Among other things, the Tiptons amended their complaint and Old Dominion answered and raised affirmative defenses.

On June 2, 2015 – a total of 132 days after the Tiptons had filed suit – Old Dominion served the Tiptons with a proposal for settlement.

On June 10, 2015, the Tiptons moved to strike the proposal, contending that it was both premature in light of the stay and not made in good faith. They did not seek any extension of time to accept the proposal pending the outcome of their motion.

The trial court agreed that the proposal was premature and, on July 27, 2015 – well after the 30-day time period for the Tiptons to accept the proposal had elapsed under Rule 1.442(f)(1) of Florida's rules of civil procedure – the trial court granted the Tiptons' motion. The trial court explicitly did not reach the Tiptons' contention of lack of good faith.

Ultimately, Old Dominion prevailed at trial and moved for attorneys' fees based on the rejected proposal.

The Tiptons opposed Old Dominion's motion. They argued that under Rule 1.442(b), “a proposal to a plaintiff shall be served no earlier than 90 days after the action has been commenced,” and that a premature proposal was “invalid.” In their view, the stay of court proceedings pending neutral evaluation also stayed the 90-day waiting period for serving the proposal, rendering Old Dominion's proposal roughly 30 days' premature and, therefore, invalid. They reasoned that a proposal for settlement was a part of a court proceeding and a matter related to the sinkhole litigation; that the legislative purpose behind the stay was “to efficiently resolve sinkhole disputes . . . and to minimize, if not avoid, the costs associated with unnecessary litigation”; and that refusing to stay the waiting period for serving a proposal for settlement frustrated that purpose.

The trial court denied the insurer's motion for attorneys' fees, and it appealed.

The Appellate Court's Decision

The appellate court reversed.

In its decision, the appellate court ruled that, regardless of whether the serving of a proposal was a “court proceeding,” the 90-day waiting period mandated before one could be served was not – it was “a rule of civil procedure.” The stay, therefore, did not stay that period.

Moreover, the appellate court continued, there was nothing within Rule 1.442 indicating that a stay under Section 627.7074 stayed that period.

The appellate court rejected the Tiptons' contention that interpreting Section 627.7074(10) in this manner would lead to a result contrary to the legislative intent behind the neutral evaluation procedure: to “facilitate the timely and cost-effective resolution of sinkhole disputes.” Rather, the court found, the Tiptons' interpretation – which would stay the 90-day period and prolong the amount of time that a party must wait before serving a proposal for settlement – was the one contrary to legislative intent.

Accordingly, the appellate court concluded that Section 627.7074(10) did not stay Rule 1.442(b)'s 90-day waiting period for serving a proposal for settlement. Because Old Dominion served the Tiptons with its proposal more than 90 days after the Tiptons filed suit against Old Dominion, the trial court erred in striking the proposal as premature, the appellate court concluded.

The case is Old Dominion Ins. Co. v. Tipton, No. 2D18-24 (Fla. Ct. App. April 26, 2019). Attorneys involved include: Andrew A. Labbe of Groelle & Salmon, P.A., Tampa; and David R. Terry, Jr., of Groelle & Salmon, P.A., Maitland, for Appellant/Cross-Appellee. George A. Vaka and Nancy A. Lauten of Vaka Law Group, Tampa, for Appellees/Cross-Appellants.