Morris v. Boyer
6th DCA, 3/8/24
No. 6D23-1031, 2024 WL 996291
Chief Judge Traver
Topics: Setoffs; Proposal for Settlement
Quick Take: Where husband-defendant settled his portion of a car accident case for $50,000 and then wife-defendant, the spouse of the first defendant, agreed to settle her part of the case for $49,500, she was not entitled to—and the court could not enter a judgment—a setoff from her husband’s $50,000. Where parties settle, there is no judgment, and setoffs do not apply to settlements unless those terms are included in the settlement agreement.
Full Take: Rachel Boyer sued Jeffrey Morris after the two were involved in a car accident. Jeffrey Morris then countersued both Mrs. Boyer and her husband. The husband, Mark, had not been present at the time of the accident, but Mr. Morris sued Mark Boyer on a theory of negligent entrustment of the car and vicarious liability.
Rachel Boyer dismissed her complaint, but Mr. Morris kept his countersuit alive. He served a proposal for settlement (“PFS”) on Mr. Boyer for $50,000, and Mr. Boyer accepted and was discharged from the case.
Mr. Morris then sent a PFS to Mrs. Boyer for $49,500, agreeing to discharge her from the case if she accepted the offer. She agreed via a “notice of acceptance,” but the notice argued that she should not have to pay anything because Mr. Morris had already received full payment from Mr. Boyer. She claimed she was entitled to set off $50,000 from the $49,500. Mr. Morris disagreed and moved to enforce the settlement.
Mr. Boyer also moved to enforce the settlement, arguing that Mr. Morris had not yet dismissed him from the case following the $50,000 payment. Mr. Morris then voluntarily dismissed against Mr. Boyer.
The trial court held a hearing. The trial court denied Morris’ motion to enforce settlement. Instead, it ruled that Mrs. Boyer accepted Morris’ proposal for settlement, and setoff applied “as a matter of law.” The trial court then entered final judgment in Mrs. Boyer's favor and ruled that Morris was entitled to “no further recovery.” This was error.
Accepted proposals for settlement are contracts, and the appellate court reviews their formation de novo. Unless the terms of settlement specifically provide for the entry of a judgment against the offeror, a trial court lacks authority to enter a final judgment where the offeror is willing to proceed with payment and conclusion of the settlement. Rule 1.442(c)(2)(B) requires a proposal for settlement to state that it “resolves all damages that would otherwise be awarded in a final judgment in the action in which the proposal is served.” It also mandates a proposal for settlement “exclude nonmonetary terms, with the exception of a voluntary dismissal of all claims with prejudice and any other nonmonetary terms permitted by statute.”
The trial court had no legal basis to enter a judgment in Mrs. Boyer's favor after she accepted Morris’ proposal for settlement. The trial court lacked power to apply a post-judgment setoff because the proposal for settlement did not include this nonmonetary term. REVERSED and REMANDED with instructions to vacate the judgment entered in Mrs. Boyer's favor and, if necessary, enforce the parties’ agreement for Mrs. Boyer to pay Morris $49,500 in exchange for her dismissal from the case.
(NOTE: The court seems to recognize that the parties have framed the issues incorrectly. From the facts, Mrs. Boyer’s notice of “acceptance” that argued within the notice that she would not have to pay anything because he had already received $50,000 means that there was no meeting of the minds. She did not accept the offer. The offer, and her responses, though termed an acceptance, should have been deemed a rejection of the offer that is unenforceable. The Court drops footnote 3, however, to clarify that in the trial court and on appeal, the parties both characterized Mrs. Boyer’s actions “as an unequivocal acceptance of Morris’s offer,” and Mrs. Boyer claimed that she only didn’t pay because of the judgment imposing a setoff. Therefore, the Court did not address whether Mrs. Boyer’s actions were anything other than an unequivocal acceptance of Morris’s offer. In other words, Mrs. Boyer’s attorneys failed to make the argument that there was no valid acceptance even though it’s clear she never meant to accept an obligation to pay $49,500.)