FORT LAUDERDALE BUSINESS LITIGATION: THE LAW OF THE CASE AFFECTS SUBSEQUENT PROCEEDINGS

When a party appeals a court order before the conclusion of the case, the appellate court’s decision on the questions of law presented on appeal governs how the trial court decides those questions of law throughout all subsequent stages of the lawsuit. This concept is known as the “law of the case” doctrine. The law of the case can have a substantial impact the ultimate outcome in business litigation, because a party cannot relitigate a legal issue already decided by the appellate court. Peter Mavrick is a Fort Lauderdale business litigation lawyer, and also represents clients in business litigation in Miami, Boca Raton, and Palm Beach. The Mavrick Law Firm represents clients in breach of contract litigation, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, employment litigation, and other legal disputes in federal and state courts and in arbitration.

One example of this circumstance occurred in the case of Specialty Restaurants Corp. v. Elliott, 924 So. 2d 834 (Fla. 2d DCA 2005). The appellate court affirmed a summary judgment in favor of Specialty Restaurants Corporation (“SRC”) as to all claims brought by Mike Elliott and Mike Elliott & Company (collectively the “Elliotts”). SRC filed a motion seeking appellate attorney’s fees and costs based on its proposal for settlement. A proposal for settlement is a tactic used in business litigation that consists of a written settlement offer which if not accepted can make the opposing party responsible for its attorney’s fees if the monetary outcome of the case is within a specific range of the offer. The Elliotts opposed SRC’s motion for appellate attorney’s fees but did not challenge the legal sufficiency of the proposal for settlement. The appellate court granted SRC’s motion for appellate attorney’s fees based on the unchallenged proposal for settlement. On remand, the trial court initially determined that SRC was entitled to attorney’s fees and costs for both the trial court and on appeal based on the proposal for settlement. Before the trial court could decide the amount of attorney’s fees and costs to be awarded, the Elliotts filed a motion to reconsider, contending for the first time that the proposal for settlement was legally insufficient. The trial court entered an order vacating the portion of the order that determined entitlement pursuant to the proposal for settlement. SRC immediately appealed.

The appellate court held that its prior order awarding appellate attorney’s fees found that SRC was entitled to attorney’s fees under the proposal for settlement and that this ruling became the law of the case on the issue of the enforceability of that proposal for settlement. In business litigation, the law of the case doctrine includes not only issues explicitly ruled upon by the court, but also those issues which were implicitly addressed or necessarily considered by the appellate court’s decision. The appellate court held that by awarding fees pursuant to the proposal for settlement, the appellate court necessarily determined the legal sufficiency of the proposal for settlement, and that determination of legal sufficiency was binding on the trial court in any subsequent proceedings. “[W]hatever is once established between the same parties in the same case continues to be the law of the case, whether correct on general principles or not, so long as the facts on which such decision was predicated continue to be the facts in the case….” Specialty Restaurants Corp. v. Elliott, supra.

By contrast, the law of the case doctrine was not applied in the case of Tiede v. Satterfield, 870 So. 2d 225 (Fla. 2d DCA 2004). Tiede did not follow the law of the case because between the first appeal (Tiede I) and the second appeal (Tiede II), the Florida Supreme Court entered its opinion in Willis Shaw Express v. Hilyer Sod, Inc., 849 So. 2d 276 (Fla. 2003), which conflicted with the appellate court’s earlier decision in Tiede I interpreting the offer of judgment statute. An offer of judgment is essentially the same as a proposal for settlement and is used in business litigation for the same purpose. Tiede II held that pursuant to Brunner Enters., Inc. v. Department of Revenue, 452 So. 2d 550 (Fla. 1984), an appellate court can alter the law of the case, if “strict adherence to the rule would result in ‘manifest injustice.’” In other words, if the appellate court strictly applied the ruling from the first appeal, it would have worked a manifest injustice because the law on offers of judgment had changed between the first appeal and the second appeal.

Another example occurred in the case of Candyworld, Inc. v. Granite State Ins. Co., 700 So. 2d 424 (Fla. 4th DCA 1997). The law of the case did not apply because the appellate court’s denial of a party’s entitlement to attorney’s fees was not on the merits. The motion for attorney’s fees was denied for failure to state legally sufficient grounds. Therefore, the legal issue of entitlement to attorney’s fees had not been decided on the merits and could still be considered by the trial court. In Pompi v. City of Jacksonville, 872 So. 2d 931 (Fla. 1st DCA 2004), the law of the case did not apply because the appeal was dismissed based on untimely filing, which “signifies that the court did not reach the merits.” The order dismissing the appeal only resolved the question of whether the appellate court had the judicial power to review the judgment.

Peter Mavrick is a Fort Lauderdale business litigation attorney who also practices business litigation in Miami, Boca Raton, and Palm Beach. This article does not serve as a substitute for legal advice tailored to a particular situation.