By Christopher J. Mueller, Esq. and Keegan Pearl, J.D. Candidate
On May 26, the Florida Supreme Court issued an opinion that amended the Florida Rule of Civil Procedure 1.442, which will go into effect on July 1, 2022 (the “Amendment”). The Amendment intends to create uniformity among Florida’s settlement proposal rules and statutes with respect to their substantive elements. Specifically, the Amendment seeks to align Florida Rule of Civil Procedure 1.442 with Florida Statutes §768.79 in terms of the propriety of including nonmonetary terms in settlement proposals. Prior to this decision, Rule 1.442 allowed parties to include nonmonetary terms in their settlement proposals, while section 768.79 permitted parties to state the total amount of the settlement and the amount offered to settle a claim for any punitive damages with no reference to the inclusion of nonmonetary terms.
The specific changes within Rule 1.442 are found in Sections (c)(2)(C)-(D). First, section (c)(2)(C) previously stated that “any relevant conditions” may be included in a settlement proposal. That language was stricken from the Rule and now states that a proposal shall “exclude nonmonetary terms”. However, it provides for exceptions “of a voluntary dismissal of all claims with prejudice and any other nonmonetary terms permitted by statute”. The relevant statute that provides for nonmonetary terms is Florida Statutes §70.001(4)(c). This section includes nonmonetary terms that governmental entities may include in settlement offers whenever government action “inordinately burdens private property rights”. The second, and final, change to Rule 1.442 is found in Section (c)(2)(D). The amendment keeps the language that the proposal must state the total amount sought but strikes out the allowance of all nonmonetary terms. In re Amendments to Florida Rule of Civil Procedure 1.442, SC21-277, 2022 WL 1679398 (Fla. May 26, 2022).
Stated succinctly, Rule 1.442 will no longer permit parties to include non-monetary terms in their Proposals for Settlement. This is significant for defense counsel that typically include non-monetary terms in their settlement proposals, such as a general release, a requirement of confidentiality, or indemnity from unpaid liens or other claimants to the settlement proceeds. Unfortunately, with the change in the Rule, these non-monetary terms are no longer permissible and including them will likely lead to arguments that a Proposal for Settlement served after the amended Rule goes into effect on July 1, 2022, that includes non-monetary conditions is void and unenforceable.