                                                             [PUBLISH]


              IN THE UNITED STATES COURT OF APPEALS

                     FOR THE ELEVENTH CIRCUIT             FILED
                     ___________________________ U.S. COURT OF APPEALS
                                                     ELEVENTH CIRCUIT
                             No. 00-10323                NOV 6 2002
                     ___________________________     THOMAS K. KAHN
                                                          CLERK
                   D.C. Docket No. 96-08294-CV-DMM


D. BRUCE MCMAHAN,
NEMESIS VERITAS, f.k.a.,
Mcmahan & Company,
                                                 Plaintiffs-Appellants,


     versus


WILLIAM A. TOTO,
                                              Defendant-Appellee.
__________________________________________________________________
                    ___________________________

                             No. 00-14728
                     ___________________________

                   D.C. Docket No. 96-08294 CV-DMM


D. BRUCE MCMAHAN,
NEMESIS VERITAS,
f.k.a. Mcmahan & Company,
                                                 Plaintiffs-Appellants-
                                                 Cross-Appellees,
      versus


WILLIAM A. TOTO,
                                                             Defendant-Appellee-
                                                             Cross-Appellant.

                         ____________________________

                    Appeals from the United States District Court
                        for the Southern District of Florida
                        ____________________________
                                (November 6, 2002)


                         ON PETITION FOR REHEARING



Before CARNES and MARCUS, Circuit Judges, and HAND*, District Judge.

CARNES, Circuit Judge:

      Recent events in this case illustrate that “when we write to a state law issue,

we write in faint and disappearing ink.” Sultenfuss v. Snow, 35 F.3d 1494, 1504

(11th Cir. 1994) (en banc) (Carnes, J., dissenting). The disappearing ink here is

that which we used in our previous opinion in this case to express our holding

about whether the Florida Supreme Court would apply its offer of judgment

statute, Fla. Stat. § 768.79, in a case tried in Florida but for which the substantive

      *
      Honorable William B. Hand, U.S. District Judge for the Southern District of
Alabama, sitting by designation.
                                           2
law of another state governed. There were no Florida decisions on point, and we

made an Erie guess that the Florida Supreme Court would not apply the statute in

those circumstances. As a result, we reversed the part of the district court’s

judgment awarding attorney’s fees under the statute. McMahan v. Toto, 256 F.3d

1120, 1130-35 (11th Cir. 2001).

  I. THE APPLICABILITY OF THE OFFER OF JUDGMENT STATUTE

      Our earlier opinion was barely in the hardback books when the Fourth

District Court of Appeal in Florida issued a decision disagreeing with our estimate

of Florida law. See BDO Seidman, LLP v. British Car Auctions, Inc., 802 So. 2d

366 (Fla. 4th DCA 2001), review denied, (Fla. Sept. 24, 2002) (No. SC02-96). If

the BDO Seidman decision had been around when we issued our first decision in

this case, we would have followed it. We would have been compelled to do so

because the rule is that, absent a decision from the state supreme court on an issue

of state law, we are bound to follow decisions of the state’s intermediate appellate

courts unless there is some persuasive indication that the highest court of the state

would decide the issue differently. See Galindo v. ARI Mut. Ins. Co., 203 F.3d

771, 775 (11th Cir. 2000); Trumpet Vine Invs., N.V. v. Union Capital Partners I,

Inc., 92 F.3d 1110, 1120 (11th Cir. 1996); Williams v. Singletary, 78 F.3d 1510,

1515 (11th Cir. 1996). That rule is, if anything, particularly appropriate in Florida,


                                          3
where the state’s highest court has held that “[t]he decisions of the district courts of

appeal represent the law of Florida unless and until they are overruled by [the

Florida Supreme Court].” Pardo v. State, 596 So. 2d 665, 666 (Fla. 1992) (quoting

Stanfill v. State, 384 So. 2d 141, 143 (Fla. 1980)).

