                                       IN THE DISTRICT COURT OF APPEAL
                                       FIRST DISTRICT, STATE OF FLORIDA
TAYLOR ENGINEERING, INC.
& ROBERT J. WAGNER, P.E.,              NOT FINAL UNTIL TIME EXPIRES TO
                                       FILE MOTION FOR REHEARING AND
      Appellants,                      DISPOSITION THEREOF IF FILED

v.                                     CASE NO. 1D15-4782

DICKERSON FLORIDA, INC., a
Florida corporation,

      Appellee.


_____________________________/

Opinion filed May 31, 2017.

An appeal from the Circuit Court for Duval County.
Karen K. Cole, Judge.

George R. Truitt and Kathryn L. Ender of Cole, Scott & Kissane, P.A., Miami, for
Appellants.

Peter A. Robertson, Erin Rohan Smith, William Douglas Stanford, Thomas J.
Tollefsen, and William Collins Cooper of the Robertson Firm, St. Augustine; James
C. Hauser of Attorney’s Fees in Florida PL, Maitland, for Appellee.




WINOKUR, J.

      Appellants (collectively “Taylor”) filed a post-trial motion for attorneys’ fees

and costs pursuant to section 768.79(1), Florida Statutes, and Florida Rule of Civil
Procedure 1.442. The trial court denied the motion on the authority of Borden Dairy

Co. of Alabama, LLC v. Kuhajda, 171 So. 3d 242 (Fla. 1st DCA 2015) (holding that

a proposal for settlement must strictly comply with the content requirements of rule

1.442(c)(2) in order to entitle the movant to attorneys’ fees and costs). Taylor

appealed. However, while this appeal was pending, the Florida Supreme Court

quashed our decision in Borden Dairy. Kuhajda v. Borden Dairy Co. of Alabama,

LLC, 202 So. 3d 391 (Fla. 2016). Based on the supreme court’s decision, Appellee

(“Dickerson”) concedes that the trial court erred in holding that Taylor’s proposal

for settlement was invalid for failing to strictly comply with the content requirements

of rule 1.442. Accordingly, we reverse and remand for the trial court to reconsider

Taylor’s motion in light of the supreme court’s decision in Kuhajda.

      The Kuhajda decision does not, however, fully resolve this appeal. Dickerson

also argued that Taylor’s proposal for settlement was a nominal offer that was not

made in good faith, and for this reason the trial court should disallow an award of

costs and attorneys’ fees. § 768.79(7)(a), Fla. Stat. The parties contend that this

Court has made inconsistent rulings concerning the standard in determining whether

a nominal offer is made in good faith. While we find that the case law is not

inconsistent, we reiterate that, for purposes of the offer of judgment statute, a

nominal offer is made in good faith where the offeror has a reasonable basis to

believe that its exposure to liability is minimal.

                                           2
      The apparent inconsistency in the good-faith standard involves Arrowood

Indemnity Co. v. Acosta, Inc., 58 So. 3d 286 (Fla. 1st DCA 2011), and General

Mechanical Corp. v. Williams, 103 So. 3d 974 (Fla. 1st DCA 2012). The Arrowood

court noted “[i]n the context of a nominal offer of judgment, this court has held that

where the offeror has a reasonable basis to believe that exposure to liability is

minimal, a nominal offer is appropriate.” Arrowood, 58 So. 3d at 289 (emphasis

supplied). However, in the same context, we held in General Mechanical that “a

reasonable basis [for a nominal offer] exists only where the undisputed record

strongly indicates that the defendant had no exposure.” Gen. Mech., 103 So. 3d at

976 (emphasis supplied). At first glance, it appears that the General Mechanical

court would disqualify a nominal offer from the offer of judgment statute unless the

defendant had “no exposure” at all to liability, whereas the Arrowood court would

permit a nominal offer under the statute as long as the defendant’s exposure to

liability could be characterized as “minimal.” However, a review of the relevant case

law reveals no such inconsistency.

      The offer of judgment statute provides in pertinent part as follows:

                     (1) 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 . . . from the date of
             filing of the offer if the judgment is one of no liability[.]

                   ....
                                           3
                    (7)(a) If a party is entitled to costs and fees pursuant
             to the provisions of this section, the court may, in its
             discretion, determine that an offer was not made in good
             faith. In such case, the court may disallow an award of
             costs and attorney's fees.

§ 768.79(1) & (7)(a), Fla. Stat.1

      In determining whether a nominal offer was made in good faith, we have

previously applied the standard articulated in Arrowood. See Zachem v. Paradigm

Prop. Mgmt. Team, Inc., 867 So. 2d 1263 (Fla. 1st DCA 2004) (“A nominal offer is

appropriate where the offeror has a reasonable basis to believe that exposure to

liability is minimal.”). See also Connell v. Floyd, 866 So. 2d 90, 94 (Fla. 1st DCA

2004) (Benton, J., dissenting) (stating that the rule is that “a minimal offer can be

made in good faith if the evidence demonstrates that, at the time it was made, the

offeror had a reasonable basis to conclude that its exposure was nominal”).2 The

apparently different standard used by this Court in General Mechanical cites for that

rule to Event Services America, Inc., v. Ragusa, 917 So. 2d 882 (Fla. 3d DCA 2005).

In fact, Event Services does not necessarily set a different standard.

