CCM Condo. Ass'n, Inc. v. Petri Positive Pest Control, Inc.

330 So.3d 1

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

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

No. SC19-861

Supreme Court of Florida.

September 9, 2021

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

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.

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 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 postoffer 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 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 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 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).

Then, in State Farm Mutual Automobile Insurance Co. v. Nichols , 932 So. 2d 1067, 1074 (Fla. 2006), this Court reaffirmed the White formula,...