14 Fla. L. Weekly Supp. 842a
Attorney’s fees — Insurance — Personal injury protection — Proposal for settlement — Error to deny insurer’s motion for attorney’s fees and costs on grounds that release contained in proposal for settlement was ambiguous as to whether acceptance of proposal would have extinguished potential uninsured or underinsured motorist claim where plain reading of entire proposal specifically limits release to actual case being litigated — Appellate fees awarded to insurer
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Appellant, v. LAURA MCELVIN, Appellee. Circuit Court, 9th Judicial Circuit (Appellate) in and for Orange County. Case No. CVA1 05-105. L.C. Case No. 2002-SC-0400. June 4, 2007. Appeal from the County Court, for Orange County, Deb S. Blechman, Judge. Counsel: Hinda Klein and Carlos D. Cabrera, Conroy, Simberg, Ganon, Krevans, Abel, Lurvey, Morrow & Schefer, P.A., Hollywood, for Appellant. Steven J. Kirschner, Winter Park, for Appellee.
(Before GRINCEWICZ, DAWSON, and SPRINKEL, JJ.)
ORDER REVERSING AND REMANDING THE DECEMBER 7,2005, “ORDER REGARDING NOVEMBER 3, 2005 HEARING” OF THE TRIAL COURT
(PER CURIAM.) Laura McElvin (“Appellee”) brought two breach of contract actions for No Fault benefits, medical payments coverage benefits, and damages against State Farm Mutual Automobile Insurance Company (“Appellant”) arising out of a motor vehicle accident that occurred on June 26, 2000. Appellee’s cases were later consolidated into Case Number 2002-SC-400. On October 11, 2004, Orange County Judge C. Jeffery Arnold granted Appellant’s Amended Motion for Summary Judgment. Prior to the entry of Summary Judgment, Appellant served a Proposal for Settlement which Appellee failed to accept. Appellant made two Motions to Tax Attorney’s Fees and Costs, and a hearing was held. Appellant is appealing the final judgment of the county court denying its Motion to Tax Attorney’s Fees and Costs. This Court has jurisdiction pursuant to section 26.012, Florida Statutes, and rule 9.030(c)(1)(A), Florida Rules of Appellate Procedure. We dispense with oral argument.
Factual and Procedural Background
Appellee filed her original complaint on January 14, 2002. Appellee claimed that Appellant failed to pay medical payment coverage benefits. Specifically, Appellee alleged that Appellant failed to pay her outstanding medical payment bills from the Wittmer Clinic of Chiropractic. Appellant filed its Amended Motion for Summary Judgment on August 15, 2002, positing that Appellee was not entitled to medical payment coverage under the contract and that Appellee lacked standing because she had assigned her rights to the Wittmer Clinic. Thereafter, Appellant served a Proposal for Settlement on or about December 13, 2002. The Proposal contained the following clauses and conditions:
3. This Proposal for Settlement is made to resolve any and all claims, No Fault benefits, medical payments coverage benefits, damages, or injuries, whether known or unknown, disclosed or manifestly present or in the future on the part of [Appellee] arising out of the cause of action which is the subject matter of [the case].
4. The total amount of this proposal is $200.00 which represents $100.00 in No Fault and Medical Payments coverage benefits and $100.00 in attorney’s fees and costs, and is made in alternative to and not in addition to, any other offer.
5. The relevant conditions of this proposal is [sic] that the offer is to be construed as including any and all No Fault benefits, Medical Payments coverage benefits or other damages that may be awarded in final judgment, including costs and attorney’s fees in the above referenced litigation.
6. The non-monetary terms of this proposal are that the [Appellee] execute a release of all claims against [Appellant] and any [and] all persons legally liable for [Appellant’s] actions upon which the above styled cause is based, including the provision under which [Appellee] shall indemnify and hold harmless any and all releasees as to any and all liens and subrogated interests of any party by virtue of any service or benefits provided to the releaser, including but not limited to, services provided by Wittmer Clinic of Chiropractic, its doctors, employees, agents or assigns, hospital liens, doctors’ liens, worker’s compensation liens, CHAMPUS liens, and any other liens, and the filing of a Notice of Voluntary Dismissal with Prejudice as to the consolidated instant case. . . .
9. This Proposal for Settlement is being made in an effort to resolve the case and to avoid future costs and fees. . . .
(R. 151-54 (emphasis added).)
