer of judgment statute, contending that its judgment of $636,326.90, inclusive of interest, exceeded the offer by more than 25%. Thus, CCM was entitled to an award of attorney’s fees incurred. Petri objected, contending that in accordance with White v. Steak & Ale of Florida, Inc., 816 So. 2d 546 (Fla. 2002), the amount of the plaintiff’s total recovery included only its attorney’s fees, costs, and prejudgment interest accrued up to the date of the offer of judgment. Without the post-offer prejudgment interest and costs, CCM had not met the threshold amount of $625,000. The court granted CCM’s motion for attorney’s fees. It concluded that White addressed only pre-offer costs in relation to a plaintiff’s “judgment obtained,” not prejudgment interest. Relying on Perez v. Circuit City Stores, Inc., 721 So. 2d 409 (Fla. 3d DCA 1998), the court ruled that prejudgment interest is included in the “judgment obtained” for section 768.79 purposes. The court held a hearing to determine the amount of attorney’s fees, and the parties ultimately agreed on the amount, leaving the issue of entitlement for this appeal.

Petri, 271 So. 3d at 1002-03.

On appeal, the Fourth District reversed the award of attorney’s

fees based upon this Court’s precedent, although it concluded that

-3- the plain meaning of section 768.79 did not support the precedent.

The Fourth District held that this Court’s decisions in White and

Shands Teaching Hospital & Clinics, Inc. v. Mercury Insurance Co. of

Florida, 97 So. 3d 204 (Fla. 2012), required the exclusion of post-

offer prejudgment interest from the “judgment obtained” when

determining entitlement to attorney’s fees pursuant to section

768.79. The Fourth District explained that its conclusion, that only

pre-offer prejudgment interest is included in the calculation,

conflicts with the Third District’s decision in Perez and the First

District’s decision in Phillips. Therefore, the Fourth District certified

conflict with Perez and Phillips, both pre-White cases. It also

certified the above question of great public importance.

II. ANALYSIS

CCM argues that the plain meaning of section 768.79 does not

exclude post-offer prejudgment interest from the “judgment

obtained” that is compared to a rejected settlement offer when

determining whether to award attorneys’ fees under the offer of

judgment statute. Petri counters that this Court in White already

held that post-offer prejudgment interest is to be excluded and that

the White formula has been consistently and workably applied and

-4- reaffirmed for nearly two decades. Because this Court’s precedent

is not clearly erroneous, we decline to recede from the White

formula.

This Court recently explained that “[i]n a case where we are

bound by a higher legal authority—whether it be a constitutional

provision, a statute, or a decision of the Supreme Court—our job is

to apply that law correctly to the case before us.” State v. Poole,

297 So. 3d 487, 507 (Fla. 2020). And “[w]hen we are convinced that

a precedent clearly conflicts with the law we are sworn to uphold,

precedent normally must yield.” Id. “But once we have chosen to

reassess a precedent and have come to the conclusion that it is

clearly erroneous, the proper question becomes whether there is a

valid reason why not to recede from that precedent.” Id. When

determining whether there is a valid reason not to recede, “[t]he

critical consideration ordinarily will be reliance.” Id.

Section 768.79(1), Florida Statutes (2014) (emphasis added),

provides that “[i]f a plaintiff files a demand for judgment which is

not accepted by the defendant within 30 days and the plaintiff

recovers a judgment in an amount at least 25 percent greater than

the offer, she or he shall be entitled to recover reasonable costs and

-5- attorney’s fees incurred from the date of the filing of the demand.”

Similarly, section 768.79(6)(b), Florida Statutes (2014) (emphasis

added), provides that “[i]f a plaintiff serves an offer which is not

accepted by the defendant, and if the judgment obtained by the

plaintiff is at least 25 percent more than the amount of the offer,

the plaintiff shall be awarded reasonable costs, including

investigative expense, and attorney’s fees . . . incurred from the date

the offer was served.” Section 768.79(6), Florida Statutes (2014)

(emphasis added), explains that “judgment obtained” in subsection

(6)(b) “means the amount of the net judgment entered, plus any

postoffer settlement amounts by which the verdict was reduced.”

