Auto-Owners Insurance Co. v. Southeast Floating

FILED
U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
FEBRUARY 8, 2011
JOHN LEY
CLERK
[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 09-15846
________________________
D. C. Docket No. 05-00334-CV-ORL-31-GJK
AUTO-OWNERS INSURANCE COMPANY,
Plaintiff-Appellee,
versus
SOUTHEAST FLOATING DOCKS, INC.,
Defendant-Appellant.
________________________
Appeal from the United States District Court
for the Middle District of Florida
_________________________
(February 8, 2011)
Before WILSON, PRYOR and ANDERSON, Circuit Judges.
ANDERSON, Circuit Judge:
In this offer of judgment case, we certify three questions to the Florida
Supreme Court, seeking guidance as to the application of Florida’s offer of
judgment statute, Fla. Stat. § 768.79, and Florida Rule of Civil Procedure 1.442.

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First, we inquire whether an offer of judgment may be viable when filed under the
following circumstances: the offer was filed by a defendant after a jury verdict for
the defendant had been set aside by the district court’s grant of a new trial, and
after the new trial date had been scheduled, but more than 45 days before the
scheduled retrial; and the defendant ultimately prevailed because the appellate
court reversed the grant of a new trial and reinstated the initial verdict. Second, we
ask whether the term “joint proposal” in Rule 1.442(c)(3) applies to cases where
acceptance of the offer is conditioned upon dismissal with prejudice of an offeree’s
claims against an offeror and a third party. Finally, we seek a determination of
whether the Florida offer of judgment statute applies to actions filed in Florida, in
which there exists a contractually agreed upon choice-of-law clause providing for
the application of the substantive law of another state. We certify these questions
because we are unable to find definitive answers in clearly established Florida law,
either case law or statutory. “Where there is doubt in the interpretation of state
law, a federal court may certify the question to the state supreme court to avoid
making unnecessary Erie guesses and to offer the state court the opportunity to
interpret or change existing law.” Tobin v. Mich. Mut. Ins. Co., 398 F.3d 1267,
1274 (11th Cir. 2005) (per curiam).
I. FACTS AND PROCEDURAL HISTORY
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Plaintiff and Defendant are in virtual agreement as to the facts of this case.
Auto-Owners Insurance Company (“Auto-Owners”) insured the performance of
Southeast Floating Docks, Inc. (“Southeast”) pursuant to a contract between
Southeast and Rivermar Contracting Company (“Rivermar”). Southeast was to
build a floating dock for Rivermar. A dispute arose between Rivermar and
Southeast as to whether the contract had been properly performed, and Rivermar
sued Southeast and Auto-Owners. Auto-Owners agreed to settle the case with
Rivermar for $956,987.00. In turn, Auto-Owners commenced the instant suit,
seeking indemnification from Southeast based on a written agreement between it
and Southeast (and its president, Alan L. Simpson ). Southeast and Simpson1
contended that they were not responsible for indemnifying Auto-Owners because
the surety payments to Rivermar were made in bad faith.
On June 1, 2006, the jury returned a verdict in favor of Southeast, finding
that Auto-Owners had settled with Rivermar in bad faith, and thus finding that
Southeast had no liability to Auto-Owners. Judgment was entered on Southeast’s
behalf the next day. Shortly thereafter, Auto-Owners filed a motion for a new trial
in the district court, and the motion was granted in September of that year. On
September 25, 2006, the district court scheduled a retrial for April 2, 2007.
Simpson is not a party to this appeal.1
3

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On December 11, 2006, more than 6 months after the conclusion of the first
trial and 4 months in advance of the scheduled second trial, Southeast sent Auto-
Owners the § 768.79 proposal for settlement that is the subject of this appeal. In2
the proposal, Southeast offered to settle the case by paying Auto-Owners $300,000,
provided that Auto-Owners agree to resolve and dismiss with prejudice all claims
asserted in this action by Auto-Owners against Southeast and Alan L. Simpson,
including attorney’s fees. Auto-Owners did not accept the settlement offer, and the
case continued to proceed toward a second trial.
On March 1, 2007, the district court granted Auto-Owners’s motion for
summary judgment and, ultimately, entered an award of $1,135,658.98 in its favor.
Southeast appealed from this judgment on July 18, 2008. That appeal argued,
among other matters, that the court’s grant of the motion for a new trial was
erroneous.
