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Legal Updates for Florida Coverage and Property Litigation

Appellate Court Reverses Fee Award, Clarifies ‘Judgment Obtained’ Under Florida’s Offer of Judgment Statute

SFR Services, LLC a/a/o John & Rose Zapisek v. Florida Department of Financial Services o/b/o Avatar Property and Casualty Insurance Company, Fla. 6th DCA, No. 6D2023-1050, L.T. Case No. 19-CA-001630, May 16, 2025

June 1, 2025

This case arises from a dispute regarding a Hurricane Irma homeowners’ insurance claim. SFR Services, LLC, a Florida restoration company, performed repairs for the homeowners, and in exchange the homeowners executed an agreement assigning their insurance benefits to SFR Services. Ultimately, SFR Services filed suit against the insurance company, seeking payment of its invoices in addition to recovering “damages, together with interest, costs and attorneys’ fees” under section 627.428, Florida Statutes.

During the underlying litigation, Avatar Property and Casualty Insurance Company, the homeowners’ insurance company, served a proposal for settlement (PFS) to SFR Services for $15,000, which included the language that the settlement amount was “exclusive of all taxable costs and attorneys’ fees.” SFR Services did not accept the PFS, and the matter proceeded to trial. 

At trial, the jury found in favor of SFR Services and concluded that the insurance company owed $20,000 in damages to SFR Services. The trial court subsequently reduced the damages amount to $9,000 to account for both the insurance policy’s applicable $6,000 hurricane deductible and to account for a prior directed verdict motion judgment for $5,000 regarding the interior damages. 

Afterwards, both the insurance company and SFR Services filed competing motions for attorneys’ fees and costs. The insurance company sought fees and costs under F.S. § 768.79(1), based on SFR Services’ rejection of the $15,000 PFS. Under Florida law, when a defendant serves a PFS that “is not accepted by the plaintiff, and if the judgment obtained by the plaintiff is at least 25 percent less than the amount of the offer, the defendant” is entitled to reasonable attorneys’ fees and costs “incurred from the date the offer was served.” F.S. § 768.79(7)(a). Regarding offers made by defendants to plaintiffs, “the term ‘judgment obtained’ means the amount of the net judgment entered, plus any post-offer collateral source payments received or due as of the date of the judgment, plus any post-offer settlement amounts by which the verdict was reduced.” F.S. § 768.79(7).

Thus, the insurance company argued that the final damages amount ($9,000) plus SFR Service’s pre-offer interest ($1,364.93) was 25% less than the $15,000 PFS, triggering fee shifting under the statute. In response, SFR Services argued that its pre-offer attorneys’ fees and costs also had to be factored in, in order to calculate the correct “judgment obtained.” By doing so, SFR Services argued that this would place the “judgment obtained” above the $11,250 threshold, thereby eliminating the fee triggering. 

After a hearing, the trial court sided with the insurance company and concluded that the “judgment obtained” by SFR Services, exclusive of taxable costs and attorneys’ fees, was $9,000. Because this $9,000 amount was less than the $11,250 threshold (at least 25% less than the $15,000 PFS), the trial court determined that the insurance company was entitled to recover its attorneys’ fees and costs incurred from the date the PFS was served. SFR Services subsequently appealed. 

Upon appeal, the Sixth District Court of Appeals agreed with SFR Services and determined that the trial court erred by not applying the Florida Supreme Court’s decision in White v. Steak & Ale of Fla., Inc. when calculating the “judgment obtained.”

In the White decision, the Florida Supreme Court held “that the ‘judgment obtained’ . . . includes the net judgment for damages and any attorneys’ fees and taxable costs that could have been included in a final judgment if such final judgment was entered on the date of the offer.” Id., 816 So. 2d at 551. This judgment calculation (which includes pre-offer attorneys’ fees and costs as of the date of the PFS offer) has become known as the White formula. Application of the White formula does not turn on whether the PFS includes attorneys’ fees or costs. Id. at 552.