In White this Court concluded that, in determining whether

attorney’s fees are to be awarded under section 768.79, settlement

offers should be compared to what would be included in judgments

if the judgments were entered on the date of the settlement offers

because these amounts are the ones that are evaluated when

determining the amount of offers and whether to accept offers. See

816 So. 2d at 550-51. This Court in White reasoned as follows:

In determining both the amount of the offer and whether to accept the offer, the party necessarily must evaluate not only the amount of the potential jury verdict, but also

-6- any taxable costs, attorneys’ fees, and prejudgment interest to which the party would be entitled if the trial court entered the judgment at the time of the offer or demand. As we stated in Danis Industries Corp. v. Ground Improvement Techniques, Inc., 645 So. 2d 420, 421–22 (Fla. 1994):

[A]ny offer of settlement shall be construed to include all damages, attorney fees, taxable costs, and prejudgment interest which would be included in a final judgment if the final judgment was entered on the date of the offer of settlement.

Id. at 421–22. We reaffirmed this principle in our recent decision in Scottsdale Insurance. Co. v. DeSalvo, 748 So. 2d 941, 944 n.3 (Fla. 1999), where we explained that the plaintiff’s “recovery” must be added to its “attorney fees, costs, and prejudgment interest” accrued up to the date of the “offer” to determine the total “judgment.” It is this judgment to which the offer must be compared in determining whether to award fees and costs. Id. In summary, we conclude that the “judgment obtained” pursuant to section 768.79 includes the net judgment for damages and any attorneys’ fees and taxable costs that could have been included in a final judgment if such final judgment was entered on the date of the offer. Thus, in calculating the “judgment obtained” for purposes of determining whether the party who made the offer is entitled to attorneys’ fees, the court must determine the total net judgment, which includes the plaintiff’s taxable costs up to the date of the offer and, where applicable, the plaintiff’s attorneys’ fees up to the date of the offer.

Id. (footnotes omitted).

-7- Then, in State Farm Mutual Automobile Insurance Co. v.

Nichols, 932 So. 2d 1067, 1074 (Fla. 2006), this Court reaffirmed

the White formula, which we described as follows:

In White v. Steak & Ale of Florida, Inc., 816 So. 2d 546 (Fla. 2002), we held that the term “judgment” under the offer of judgment statute must be defined—as it is under section 627.428—to include not only the plaintiff’s damages award, but also any attorney’s fees, taxable costs, and prejudgment interest to which the plaintiff would have been entitled when the offer was made. Id. at 551. “It is this judgment to which the offer must be compared in determining whether to award fees and costs” under both the offer of judgment statute and section 627.428. Id. (citing DeSalvo, 748 So. 2d at 944 n.3).

Additionally, in Shands, 97 So. 3d at 213, this Court held that a

trial court properly calculated the “judgment obtained” as including

pre-offer prejudgment interest pursuant to the White formula.

Following the formula that this Court first set forth in White,

the district courts have consistently excluded amounts that were

not present on the date of the offer, including damages for claims

that had not yet been added. See Palmentere Bros. Cartage Serv. v.

Copeland, 277 So. 3d 729, 733 (Fla. 1st DCA 2019) (“Because

punitive damages were not part of the case on the date of the offer

of settlement, the calculation of the ‘net judgment’ and ‘judgment

-8- obtained’ required in section 768.79(6)(b), could not include the

amount of the punitive damages verdict.”); R.J. Reynolds Tobacco

Co. v. Lewis, 275 So. 3d 747, 749 (Fla. 5th DCA 2019) (explaining

that “it is clear that under White, a court may only properly

consider those costs that were already taxable on the date the PFS

was filed,” and holding that the experts’ costs were not taxable

because they had not been deposed and did not testify); Diecidue v.