On June 16, 2009, this Court reversed the district court’s grant of a new trial
and reinstated the jury verdict in favor of Southeast from the first trial. Southeast
subsequently filed the motion for attorney’s fees that is the subject of this appeal.
We use the terms offer of judgment, proposal for settlement, demand for2
settlement, and shortened versions thereof interchangeably, as these terms are used
interchangeably in § 768.79 and Rule 1.442.
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The district court denied the attorney’s fees motion, finding that Southeast
had failed to comply with the requirement in Florida Rule of Civil Procedure
1.442(b) that an offer of judgment be served at least 45 days in advance of trial.
The district court held that the trial date in question was that of the first trial, which
had occurred several months before the settlement offer. Thus, Southeast’s
proposal was deemed untimely. Auto-Owners opposed Southeast’s motion on
several other grounds, but the district court declined to reach them because they did
not affect its disposition of the case. These issues are also addressed in this appeal.
II. DISCUSSION
A. Was Southeast’s offer of judgment rendered non-viable by the 45-day
requirement in Rule 1.442?
The issue here is whether Southeast’s offer of judgment, which came after
the first trial had ended but more than 45 days in advance of the scheduled second
trial, was timely according to Rule 1.442. Section 768.79(1) provides, in relevant
part:
In any civil action for damages filed in the courts of this state, if a
defendant files an offer of judgment which is not accepted by the
plaintiff within 30 days, the defendant shall be entitled to recover
reasonable costs and attorney’s fees incurred by her or him or on the
defendant’s behalf . . . if the judgment is one of no liability . . . .
5

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Fla. Stat. § 768.79(1). Florida Rule of Civil Procedure 1.442 controls the process
for making offers of judgment and states, in relevant part:
No proposal shall be served later than 45 days before the date set for
trial or the first day of the docket on which the case is set for trial,
whichever is earlier.
Fla. R. Civ. P. 1.442(b). Because the Florida offer of judgment statute provides for
attorney’s fees in derogation of the common law, the statute, and its accompanying
rule of procedure, must be strictly construed. See Campbell v. Goldman, 959 So.
2d 223, 226–27 (Fla. 2007); Willis Shaw Express, Inc. v. Hilyer Sod, Inc., 849 So.
2d 276, 278 (Fla. 2003).
The language of Rule 1.442 is not clear as applied to the current controversy.
The word “trial” could be used to refer to either the first or second trial in this case
or to both. Southeast supplies several examples of persuasive authority that have
held that an offer of judgment can be made after the first phase of trial has been
completed in a bifurcated trial scenario. See, e.g., Cover v. Chi. Eye Shield Co.,
136 F.2d 374 (7th Cir. 1943); Allianz Ins. Co. v. Gagnon, 860 P.2d 720 (Nev.
1993) (per curiam). Typically, these bifurcated trials are comprised of separate
trials for liability and damages. Courts considering offer of judgment statutes
analogous to Florida’s have determined that parties may propose offers of
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judgment after the first phase of the trial is resolved, as long as the timeliness
requirement is met in relation to the date of the second phase of the trial.
Auto-Owners distinguishes these cases on the basis of the procedural history
of the instant dispute. Auto-Owners’s primary argument is that there must be a
nexus between the dispositive judgment and the timeliness requirement of the offer
of judgment. That is to say, they believe that it is improper to measure the
timeliness of Southeast’s offer according to the date of the second trial when the
outcome of the case was decided by the judgment in the first trial. Auto-Owners
also notes that Florida, like Nevada, the District of Columbia, and other
jurisdictions that have an offer of judgment statute, provides for payments of
attorney’s fees to a defendant only if the judgment is less favorable to the plaintiff
than the proposed offer. Auto-Owners argues that this statutory comparison of3
the offer and the ultimate judgment supports its position that there must be a nexus
between the two. In bifurcated trial cases like Allianz, the party seeking attorney’s
fees was dependant on the outcome of the forthcoming trial to determine the
reasonableness of their offer; therefore, these cases represented instances where the
offer in question satisfied the nexus with the determinative judgment for which
Auto-Owners advocates.
See Fla. Stat. § 768.79; Nev. R. Civ. P. 68; D.C. Super. Ct. Civ. R. 68.3
7

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Southeast argues that Auto-Owners’s proposed nexus requirement is at odds
with the purpose of the statute. “[R]ule 1.442 is punitive in nature, [and] its
purpose is to sanction a party who unreasonably refuses to settle by shifting the
payment of attorney’s fees.” Mills v. Martinez, 909 So. 2d 340, 343 (Fla. 5th DCA
2005). “‘Encouraging settlement lowers litigation costs for the parties and reduces
the fiscal impact of litigation on the court system . . . .’” Allstate Prop. & Cas. Ins.
