21 Fla. L. Weekly Supp. 91a

Online Reference: FLWSUPP 2101PEDRInsurance — Personal injury protection — Attorney’s fees — Proposal for settlement — Where insurer withdrew proposal for settlement within seven days of offering proposal, proposal was void, and order finding entitlement to attorney’s fees pursuant to void proposal is also void — Motion for reconsideration filed 21 months after entry of void judgment was timely filed — Insurer remains entitled to cost judgment

P & G MEDICAL REHAB CENTER, INC. a/a /o YAJAIRA S. PEDROSA, Plaintiff, vs. STATE FARM FIRE AND CASUALTY COMPANY, Defendant. County Court, 13th Judicial Circuit in and for Hillsborough County, Civil Division. Case No. 09-CC-022600, Division M. May 13, 2013. Rehearing denied September 3, 2013. Herbert M. Berkowitz, Judge. Counsel: James R. Collins, Law Firm of Gonzalez & Associates, LLC, Brandon, for Plaintiff. David B. Kampf, Ramey & Kampf, PA, Tampa, for Defendant.

ORDER VACATING ENTITLEMENT TO ATTORNEYSFEES AND ORDER DETERMINING COSTS

This cause came on to be heard on March 11, 2013, for an evidentiary hearing to determine the appropriate amount of reasonable attorney’s fees the Defendant should be awarded pursuant to an earlier Order in this case which found an entitlement to such fees. A short time before this evidentiary hearing was held, Plaintiff had come before this Court on February 25, 2013, on its Amended Motion for Reconsideration of the Order Awarding Entitlement of Attorney’s Fees to the Defendant, said Order having been entered on November 2, 2010. On March 8, 2013, this Court denied the Plaintiff’s Amended Motion for Reconsideration of the Order entitling Defendant to Attorney’s Fees, and proceeded with the evidentiary hearing. For the reasons stated below, this Court has determined that the Amended Motion for Reconsideration of the Order Awarding entitlement of Attorney’s Fees to the Defendant should have been granted and the Order of November 2, 2010, as it relates to entitlement of attorney’s fees, should have been vacated.

The Court has found the relevant facts to be as follows:

Findings of Fact:

1. This case was originally filed on July 29, 2009, seeking PIP benefits arising out of health care provided to and incurred by Plaintiff’s assignee, an insured of the Defendant State Farm.

2. Defendant filed its Answer and Affirmative Defenses on August 17, 2009, in essence asserting that the Plaintiff failed to properly file its statutorily required presuit demand.

3. After some preliminary discovery, Defendant filed a Motion for Summary Judgment on September 25, 2009 on the issue of the validity of Plaintiff’s PIP pre-suit demand, and that Motion was set for hearing on November 16, 2009, at 11:00 a.m.

4. On November 9, 2009, Defendant served its Proposal For Settlement, pursuant to F.S. §768.79 and Fla.R.Civ.P. 1.442, which was then filed with the Clerk of this Court on November 16, 2009, at 9:59 a.m.

5. On November 16, 2009, the Defendant served a written withdrawal of the above described Proposal For Settlement, and filed a Notice of Withdrawal on November 16, 2009, at 10:36 a.m.

6. At 11:00 a.m., on November 16, 2009, the Defendant’s Motion for Summary Judgment was argued before the Court, and the Court granted Defendant’s Motion, thereby effectively concluding the underlying litigation.

7. The Order granting Summary Judgment was timely prepared by Defendant’s Counsel and signed by the Court on December 2, 2009. Of significance is the absence of any language in that Order retaining jurisdiction to consider attorney’s fees and costs. The Order also did not contain any executory language.

8. On March 9, 2010, some three months after the Summary Judgment Order was entered, Defense counsel moved for Entry of a Final Judgment which sought entitlement to attorney’s fees and costs. The Motion For Entry of Final Judgment argued that a Proposal For Settlement (a copy of which was attached to the Motion), had been served on the Plaintiff; that the Plaintiff did not accept the Proposal For Settlement; and that the Court had found in favor of the Defendant on the Motion for Summary Judgment. For reasons never adequately explained, this Motion made no mention of the written withdrawal of the subject Proposal For Settlement, withdrawn seven (7) days after the original Proposal was served, and filed minutes before the hearing on the Motion For Summary Judgment.

9. A hearing was held on July 28, 2010, on Defendant’s Motion for Entry of Final Judgment. The validity of the Defendant’s Proposal For Settlement was apparently examined, and consequently, it was determined that the Defendant was entitled to attorney’s fees. It is uncontested that the Proposal for Settlement of November 9, 2009, made pursuant to the statutory provisions of F.S. §768.79 and Fla.R.Civ.P. 1.442 was the only basis for attorney’s fees.