Lewis, 223 So. 3d 1015, 1017 n.2 (Fla. 2d DCA 2017) (“The majority

of this cost award was not considered when calculating the

necessary twenty-five percent margin in section 768.79(1) because

the costs were not incurred on [the date of the offer].”); UCF

Athletics Ass’n v. Plancher, 121 So. 3d 616, 618-19 (Fla. 5th DCA

2013) (explaining that “[f]or the purpose of the offer of judgment

statute, the judgment obtained includes the net judgment for

damages and any attorney’s fees and taxable costs that could have

been included in a final judgment if such final judgment was

entered on the day of the offer,” and reversing the award of

attorneys’ fees because “[h]ad the trial court properly ruled [on the

issue of sovereign immunity], on the day the offer was made, the

most Appellee would have been entitled to recover from UCFAA was

-9- $200,000, an amount much less than the offer Appellee made to

settle the case”); Nilo v. Fugate, 30 So. 3d 623, 625 (Fla. 1st DCA

2010) (“Only those costs incurred pre-demand may be considered in

determining whether the total judgment meets the statutory

threshold.”); Segundo v. Reid, 20 So. 3d 933, 938 (Fla. 3d DCA

2009) (“[T]o require the defendant to pay attorney’s fees as a

sanction for ‘unreasonably’ rejecting the plaintiff’s proposal for

settlement would penalize the defendant for damages not pled nor

proven until after the proposal for settlement was rejected and

permit the plaintiff to benefit from the changing nature of his claim

after the proposal for settlement expired.”); Segui v. Margill, 864 So.

2d 518, 518 (Fla. 5th DCA 2004) (“[White] do[es] not support the

award of attorney’s fees in the instant case because no attorney’s

fees had accrued as of the date of the offer of settlement.”); Amador

v. Walker, 862 So. 2d 729, 731 (Fla. 5th DCA 2003) (rejecting the

argument that “[t]he lesson and holding of White is that all taxable

costs, pre-offer and post-offer, are to be included in determining the

‘judgment obtained’ ”).

In fact, as Petri notes, CCM does not cite a decision after White

that stands for the proposition that post-offer prejudgment interest

- 10 - is included in the “judgment obtained.” Even the two decisions with

which the Fourth District certified conflict are pre-White decisions.

See Petri, 271 So. 3d at 1007 (certifying conflict with Perez, which

was decided by the Third District in 1998, and Phillips, which was

decided by the First District in 1991). Moreover, as Petri argued

during oral argument, the White formula appears somewhat

uniquely clear and consistently applied in Florida’s related

jurisprudence.

When considering the text of section 768.79 as a whole and in

context, we cannot conclude that this Court’s precedent setting

forth the White formula is “clearly erroneous.” Poole, 297 So. 3d at

507. We simply do not have a definite and firm conviction that this

Court’s prior interpretation of the offer of judgment statute and the

terms “judgment,” “judgment obtained,” and “net judgment entered”

is wrong. Cf. United States v. U.S. Gypsum Co., 333 U.S. 364, 395

(1948) (“A finding [in an action tried without a jury] is ‘clearly

erroneous’ when although there is evidence to support it, the

reviewing court on the entire evidence is left with the definite and

firm conviction that a mistake has been committed.”); Branch v.

Sec’y, Fla. Dep’t of Corr., 638 F.3d 1353, 1356 (11th Cir. 2011) (“A

- 11 - finding is clearly erroneous when we are left with the definite and

firm conviction that it is wrong.”); Tropical Jewelers Inc. v. Bank of

Am., N.A., 19 So. 3d 424, 426 (Fla. 3d DCA 2009) (same).

CCM claims that the language of section 768.79(6) defining

“judgment obtained” as the “net judgment entered,” means that all

amounts awarded in any judgment in the case are to be used for

comparison to the offer, including all prejudgment interest, all

costs, and all attorney’s fees. However, the term “net judgment

entered” does not automatically include attorney’s fees, interest, or

costs. Further, section 768.79(2) provides that “[t]he offer shall be

construed as including all damages which may be awarded in a

final judgment.” Attorney’s fees and costs are not damages. See

First Specialty Ins. Co. v. Caliber One Indem. Co., 988 So. 2d 708,

714 (Fla. 2d DCA 2008); Golub v. Golub, 336 So. 2d 693, 694 (Fla.

2d DCA 1976). It was only by interpreting the phrase “net

judgment entered,” which is not defined in the statute, that this

Court determined that pre-offer attorneys’ fees, pre-offer costs, and

pre-offer prejudgment interest should be included in the “judgment

obtained.”

