Southeast Floating Docks, Inc. v. Auto-Owners Ins. Co., 2012 WL 301029 (Fla. February 2, 2012).
This case arises from a performance bond issued by Auto-Owners in connection with the work of Southeast Floating Docks to build a floating dock for Rivermar Contracting Company. Rivermar sued Southeast and Auto-Owners in federal district court for breach of contract related to Southeast’s performance under the contract. Auto-Owners settled with Rivermar and sued Southeast and its president based upon a written agreement between the parties. The agreement contained a choice-of-law clause that provided that the substantive law of Michigan would apply to all disputes arising under the contract.
After a jury found in Southeast’s favor, Auto-Owners filed a motion for a new trial. The district court granted the motion and a re-trial was scheduled. Prior to the second trial, Southeast served Auto-Owners with an offer of judgment pursuant to section 768.79, which was rejected by Auto-Owners. The district court subsequently granted Auto-Owner’s motion for summary judgment. Southeast appealed this ruling to the Eleventh Circuit as well as the district court’s previous ruling granting Auto-Owner’s a new trial. The Eleventh Circuit reversed the judgment and the district court’s order for a new trial and reinstated the jury verdict from the original trial in favor of the Southeast. Southeast filed a motion for attorney’s fees pursuant to section 768.79. The district court denied the motion based upon Southeast’s failure to serve the proposal for settlement at least 45 days before the first trial. Southeast once again appealed to the Eleventh Circuit. The Eleventh Circuit certified three questions to the Florida Supreme Court regarding the application of section 768.79 and Florida Rule of Civil Procedure 1.442.
Whether Florida’s offer of judgment statute, section 768.79, applies to cases in which the parties have agreed that their dispute would be governed by the substantive law of another jurisdiction.
The Court held that an award of attorney’s fees under section 768.79 is a substantive right for conflict-of-law purposes and will not apply in instances where the parties have agreed to be governed by the substantive law of another jurisdiction. An agreement between parties to be bound by the substantive laws of another jurisdiction is presumptively valid and will be enforced unless applying the chosen forum’s law would contravene a strong public policy of the State of Florida.
In reaching its decision, the Court stated the plain meaning of the introductory clause of section 768.79, which provides the statute applies “[i]n any civil action for damages filed in the courts of this state,” does not mandate the application of the statute irrespective of the parties’ choice of applicable substantive law. The Court noted that if the statute had actually stated that it applied to all civil actions for damages brought in Florida, “even where the substantive law of another jurisdiction is applied,” the plain meaning of the statute would supersede the choice of law by the parties. But the statute does not have such language; thus the plain meaning of the statute does not mandate application of the statute in cases where the parties have agreed to be governed by the substantive law of another state.