      There is no persuasive indication that the Florida Supreme Court would not

follow the Fourth District Court of Appeal’s BDO Seidman decision on whether its

offer of judgment statute, Fla. Stat. § 768.79, applies when the case is governed by

the substantive law of another state. The fact that we decided the issue differently

is not a persuasive indication that the Florida Supreme Court would agree with us

and not with one of its own intermediate appellate courts, which presumably

knows more about Florida law than we do. Nor is the fact that one of the three

judges dissented on this point in BDO Seidman, 802 So. 2d at 374 (Polen, C.J.,

dissenting), a persuasive indication that the Florida Supreme Court would decide

the issue differently. Two is a majority of three, and a majority of participating

judges controls a court’s decision. See Fla. R. Jud. Admin. 2.040(a)(1) (2002)

(“Three judges shall constitute a panel for and shall consider each case, and the

concurrence of a majority of the panel shall be necessary to a decision.”). The

holding in BDO Seidman is and will remain Florida law until such time, if any, as




                                           4
the Florida Supreme Court has the inclination and opportunity to rule to the

contrary.

      Of course, at the time we issued our decision in this case we did not have the

benefit of the BDO Seidman decision, which was released on the very day we

denied the petition for rehearing and suggestion for rehearing en banc in this case.

In a diversity case, however, we are bound to follow any changes in a state’s

decisional law that occur during the case. See Huddleston v. Dwyer, 322 U.S. 232,

236, 64 S. Ct. 1015, 1018 (1944); see also Technical Coating Applicators, Inc. v.

United States Fid. & Guar. Co., 157 F.3d 843, 845 (11th Cir. 1998) (“Intervening

state decisions must be given full effect as if the decisions existed during the

pendency of the case in district court.”). We still have the authority, power, and

duty to modify our decision to comport with the latest word from the Florida courts

even though we have already denied rehearing, because we have not yet issued the

mandate returning the case to the district court. The case is still before us and we

can correct our missed guess about Florida law.

      In light of the BDO Seidman decision, we rescind Part II.D of our prior

decision, 256 F.3d at 1130, and in its place we hold that Florida’s offer of

judgment statute, Fla. Stat. § 768.79, is applicable to cases, like this one, that are




                                           5
tried in the State of Florida even though the substantive law that governs the case is

that of another state.1

      We turn now to the contentions raised by MBM and McMahan in this appeal

that we did not reach in our previous opinion because of our no longer viable

holding that Fla. Stat. § 768.79 was inapplicable in this case. Many of these born-

again contentions are not sufficiently viable to warrant discussion because they

either are so clearly without merit, or they are without merit and are of

insufficiently general application, to warrant discussion in a published opinion.

Those not mentioned are summarily rejected.

      Some of the contentions we did not reach in our earlier opinion do warrant

discussion, and some even have merit. For reasons we will discuss, we are going

to remand this case for further proceedings relating to the amount of attorney’s fees

that should be awarded. Accordingly, we also rescind Part III(3) of our prior



      1
       MBM and McMahan contend we should not reconsider our prior decision
because Toto’s motion to do so is untimely under 11th Circuit Rules 35-2 and 40-3.
Although both rules provide that petitions for rehearing “must be filed within 21
days of entry of judgment” (R. 35-2 addresses petitions for en banc rehearings; R.
40-3 addresses panel rehearings), they also state that counsel can “request
extensions of time . . . for the most compelling reasons.” We conclude the
issuance of BDO Seidman by the Fourth District Court of Appeal of Florida is a
“most compelling reason,” given that it is directly on point with this case, is
controlling, and is directly contrary to our previous decision in this case. Therefore,
Toto’s motion is not time-barred.
                                          6
decision, 256 F.3d at 1135, and replace it with the conclusion at the end of this

opinion.



               II. THE DETERMINATION OF ENTITLEMENT

             A. WHETHER THE OFFER WAS FACIALLY VALID

        MBM and McMahan contend the district court erred by awarding Toto any

attorney’s fees and costs because his offer was facially defective in several ways.

Toto’s offer of judgment provided as follows:

      Defendant, WILLIAM A. TOTO, hereby offers pursuant to Fla. Stat.
      § 45.061 to settle this case for the amount of $100.00 (One Hundred Dollars)
      upon a stipulation for dismissal, or, alternatively, pursuant to Fla. Stat.
      § 768.79, at Plaintiff’s election, to allow judgment to be taken against him in
      the total sum of $100.00 (One Hundred Dollars), in full and final resolution
      of all claims made in this action.

We review de novo a district court’s interpretation of a state law. Fioretti v. Mass.