Co. v. Lewis, 14 So. 3d 1230, 1235 (Fla. 1st DCA 2009) (quoting BDO Seidman,
LLP v. British Car Auctions, Inc., 802 So. 2d 366, 371–72 (Fla. 4th DCA 2001)
(Gross, J., concurring specially) (citations omitted)). The purpose of settling cases
and avoiding litigation and court costs would be furthered by allowing offers of
judgment before second trials, regardless of any nexus to the judgment that
ultimately decided the case. At the time that Southeast proposed its $300,000
offer, it appeared that the parties were headed to a second trial. Acceptance of the
offer would have saved the parties and courts a substantial amount of time and
money.
Although Auto-Owners offers no satisfactory explanation for how a nexus
requirement would further the purpose of the statute, it does point to possible
issues of fairness that could arise in such cases. Florida courts have held that offers
of judgment submitted after the final judgment is entered but before the notice of
8

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appeal is filed may not be used to recover attorney’s fees incurred during that
appeal. See, e.g., Glanzberg v. Kauffman, 771 So. 2d 60, 61 (Fla. 4th DCA 2000)
(per curiam). The court in Glanzberg stated, “Litigants (particularly defendants)
who file after the conclusion of trial have the benefit of knowing the jury’s verdict,
from which they can calculate the exact amount for which they must offer to settle
in order to be entitled to attorney’s fees under section 768.79 if they were to win on
appeal.” Id. However, the court in that case did go on to state in dicta that
attorney’s fees could be properly awarded for second trials and that Glanzberg
could be entitled to attorney’s fees if she were to prevail after remand. Id.
The cautionary advice in Glanzberg is potentially applicable to many or most
cases that proceed to a second trial after the grant of a motion for a new trial. A
party filing an offer of judgment before the second trial at least has the advantage
of knowing the value that the first jury placed upon the case. For example, in the4
case of a defendant prevailing in the first trial, like Southeast here, the defendant
might have filed an offer of judgment in a nominal amount, hoping that the second
jury would mimic the first jury or that the defendant might ultimately prevail on
appeal and succeed in reinstating the first jury verdict. Of course, Fla. Stat. §
On the other hand, of course, the offeree of such a proposal for settlement would4
also have the same knowledge.
9

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768.79(7) provides that a trial court may disallow an award of fees upon
determining that an offer of judgment (like the nominal one in our hypothetical
example) was not made in good faith. Although it is fairly clear that Southeast’s
offer of judgment in this case was not made in bad faith, extant Florida case law is5
unclear as to the significance to be placed upon the cautionary advice in Glanzberg.
It is unclear whether the Florida Supreme Court would decide to handle such cases
on a case-by-case basis, deciding in each case whether the offer was made in good
faith, or whether that Court would prefer a bright-line rule and invalidate all offers
of judgment filed after a first jury verdict.
Because the language of the statute and the intent of the Florida legislature
are unclear, and because there are no Florida cases that conclusively indicate what
the proper interpretation should be, we respectfully certify to the Florida Supreme
Court the following question:
DOES FLA. STAT. § 768.79 ALLOW FOR VALID OFFERS OF JUDGMENT IN
A SEPARATE SECOND TRIAL; AND, IF SO, MAY OFFERS BE DEEMED
VALID IN INSTANCES WHERE AN APPELLATE COURT REINSTATES THE
JUDGMENT OF THE FIRST TRIAL?
Auto-Owners has not argued on appeal that Southeast’s offer was made in bad5
faith, and the offer of $300,000 was clearly not nominal.
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B. Was Southeast’s offer rendered a nullity because it was a joint proposal?6
Florida Rule of Civil Procedure 1.442(c)(3) states, “A proposal may be made
by or to any party or parties and by or to any combination of parties properly
identified in the proposal. A joint proposal shall state the amount and terms
attributable to each party.” Joint proposals that do not state the terms attributable
to each party are invalid and unenforceable. See, e.g., Att’ys’ Title Ins. Fund, Inc.
v. Gorka, 36 So. 3d 646, 650–51 (Fla. 2010) (per curiam); Graham v. Peter K.
Yeskel 1996 Irrevocable Trust, 928 So. 2d 371, 372 (Fla. 4th DCA 2006).