      The Event Services court held as follows:


      1
           Similarly, Florida Rule of Civil Procedure 1.442(h)(1) provides that the
court may “determine that a proposal [for settlement] was not made in good faith”
and “disallow an award of costs and attorneys’ fees.”
        2
          While this observation was made in a dissenting opinion, the majority based
its ruling on the lack of particularity of the settlement offer, not the lack of exposure
to liability.
                                             4
             A reasonable basis for a nominal offer exists only where
             “the undisputed record strongly indicate[s] that [the
             defendant] had no exposure” in the case. Therefore, a
             nominal offer should be stricken unless the offeror had a
             reasonable basis to conclude that its exposure was
             nominal.

Id. at 884 (citations omitted; emphasis supplied) (citing Peoples Gas Sys., Inc. v.

Acme Gas Corp., 689 So. 2d 292, 300 (Fla. 3d DCA 1997)). In other words, Event

Services appears to utilize both the no-exposure and the minimal-exposure standard.

However, we find that Event Services can be reasonably read as using the phrase “no

exposure” as synonymous with “nominal exposure.” This conclusion is bolstered by

the fact that, aside from Event Services and Peoples Gas, the Third District has

consistently held that the standard is whether there is a reasonable basis to indicate

that a defendant’s exposure was nominal. See, e.g., Key West Seaside, LLC v.

Certified Lower Keys Plumbing, Inc., 208 So. 3d 718 (Fla. 3d DCA 2015) (holding

that good faith exists as a matter of law where at the time an offer was made the

offeror had a reasonable basis to conclude that its exposure was nominal); Isaias v.

H.T. Hackney Co., 159 So. 3d 1002, 1004-05 (Fla. 3d DCA 2015) (footnote omitted)

(“The determination of whether a ‘nominal’ offer is in good faith requires the trial

court to consider whether the offeror had a reasonable basis to conclude, at the time

of making the offer, that its exposure was nominal.”); Downs v. Coastal Sys. Int’l,

Inc., 972 So. 2d 258 (Fla. 3d DCA 2008) (applying standard requiring a reasonable

belief of nominal exposure); Dep’t of Highway Safety & Motor Vehicles, Fla.
                                          5
Highway Patrol v. Weinstein, 747 So. 2d 1019, 1020 (Fla. 3d DCA 1999) (applying

standard requiring reasonable belief of nominal exposure). Moreover, the fact that

the Third District has not seen fit to address the seeming discrepancy supports the

proposition that it does not consider Event Services or Peoples Gas to be inconsistent

with its other cases.

      Even if Event Services did set a “no exposure” standard, we continue to follow

the “minimal exposure” standard. The Fourth District has suggested that Event

Services did specifically establish a no-exposure standard for a good-faith offer, but

has rejected that standard. In Citizens Property Insurance Corp. v. Perez, the Fourth

District distinguished Event Services and clarified that it had consistently held that

“[t]he rule is that a minimal offer can be made in good faith if the evidence

demonstrates that, at the time it was made, the offeror had a reasonable basis to

conclude that its exposure was nominal.” 164 So. 3d 1, 3 (Fla. 4th DCA 2014)

(quoting State Farm. Mut. Auto. Ins. Co. v. Sharkley, 928 So. 2d 1263, 1264 (Fla.

4th DCA 2006) (emphasis original)). The Fourth District opined that the no-

exposure standard is “too onerous.” Id. at 3; see also Sharaby v. KLV Gems Co., 45

So. 3d 560, 564 (Fla. 4th DCA 2010) (Warner, J., concurring) (disagreeing with the

Event Services standard and also stating she did not “think that Peoples Gas intended

to set a rule that requires an undisputed record, showing no liability, in order to prove

that a minimal offer was made in good faith”).

                                           6
      The Second and Fifth District Courts of Appeal also apply the standard

articulated in Arrowood. See, e.g., Gawtrey v. Hayward, 50 So. 3d 739, 743 (Fla. 2d

DCA 2010) (“In assessing whether Ms. Gawtrey’s nominal offer was made in good

faith, the trial court was required to look at whether Ms. Gawtrey had a reasonable

basis when the offer was made to conclude that her exposure in the case was

nominal.”); Gurney v. State Farm Mut. Auto. Ins. Co., 889 So. 2d 97, 99 (Fla. 5th

DCA 2004) (explaining that a nominal offer can be made in good faith if the

evidence demonstrates that, at the time it was made, the offeror had a reasonable

basis to conclude that its exposure was nominal).

      In summary, it appears that the no-exposure standard articulated in General

Mechanical originated from language in Peoples Gas, which was then adopted in

Event Services—but neither opinion clearly adopts this standard. In turn, this Court

cited Event Services in explaining the appropriate standard to determine whether a

nominal offer is made in good faith. Because this Court and other district courts have

generally applied the Arrowood minimal-exposure standard, and because Event

Services—the case on which General Mechanical relies—appears to be a deviation

from the standard generally used in the Third District, the appropriate standard is

whether the offeror had a reasonable basis to conclude that his/her exposure was

nominal or minimal. 3 This is the standard the trial court should apply on remand to


      3
          We also note the well-established rule that “a three-judge panel of a district
                                           7
determine whether Taylor’s offer of judgment was made in good faith, pursuant to

section 768.79(7)(a).

      REVERSED AND REMANDED.

OSTERHAUS and BILBREY, JJ., CONCUR.




court should not overrule or recede from a prior panel’s ruling on an identical point
of the law.” In re Rule 9.331, 416 So. 2d 1127, 1128 (Fla. 1982). The General
Mechanical panel would not have been authorized to overrule Arrowood without an
en banc proceeding. See Adams v. State, 188 So. 3d 849 (Fla. 1st DCA 2012).
                                         8
