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How Non-Compliance With a Procedural Rule Cost a Litigant an Opportunity to Collect Attorneys’ Fees

Poole Huffman, LLC

Whether you are litigating in federal court or Georgia state court, it is very important to ensure that your side is in total compliance with all statutory demands and procedural requirements. Failing to meet the obligations of these rules can have disastrous consequences for your case. In some situations, even slight missteps could cost you thousands of dollars (or more). Make sure that your interests are completely protected by retaining a skilled Georgia business attorney to handle your case for you.

One recent federal case from the 11th Circuit Court of Appeals demonstrates how damaging a lack of complete procedural compliance can be. The case began when a motel group filed a lawsuit against an insurance company, alleging that the insurance company was liable for breach of contract. The lawsuit started out in Florida state court in 2013, but, as is the case with many commercial litigation actions, the case qualified for removal to federal court, which the insurance company sought in this situation.

Ten days after the removal to federal court, the insurance company submitted to the motel group a settlement proposal that complied with the Florida statutes and the Federal Rules of Civil Procedure. Florida Statutes Section 768.79 gives the recipient 30 days to respond. The motel group did not respond in that time-frame.

Eventually, the insurer sought and obtained an order of summary judgment, ending the motel group’s case and declaring the insurer not liable. At this point, the insurer’s decision to submit a statutory settlement proposal is very important. The statute says if you — as the defendant — submit a qualifying settlement proposal to which the plaintiff does not respond within 30 days (or which the plaintiff rejects), and if the outcome of the case is a judgment of no liability or a judgment at least 25% less than what you offered in your proposal, you may be entitled to recover certain attorneys’ fees and costs.

The insurance company, since it received a judgment of no liability and had previously made a settlement proposal the motel group did not accept, made that request for fees and costs. Despite these facts, the insurance company did not receive an award of attorneys’ fees.

Why not? The answer again came down to compliance with procedural rules. Although the case was proceeding within the federal courts, the parties were still required to comply with the Florida state rules of procedure with regard to the submission of settlement offers. The Florida rules say that you must wait at least 90 days before making a settlement proposal. The insurance company didn’t wait the required 90 days, and that premature action cost it.

While this federal case specifically involves issues of Florida law, rulings by the 11th Circuit affect Florida, Georgia, and Alabama. Additionally, Georgia has a statutory settlement code section, OCGA 9-11-68, that functions very similarly to the Florida statute at issue in this case (Section 768.79). The Georgia statute has the same 25% differential between statutory offer and case outcome provision, and it also has the same 30-day window for a recipient to respond to a statutory settlement offer. OCGA 9-11-68 does not have the 90-day requirement that the Florida rules have, however. The absence of the 90-day provision raises the possibility that the outcome might have been different if this case had begun in Georgia instead of Florida.

Whether you are preparing to launch a commercial litigation action or defend against one, the experienced Atlanta contract litigation attorneys at Poole Huffman, LLC are here to help. Our attorneys have spent many years formulating and executing effective business litigation strategies to protect and enhance our clients’ interests. Contact our attorneys online or by calling 404-373-4008 to schedule your confidential consultation.

More blog posts:

Property Investors Beware: “self-Help” Evictions Are Never an Option, Atlanta Business Litigation Attorneys Blog, June 18, 2015

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