Settlement Offers May Not Be Introduced At Trial As Evidence

Luxury Homes and Estates of Florida

The Florida Legislature and the Florida Evidence Code promote settlement of business disputes. In an effort to foster the settlement process the Florida Evidence Code specifically provides that settlement offers are inadmissible is subsequent litigation.₁

Despite this rule of evidence, I am routinely confronted with an opposing party’s effort to introduce settlement letters written between the parties discussing facts of a business dispute. The letter may have been written to posture or as a mea culpa in order to head off conflict. In either event, the letters sent prior to the commencement of litigation are privileged against disclosure in the courtroom. Rease v. Anheuser-Busch, 644 So.2d 1383, 1388 (Fla. 1st DCA 1994); Frank v. Ruwitch, 318 So.2d 188, 189 (Fla. 3rd DCA 1975). These rules are designed to encourage honest communication without fear of your own words being used against you.

Many attorneys argue that the language in a letter relating to the settlement offer should be stricken but admissions of fact should be introduced. This position is wrong. A letter containing a settlement offer is inadmissible in its entirety even though matters are discussed beyond the scope of the dispute claim. By way of example, in Benoit v. District, 463 So.2d 1260 (Fla.5th DCA 1985), the court reversed a judgment imposing liability on Benoit for a defective roof because a settlement letter was introduced as evidence. The roof had been constructed in 1977 pursuant to Benoit’s specifications. The owner of the building maintained that Benoit failed to warn users of its system not to combine its moisture barrier materials with asbestos because the asbestos would crack, thereby causing the roof to leak. Critical in the case was whether Benoit knew of the asbestos problem in 1977. As part of its case in chief, the owner placed into evidence a letter it received from Benoit dated February 25, 1982 which stated:

This letter is to confirm my phone conversation of this date with you…I pointed out the fact that my company does not recommend the use of asbestos felts on our tapered foam system and have published a statement to that effect. I am enclosing our application instructions dated 1976, wherein we state that asbestos felts are not acceptable over our system in that an organic felt or fiberglass membrane should be used.

The trial judge had simply blocked out the part of the letter pertaining to the settlement offer and admitted the remainder of the letter. The letter was exceedingly damaging to Benoit’s case because it established knowledge of a problem with asbestos before year 1977.

The Appellate Court overturned the jury verdict entered in favor of the owner. The Appellate Court stated that it was compelled to do so because the settlement letter should not have been admitted in evidence. The letter was written as an offer to settle and the court followed the rule and precluded the introduction of the letter as evidence.

It is recommended that before preparing any letter to compromise or settle a claim that the advice of an attorney should be sought.

₁Florida Statute 90.408: “Evidence of an offer to compromise a claim which was disputed as to validity or amount, as well as any relevant conduct or statements made in negotiations concerning a compromise, is inadmissible to prove liability or absence of liability for the claim or its value.”

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Houston Short grew up in the Central Florida area, and continues to reside in Orlando with his family. He provides representation in arbitration actions for the American Arbitration Association and engages in alternative dispute resolutions including mediation both binding and non-binding arbitration, and settlement negotiations. He is an active member of the American Arbitration Association Panel Review Committee, the Orange County Bar Association, and the Florida Bar. He graduated from Florida State University in 1984 with a bachelors of science degree (cum laude) and received his juris doctor from the University of Florida in 1987 (with honors). Houston co-authored, "The Constitutionality of the Legislatures Mandate to Sever Counterclaims in Mortgage Foreclosure Action," the Real Property, Probate and Trust Law Section, The Florida Bar.