Gen. Life Ins. Co., 53 F.3d 1228, 1234 (11th Cir. 1995).

      First, MBM and McMahan contend the offer was invalid because it failed to

state whether it included their claims for attorney’s fees and costs and Toto’s own

claims for costs in his answer.

      Florida Rule of Civil Procedure 1.442 governs settlements and provides that

a settlement proposal must “state the total amount of the proposal . . . [and] state

whether the proposal includes attorney’s fees.” Fla. R. Civ. P. 1.442(c)(2)(D) and

                                           7
(F). That rule applies to offers made pursuant to § 768.79. See United Servs.

Auto. Ass’n v. Behar, 752 So. 2d 663 (Fla. 2d DCA 2000). Where an offer

explicitly excludes attorney’s fees, it is invalid because the total amount of the

proposal is not stated. See State Farm Life Ins. Co. v. Bass, 605 So. 2d 908, 910

(Fla. 3d DCA 1992) (holding offer of judgment stating that attorney’s fees and

costs were to be determined at a later date did not satisfy Rule 1.442). But where

an offer does not explicitly exclude attorney’s fees, they are assumed to be

included. See Unicare Health Facilities, Inc. v. Mort, 553 So. 2d 159, 161 (Fla.

1989) (stating that “[t]here is an organic right of parties to contract a settlement,

which by definition concludes all claims unless the contract of settlement specifies

otherwise”); George v. Northcraft, 476 So. 2d 758, 759 (Fla. 5th DCA 1985) (“We

think the right to an award of attorney’s fees . . . is encompassed in an offer of

judgment . . . which fails to mention them specifically or reserve a right to seek

them later.”).

      Toto’s offer did not specifically exclude attorney’s fees. Further, it stated

that it would be “in full and final resolution of all claims made in this action”

(emphasis added), and that language is broad enough to cover both MBM and

McMahan’s claims for costs and attorney’s fees, and Toto’s own claims for costs.

See Liberty Mut. Fire Ins. Co. v. Ramos, 565 So. 2d 798, 800 (Fla. 4th DCA 1990)


                                           8
(where offer did not specifically mention attorney’s fees, holding that “when

Ramos made the offer of settlement . . . the amount of money demanded

necessarily included attorney’s fees. If it were otherwise, the claims would not be

terminated, the disputes would not be at an end, and the judicial process would be

needed to intervene to resolve the disputed amount of attorney’s fees.”).

Therefore, the offer of judgment was not invalid for failure to cover costs and

attorney’s fees.

      Second, MBM and McMahan contend that Toto’s offer was invalid because

it failed to state with particularity the amount, if any, applicable to the claim for

punitive damages. Both § 768.79 and Rule 1.442 provide that an offer must state

with particularity the amount, if any, offered to settle a claim for punitive damages.

Fla. Stat. § 768.79(2)(c); Fla. R. Civ. P. 1.442(c)(2)(E). Toto’s offer did not

specifically mention punitive damages, but it did state that, if accepted, it would be

“in full and final resolution of all claims made in this action.”

      Florida courts have not addressed whether an offer that does not specifically

address punitive damages can be valid under § 768.79 and Rule 1.442, but their

approach to the attorney’s fees requirement of Rule 1.442 is instructive. Rule

1.442(c)(2)(F) does say that offers should state whether they include attorney’s

fees, yet Florida courts have held those fees are included in offers where they are


                                            9
not mentioned as long as they are not specifically excluded. See Unicare Health

Facilities, 553 So. 2d at 161; Northcraft, 476 So. 2d at 759.

      Extending that logic to the context of the punitive damages requirements of

§ 768.79(2)(c) and Rule 1.442(c)(2)(E) – and there is no apparent reason we

should not – we conclude that Toto’s offer satisfied those requirements because it

did not explicitly exclude punitive damages from its coverage. If simple omission

were not enough, the “final resolution” language of the offer is. The offer was not

invalid under § 768.79 and Rule 1.442.

