12 Fla. L. Weekly Supp. 183a
Attorney’s fees — Insurance — Personal injury protection — Confession of judgment — Where insured’s obligation to pay outstanding medical bills was resolved in insured’s favor by settlement between insured and medical provider after insured filed suit against insurer, suit resulted in equivalent of confession of judgment and insured is entitled to award of attorney’s fees even though settlement was not between parties to suit and did not result in any payments to insured or provider
JEAN W. SAGESSE, Plaintiff, vs. ALLSTATE INDEMNITY COMPANY, Defendant. County Court, 20th Judicial Circuit in and for Collier County. Case No. 00-1194-CC, County-Civil. October 29, 2004. Ramiro Manalich, Judge. Counsel: Paul A. Giordano. K. Jack Breiden, Breiden & Associates, Naples.
ORDER ON PLAINTIFF’S ENTITLEMENTTO FEES AND COSTS
THIS MATTER having come on to be heard before the Court on August 19, 2004, on Plaintiff’s Motion for Entitlement to Attorney Fees and Costs, and the Court having heard the arguments of counsel and being otherwise fully advised in the premises, this Court finds as follows:UNDISPUTED FACTS
1. On or about February 5, 1999, the plaintiff/insured Jean W. Sagesse, was involved in a motor vehicle collision which required chiropractic treatment. This treatment was provided by Naples Family Chiropractic. Naples Family Chiropractic secured a letter of protection and forwarded its bills to Defendant, Allstate.
2. This personal injury protection (PIP) suit was filed because of Defendant Allstate’s failure to pay medical bills submitted by Naples Family Chiropractic which obligated plaintiff for the balance owed to Naples Family Chiropractic. That balance was more than $3700.
3. Following suit, Defendant filed a third party claim against Naples Family Chiropractic and a separate suit was also filed in Federal Court involving Naples Family Chiropractic and Allstate. Simply stated, the suit and third party complaint alleged that Naples Family Chiropractic had been performing unnecessary or unreasonable medical treatment. On July 25, 2001, an agreed order allowed Allstate’s request to file a third party complaint, “. . .with the understanding that the Defendant agrees to have a separate trial on any Third Party claims”.
4. Shortly before Mr. Sagesse’s claim was scheduled for trial, Naples Family Chiropractic and Defendant settled the aforementioned third party claim and federal action. As a part of that settlement, Naples Family Chiropractic agreed that no further amounts were owed by Defendant or Defendant’s insureds to Naples Family Chiropractic.
5. As a result of the aforementioned settlement, Plaintiff no longer is responsible for the remaining balance to his health-care provider.
6. Plaintiff’s attorney thereafter filed his Motion for Attorney Fees and Costs pursuant to Section 627.428, F.S.
ARGUMENTS AND ANALYSIS
Section 627.428, F.S., provides in pertinent part:
(1) upon the rendition of a judgement. . .against an insurer and in favor of any named or omnibus insured or the named beneficiary. . .the trial court. . .shall adjudge or decree against the insurer. . .a reasonable sum as fees or compensation for the insured’s or beneficiary’s attorney prosecuting the suit in which the recovery is had (emphasis added).
Allstate argues that a judgement was not rendered in this case, and that as a result of the aforementioned settlement, a judgement cannot now be entered in this case. Allstate also argues that the strict construction of the statute regarding entitlement to fees under Section 627.428, F.S., requires the “rendering” of a judgement. In support of its argument, the Court was provided with copies of Wollard v. Lloyd’s and Companies of Lloyds, 439 So.2d 217 (Fla 1983); Danis Inds. Corp. v. Ground Improvement Techniques, Inc., 645 So.2d 420 (Fla. 1994); DeSalvo v. Scottsdale Ins. Co., 410 So.2d 1001 (Fla. 3rd DCA 1982); and Fortune Ins. Co. v. Brito, 522 So.2d 1028 (Fla. 3rd DCA 1988).
