13 Fla. L. Weekly Supp. 746a
Attorney’s fees — Insurance — Automobile — Confession of judgment — Summary judgment — Opposing affidavit — Claims manager’s affidavit in opposition to insured’s motion for summary judgment is stricken where affidavit contains statements based on manager’s understanding of underlying issues, not on personal knowledge — Insurer’s payment for vehicle damage after suit was filed was functional equivalent of confession of judgment entitling insured to recover attorney’s fees and costs, irrespective of fact that insurer had offered to pay same amount to insured pre-suit but failed to make payment before suit was filed — Insured is also entitled to fee award for time spent litigating entitlement to fees
HEROLD AIMABLE, Plaintiff, vs. AMERICAN VEHICLE INSURANCE COMPANY, Defendant. County Court, 18th Judicial Circuit in and for Seminole County. Case No. 03-SC-5904. May 3, 2006. John R. Sloop, Judge. Counsel: Michael Tierney, Michael Tierney, P.A., Winter Park. Sean McDonough, Wilson, Elser, Moskowitz, Edelman & Dicker LLP, Orlando.
ORDER
THIS CAUSE having come before the Court, and the Court having reviewed the Motion(s) being otherwise duly advised in the premises, hereby notes the following:
FACTS
HEROLD AIMABLE was involved in a motor vehicle accident on August 25, 2003, in which his vehicle sustained property damage. HEROLD AIMABLE was insured with Defendant’s automobile policy allowing for collision coverage for property damage to his vehicle. HEROLD AIMABLE’S vehicle sustained at least $1,676.16 in property damage. Plaintiff, through his attorney, contacted the Defendant to pay for the damages. Defendant claimed they offered, pre-suit to pay the amount which was later tendered to Plaintiff after suit was file. However, Plaintiff filed suit on December 18, 2003, for breach of contract since no payment had yet been received. Defendant was served with the law suit on 01/07/05. On January 25, 2004, AMERICAN VEHICLE INSURANCE COMPANY paid Plaintiff’s property damage claim. Plaintiff contends said payment by the Defendant is a functional equivalent of a confession of judgment. Defendant refused to recognize their act of paying the bill after suit was filed as a functional equivalent as a confession of judgment since the same amount paid was supposedly offered before suit was filed.
AFFIDAVIT IN OPPOSITION TO PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT
On March 9, 2006, defendant faxed Plaintiff an Affidavit in opposition to Plaintiff’s motion for summary judgment. The affiant was Harold Lee Sutton, the claims manager. Mr. Sutton’s assertions therein were based on notes from a prior adjuster. Plaintiff moved to strike this affidavit stating that is was hearsay on hearsay, as well as containing statements that are not based on affiant’s personal knowledge, but, rather were statements based upon affiant’s understanding of the underlying issues, thus containing inadmissible hearsay evidence. FLORIDA DEPARTMENT OF FINANCIAL SERVICES, Appellant, v. ASSOCIATED INDUSTRIES INSURANCE COMPANY, INC., 29 Fla. L. Weekly D568a. The court agrees with Plaintiff and strikes the affidavit.
As to the content of the affidavit, pursuant to Florida Rule of Civil Procedure 1.510(e), supporting and opposing affidavits for summary judgment “shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein. . . . The court may permit affidavits to be supplemented or opposed by . . . further affidavits.” An affidavit in support of summary judgment may not be based on factual conclusions or conclusions of law. Jones Constr. Co. of Cent. Fla., Inc. v. Fla. Workers’ Comp. JUA, Inc., 793 So. 2d 978, 979 (Fla. 2d DCA 2001). “The purpose of the personal knowledge requirement is to prevent the trial court from relying on hearsay when ruling on a motion for summary judgment. . . and to ensure that there is an admissible evidentiary basis for the case rather than mere supposition or belief.” Pawlik v. Barnett Bank of Columbia County, 528 So. 2d 965, 966 (Fla. 1st DCA 1988).
Sutton’s affidavit contains statements that are not based upon his personal knowledge. Rather, his statements are based upon his understanding of the underlying issues. Thus, the affidavit contains inadmissible hearsay evidence. Consequently, the defendant has failed to show that there are any material facts at issue.
CONFESSION OF JUDGMENT BY INSURER
The general rule with respect to entitlement to attorney’s fees was stated in the seminal case of Stockman v. Downs, 573 So. 2d 835 (Fla. 1991). Stockman, which held that “a claim for attorney’s fees, whether based on statute or contract. Stockman, 573 So. 2d at 838. (“For those reasons, the Supreme Court held ‘that a claim for attorney’s fees, whether based on statute or contract, must be pled.’ ”).
