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Florida Third DCA reverses trial court's holding that proposal for settlement was fatally ambiguous because it did not clearly indicate that it did not require acceptance by both defendants

On March 1, 2017, in Atlantic Civil v. Swift, No. 3D15-1594, the Florida Third DCA reversed the trial court’s denial of the prevailing plaintiff’s motion for attorney’s fees pursuant to Fla. Stat. 768.79. The trial court concluded that the underlying proposal for settlement was fatally ambiguous in its terms because it was fashioned as a proposal made jointly to both defendants, apportioning out a total demand and each individual defendant’s individual financial responsibility, but not explicitly indicating that the proposal did not require the acceptance by both defendants. Although the Court of Appeal noted the general rule of construction that proposals for settlement are to be interpreted strictly, citing Willis Shaw Express, Inc. v. Hilyer Sod, Inc., 849 So. 2d 267 (Fla. 2003), the Court also cited the Florida Supreme Court’s recent admonition in Anderson v. Hilton Hotels Corp., 202 So. 3d 846, 852 (Fla. 2016), that “courts are discouraged from ‘nitpicking’ proposals for settlement to search for ambiguity.” The Court of Appeal focused on the fact that the general release form allowed for the defendants to sign separately, and determined that an “examination of the whole contract” supported the conclusion that the proposal was not fatally ambiguous and in fact contemplated that one or both defendants could accept the proposal.

This is an example of a decision that may have been rightly decided for the wrong reasons. The Third DCA’s somewhat tortured defense of the terms of the proposal for settlement fly in the face of the fact that the proposal for settlement actually seems to contemplate that a joint and indivisible offer is being made. At the very least, the drafter’s intention is ambiguous. What arguably saves the proposal for settlement is not the language of the proposal, but a basic tenet of contract construction that interpretations that will make a contract lawful and enforceable are preferred over interpretations that render part or all of the contract unenforceable, illegal, or unreasonable. See, generally, Restatement (Second) of Contracts §§ 228-229. If the proposal for settlement was interpreted as being made as a joint and indivisible offer, it would be unenforceable under Florida law. See Attorney’s Title Insurance Fund, Inc. v. Gorka, 36 So. 3d 646 (Fla. 2010). Consequently, any ambiguity in the proposal for settlement on this issue arguably should be resolved in favor of enforceability.