           B. WHETHER THE OFFER WAS MADE IN BAD FAITH

      If an offer satisfies the requirements of § 768.79(1)-(6), as this one did,

“[t]he sole basis on which a court can disallow an entitlement to an award of fees is

if it determines that [the] offer was not made in good faith.” Levine v. Harris, 791

So. 2d 1175, 1177 (Fla. 4th DCA 2001); see also § 768.79(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.”). The district court

found that Toto’s offer was made in good faith because “an appellate court of New

York had . . . held that the Releasors had not breached their contracts,” which

means Toto “was reasonable in concluding that Plaintiffs could not make out their


                                          10
remaining claim of tortious interference, breach of contract being an essential

element of that claim.”

      MBM and McMahan contend Toto’s offer was made in bad faith because, at

the time Toto made his offer, he had no reasonable basis for making it. At that

time, although the New York court had entered its decision in McMahan & Co. v.

Bass, 250 A.D.2d 460 (N.Y. App. Div. 1998), the district court had since denied

Toto’s motion for summary judgment on the tortious interference claim based on

the Bass decision. That means, according to MBM and McMahan, “the validity of

appellants’ claim had been confirmed by the trial court, Toto was facing millions

of dollars of potential liability and appellants had incurred thousands of dollars in

legal fees incurred during three years of litigation” so “the $100 Offer could not

be bona fide.”

      We review only for clear error the district court’s finding that Toto acted in

good faith, Turner v. Orr, 759 F.2d 817, 821 (11th Cir. 1985), and “[t]he burden is

upon the offeree to prove that the offeror acted without good faith,” Levine, 791

So. 2d at 1178 (citing Schmidt v. Fortner, 629 So. 2d 1036, 1041 n.6 (Fla. 4th DCA

1993), approved by TGI Friday’s, Inc. v. Dvorak, 663 So. 2d 606, 613 (Fla. 1995)).

Here, the offerees did not come close to carrying their burden of proof in the




                                          11
district court, and they are even further from convincing us that the district court

clearly erred in deciding this issue against them.

      Toto offered $100.00, a nominal amount. Although “nominal offers are

suspect where they are not based on any assessment of liability and damages,” Fox

v. McCaw Cellular Communications of Fla., Inc., 745 So. 2d 330, 332 (Fla. 4th

DCA 1998), they can be valid if the offerors have “a reasonable basis at the time of

the offer to conclude that their exposure was nominal.” Id. at 333. The good faith

requirement of § 768.79(7)(a) does not “demand that an offeror necessarily

possess, at the time he makes an offer or demand under the statute, the kind or

quantum of evidence needed to support a judgment. The obligation of good faith

merely insists that the offeror have some reasonable foundation on which to base

an offer.” Schmidt, 629 So. 2d at 1039.

      The argument of MBM and McMahon that Toto lacked any reasonable basis

for believing that he would prevail against them ignores the inconvenient fact that

he did prevail against them. To accept in the same case in which a party did

prevail the notion that there was no reasonable basis for that party prevailing would

require self-contradiction on a scale that we are unwilling to consider. It is MBM

and McMahon’s argument that is illogical, and thus unreasonable.




                                          12
                 III. THE DETERMINATION OF AMOUNT

      We review only for abuse of discretion the amount of attorney’s fees

awarded by the district court. See Farley v. Nationwide Mut. Ins. Co., 197 F.3d

1322, 1340 (11th Cir. 1999). The district court awarded Toto $260,034.29 in

attorney’s fees and costs. MBM and McMahan challenge that award on several

grounds, only some of which merit discussion here.

        A. WHETHER THE REQUESTED AMOUNT WAS INFLATED

      MBM and McMahan contend that Toto’s calculations of the amount of

attorney’s fees to which he was entitled was inflated by more than $70,000. They

assert that on March 6, 2000, Toto’s counsel discounted all of his attorney’s fees to

$136,103.54. They claim Toto’s fee application sought that amount plus

$51,394.76 in subsequent invoices, and that those figures totaled $187,498.30, not

the $260,447.72 requested by Toto.

      Toto disagrees with MBM and McMahan about the March 6, 2000 discount

and, therefore, about the total amount sought. According to Toto, as of March 6,

2000, he had paid $71,730 in attorney’s fees and had an outstanding balance of

$151,226.16. He asserts that only the outstanding balance was discounted by ten

percent (from $151,226.16 to $136,103.54), and that the $71,730 he had already

paid was not affected by that discount. He says that for services up to March 6,

                                         13
2000, he sought in his fee application $71,730 plus $136,103.54, which totals

$207,833.54. Additionally, he sought $51,394.76 in subsequent invoices for fees

incurred thereafter.