Auto-Owners claims that the offer of judgment in question was a joint
proposal from Southeast and co-defendant Alan Simpson that failed to identify the
terms attributable to each party. The Florida Supreme Court has held that
proposals are invalid when offered to multiple parties and conditioned upon
acceptance by all. Gorka, 36 So. 3d at 649, 651–52. Likewise, offers made by
multiple parties that fail to attribute the terms applicable to each are not in
compliance with Rule 1.442(c)(3). Willis Shaw, 849 So. 2d at 278–79.
The District Court did not address this issue because it was mooted by that court’s6
holding that the offer was untimely. Appellant concedes that this Court can affirm the lower
court’s decision on the basis of any claim that was made to the trial court. Thus, this argument of
Auto-Owners and those discussed below must be evaluated because they constitute alternative
grounds for affirmance.
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In this case, Auto-Owners makes several arguments suggesting that
Southeast’s offer of judgment was an invalid joint proposal or was vague or
ambiguous. We reject some such arguments outright, and we certify one7
argument. The argument that we certify is Auto-Owners’s contention that the offer
of judgment was an invalid joint proposal because it required the resolution of and
dismissal with prejudice of Auto-Owners’s claim against a third party to the offer,
Simpson, without stating the terms attributable to each party.
We reject outright Auto-Owners’s argument that it was not clear who the parties7
to the offer of judgment were. Auto-Owners argues that it was not clear whether or not Simpson
was a party. The introductory paragraph of the offer referred twice to “Defendant” in the singular
and expressly provided that Southeast Floating Docks, Inc. was the offeror. Only one offeror was
named, and this was Southeast, not Simpson. We conclude that the offer was not ambiguous in
this regard.
Auto-Owners also argues that the offer of judgment was ambiguous in that it was unclear
whether it required Auto-Owners to give up its right to assert unrelated claims in other suits.
Auto-Owners relies upon Palm Beach Polo Holdings, Inc. v. Village of Wellington, 904 So. 2d
652, 653 (Fla. 4th DCA 2005). Auto-Owners fails to point to any language in the proposal that
was unclear in this regard. Contrary to Auto-Owners’s argument, the offer of judgment expressly
provided for the resolution of “[a]ll issues and claims asserted by Plaintiff in this action against
Defendants” and expressly provided for a “dismissal with prejudice of this action.” There is no
language in the offer of judgment suggesting that claims unrelated to the instant suit might be
affected.
Auto-Owners’s other arguments with respect to vagueness or ambiguity are so conclusory
that they are deemed abandoned. See Marek v. Singletary, 62 F.3d 1295, 1298 n.2 (11th Cir.
1995) (“Issues not clearly raised in the briefs are considered abandoned.”) (citation omitted);
United States v. Jernigan, 341 F.3d 1273, 1283 n.8 (11th Cir. 2003) (holding that to avoid being
abandoned, claims must be unambiguously demarcated so that there is no confusion as to which
issues are being argued) .
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It is true that the offer of judgment required the resolution of and the
dismissal with prejudice of Auto-Owners’s claims in this action—not only
its claims against Southeast, but also its claims against Simpson. However,
the Florida Fourth District Court of Appeal has held that an offer of
settlement made by one party to another party is not transformed into a joint
proposal simply because it conditions acceptance on the dismissal of claims
against a third party. See Alioto-Alexander v. Toll Bros., 12 So. 3d 915,
917 (Fla. 4th DCA 2009). If Toll Bros. correctly reflects Florida law, it
would control the resolution of this issue and mandate a rejection of Auto-
Owners’s argument that the instant offer of judgment is an invalid joint
proposal. If we were not in any event certifying the issue discussed above
in Part II.A., we would simply follow Toll Bros. and reject Auto-Owners’s
argument that the offer of judgment in this case was a joint proposal and
therefore invalid. However, because Toll Bros. is a decision of an
intermediate appellate court, and because we have found no pertinent case
from the Florida Supreme Court, it is possible that the Florida Supreme
Court may desire to review the rule of Toll Bros. Therefore, we certify the
following question:
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DOES THE CONDITIONING OF AN OFFER OF JUDGMENT ON THE
RESOLUTION AND DISMISSAL WITH PREJUDICE OF THE
OFFEREE’S CLAIMS IN THE ACTION AGAINST A THIRD-PARTY
RENDER THE OFFER OF JUDGMENT A JOINT PROPOSAL, AS THAT
TERM IS USED IN FLORIDA RULE OF CIVIL PROCEDURE
1.442(c)(3)?