- 12 - Accordingly, because we cannot conclude that this Court’s

prior interpretation of section 768.79 is clearly erroneous, we

decline to recede from the formula this Court set forth in White.

See Poole, 297 So. 3d at 507.

III. CONCLUSION

Based upon this Court’s precedent from which we decline to

recede, we hold that post-offer prejudgment interest is excluded

from the “judgment obtained” that is compared to a rejected

settlement offer when determining entitlement to attorneys’ fees

under section 768.79. Accordingly, we answer the certified

question in the affirmative, approve the Fourth District’s decision in

Petri, and disapprove the Third District’s decision in Perez and the

First District’s decision in Phillips to the extent they are

inconsistent with this decision.

It is so ordered.

LABARGA, MUÑIZ, COURIEL, and GROSSHANS, JJ., concur. CANADY, C.J., dissents with an opinion, in which LAWSON, J., concurs.

NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION AND, IF FILED, DETERMINED.

- 13 - CANADY, C.J., dissenting.

The majority rest its decision on the conclusion that the

question presented is settled by our precedents and there is not an

adequate basis for disturbing those precedents. But as the Fourth

District correctly acknowledged, this Court “has never squarely

addressed [the] issue” presented for decision here. Petri Positive

Pest Control, Inc. v. CCM Condo. Ass’n, 271 So. 3d 1001, 1002 (Fla.

4th DCA 2019). Because we have no applicable precedent and the

result reached by the majority is detached from the text of the

statute, I dissent. I would conclude that post-offer prejudgment

interest must be included in calculating the “judgment obtained”

under section 768.79, answer the certified question in the negative,

and quash the decision on review.

“Not all text within a judicial decision serves as precedent.

That’s a role generally reserved only for holdings: the parts of a

decision that focus on the legal questions actually presented to and

decided by the court.” Bryan A. Garner et al., The Law of Judicial

Precedent 44 (2016). “A decision’s authority as precedent is limited

to the points of law raised by the record, considered by the court,

and determined by the outcome. The assumptions a court uses to

- 14 - reach a particular result do not themselves create a new precedent

or strengthen existing precedent.” Id. at 84.

Here, the primary authority on which the majority relies, White

v. Steak & Ale of Florida, Inc., 816 So. 2d 546 (Fla. 2002), stated

that the “question presented” was “whether a prevailing party’s pre-

offer taxable costs are included for purposes of calculating the

‘judgment obtained.’ ” Id. at 549 (emphasis added). The framing of

the issue by the petitioner and the Court in White left aside the

issue of post-offer taxable costs. So the Court had no occasion to

decide whether post-offer taxable costs—much less post-offer

prejudgment interest—should be included in the calculation of the

amount of the judgment obtained. Of course, in White any

argument over post-offer costs would have been meaningless, since

the 25%-of-offer threshold was crossed once pre-offer costs were

included in the calculation of the judgment obtained. In White, the

holding of the Court turned on its rejection of decisions that had

excluded all costs from the calculation of the judgment obtained.

Id. at 550. The Court reasoned that costs were properly considered

in “determining the judgment threshold because a prevailing party

- 15 - is entitled to a judgment for taxable costs.” Id. That resolved the

issue presented to the Court for decision in White.

What White went on to say about costs, fees and interest “to

which the party would be entitled if the trial court entered the

judgment at the time of the offer or demand,” id., was not necessary

to decide the issue presented. See id. at 550-51. Indeed, the issue

presented effectively assumed at least that post-offer costs would

not be included in the calculation of the judgment obtained. But

such an assumption that is not necessary to the resolution of the

issue actually presented is not transformed into a holding even if

the court adopts the assumption.

The majority’s reliance on Shands Teaching Hospital & Clinics,

Inc. v. Mercury Insurance Co. of Florida, 97 So. 3d 204 (Fla. 2012), is

similarly misplaced. There is no indication in the Shands opinion

that any argument was presented to the Court regarding post-offer

costs and post-offer prejudgment interest. In any event, the award

of fees sought under section 768.79 was defeated without any need

to consider post-offer costs or post-offer prejudgment interest. See

id. at 214. So—just as in White—that issue was irrelevant to the

disposition of the section 768.79 issue in the case.