10. Although it is unclear from the record whether Plaintiff argued that the written withdrawal of the Proposal For Settlement rendered the Proposal void, it is unlikely that Plaintiff did so. It is also unlikely that the Court was aware of the existence of the written withdrawal of the proposal, based upon the absence of any reference to it in the Court’s Order of November 2, 2010.

11. After the hearing on July 28, 2010, the Court took the matter under advisement, and after a series of contentious motions, issued its three (3) paragraph Order on November 2, 2010, entering Final Judgment for the Defendant on the Summary Judgment ruling of November 16, 2009; finding that the Defendant was entitled to attorney’s fees and costs; and ordering that the parties go to mediation to attempt to resolve the amount of attorney’s fees and costs that would be appropriate.

12. After this Final Judgment was entered in favor of the Defendant, litigation continued solely as to the matter of attorney’s fees and costs.

13. From the date of the Final Judgment of November 2, 2010, until the filing of the Plaintiff’s “Motion for Reconsideration of the Order Awarding Entitlement of Attorney’s Fees to the Defendant Dated November 2, 2010”, file activity consisted of Defendant’s multiple affidavits as to fees and costs; referrals to and attendance at mediation conferences; discovery requests; various hearings, scheduled and cancelled; and a notice of appearance of new counsel for the Plaintiff on February 1, 2012. On August 24, 2012, Plaintiff’s new counsel filed the first Motion for Reconsideration of the subject Order on Entitlement, which was then amended on September 6, 2012.

14. On February 25, 2013, this Court heard Plaintiff’s Amended Motion for Reconsideration and Defendant’s response. This Court denied the Amended Motion for Reconsideration, based upon Defendant’s argument that Plaintiff waived any challenge to the previous ruling on entitlement, in essence, relying on Rule 1.540, the long delay in seeking Reconsideration, and the need for finality in litigation. Despite this Court’s voiced skepticism, the Motion for Reconsideration was denied and an evidentiary hearing was set to determine what fees and costs might reasonably be due to the Defendant.

15. On March 11, 2013, an evidentiary hearing was held to determine the reasonable attorney’s fees and costs defendant was entitled to in this case. Defense Counsel filed his affidavit of hours and rates, and presented attorney Elizabeth Andrews as his expert witness. Ms. Andrews was qualified, tendered, and found to be an appropriate expert to testify in the matters then before the Court. She testified as to:

(a) the hourly rates charged by the various attorneys handling this case for the Defendant, including the hourly rates of attorney Kampf at $155/hour; attorneys Weekley, Liebgold and Sorgi at $135/hour; and paralegals at $85/hour;

(b) that all of these rates were reasonable within the community;

(c) that the amount of time reasonably spent by these attorneys and paralegals were adequately and correctly specified in the Affidavit filed by Mr. Kampf, and those hours at the rates above described totaled $13,730.00 from the inception of the representation to February 25, 2013;

(d) that the proper amount of fees owed, using the same criteria, but beginning at the time the Proposal For Settlement was served (November 9, 2009) to February 25, 2013, totaled $9,944.00;

(e) that costs were $2,206.50, plus her additional time spent in the Courtroom testifying at this hearing, for which the Defendant was seeking an additional $1200.00;

(f) that all of the above were considered in light of the Rowe and Quanstrom standards.

16. On cross examination, Plaintiff neither challenged the hourly rates, nor the number of hours being claimed, although Plaintiff’s counsel did challenge all amounts claimed for work done prior to the serving of the Proposal For Settlement and also challenged the witness on some of the cost items being sought. Plaintiff’s counsel also inquired whether in her review of the file she had come across the Defendant’s Motion seeking Final Judgment, and whether she also noticed that this Motion omitted the fact that a written withdrawal of the Proposal had been served and filed within seven days of the Proposal itself. Ms. Andrews acknowledged that such an omission was a significant fact in determining entitlement. Upon further inquiry, however, Ms. Andrews also opined that the Proposal For Settlement itself was valid and was the likely basis for the Court’s determination that the Defendant was entitled to recover its attorney’s fees.

17. After allowing Defendant redirect testimony, the Court made a short inquiry of its own. After clarifying some minor discrepancies in the cost items and in the hours claimed, Ms. Andrews was asked whether her reference to the validity of the Proposal referred to the Proposal being in conformity with the requirements of the Statute and Rule, as defined by the Appellate Courts in this and other Districts. She indicated that the form of the Proposal was consistent with the requirements of the Statute, Rule and Case Law, and was therefore a valid Proposal. The Court then asked whether the language of Fla.R.Civ.P. 1.442(e), in her view, rendered the Proposal for Settlement void or merely voidable. She answered that the Rule stated that the Proposal became void. The evidentiary hearing closed after argument presented by both parties and the Court retired to consider the matter further.