        Our review of the Verified Bill of Fees and Costs shows that, as of March 6,

2000, Toto had been billed for attorney’s fees and costs in the amount of

$222,956.16 ($1,125.00 for May 1999; $1,941.04 for June 1999; $74,682.71 for

July, August, September, and October 1999; and $145,207.41 for November and

December 1999). The Verified Bill states that “[o]n March 6, 2000 . . . [Toto’s

attorney] agreed . . . to discount the then outstanding balance of $151,226.16 by ten

percent to $136,103.54.” (emphasis added). The term “outstanding balance”

refers to the amount unpaid as of that date, see Black’s Law Dictionary 1129 (7th

ed. 1999); it does not refer to fees already paid. Therefore, any fees that were

already paid were not affected by the ten-percent discount. Although the Verified

Bill did not explicitly state that Toto had already paid $71,730, the implication was

clear, because the $222,956.16 of attorney’s fees and costs would reduce to an

unpaid balance of $151,226.16 only if Toto had paid the difference of $71,730.

Toto did not give up his claim to the full amount of the $71,730 he had already

paid.




                                          14
      Adding the $71,730 that Toto had already paid to the $136,103.54 that

resulted from the ten percent discount of the unpaid balance, and then adding to

that sum the $48,282.26 of attorney’s fees and costs from January, February, and

March 2000, and the $3,112.50 anticipated for April 2000, the total comes to

$259,228.30. Because the district court had already awarded taxable costs of

$4,799.33 pursuant to 28 U.S.C. § 1920, that amount is subtracted from

$259,228.30, and the balance is $254,428.97.

      In the verified bill, Toto sought $260,447.72. That figure is erroneous

according to our calculations, because it is $6,018.75 more than the $254,428.97 to

which Toto was entitled. (There is no reason to think that the error is anything

other than a mathematical one.) We will remand to the district court for it to

reduce the amount of attorney’s fees awarded Toto by $ 6,018.75.


          B. WHETHER THE AWARD EXCEEDED THE REQUEST

      MBM and McMahan contend the district court’s award of any attorney’s

fees beyond the $152,268.71 incurred as of December 21, 1999 was in error

because Toto’s counsel voluntarily limited the fee application to those incurred by

that date. Toto’s attorney’s affidavit, submitted as part of the fee application,

stated that he “cut off the claimed time immediately following the entry of the



                                          15
summary judgment [on December 21, 1999], even though the client has incurred

fees to pursue the issue of entitlement to fees which is fairly recoverable.”

      That language could be plausibly interpreted in two ways. It could be

construed to mean that any fees incurred from December 21, 1999 to any time in

the future were “cut off,” in the way MBM and McMahan insist. Or it could be

read to mean that Toto was not going to seek fees incurred from December 21,

1999, to the date the affidavit was executed, January 20, 2000. Toto claims he

initially decided to forego fees incurred during that period “in order to simplify the

fee application – and in the hope that making such allowance would obviate a fight

on reasonableness – which obviously has not happened.” As a result of the dispute

over fees, Toto now wants to recover fees incurred during that period and

afterwards.

      Although the district court did not explicitly address this issue, it is clear

from its order that the court read the fee application as not limiting the recovery of

attorney’s fees to those incurred before December 21, 1999, because the amount

awarded was $260,034.29, well in excess of the $152,268.71 incurred as of that

date. Given the ambiguity of the attorney’s fee affidavit, the district court did not

abuse its discretion in allowing Toto to recover attorney’s fees incurred after

January 20, 2000. But the attorney’s affidavit clearly excluded any fees incurred


                                          16
from December 21, 1999 to January 20, 2000, and Toto never amended his

application to seek those fees. Therefore, fees from that period should not have

been awarded, and we remand to the district court to determine that amount and

subtract it from the attorney’s fees award.

        C. WHETHER FEES FOR LITIGATING FEES WERE PROPER

      Determining that time spent calculating the amount of attorney’s fees due

was not recoverable, the district court lowered Toto’s fees request by $905, which

is the amount of attorney’s fees billed for “preparing the fees application.” MBM

and McMahan contend the district court did not go far enough. They say that it

should also have excluded any fees for litigating the issue of how much fees were

due, which they calculate would have reduced the award by another $51,973.75.

