Proposal for Settlement : Ambiguities and When to Inform
Submitted by Philip Wiseberg on 07 Mar, 2022
The Proposal for Settlement (PFS) is a tool that can be used to settle a case and also as a means to recover fees and costs at the close of the case depending on the amount of the judgment against a party. A party can challenge the validity of a PFS when the opposing party seeks to have the Court determine entitlement to fees and costs based on the PFS.
This challenge usually occurs months or years after the PFS is served and after a judgment is obtained. Many times, the challenge to the PFS is based on a claim of an ambiguity within the PFS which would render it invalid. For example, if a party determines that there is an ambiguity in a PFS days after it is served, they are not required to inform the serving party of the ambiguity at any time prior to the hearing on the motion to determine entitlement under the PFS. At the hearing, they can claim an ambiguity and, if the Court agrees, the PFS is deemed invalid and not one that a party can use to recover fees and costs. The party that served the PFS has no opportunity to go back and correct the ambiguity since they are not made aware of it until after the time to serve a PFS has long passed.
In a recent ruling of the Fourth District Court of Appeals, Judge Jonathan Gerber, in a concurring Opinion, took this situation straight on with a question as to why there is no time requirement for a party to claim an ambiguity in a PFS after it is served. See Tower Hill Signature Ins. Co. v. Kushch_, 2022 WL 480594 (Fla. 4th DCA February 16, 2022). Judge Gerber refers to language in an Opinion he drafted 11 years prior (_Land & Sea Petroleum, Inc. v. Business Specialists, Inc., 53 So. 3d 348 (Fla. 4th DCA 2011)). He again indicates that requiring the parties to resolve any ambiguities in a PFS within a set time after service would be better suited for the spirit of the statute and rule which is “to encourage litigants to resolve cases early to avoid incurring substantial amounts of court costs and attorney’s fees”.
In this new Opinion, Judge Gerber again encourages the Civil Rules Committee of the Florida Bar to propose to the legislature or the Florida Supreme Court an amendment to the statute and rules regarding PFS’s to include a time limit for a party to claim an ambiguity in a PFS. If the party that is served does not identify the ambiguity in the PFS within a fixed period of time after service, then the objection to the PFS would be waived.
Certainly, it appears that there may be a change coming as to the rules and laws related to a PFS that may prevent the “gotcha” tactics as to ambiguities and put the onus on the served party to place the other party on notice of any claimed ambiguities in a PFS shortly after service so they can be timely corrected. However, as the law currently stands in Florida, a party has no time limitation to inform the serving party of an ambiguity in a PFS.