On April 27, 2016, the Third and Fourth District Courts of Appeal issued separate opinions on the much beguiled Proposal for Settlement.
In Vanguard Car Rental USA, LLC v. Suttles, the Third DCA was confronted with the situation where defendant “Vanguard, Inc.” served a Proposal for Settlement on the Plaintiff. Some time later, the Plaintiff realized that this Defendant was now “Vanguard LLC” and amended the Complaint to replace “Inc” with “LLC.” The matter went to summary judgment in Defendant Vanguard’s favor. It moved for attorney’s fees but lost. The issue was whether Inc’s Proposal applied to LLC’s summary judgment.
The short answer is that Inc. was not “dropped” from the suit but was only “re-named” to LLC in the pleadings. The court held, “this did not change the identity of the party making the proposal.” The court also noted that Florida and Delaware law permitted a conversion from one corporate entity to another resulted in “the same entity that existed before the conversion.” The appellate court ruled that the defendant was entitled to fees per the Proposal and remanded for the trial court to do the math.
In Deer Valley Realty, Inc. v. SB Hotel Associates, LLC, a failed real estate investment led to a suit to recoup costs. One of the features of the deal was that the name Trump International Hotel would be licensed to the property but that, if the license is terminated, it could affect unit values. The suit, however, appeared to be based on alleged claims in the advertising materials. During litigation, the Defendant served a Proposal and ultimately won. However, their motion for fees was denied.
While the Proposal referenced that it applied to “all claims” and it was “inclusive of all attorney’s fees” it did not, per Rule 1.442(c)(2)(F) state “whether attorney’s fees are part of the legal claim.” This was the ruling in a 2013 Florida Supreme Court case, Diamond Aircraft Indus., Inc. v. Horowitch and was the ruling in this case.