C. Do Florida’s choice-of-law rules mandate the application of Michigan
law to this case?
Auto-Owners claims that Michigan law should apply to this case
because the parties agreed to apply the substantive law of Michigan in a
choice-of-law provision in the indemnity agreement on which Auto-Owners
sued. At least one Florida District Court of Appeal has held that § 768.79
applies to all civil cases in Florida, regardless of the substantive law of the
case. See BDO Seidman, 802 So. 2d at 369. Auto-Owners attempts to
distinguish the instant case on the basis of the fact that the choice of law at
issue was contractually agreed upon.
If we were not in any event certifying the issue described above in
Part II.A., we would follow BDO Seidman and reject Auto-Owners’s
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argument that Michigan law applies. We would reject Auto-Owners’s
attempt to distinguish BDO Seidman. It is true that this case is different
from BDO Seidman in that it was a tort case whereas this case involves a
choice-of-law provision in a contract. However, in light of the holding and
rationale of BDO Seidman, we do not believe that this factual difference
undermines that case as precedent for this case. The holding in BDO
Seidman did not depend on the kind of case that was involved. Rather, it
held that § 768.79(1) is clear and applies to “‘any civil action for damages
filed in the courts of this state . [. . .]’” Id. at 368 (quoting Fla. Stat. §
768.79(1) (1991) (emphasis added)). Thus, the court held that the Florida
offer of judgment statute “should be applied without engaging in a conflict
of laws analysis.” Id. The court also reasoned:
Our conclusion that section 768.79 applies to all civil actions for
damages brought in Florida courts is consistent with the legislative
intent, which is to reduce litigation. An action for damages based
on the substantive law of another jurisdiction has the same impact
on the Florida court system as one based on the substantive law of
Florida.
Id. at 369 (internal citation omitted).
BDO Seidman also stated that § 768.79 is procedural, not substantive.
Id. at 369. See also id. at 370–74 (Gross, J., concurring specially) (explaining
15

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why § 768.79 is procedural). Thus, the contractual choice-of-law provision
would not apply in any event. See Cole v. Mileti, 133 F.3d 433, 437 (6th Cir.
1998) (“Contractual choice-of-law clauses incorporate only substantive law,
not procedural provisions.”); Gluck v. Unisys Corp., 960 F.2d 1168, 1179 (3d
Cir. 1992) (holding that contractual choice-of-law provisions do not apply to
statutes of limitations in jurisdictions that deem such provisions to be
procedural for the purposes of the choice-of-law analysis); FDIC v. Petersen,
770 F.2d 141, 142 (10th Cir. 1985) (“Choice-of-law provisions in contracts are
generally understood to incorporate only substantive law.”); Gaisser v.
Portfolio Recovery Assocs., LLC, 571 F. Supp. 2d 1273, 1276 (S.D. Fla. 2008)
(holding that statute of limitations was governed by contractual choice-of-law
provision only because Florida law deemed statutes of limitations to be
substantive). “Whether this lawsuit expended Florida’s judicial resources is
not a concern of” Michigan. BDO Seidman, 802 So. 2d at 372 (Gross, J.,
concurring specially).
However, because we are in any event certifying the issue discussed in
Part II.A., because BDO Seidman is a decision of an intermediate appellate
court, and because we found no pertinent case from the Florida Supreme Court,
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it is possible that the Florida Supreme Court may desire to address the conflict
of laws issue. Therefore, we certify the following question:
DOES FLA. STAT. § 768.79 APPLY TO CASES THAT ARE GOVERNED
BY THE SUBSTANTIVE LAW OF ANOTHER JURISDICTION; AND, IF
SO, IS THIS STATUTE APPLICABLE EVEN TO CONTROVERSIES IN
WHICH THE PARTIES HAVE CONTRACTUALLY AGREED TO BE
BOUND BY THE SUBSTANTIVE LAWS OF ANOTHER JURISDICTION?
“The phrasing of these [three] questions is not intended to limit the
Florida Supreme Court’s consideration of the issues involved or the manner in
which it gives its answers.” MCI WorldCom Network Servs. v. Mastec, Inc.,
370 F.3d 1074, 1079 (11th Cir. 2004) (internal citations omitted). In order to
assist in the resolution of these questions, the record in this case and the briefs
of the parties shall be transmitted to the Florida Supreme Court.
QUESTIONS CERTIFIED.
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