Plaintiff’s counsel argues that when an insurer resolves a disputed PIP claim favorable to the insured after suit is filed, it is the functional equivalent of a confession of judgement sufficient to entitle Plaintiff to recovery of fees under Section 627.428, F.S. This position has long-standing case law support in PIP cases. In Wollard, supra, the Supreme Court quashed the Third DCA’s ruling that a negotiated settlement between the insured and his insurer does not entitle the insured to attorney fees pursuant to Section 627.428, F.S. and stated that:
“When the insurance company has agreed to settle a disputed case, it has, in effect, declined to defend its position in the pending suit. Thus, the payment of the claim is, indeed, the functional equivalent of a confession of judgment or a verdict in favor of the insured. Requiring the Plaintiff to continue litigation in spite of an acceptable offer of settlement merely to avoid having to offset attorney’s fees against compensation for the loss puts an unnecessary burden on the judicial system, fails to protect any interest — the insured’s, the insurer’s or the public’s — and discourages any attempt at settlement.” This literal requirement of the statute exults form over substance to the detriment of public policy, and such a result is clearly absurd. It is a basic tenant of statutory construction that statutes will not be interpreted so as to yield an absurd result (emphasis added and citations omitted). Wollard, at Pg. 218-219.
Wollard cited Cincinnati Ins. Co. v. Palmer, 297 So.2d 96 (Fla. 4th DCA 1974) with approval. Therein, the Fourth District stated:
“On the other hand it is neither reasonable nor just that an insurer can avoid liability for statutory attorney’s fees by the simple expedient of paying the insurance proceeds to the insurer or beneficiary at some point after suit is filed but before final judgement is entered, thereby making unnecessary the entry of a judgment. . . We think the statute must be construed to authorize the award of an attorney fee to an insured or beneficiary under a policy or contract of insurance who brings suit against the insurer after loss is payable even though technically no judgement for the loss claimed is thereafter entered favorable to the insured or beneficiary due to the insurer voluntarily paying the loss before such judgement can be rendered. After all, such voluntary payment by the insured is the equivalent of a confession of judgement against it.”
(emphasis added), Cincinnati Ins. Co. at Pg. 99.
In further support of its position, counsel for Plaintiff provided representative reported opinions from other Florida County Courts reaffirming the principal set forth in Wollard that the absence of the rendering of a technical judgement does not preclude entitlement to fees under 627.428, F.S., Palm Beach Regional MRI, 11 Fla. L. Weekly Supp. 742a (Fla. 15th Circuit, Palm Beach Cty. Ct., Judge Joseph Marx, June 1, 2004); Rural Metro Ambulance v. New Hampshire Indemnity Ins. Co., 11 Fla. L. Weekly Supp. 755a (Fla. 18th Circuit, Seminole Cty. Ct., Judge Mark E. Herr, June 3, 2004).
In each of these cases, the County Courts held that a favorable benefit received by the insured after suit is filed meets the requirements for entitlement to fees even though no monetary judgement is rendered in favor of the insured. In each case, the Courts determined that the insurance companies’ actions in resolving a disputed issue in a PIP case after suit constituted a confession of judgement.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
It is undisputed that, at the time suit was filed herein, Allstate’s failure to pay Naples Family Chiropractic bills for medical treatment under PIP coverage placed the burden of payment on its insured, Mr. Sagesse. The Court also finds that Allstate’s settlement with Naples Family Chiropractic after suit was filed herein obviated the burden of payment on Mr. Sagesse.
Allstate is correct that statutes allowing an award of attorney fees are to be strictly construed. However, it appears that case law has interpreted Section 627.428, F.S., as providing for an award of fees when an insurer’s action after suit constitutes the functional equivalent of a confession of judgement. Wollard, supra. In the case sub judice, Plaintiff’s obligation to pay the outstanding medical bills of more than $3700 was resolved in Mr. Sagesse’s favor by Allstate’s settlement after suit even though technically no judgement for the loss claimed was thereafter entered in favor of the insured. Allstate should not escape liability for attorneys fees under Section 627.428, F.S., simply by settling the suit before a judgement is entered. Fortune Ins. Co. v. Brito, 522 So.2d 1028, 29 (Fla. 3rd DCA 1998). This is so even though settlement was not between the two parties in this case and no payment was made to Naples Family Chiropractic or the Plaintiff. Case law recognizes that Section 627.428, F.S., fees should be awarded whenever a suit against a party’s insurer results in the equivalent of a confession of judgement that confers a benefit on the insured. This construction of the statute is necessary to give effect to its primary purpose: to discourage litigation and encourage prompt disposition of valid insurance claims without litigation. Wollard at p. 218, supra.
Wherefore, it is hereby
ORDERED AND ADJUDGED:
1. Plaintiffs Motion for Entitlement to Attorney Fees and Costs is GRANTED;
2. The Court reserves jurisdiction for the purpose of determining the amount of fees and costs.
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