RLS BUSINESS VENTURES, INC., and Richard Lee Soto, Appellants,
v.
SECOND CHANCE WHOLESALE, INC.; Second Chance Finance, Inc.; Seminole Finance Corporation; and Michael G. Krizmanich, Appellees.
District Court of Appeal of Florida, Second District.
*1195 Daniel Joy of Law Office Daniel Joy, Sarasota, for Appellants.
Henry A. Stein and Phyllis J. Towzey of Stein, Ford, Schaaf & Towzey, L.L.P., St. Petersburg, for Appellees.
NORTHCUTT, Judge.
RLS Business Ventures, Inc. and Richard Soto were involved in litigation with Seminole Finance Corporation, Michael Krizmanich and the Second Chance entities,[1] over a failed used car business. The Second Chance entities prevailed on their claims and on RLS's counterclaims and third party claims. They then moved for attorney's fees on three grounds: 1. a contract between the parties; 2. section 772.104, Florida Statutes (1995); and 3. an offer of judgment. The circuit court awarded fees on all these bases. We reverse the fee award with the exception of the contractual fees granted for services rendered on the replevin count.
RLS asserted a counterclaim against Second Chance based on the Florida Civil Remedies for Criminal Practices Act, section 772.104. The circuit court awarded fees to Second Chance under that statute, which provides for such an award upon a finding that the claim was "without substantial fact or legal support." At first blush, our analysis of the fee award is somewhat complicated by the fact that the circuit court directed a verdict in favor of Second Chance on this claim, and we affirmed that ruling in RLS's appeal of the final judgment on the merits. RLS Bus. Ventures, Inc. v. Second Chance Wholesale, Inc.,
In this case, however, the directed verdict was founded on RLS's failure to prove a separate racketeering injury. As we will discuss below, whether a plaintiff under section 772.104 must prove that it has suffered a racketeering injury is arguable. When affirming the directed verdict in RLS I, we did not endorse the trial court's view on this issue. Rather, we discerned that the appellate issue was moot because the jury ultimately rejected RLS's claim for usury, which RLS had alleged as the "criminal activity" giving rise to its count under chapter 772. Without a "criminal activity," RLS had no cause of action under that chapter. Given this, we did not address the trial court's reason for granting the directed verdict because it was unnecessary to do so.
When opposing the directed verdict in this case, RLS argued that a line of authorities interpreting the federal RICO Statute, beginning with Sedima, S.P.R.L. v. Imrex Co., Inc.,
We also reverse the fee award based on Second Chance's offer of judgment. The offer was served on April 13, 1998, and stated:
Counter-defendants, Second Chance Wholesale, Inc., Second Chance Finance, Inc., Seminole Finance Corporation and Michael G. Krizmanich, jointly and severally, pursuant to and in accordance with Section 768.79, Florida Statutes, offer judgment to Counter Plaintiff RLS Business Ventures, Inc., in the total amount of $50,000.00 inclusive of court costs and attorneys fees.
Because the offer was served after January 1, 1997, its terms were governed by Florida Rule of Civil Procedure 1.442. United Servs. Auto. Ass'n v. Behar,
Second Chance's offer did not comply with the rule. At the time of the offer, Second Chance Wholesale and Second Chance Finance had a two-count claim pending against RLS, one count for replevin of over 60 motor vehicles, the other for damages of $8,700. Seminole had pending claims for damages and replevin of office equipment. RLS had asserted third party claims or counterclaims based on breach of contract and section 772.104. As is evident by the quoted offer, it did not specifically state which of the pending claims were covered by the proposal. Cf. MGR Equip. Corp., Inc. v. Wilson Ice Enters., Inc.,
Offers of judgment are punitive in nature and are in derogation of the common law, and for those reasons they must be strictly construed. Schussel v. Ladd Hairdressers, Inc.,
The circuit court did correctly award Second Chance attorney's fees for the services rendered on the count seeking replevin of motor vehicles in RLS's possession. These contractual fees were based on a consignment agreement between RLS and some of the Second Chance parties. The attorney's fee clause provided:
If [Second Chance] is required to seek legal counsel or to commence any action in any court of law or administrative tribunal for the enforcement of any provisions of this Agreement, [Second Chance] will be entitled to the recovery of reasonable attorney's fees and court costs (including those incurred for appellate, administration or bankruptcy proceedings) from [RLS].
Another portion of the contract required RLS to "return to [Second Chance] all unsold automobiles upon demand of [Second Chance]." Thus, the replevin count was an action to enforce a provision of the agreement.
RLS agreed to a judgment in replevin in favor of Second Chance. Therefore, Second Chance was entitled to its fees under the contractual provision. Cf. Pici v. First Union Nat'l Bank of Fla.,
Because we have affirmed one portion of the fees award and reversed others, we remand to the circuit court to take evidence on what fees were attributable to Second Chance's attorney's services on the claim for replevin of the automobiles, and to award fees for that claim alone. We also note that RLS was the prevailing party on Second Chance's claims for damages under the contract. See RLS I. As such, Second Chance would not be entitled to fees under the contract for its attorney's services related to that claim.
*1198 Affirmed in part, reversed in part and remanded.
PATTERSON, C.J., and ALTENBERND, J., concur.
NOTES
Notes
[1] The latter are Second Chance Wholesale, Inc. and Second Chance Finance, Inc. For brevity's sake, in the rest of this opinion we will refer to RLS and Soto as "RLS" and all the appellees as "Second Chance," unless it is necessary to single out a specific party.
[2] Florida courts have held that cases interpreting the federal RICO statute, title 18, United States Code, are persuasive as to the meaning of Florida's RICO statute, chapter 895, Florida Statutes. O'Malley v. St. Thomas Univ., Inc.,
