A $4.75 million diamond was erroneously sold for $235,000 aboard a Starboard Cruise Services’ ship. Courtesy photo

The latest installment in the battle between a cruise ship passenger and a Doral-based cruise line over a diamond worth nearly $5 million has handed a victory to the passenger.

The Third District Court of Appeal denied Starboard Cruise Services’ motion for attorney fees from former passenger Thomas DePrince in a ruling issued Wednesday. The two parties have been locked in litigation for several years over DePrince’s purchase of a 20.64-carat diamond for only $235,000 in 2013.

In reality, the stone was valued at $4.75 million.

A former fine-jewelry dealer, DePrince bought the deeply discounted diamond while aboard one of Starboard’s ships. Once the cruise line learned of its vendor’s pricey mistake, it reversed the charge on DePrince’s credit card, prompting him to file suit for breach of contract.

Following years of litigation, the Third District Court of Appeal issued a favorable ruling to Starboard in August. The appellate panel held that “a party seeking rescission of a contract based on a unilateral mistake does not have to prove that she was induced into making the mistake by the other party.”

But after handing Starboard that legal victory, the same appellate court ruled against the company in its pursuit of attorney fees. The latest opinion written by Chief Judge Leslie Rothenberg affirmed an order denying the cruise company’s motion for fees based on its settlement proposal. Judges Vance Salter and Robert Luck concurred.

Read the appeals court’s opinion: 

Prior to trial, Starboard submitted a proposal for settlement to DePrince that went unanswered. After a jury ruled in its favor, the company entered a motion for attorney fees with the court.

Starboard argued it was entitled to receive attorney fees from DePrince under Florida Statute 768.79, the rule pertaining to offers of judgment. As summarized in the Third DCA’s opinion, “Section 768.79 creates a substantive right to attorney’s fees when, among other things, a plaintiff refuses to accept an offer of judgment from the defendant, and the resulting judgment is either one of no liability … or if the judgment obtained by the plaintiff is at least twenty-five percent less than the amount of the offer.”

Although Starboard was the prevailing party, both the trial and appellate courts denied its motion for attorney fees. Citing precedent, the Third DCA held that because DePrince’s complaint included both monetary and non-monetary claims, the company’s offer of settlement was unenforceable because it required the plaintiff to dismiss all of his claims.

The judges justified their opinion in part by citing the Florida Supreme Court’s ruling in Diamond Aircraft Industries Inc. v. Horowitch, wherein the high court found that “Section 768.9 does not apply to an action in which a plaintiff seeks both damages and equitable relief, and where the defendant has served a general offer of judgment that seeks the release of all claims.”

Eric Isicoff, with Isicoff Ragatz. Photo: Jill Kahn/ALM

Starboard’s attorney, Eric Isicoff, told the Daily Business Review this ruling does not mark the end of litigation between his client and DePrince.

“We are very grateful that the appellate court ultimately reversed itself and ruled in favor of our client on the merits,” the Isicoff Ragatz partner said. “We are disappointed that fees were not awarded after all the expense our client had to incur in this matter, but plan to pursue the cost award which will not be insignificant.”

Mario Ruiz of Miami business advocacy firm McDonald Hopkins was one of the attorneys employed by DePrince. According to Ruiz, the appeals court’s opinion “confirms that although offers of judgment are important tools in promoting settlements, they must be used correctly in order to have their intended effect.”

“The Third District was correct in observing that, in our particular case, the offer of judgment was not used correctly,” he asserted. “As an attorney that regularly appears before this court, I was pleased to receive the Court’s decision.”

Related stories:

Oops! Cruise-Ship Buyer Gets Another Chance to Snag Dramatically Discounted Diamond

No Deal: Contract Rescission, Unilateral Mistakes and the Case of the Under-Priced Diamond

Appellate Court Issues Ruling on Attorney Fees by Way of Rejected Offers of Judgment