Stack of $US 50 bills with notebook, glasses, and newspaper.

In Miccosukee Tribe of Indians of Florida v. Lewis Tein, P.L. (Fla. 3d DCA August 14, 2019), a nominal proposal for settlement was upheld because the party making the proposal had a good-faith basis for concluding that its exposure was minimal.

The underlying case involved a convoluted saga between the Miccosukee Tribe and its former lawyers, described in detail in a prior opinion from the Third DCA. During the pendency of the previous appeal, the tribe served proposals for settlement in the total amount of $7,500 on the former lawyers, which were not accepted. The prior appellate opinion held that the claims alleged in the lawsuit were barred by tribal sovereign immunity, and reversed the trial court order denying the tribe’s motion to dismiss.

On remand, the trial court dismissed the action, but denied the tribe’s motion for attorney’s fees. The trial court ruled that the proposals for settlement were filed in bad faith because they were nominal.

The Third DCA reversed the trial court. It held that a nominal proposal for settlement is not made in bad faith if the party making the proposal has a reasonable basis to conclude that its exposure is nominal or minimal. Thus, proof of bad faith requires a showing beyond the mere amount of the offer. Rather, a determination that a proposal was made in bad faith requires an inquiry into the circumstances shown by the entire record of the case.

In this case, the Miccosukee Tribe had a “well-founded, good faith, and legally correct” basis to conclude that sovereign immunity barred the Plaintiff’s claim. Thus, its nominal proposals for settlement were enforceable. Therefore, the trial court abused its discretion in ordering that the proposals were unenforceable.

Note: this post was updated on August 19, 2019 at 1:25 p.m. to reflect minor changes to the opinion issued by the Third DCA pursuant to its recent granting of a motion for rehearing.