Appellee’s claims were consolidated according to an order of the lower court on or about May 28, 2003. Then, on January 21, 2004, Appellee filed a Motion for Partial Summary Judgment. The trial court denied Appellee’s Motion for Partial Summary Judgment when it entered its order granting Appellant’s Amended Motion for Summary Judgment on October 11, 2004. Appellee recovered nothing.
On April 1, 2004, Appellee notified Appellant of the possibility of an outstanding Uninsured or Underinsured claim against Appellant.
On November 5, 2004, and then again on February 5, 2005, Appellant filed Motions to Tax Attorney’s Fees and Costs. A hearing was held on November 3, 2005, regarding Appellant’s motions. The trial court entered its Order Regarding the November 3, 2005, Hearing on December 7, 2005. The trial court found “the terms of the proposed release were not sufficiently definite to assure [Appellee] that claims extrinsic to the subject case would not be barred,” and denied Appellant’s motion. (R. 211 (emphasis added).)
On December 19, 2005, Appellant filed a Notice of Appeal regarding the trial court’s December 7, 2005, order.Standard of Review
While the instant appeal appears to involve purely legal matters, the parties disagree as to the appropriate standard of review.
Appellant correctly states that the appropriate standard of review is de novo when determining whether a proposal for settlement comports with rule 1.442, Florida Rules of Civil Procedure, and section 768.79, Florida Statutes, “because a proposal for settlement is in the nature of a contract.” Hall v. Lexington Ins. Co., 895 So. 2d 1161, 1165 (Fla. 4th DCA 2005), abrogated on other grounds in Graham v. Peter K. Yeskel 1996 Irrevocable Trust, 928 So. 2d 371, 374 (Fla. 4th DCA 2006); see also Jamieson v. Kurland, 819 So. 2d 267, 268 (Fla. 2d DCA 2002) (holding the standard of review for interpreting a proposal for settlement is de novo).
Appellee, on the other hand, argues that the appropriate standard of review when determining whether a proposal for settlement was made in good faith is abuse of discretion. While Appellee correctly states the standard of review when the issue is whether a proposal was made in good faith, that is not the issue under review. See Gurney v. State Farm Mut. Auto. Ins. Co., 889 So. 2d 97, 99 (Fla. 5th DCA 2004) (holding that the standard of review when determining whether a proposal for settlement was offered in good faith is abuse of discretion). The instant issue under review is whether the trial court erred as a matter of law by finding State Farm’s proposal for settlement too indefinite to award attorney’s fees under section 768.79, Florida Statutes, and rule 1.442, Florida Rules of Civil Procedure. The instant proposal is like a contract, and therefore, when the appellate court interprets the proposal it is on an equal footing with the trial court. See Muir v. Muir, 925 So. 2d 356, 358 (Fla. 5th DCA 2006) (holding that the standard of review when an appellate court interprets a marital settlement agreement is de novo because the settlement agreement is in the nature of a contract).
When an appeal involves a purely legal matter the standard of review is de novo. Armstrong v. Harris, 773 So. 2d 7, 11 (Fla. 2000). When an appeal calls for judicial interpretation of a statute, then the appeal is a purely legal matter. Racetrac Petroleum, Inc. v. Delco Oil, Inc., 721 So. 2d 376, 377 (Fla. 5th DCA 1998). The instant appeal invokes judicial interpretation of section 768.79, Florida Statutes, and rule 1.442, Florida Rules of Civil Procedure, when determining whether the trial court erred by finding the proposal for settlement insufficiently definite as a matter of law. Therefore, the standard of review is de novo.
Discussion
The Florida Supreme Court has held that awarding attorney’s fees to the prevailing party is a purely substantive legal issue and therefore belongs under the authority of the Legislature. State Farm Mut. Auto. Ins. Co. v. Nichols, 932 So. 2d 1067, 1077 (Fla. 2006); Whitten v. Progressive Cas. Ins. Co., 410 So. 2d 501, 504 (Fla. 1982). The Legislature has determined, in the offer of judgment statute, that:
In any civil action for damages filed in the courts of this state, if a defendant files an offer of judgment which is not accepted by the plaintiff within 30 days, the defendant shall be entitled to recover reasonable costs and attorney fees incurred by her or him . . . from the date of filing of the offer if the judgment is one of no liability or the judgment obtained by the plaintiff is at least 25 percent less than such offer, and the court shall set off such costs and attorney’s fees against the award.