Here, the Plaintiff satisfied this threshold requirement by pleading entitlement to fees in their initial complaint. Specifically, HEROLD AIMABLE sought an award of attorney fees under Section 627.428, Florida Statutes, which requires a judgment against an insurer and in favor of an insured or the insured’s assignee in order for the insurer to be liable for attorney fees. Consequently, any successful disputes related thereto create an entitlement to recover fees. (“[T]hird parties who claim policy coverage by assignment from the insured are entitled to recover fees.”) Superior Ins. Co. v. Liberty, 776 So. 2d 360.
Here, when the Defendant paid the bill at issue on January 25, 2004, after suit was filed, this amounted to a functional equivalent of a confession of judgment, and thereby creating entitlement to attorney’s fees and costs. (“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.”) Wollard v. Lloyd’s and Companies of Lloyd’s, 439 So. 2d 217, 218 (Fla. 1983); Central Magnetic Imaging v. State Farm Mut. Auto. Ins. Co., 745 So. 2d 405 (Fla. 3d DCA 1999); O.A.G. Corp., supra, Chusko v. Metropolitan Property and Casualty Ins. Co., 9 Fla. L. Weekly Supp. 556a (7th Jud. Cir., Volusia County, July 3, 2002).
In Wollard, an insurer sought to escape liability for attorney’s fees by paying the claim just before the commencement of their scheduled trial. The litigants stipulated to the settlement of the underlying claim, and agreed that attorney’s fees and costs would need to be resolved by the court. The Wollard court followed the holding in Palmer, Supra.
The Palmer case involved the payment of a mortgagee by a fire insurer shortly after suit was filed. While the fire insurer paid the loss to the mortgagee, it maintained it was not liable for attorney’s fees to its insured that brought suit. Specifically, the fire insurer maintained that “it had never wrongfully refused to pay the policy proceeds.” The Palmer court found that “the fact that the insurer’s refusal to pay the amount owed by it under the terms of the policy was in good faith and on reasonable grounds does not relieve the insurer from liability for payment of attorney’s fees where it is subsequently found liable on the policy” at page 98. The Wollard court also held in favor of awarding fees and stated at page 218:
When an 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.
As stated in Palmer, good faith is not an issue on fees. Whenever an insured prevails against an insurer, the court must award attorneys fees. Even if the insurer believed in good faith the claim should not have been paid, the court must award fees. INA v. Lexow, 602 So.2d 528 (Fla. 1992); Travelers v. Lindsay, 387 So.2d 341 (Fla. 1980). Thus, the good faith belief by the defendant that they never received the Plaintiff’s bill, and yet later paying it in October of 2002, does not absolve it of the obligation for attorney’s fees and costs once it made payment for date of service August 24th, 2001.
FEES FOR CONTESTING ENTITLEMENT
Additionally, Plaintiff is also seeking fees for the time not only prosecuting the underlying claim, but also for time spent litigating their entitlement pursuant to the Supreme Court’s holding in Palma. State Farm Fire & Casualty Co. v. Palma, 629 So. 2d 830 (Fla. 1993). The actual holding in Palma was twofold: (1) that an insurer who loses suit to an insured but contests the insured’s entitlement to attorney fees may be held liable for attorney fees incurred in litigating the issue of entitlement to fees, but not for the time spent litigating the amount of those fees; and the Florida Supreme Court twice and it established that (1) attorney’s fees could be awarded for litigating entitlement to those fees, but not for litigating the amount of the fees. Should this Honorable Court hold that Plaintiff’s counsel is entitled to fees relating to the underlying matter, Plaintiff’s counsel will seek an award of time for establishing entitlement pursuant to Florida case law.
CONCLUSION
Because the Defendant paid Plaintiff’s property damage claim at issue after suit was filed, this acted as a functional equivalent of a confession of judgment. Chusko v. Metropolitan Property and Casualty Ins. Co., 9 Fla. L. Weekly Supp. 556a (7th Jud. Cir., Volusia County, July 3, 2002) (holding that “it is well established that when an insurer agrees to settle a law suit by paying the disputed claim that this serves as the functional equivalent of a confession of judgment and provides the basis for the award of attorney’s fees to the insured”). When a dispute arises between an insurer and an insured, and judgment is entered in favor of the insured, he or she is entitled to attorney’s fees. According to the holding in Ivey, “It is the incorrect denial of benefits, not the presence of some sinister concept of “wrongfulness,” that generates the basic entitlement to the fees if such denial is incorrect. Allstate v. Ivey, 728 So.2d 282 (Fla. 3d DCA 1999), Id. at page 14. For the reasons cited above, this Court GRANTS Plaintiff’s Motion for Summary Judgment and FINDS:
1. When the defendant paid the claim at issue, it was a functional equivalent of a confession of judgment.
2. Plaintiff is entitled to fees and costs.
3. Court reserves jurisdiction as to the issue of Plaintiff’s attorney’s fees and costs. [See 13 Fla. L. Weekly Supp. 1242a.]
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