ANALYSIS

Defendant’s claim of entitlement to attorney’s fees is based exclusively on the Proposal for Settlement it served on the Plaintiff on November 9, 2009. There is no claim of contractual right to attorney’s fees, but rather an acknowledgement that Defendant’s claim for attorney’s fees arises only by operation of F.S. §768.79 and Fla.R.Civ.P. 1.442. It has been consistently held that F.S. §768.79 and Fla.R.Civ.P. 1.442 are punitive in nature in that they impose sanctions upon the losing party and are in derogation of the common law and must, therefore be strictly construed. Liguori v. Daly, 756 So.2d 268, 269 (Fla. 4th DCA, 2000) [25 Fla. L. Weekly D655a]. See, too, Grip Development, Inc. v. Coldwell Banker Residential Real Estate, Inc., 788 So.2d 262 (Fla. 4th DCA, 2000) [25 Fla. L. Weekly D2240b].

Defendant argued at the February 25, 2013 hearing on the Amended Motion for Reconsideration that, pursuant to Rule 1.540, Plaintiff’s Motion was untimely filed and that Plaintiff’s objection to the Order on Entitlement of Attorney’s Fees was waived. Defendant pointed out that the subject Order was entered on November 2, 2010, and that Plaintiff did not move for Reconsideration until August 24, 2012, some 21 months after the Order was entered. Defendant argued that Rule 1.540 allows only a window of one year for reasons underlying the basis for reconsideration, and conceded that while the Rule permits certain of its enumerated reasons for reconsideration to be filed within a “reasonable time”, Defendant argued that 21 months was not reasonable, and that finality required that Plaintiff’s Motion for Reconsideration be denied.

In certain enumerated circumstances, Rule 1.540(b) does apply a one year time limit but, in this instance, no specific time limit applies. Rule 1.540 provides that a motion for relief from judgment is to be filed within a reasonable time. It specifies three reasons when a motion must be filed not more than one year after the decree in question. In all other instances, the time standard is one of reasonableness. Under the facts at Bar, the first two reasons listed in Rule 1.540 (b) have no application. While the third reason — fraud, misrepresentation, or misconduct — might have had application here, a Motion For Reconsideration on this ground is clearly time barred.¹

It is just as clear, however, that the fourth reason, — that the judgment is void — does apply here. The only basis for Attorney’s Fees is in the statutory authority of F.S. §768.79 and Fla.R.Civ.P. 1.442. With the written withdrawal of its Proposal For Settlement, Rule 1.442(e) specifically deems the Proposal For Settlement void. Either a Proposal For Settlement is pending for the statutorily mandated period or it is withdrawn (as opposed to being rejected). There is no discretion available, nor is there room for interpretation. Therefore, once withdrawn in accordance with Fla.R.Civ.P. 1.442, the Proposal For Settlement is rendered void and ceases to have any legal effect or consequence. Grip Development, Inc v. Coldwell Banker Residential Real Estate, Inc., 788 So.2d 262, 265 (Fla. 4th DCA, 2000) [25 Fla. L. Weekly D2240b]. With a void Proposal for Settlement, an Order finding entitlement to Attorney’s Fees pursuant to such voided Proposal for Settlement must itself be void as to the matter of entitlement. See Mauna Loa Investments, LLC, v. Santiago, 38 Fla. L. Weekly D658a (Fla. 3rd DCA, March 20, 2013) (Opinion not final).

This Court does not reach the question of whether the Motion for Reconsideration was filed within a reasonable time pursuant to Rule 1.540(b), because this Court finds that a void judgment is a nullity and can be attacked as such at any time.

While there are many written opinions dealing with the construction and application of most of the subparagraphs of Rule 1.442, there are virtually no cases dealing with subparagraph (e). This is obviously so because of the clear language of this subsection, and its simple operation. Fla.R.Civ.P. 1.442 (e) reads as follows, “Withdrawal. A proposal may be withdrawn in writing provided the written withdrawal is delivered before a written acceptance is delivered. Once withdrawn, a proposal is void.” (Emphasis added). A void proposal is void ab initio and cannot be resurrected. See Liguori, supra.

A void judgment is defined as a judgment for which the Court had no subject matter jurisdiction upon which to enter said judgment, or when a Court had no personal jurisdiction over the defendant. A void judgment is so defective that it is deemed never to have had legal force and effect. Sterling Factors Corporation v. U.S. Bank National Association, et al., 968 So.2d 658, 665 (Fla. 2nd DCA, 2007) [32 Fla. L. Weekly D2608b].