§ 768.79, Fla. Stat. (2002).
Appellee’s underlying PIP lawsuit was a civil action seeking damages for breach of an insurance contract. The Fifth District Court of Appeal, in Nichols v. State Farm Mutual Automobile Insurance Company, 851 So. 2d 742, 744 (Fla. 5th DCA 2003), aff’d, 932 So. 2d 1067, 1070 (Fla. 2006), held that the offer of judgment statute, section 768.79, Florida Statutes, applies to PIP suits. Additionally, the Florida Supreme Court has held that the offer of judgment statute applies to both insurers and insureds without upsetting the purpose of compulsory PIP insurance. Nichols, 932 So. 2d at 1070, 1077.
Rule 1.442, Florida Rules of Civil Procedure, supersedes portions of section 768.79, Florida Statutes, to the extent the statute is inconsistent with the rule’s form and content requirements for proposals for settlement. Fla. R. Civ. P. 1.442(a). Accordingly, rule 1.442, requires that a proposal for settlement must “state with particularity any relevant conditions” and “all nonmonetary terms.” The Florida Supreme Court has determined that the particularity requirements are “fundamental to the purpose underlying the statue and rule.” State Farm Mut. Auto. Ins. Co. v. Nichols, 932 So. 2d 1067, 1078 (Fla. 2006) (quoting Nichols v. State Farm Mut. Auto. Ins. Co., 851 So. 2d 742, 746 (Fla. 5th DCA 2003)).
Appellant contends that the proposed release contained within its proposal for settlement was sufficiently definite as a matter of law because it was a limited release. Further, Appellant argues that the terms of its limited release were specific and succinct, and therefore, should have left Appellee with a clear understanding that the release was limited to claims that were or could have been brought in the underlying case.
Appellant posits that the trial court misapplied the Fifth District’s holding in Nichols v. State Farm, 851 So. 2d 742 (Fla. 5th DCA 2003), because the instant case is distinguishable. In Nichols, the Fifth District Court of Appeal reviewed a proposal for settlement containing a nonmonetary term or relevant condition that the insured “ ‘exe-cute a general release in favor of [the insurer], which will be expressly limited to all claims, causes of action, etc., that have accrued through the date of [Insured’s] acceptance of this proposal.’ ” Nichols, 851 So. 2d at 744-45 (emphasis added). The Fifth District Court of Appeal reversed the trial court’s award of attorney’s fees to the insurer in Nichols because the proposed release may have extinguished a separate claim that arose from the same underlying facts. Nichols, 851 So. 2d at 745.
Rules 1.442(c)(2)(C) and (D), Florida Rules of Civil Procedure, provide that relevant conditions and all nonmonetary terms of the offer be stated with particularity. The terms of any proffered release are subject to this rule. This requirement of particularity is fundamental to the purpose underlying the statute and rule. A proposal for settlement is intended to end judicial labor, not create more. For this reason, a proposal for settlement should be as specific as possible, leaving no ambiguities so that the recipient can fully evaluate its terms and conditions. Moreover, the proposal should be capable of execution without the need for further explanation or judicial interpretation. The rule and statute must be strictly construed because they are in derogation of the common law. . . . Where, as here, a release is requested as a condition of the proposal, either the proposed language of the release or a summary of the substance of the release being sought should be included within the proposal to comply with the requirement that it be “particular.” The terms and conditions of the proposal should be devoid of ambiguity, patent or latent. . . . Because the intent of this release condition could not be determined without resort to clarification or judicial interpretation, we find that it was not sufficiently particular and reverse the judgment awarding attorney’s fees.
Id. at 746 (citations omitted).
Appellant contends that the Fifth District Court of Appeal intimated that had the insurer’s release been a limited release rather than a general release, then the release terms would have been acceptable under the particularity requirement of rule 1.442. Nichols, 851 So. 2d at 745 (“The proffered release was not limited, however to claims or causes of action that were brought (or that were required to have been brought) in the instant lawsuit.”) Appellant argues that the instant release was expressly limited to the claims that could have been or were brought by the Appellant in the instant lawsuit, and the release is specific and unambiguous. Therefore, according to Appellant, the trial court erred in finding the release not sufficiently definite as a matter of law.
Appellee, on the other hand, argues that although the verbiage of the proposed release in Nichols is slightly different, the holding is directly on point. Specifically, Appellee argues that the language of the proposed release was not limited, but if the proposal was accepted, Appellee’s uninsured or underinsured motorist claim would have been extinguished.
