Encouraging Proposals for Settlement in Florida: Old Dominion Ins. Co. v. Tipton

April 26, 2019

The topic of proposals for settlement in Florida is a dynamic one. Florida courts continue to shape and refine the landscape of proposals and offers in civil litigation. On April 26, 2019, Florida’s Second District Court of Appeal issued an opinion regarding the effects of litigation stays on the validity of a proposal.

In Old Dominion Ins. Co. v. Tipton, No. 2D18-24, 2019 WL 186—8194 (Fla. 2d DCA April 26, 2019) the Court held that a litigation stay does not stay the 90-day waiting period for serving a valid proposal for settlement pursuant to Fla. R. Civ. P. 1.442. In Tipton, the insureds filed a complaint against the insurer for breach of contract in relation to a sinkhole claim. Subsequently, the insurer filed a notice of automatic stay pending completion of a neutral evaluation pursuant to Fla. Stat. 627—074 (10). After the stay was lifted, and 132 days after the insureds filed suit, the insurer served a proposal for settlement.

The insureds argued that the proposal was premature because the stay effectively stayed the 90-day waiting period under Fla. R. Civ. P. 1.442. The insureds argued that the legislative purpose of a stay pending neutral evaluation under Fla. Stat. 627—7074 (10) is to efficiently resolve sinkhole disputes and avoid unnecessary litigation. The insureds further argued that refusing to stay the 90-day waiting period for a proposal for settlement would frustrate the legislative purpose behind Fla. Stat. 627—7074 (10).

The Court rejected this argument and held that the stay did not apply to the 90-day waiting period for serving a valid proposal under Fla. R. Civ. P. 1.442. The Court reiterated that the very purpose of a proposal for settlement is to avoid unnecessary litigation, citing the Florida Supreme Court in State Farm Mut. Auto Ins. Co. v. Nichols, 932 So. 2d 1067, 1078 (Fla. 2006). Furthermore, the Court suggested that if the stay was to apply to this 90-day waiting period as the insureds contend, the effect of prolonging the 90-day period would itself frustrate the legislative intent of a stay under Fla. Stat. 627-7074 (10).

The Tipton decision is but the most recent example of Florida’s courts honing in and continuing to develop the law around proposals for settlement. Accordingly, interested citizens should continue to monitor the evolution of this topic as Florida’s courts continue to clarify and expound upon it.

For more information, please contact Shaheen Nouri.