- 16 - In State Farm Mutual Automobile Insurance Co. v. Nichols, 932

So. 2d 1067, 1074 (Fla. 2006), the Court did refer to the pre-offer

language of White in providing background, but the reference had

no bearing on the issues actually presented and decided. Nichols

held “that the offer of judgment statute applies to PIP suits” but

that the offer at issue was invalid because it “was too ambiguous.”

Id. at 1080. Given the invalidity of the offer, there was no need for

the Court to consider the question presented in this case or any

other question concerning the calculation of the judgment obtained.

Nichols by no means established or reaffirmed any precedent

relevant to the issue in this case.

A fair reading of the text of the statute cannot support the

interpretation articulated in the statements from White relied on by

the majority. As the Fourth District explains, the authorities cited

in White to support its discussion that is relevant to post-offer fees,

costs and interest are cases interpreting a different statute, section

627.428, Florida Statutes, which provides for the award of

prevailing party fees to an insured in litigation against an insurer.

That statute is structured in an entirely different manner than

section 768.79. There is no relevant textual similarity and thus no

- 17 - basis for applying the interpretation of one statute to the other

statute. The pertinent statements from White thus are of very

dubious provenance. In issuing those statements, the White

opinion simply did not engage the relevant provisions of section

768.79.

There is no path from the statutory language of section

768.79—“net judgment entered”—to the meaning adopted by the

majority—a hypothetical judgment equivalent to “what would be

included in judgments if the judgments were entered on the date of

the settlement offers.” Majority op. at 6. The legislature certainly

could have enacted a statute with such a meaning. Indeed, the

legislature has enacted a statute containing a very similar

provision. Section 45.061, Florida Statutes (2020), which applies to

offers of settlement for causes of action that accrued on or before

the effective date of the statute in 1990, contains a provision

defining “the amount of the judgment” as “the total amount of

money damages awarded plus the amount of costs and expenses

reasonably incurred by the plaintiff or counter-plaintiff prior to the

making of the offer.” § 45.061(2)(b), Fla. Stat. So the legislature

certainly knows how to clearly exclude post-offer costs and

- 18 - expenses from the definition of the amount of judgment used to

determine whether an award is to be made under an offer of

judgment statute.

In previously rejecting particular statutory interpretations, “we

have pointed to language in other statutes to show that the

Legislature ‘knows how to’ accomplish what it has omitted in the

statute in question.” Cason v. Fla. Dep’t of Mgmt. Servs., 944 So. 2d

306, 315 (Fla. 2006). “[W]here the legislature has inserted a

provision in only one of two statutes that deal with closely related

subject matter, it is reasonable to infer that the failure to include

that provision in the other statute was deliberate rather than

inadvertent.” Olmstead v. F.T.C., 44 So. 3d 76, 82 (Fla. 2010)

(alteration in original) (quoting 2B Norman J. Singer & J.D.

Shambie Singer, Statutes and Statutory Construction § 51:2 (7th ed.

2008)). The omission from section 768.79 of a provision similar to

the pre-offer provision of section 45.061 strongly militates against

the result reached by the majority.

LAWSON, J., concurs.

Application for Review of the Decision of the District Court of Appeal Certified Great Public Importance/Certified Direct Conflict of Decisions

- 19 - Fourth District - Case No. 4D18-1290

(Broward County)

Steven J. Hammer and Zane Berg of Schlesinger Law Offices, P.A., Fort Lauderdale, Florida; Shea T. Moxon, Celene H. Humphries, and Joseph T. Eagleton of Brannock, Humphries & Berman, Tampa, Florida; and Thomas P. Angelo and James W. Carpenter of Angelo & Banta, P.A., Fort Lauderdale, Florida,

for Petitioners

Mark D. Tinker, Tampa, Florida, and Sanaz Alempour of Cole, Scott & Kissane, P.A., Fort Lauderdale, Florida,

for Respondents

- 20 -