Thus, the appellate court concluded that the trial court erred in failing to apply the White formula in calculating the “judgment obtained” because they failed to include the pre-offer attorneys’ fees or costs amount incurred by SFR Services. As of the date of the offer, SFR Services had incurred $2,384.90 in costs. Following the White formula and factoring this amount into the $9,000 damages amount, “the judgment obtained” was not “at least 25 percent less than the amount of the [$15,000.00] offer.” F.S. § 768.79(7)(a). Thus, the District Court determined that the insurance company was not entitled to attorneys’ fees and costs under the offer of judgment statute.

The final judgment in favor of the insurance company was reversed, and the case was remanded to the trial court for proceedings consistent with this opinion. 

 

Legal Update for Florida Coverage & Property Litigation – June 2025 is prepared by Marshall Dennehey to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. We would be pleased to provide such legal assistance as you require on these and other subjects when called upon. ATTORNEY ADVERTISING pursuant to New York RPC 7.1 Copyright © 2025 Marshall Dennehey, all rights reserved. No part of this publication may be reprinted without the express written permission of our firm. For reprints or inquiries, or if you wish to be removed from this mailing list, contact tamontemuro@mdwcg.com.

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Sheetz filed an administrative appeal pursuant to R.C. 2506 in the Montgomery County Court of Common Pleas, and two months later filed a complaint for damages and declaratory relief under 42 USC § 1983 as a takings action with the city, city council, and other objectors as improper takings and a violation of due process, as well as interference with business and contractual relationship. The city and city council removed the § 1983 action for damages to federal court. Montgomery County Court of Common Pleas reversed the city council’s denial, and allowed the Sheetz project to move forward. Upon that ruling, the federal court issued a show-cause order questioning whether the § 1983 action was barred by the doctrine of res judicata via claim preclusion (which includes all theories of recovery).  Sheetz argued that Ohio courts of common pleas do not have authority to award damages or declaratory relief as party of the R.C. 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In their analysis, the Supreme Court of Ohio broke down the elements of a claim preclusion analysis: 1) a prior final, valid decision on the merits by a court of competent jurisdiction; (2) a second action involving the same parties, or their privies, as the first; (3) a second action raising claims that were or could have been litigated in the first action; and (4) a second action arising out of the transaction or occurrence that was the subject matter of the previous action. The Court held that R.C. Ch. 2506 does not permit a party to argue damages as R.C. Ch. 2506 limits the common pleas jurisdiction as if it were sitting on appeal, and therefore can only affirm, reverse, vacate, or modify the appealed order, or can remand the case to the administrative body. Further, the Court held that Grava’s conclusion that a final judgment precludes additional litigation for different relief is inapplicable under this fact pattern because it was meant only to apply to those matters in which the plaintiff brings the exact same case twice, but for new relief. The Court found Grava was inapplicable because Sheetz could have requested damages or declaratory relief in the R.C. 2506 appeal. Therefore, Grava would be nothing more than dicta if it even did apply. Going further, the Ohio Supreme Court disavowed Sixth Circuit precedent which, in reliance on Grava and other district court decisions, permitted an owner to seeking relief under 42 U.S.C. § 1983 alongside an administrative appeal. See Moore v Hiram Twp., 988 F.3d 353 (6th Cir.2021). The Ohio Supreme Court found that the Sixth Circuit had disregarded a critical decision in Community Concerned Citizens, Inc. v. Union Twp. Bd. of Zoning Appeals, 1993-Ohio-115, which clearly held that a R.C. Ch. 2506 appeal cannot be combined with a complaint seeking other claims for relief. Id. at ¶ 11. To that end, the Ohio Supreme Court has determined that the decisions Moore relied on (outside of Grava) are no longer good law, and that Moore was wrongly decided. The decision draws a clear procedural boundary: Chapter 2506 provides judicial review of an administrative decision, not a forum for independent claims seeking affirmative relief. Although Grava may place claims arising from a single transaction within the potential scope of claim preclusion, those claims are not barred unless the complete claim-preclusion test is satisfied. Because Sheetz could not have pursued damages or declaratory relief in its Chapter 2506 appeal, the separate action was not precluded. 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