Concept Review: Offer of Judgment

This law firm recently represented a corporation in the appeal of an award requiring it to pay over $250,000 in legal fees to the opposing party. Our appeal argued that the basis for the fee award (specifically, Florida’s offer of judgment statute) was not applicable in this case.

Our argument was that since our client sought both money damages as well as injunctive relief, there could be no fee award in the case. In other words, when the lawsuit was filed, the client sought not only money from the other side (for an alleged taking of its customer list), but also an injunction to prevent the future improper use of those customer lists.

Although the court ultimately ruled that the customer lists had not been used by the defendants (and issued a judgment in their favor), it also entered an additional judgment in their favor for legal fees, based on an offer of judgment. The Florida statute at issue, which allows a party to recover its attorney’s fees if it offers to settle for a certain amount, and the other side rejects that offer, and also fails to prevail in the case, is only valid where when the amount sought by the plaintiff does not include a claim for an injunction or equitable relief.

In this case, we argued vigorously at the trial court level that no attorney’s fees could be awarded, because the complaint sought injunctive relief. The lower court disagreed with that argument, ultimately entering an award against our client for more than $250,000 in reimbursement of legal fees to the other side.

This law firm appeal that decision to the 11th Circuit Court of Appeals, and on April 6, 2021 the appellate court issued an order agreeing with our argument, and the requirement for our client to pay more than $250,000 in legal fees and costs was reversed. The matter was remanded back to the trial court to vacate the fee judgment.

Florida’s offer of judgment statute is a complex mechanism, that if used correctly can result in an award of legal fees to a prevailing party in litigation (who would not otherwise have any right to that type of relief). However, it is complex, and must be done with precision. Otherwise, a litigant who uses it risks reversal of any fee award.