12 Fla. L. Weekly Supp. 700a
Attorney’s fees — Insurance — Personal injury protection — Amount — Time spent litigating entitlement to fees — Error to exclude post-judgment time from calculation of insurer’s attorney’s fee award where insured failed to acquiesce to insurer’s entitlement to fees pursuant to proposal for settlement/offer of judgement and continued to litigate whether proposal for settlement or offer of judgment under section 768.79 was applicable to PIP cases and whether insurer’s proposal/offer was made in good faith
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Appellant, v. DIANE G. GURNEY, Appellee. Circuit Court, 9th Judicial Circuit (Appellate) in and for Orange County. Case No. CVA1-03-01. L.C. Case No. 97-CO-4079. March 30, 2005. Appeal from County Court for Orange County, C. Jeffery Arnold, Judge. Counsel: Beth A. Moriarty, Moriarty & Associates, Maitland, for Appellant. Steven L. Barcus, Altamonte Springs, for Appellee.
(Before Strickland, Apte, and Bronson, JJ.)
FINAL ORDER AFFIRMING IN PART AND REVERSING IN PART THE LOWER COURT’S ORDER
(PER CURIAM.) Appellant State Farm Automobile Insurance Company (“State Farm”) appeals an order entered by the county court on December 4, 2002, granting State Farm attorney’s fees and costs but denying fees incurred in litigating entitlement to fees. We have jurisdiction pursuant to Florida Rule of Appellate Procedure 9.030(c)(1)(A). We dispense with oral argument pursuant to Florida Rule of Appellate Procedure 9.320.
Factual and Procedural Background
The appellee Diane Gurney (“Gurney”) was injured in an automobile accident on March 17, 1996. At the time of the accident, Gurney was insured by State Farm (defendant below). Gurney’s policy provided for personal injury protection (“PIP”) benefits for medical expenses. Gurney received medical treatment as a result of her injuries and submitted bills to State Farm for payment.
On February 19, 1997, State Farm’s independent medical examiner (“IME”), Dr. Craig Jones, found that Gurney’s future orthopedic treatment was not reasonable, necessary or related to the automobile accident. Based upon the IME report issued by Dr. Jones, State Farm discontinued Gurney’s orthopedic benefits. Gurney subsequently filed suit seeking payment of her outstanding medical bills on April 21, 1997.
On or about April 9, 1998, prior to trial, State Farm sent a proposal for settlement of $1,750.00 for “full and complete settlement of this matter, including all medical benefits, interest, attorneys fees and costs” pursuant to Fla. R. Civ. P. 1.442 and section 768.79, Florida Statutes. State Farm also made an identical, alternative, offer of judgment.
At the conclusion of the jury trial, the jury found that none of Gurney’s medical bills were related to the accident and rendered a verdict in favor of State Farm. The trial court initially entered a partial directed verdict in favor of Gurney. However, on appeal, this Court reversed the county court’s partial directed verdict and remanded. Pursuant to the mandate, the lower court entered a final judgment in favor of State Farm.
State Farm filed a motion to tax fees and costs, referencing the proposal for settlement and offer of judgment. In support of its motion, counsel for State Farm, Beth Moriarty, (“Moriarty”) filed her original Affidavit of Fees and Costs which included 11 hours of additional attorney time, at $125.00 per hour, as being necessary for preparing and obtaining a ruling on State Farm’s motion to tax fees and costs. Moriarty also filed two supplemental affidavits of fees and costs which documented additional attorney time spent in the pursuit of fees.
In response to State Farm’s motion for fees and costs, Gurney argued that proposals for settlement do not apply in PIP cases. However, after several hearings on the matter, the trial court found that offers of judgment are valid in PIP cases, and cited U.S. Securities Ins. Co. v. Cahuasqui, 760 So. 2d 1101 (Fla. 3d DCA 2000) in support of its findings. The trial court also found that the proposal for settlement was made in good faith and awarded State Farm $38,500.00 in attorney’s fees, along with $13,863.82 of accumulated prejudgment interest, and $1,400.00 for expert fees, totaling $53,763.82 on December 4, 2002. However, the trial court denied State Farm’s time spent in the pursuit of attorney’s fees, and this appeal ensued.
Standard of Review
State Farm seeks to have this Court determine whether the lower court erred as a matter of law in its legal interpretation of section 768.79, Florida Statutes. Since the issue here involves strictly a legal determination, i.e., an evaluation of entitlement to certain attorney fees under the proposal for settlement and/or offer of judgment statute, such interpretation is subject to a de novo review. See Cascella v. Canaveral Port Authority, 827 So. 2d 308 (Fla. 5th DCA 2002); Racetrac Petroleum, Inc. v. Delco Oil, Inc., 721 So. 2d 376 (Fla. 5th DCA 1998). In a de novo standard of review, the appellate court need not deter to the trial court on matters of law. Rittman v. Allstate Ins. Co., 727 So. 2d 391, 393 (Fla. 1st DCA 1999).