      The Florida Supreme Court has held that, while attorney’s fees incurred for

litigating the issue of entitlement to attorney’s fees are recoverable, fees incurred

for litigating the amount of attorney’s fees are not. State Farm Fire & Cas. Co. v.

Palma, 629 So. 2d 830, 833 (Fla. 1993). In the context of a contingency fee

agreement, the Palma court explained that the work involved in litigating the

amount of attorney’s fees “inures solely to the attorney’s benefit and cannot be

considered services rendered in procuring full payment of the judgment.” Id. It

noted the contrary federal court practice of allowing recovery of attorney’s fees for


                                          17
litigating both entitlement and amount issues, and it distinguished that practice

based on different statutory purposes. The purpose underlying most federal

statutory fee authorizations, the Court explained, is “to encourage attorneys to

represent indigent clients,” and allowing recovery for fees from litigating the

amount of fees comports with that purpose. Id. In contrast, the Florida statute

involved in that case has a different purpose – “to discourage the contesting of

valid claims . . . and to reimburse successful insureds for their attorney’s fees,”

which led the Florida Supreme Court to the conclusion that the statute’s purpose

would not be furthered by permitting the award of attorney’s fees incurred in

litigating the amount of them due. Id. (internal quotation marks and citation

omitted).

      In this case we deal with attorney’s fees awarded pursuant to § 768.79, the

purpose of which is “to ‘terminate all claims, end disputes, and obviate the need for

further intervention of the judicial process’ by encouraging parties to exercise their

‘organic right . . . to contract a settlement, which by definition concludes all claims

unless the contract of settlement specifies otherwise.’” MGR Equip. Corp. v.

Wilson Ice Enters., Inc., 731 So. 2d 1262, 1264 (Fla. 1999) (quoting Unicare

Health Facilities, Inc. v. Mort, 553 So. 2d 159, 161 (Fla. 1989)). That purpose

does not include encouraging the representation of indigents and does not support


                                          18
an award of attorney’s fees incurred litigating the amount of those fees. See also

Diaz v. Santa Fe Healthcare, Inc., 642 So. 2d 765, 766 (Fla. 1st DCA 1994)

(holding that where at least one of the purposes of a statute awarding attorney’s

fees “is to encourage attorneys to represent indigent persons . . . the trial court has

discretion . . . to make a fee award . . . which encompasses the time spent

establishing the amount of the fee”).

      Toto attempts to distinguish Palma by noting that it concerned a contingency

fee agreement, whereas “[t]his is an hourly fee case [and Toto’s attorneys] will get

paid . . . regardless of any fee recovery.” We are unpersuaded by that argument,

because the Florida Supreme Court has explained that whether attorney’s fees

should be awarded for litigating the amount of fees due depends on the purpose of

the statute under which the fees are sought; it does not depend on the method of

calculating them. Palma, 629 So. 2d at 833.

      The district court should have decreased Toto’s attorney’s fee award by the

amount spent litigating the amount of attorney’s fees to which he was entitled.

MBM and McMahan claim that amount is $51,973.75, but they do not tell us how

they arrived at that figure. On remand the district court should determine the

amount of attorney’s fees incurred by Toto in litigating the amount of attorney’s

fees, and subtract that amount from the fees to be awarded to him.


                                           19
                               IV . CONCLUSION

      We RESCIND Part II.D and Part III(3) of our prior decision, 256 F.3d at

1130-35, and replace them with the relevant parts of this opinion.

      We REMAND this case to the district court for further proceedings in which

it should: 1) decrease the attorney’s fees award by $6,018.75 (Part III.A, supra);

2) determine the amount of attorney’s fees incurred from December 21, 1999 to

January 20, 2000, and subtract that amount from the attorney’s fees award (Part

III.B, supra); 3) determine the amount of attorney’s fees incurred by Toto in

litigating the amount of attorney’s fees, and subtract that amount from the

attorney’s fees award (Part III.C, supra);

      We AFFIRM all other aspects of the district court’s orders and judgment.




                                             20
