Escadote I Corp. v. Ocean Three Limited Partnership
211 So. 3d 1059
| Fla. Dist. Ct. App. | 2016Background
- Escadote I Corp. (plaintiff) sued Ocean Three LP (Developer), John Moriarty & Assocs. (Contractor), and the Condominium Association for water intrusion, mold, and related damages; only the claim against the Association sought statutory attorney’s fees under section 718.303.
- Jury returned a $2,050,000 verdict against Developer and Contractor. Escadote had earlier settled with the Association for $375,000 the day before jury submission. The settlement allocated $500 to compensatory damages and $374,500 to attorney’s fees.
- Trial court initially granted Developer/Contractor a full collateral set-off of the $375,000 against the jury verdict and denied Escadote prejudgment interest on the set-off amount. Escadote appealed.
- On appeal the court considered whether the Association settlement (and its internal allocation) could reduce the judgment against the non-settling co-defendants and whether Escadote could recover prejudgment interest on the portion set off.
- The appellate court found the attorney’s-fee portion was for a claim unique to the Association (not joint-and-several), so only $500 of the settlement corresponded to damages for which Developer/Contractor were jointly liable. The court reversed the full set-off and remanded to reduce the set-off to $500.
- The court affirmed denial of prejudgment interest on the settlement amount set off, because Escadote released all claims against the Association and did not preserve a claim for prejudgment interest in the settlement. Prejudgment interest remains payable on the jury award net of the $500 set-off.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the entire $375,000 settlement with the Association is an allowable collateral set-off against the jury verdict | Settlement allocated $374,500 to attorney’s fees (unique to Association); only $500 applies to damages common to all defendants, so only $500 should reduce verdict | Entire undifferentiated settlement should be set off to prevent double recovery and because allocation cannot bind non-settling defendants | Reversed: only $500 set off; attorney’s-fee portion not collectible from non-settling co-defendants because it compensates a claim unique to Association |
| Whether apportionment in a private settlement (allocation between fee and damages) is enforceable against non-settling co-defendants | Allocation was in the settlement agreement between Escadote and Association and disclosed to the defendants; allocation divides claims with distinct damage elements, so enforceable | Non-settling defendants argue apportionment after verdict (or without their input) may be ineffective and would prejudice their rights | Allocation upheld here as part of settlement agreed before submission to jury and reflected on the record; thus $374,500 not subject to set-off against Developer/Contractor |
| Whether Escadote is entitled to prejudgment interest on the settlement amount from date of loss to payment | Escadote sought prejudgment interest on the set-off portion from date of loss through payment date | Defendants argue release and all-inclusive settlement waived prejudgment interest | Affirmed: no prejudgment interest on the set-off amount because settlement and release extinguished preexisting claims and did not preserve interest entitlement |
| Standard of review for set-off and prejudgment interest determinations | N/A (legal questions) | N/A | Both questions reviewed de novo by appellate court |
Key Cases Cited
- John Moriarty & Assocs. of Fla. v. Murton Roofing Corp., 128 So.3d 58 (Fla. 3d DCA 2013) (reinstating jury verdict after directed verdict was entered)
- Cornerstone SMR, Inc. v. Bank of Am., N.A., 163 So.3d 565 (Fla. 4th DCA 2015) (set-off is a pure question of law)
- Argonaut Ins. Co. v. May Plumbing Co., 474 So.2d 212 (Fla. 1985) (prejudgment interest on liquidated pecuniary losses is a legal entitlement once damages are fixed)
- Wells v. Tallahassee Mem'l Reg'l Med. Ctr., 659 So.2d 249 (Fla. 1995) (settlement reachable only for damages for which co-defendants are jointly and severally liable)
- D'Angelo v. Fitzmaurice, 863 So.2d 311 (Fla. 2003) (same principle on joint-and-several liability for set-off)
- Gouty v. Schnepel, 795 So.2d 959 (Fla. 2001) (set-off statutes premised on joint liability for the same damages)
- Dionese v. City of West Palm Beach, 500 So.2d 1347 (Fla. 1987) (undifferentiated settlement may be set off; apportionment must appear on face of settlement and involve all relevant parties)
- Devlin v. McMannis, 231 So.2d 194 (Fla. 1970) (only settlement amounts for damage elements recoverable against co-defendants should be set off)
- Stockman v. Downs, 573 So.2d 835 (Fla. 1991) (parties generally cannot recover damages not pled)
- AXA Equitable Life Ins. Co. v. Gelpi, 12 So.3d 783 (Fla. 3d DCA 2009) (settlement that is all-inclusive can extinguish prejudgment interest claims)