Discussion
The sole issue on appeal is whether State Farm’s post-judgment time should have been included in the award of attorney fees since time spent was related to its entitlement thereto, and not to the amount of attorney fees awarded. State Farm filed several affidavits of fees evidencing the additional attorney time spent litigating entitlement to fees. We find merit in State Farm’s challenge of the trial court’s denial of fees for pursuit of fees and reverse on this point.
The Florida Supreme Court has held that attorney’s fees may be awarded for litigating entitlement to fees but not for time expended litigating the amount of fees. See State Farm Fire & Cas. Co. v. Palma, 629 So. 2d 830 (Fla. 1993). Gurney contends on appeal that State Farm became entitled to fees pursuant to the proposal for settlement or offer of judgment under section 768.79, Florida Statutes, when this Court reversed the trial court’s partial directed verdict in favor of Gurney. Gurney, therefore, argues that State Farm’s time expended in the“pursuit of attorney’s fees”is nothing more than an attempt to recover attorney’s fees for litigating the amount of fees. We disagree.
In the present case, the record shows that Gurney failed to acquiesce to entitlement, arguing at the fee hearing that State Farm had not presented sufficient evidence to prove that the proposal for settlement and/or offer of judgment were made in good faith. See T.G.I. Friday’s, Inc. v. Dvorak, 663 So. 2d 606 (Fla. 1995) (disallowing an award of fees and costs if the court determines that the proposal for settlement was not made in good faith). In addition, following the entry of the final judgment awarding State Farm fees and costs, Gurney continued to contest entitlement and filed motion to certify two questions of great public importance to the Fifth District Court of Appeal concerning: 1) whether a proposal for settlement or offer of judgment under section 768.79 applies to PIP cases; and 2) under what circumstances does a nominal proposal for settlement or offer of judgment qualify as a good faith offer to warrant fees as a sanction.
In addressing Gurney’s first question, the Fifth District Court of Appeal answered it in the affirmative in Nichols v. State Farm Mutual, 851 So. 2d 742 (Fla. 5th DCA 2003), wherein the Fifth District held that an insurer may recover fees under the proposal for settlement or offer of judgment statute in an action brought by the insured to recover PIP benefits. The holding in Nichols was subsequently adopted in Gurney v. State Farm Mutual, 889 So. 2d 97, 99 (Fla. 5th DCA 2004), wherein the Fifth District affirmed that an insurer such as State Farm may recover fees and costs under the offer of judgment or proposal for settlement in PIP cases. The Fifth District also found in Gurney, 889 So. 2d at 100, that the offer of judgment by State Farm in the instant case was made in good faith and affirmed the award of fees by the lower court. Id.
In the instant case, time expended by State Farm in the pursuit of fees is compensable because there was continued litigation over the issue of whether the proposal for settlement or offer of judgment under section 768.79 was applicable to PIP cases until the matter was settled by the Fifth District in Gurney, 889 So. 2d at 97. The applicability of section 768.79 to PIP cases is an entitlement issue. “Florida courts have recognized that when a party fails to acquiesce to entitlement, the movant party is entitled to recover all fees, including those fees incurred with post-trial discovery.” See Dr. Richard Merritt d/b/a Chiropractic Health Center v. Progressive Express Ins. Co., 12 Fla. L. Weekly Supp. 238a (Fla. 10th Cir. Ct. 2004). Here, State Farm is not challenging the calculation of time spent litigating the issue of fees, rather, State Farm is contesting its entitlement to those fees incurred in the pursuit of fees due to Gurney’s failure to acquiesce to entitlement. Therefore, the trial court erred by excluding the fees requested for seeking entitlement to fees.
Appellate Attorney’s Fees
Appellant State Farm has filed timely its motion seeking an award of attorney’s fees pursuant to section 768.79, Florida Statutes. Since State Farm has obtained some relief in this Court, it is entitled to an award of appellate attorney’s fees pursuant to Florida Rule of Appellate Procedure 9.400, and the assessment of those fees is remanded to the lower tribunal. Additionally, State Farm is entitled to have costs taxed in its favor by filing a proper motion with the lower tribunal within thirty days of the issuance of the mandate in this case.
Gurney has also filed her motion for appellate attorney’s fees. However, since Gurney is not the prevailing party on appeal, her motion for appellate attorney’s fees is denied.
Based upon the foregoing, it is hereby ORDERED AND ADJUDGED that the county court’s order of Final Judgment is AFFIRMED IN PART AND REVERSED IN PART.
It is further ORDERED AND ADJUDGED that the case is remanded to the trial court to determine the appropriate amount of fees incurred by State Farm in litigating entitlement to fees.
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