A void judgment may be attacked at any time because a void judgment creates no binding obligation upon the parties, is legally insufficient, and is a nullity. Space Coast Credit Union v. The First F.A. etc., et al., 467 So.2d 737, 739 (Fla. 5th DCA, 1985). The “reasonable time” standard as incorporated in Fla.R.Civ.P. 1.540(b) does not place a time limit on an attack on a void judgment. A judgment that is null and void for lack of subject matter jurisdiction can be attacked at any time because a void judgment is a nullity, and the passage of time cannot make valid that which has always been void. M.L. Builders Inc. et al. v. Reserve Developers, LLP, 769 So.2d 1079, 1082 (Fla. 4th DCA, 2000) [25 Fla. L. Weekly D2277a].

Fla.R.Civ.P. 1.442(a) provides that “. . . [T]his rule applies to all proposals for settlement authorized by Florida law. . .and supersedes all other provisions of the rules and statutes that may be inconsistent with this rule.” See Grip Development, supra at 265. Clearly, Rule 1.442 supersedes any application of Rule 1.540 as that Rule might be inconsistent with Proposals for Settlement. Rule 1.442 (e) provides that once a Proposal for Settlement is withdrawn in writing, the proposal is void. A void Proposal for Settlement is obviously void ab initio because the purpose of the written withdrawal is to cancel the proponent’s offer of settlement prior to its acceptance by the other side. Under this Rule, there is no discretion available, nor is there room for interpretation. Therefore, once withdrawn in accordance with Rule 1.442, the Proposal for Settlement is rendered void and ceases to have any legal effect or consequence. Reliance upon the “reasonable time” standard of Rule 1.540(b) by the Defendant must, therefore, fail.

In the case at Bar, the Order finding entitlement to Attorney’s Fees was based solely on this void Proposal for Settlement. For all purposes, factual, legal or otherwise, there was no viable Proposal for Settlement before the Court when the Order of Entitlement for Attorney’s Fees was entered. Because the Proposal For Settlement never legally existed, Defendant never had any legal basis for entitlement to attorney’s fees. Therefore, the Court lacked subject matter jurisdiction to enter any Order on this question. Without jurisdiction, the Order of Entitlement was void ab initio and is as if it had never legally existed. See Martinez v. Giacobbe, 951 So.2nd 902, 904 (Fla. 3rd DCA, 2007) [32 Fla. L. Weekly D345a], and Baker v. Baker, 920 So.2nd 689, 691 (Fla. 2nd DCA, 2006) [31 Fla. L. Weekly D376a].

DEFENDANT’S COSTS

The Defendant was and remains the prevailing party on the significant issue in this case, i.e., the Summary Judgment entered in its favor on December 4, 2009. As the prevailing party, the Defendant is entitled to a cost judgment. Defendant seeks costs in the amount of $2,206.50 together with additional expert witness fees in the amount of $1200.00, incurred at the evidentiary hearing. An examination of those cost items indicate that all but $126.23 of those cost items are directly related to defendant’s pursuit of its claim for attorney’s fees. For the reasons previously stated, all costs associated with the issue of attorney fees must be disallowed. Of the remaining costs, the Court finds that the Defendant is entitled to recover costs from the plaintiff in the amount of $115.00.

It Is Therefore ORDERED AND ADJUDGED that:

This Court’s March 8, 2013 Order Denying the Plaintiff’s Amended Motion For Reconsideration of the Order Awarding Entitlement of Attorney’s Fees to the Defendant, is hereby VACATED.

It is further ORDERED AND ADJUDGED that the Order dated November 2, 2010, to the extent that said Order awards Entitlement of Attorney’s Fees to the Defendant, is VACATED as it was void ab initio and was entered without the Court having subject matter jurisdiction.

It is further ORDERED AND ADJUDGED that the Defendant State Farm Fire and Casualty Company shall recover from the Plaintiff, P & G Medical Rehab Center, Inc., costs in the sum of $115.00, for which let execution issue.

¹The Defendant’s underlying Motion for Final judgment and Entitlement to Attorney’s Fees omitted the crucial and dispositive fact that the Proposal for Settlement had been withdrawn within a mere seven days of its having been offered. Without determining whether this omission constituted fraud or misconduct, the omission certainly constituted a material misrepresentation sufficient to have required a reconsideration of the Order on Entitlement, had it been timely filed.

ORDER DENYING THE DEFENDANT’SMOTION FOR REHEARING

THIS CAUSE having been heard before the Court on August 20, 2013 on Defendant’s Motion for Rehearing, the Court having heard arguments of counsels and the Court having considered the same, it is hereupon,

ORDERED and ADJUDGED that the Defendant’s Motion for Rehearing, is hereby DENIED.

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