Appellee compares the present case to Dryden v. Pedemonti, 910 So. 2d 854 (Fla. 5th DCA 2005). In Dryden, the Fifth District Court of Appeal held the following language of release in a proposal for settlement too ambiguous as a matter of law:
“[R]elease of All Claims against the Defendant and all persons legally liable for the Defendant’s actions in connection with the incident upon which the above styled cause of action is based, including the provision under which the Releasor shall indemnify and hold harmless their Releasees as to any and all liens and subrogated interests of any third party by virtue of any services or benefits provided by the Releasor, including, but not limited to, hospital liens, doctor’s liens, worker’s compensation liens, CHAMPUS liens, and any other liens. . .”
Dryden, 910 So. 2d at 855 (quoting Dryden’s summary of the release contained within its proposal for settlement) (emphasis added).
Determining whether the plaintiff’s extrinsic claims would be extinguished by the proposed release required clarification, and according to Dryden, “[t]he burden for clarifying the intent or extent of a settlement proposal cannot be placed on the party to whom the proposal is made.” Id. Appellee points out that the language of the proposed release in Dryden is nearly identical to the present release language. Therefore, according to Appellee, the release language in the present case is too ambiguous as a matter of law to determine whether or not Appellee’s extrinsic claims would be barred by accepting Appellant’s proposal for settlement.
In State Farm Mutual Automobile Insurance Company v. Nichols, 932 So. 2d 1067, 1079 (Fla. 2006), the Florida Supreme Court agreed that rule 1.442, Florida Rules of Civil Procedure, does not require the impossible and due to the nature of language, some ambiguity may be acceptable. The Florida Supreme Court held, however, that relevant conditions or nonmonetary terms must “be sufficiently clear and definite to allow the offeree to make an informed decision without needing clarification.” Nichols, 932 So. 2d at 1079. The Fifth District Court of Appeal in Nichols, 851 So. 2d at 746, held that a release within a proposal for settlement is a condition and a nonmonetary term. Therefore, it appears necessary to read the relevant conditions and the nonmonetary terms in conjunction when evaluating whether the release was sufficiently definite under rule 1.442.
The relevant conditions of Appellant’s Proposal for Settlement were “construed as including any and all . . . damages that may be awarded in final judgment, including costs and attorneys’ fees in the above referenced litigation.”(R. 152 (emphasis added).) Thus, the proposal was limited to the claims only brought in this case. A fair reading of Appellant’s relevant conditions specifically limits the proposal for settlement to this litigation. The nonmonetary terms, containing the language of release, again specifically referenced “the above styled cause.” (R.152.) Additionally, in paragraph nine of the Proposal for Settlement, Appellant repeats that “[t]his Proposal for Settlement is being made in an effort to resolve the case and to avoid future costs and fees.” (R. 153 (emphasis added).) A plain reading of the entire Proposal for Settlement specifically limits it to the actual case being litigated here. The release terms in Dryden, on the other hand, keep a release for “ ‘[a]ll claims . . . in connection with the incident upon which the above styled cause of action is based. . . .’ ” Dryden v. Pedemonti, 910 So. 2d 854, 855 (Fla. 5th DCA 2005) (quoting Dryden’s summary of release contained within its proposal for settlement) (emphasis added). Dryden‘srelease therefore could have included any claims arising out of the incident, but not brought, in that specific case. The release here, however, is clear that it applies only to claims in this case, and not all claims arising out of the incident upon which this case is based. Therefore, the release here, unlike the release in Dryden, when properly read in conjunction with the relevant conditions, does not create any ambiguity about whether Appellee’s acceptance of the Proposal would have extinguished a potential uninsured or underinsured motorist claim.
Motions for Sanctions and Appellate Attorney’s Fees
Appellee moves for sanctions against Appellant and Appellant’s attorney pursuant to section 57.105, Florida Statutes, based on Appellee’s contention that Appellant argued the wrong standard of review and Appellant’s position that the release was a limited release. Based upon the above reasoning, it is clear that Appellant stated the correct standard of review and Appellant’s claim was meritorious, and therefore, Appellee’s motion for sanctions is denied.
Additionally, Appellee moves for appellate attorney’s fees pursuant to section 627.428, Florida Statutes, in the event that this Court renders a judgment in Appellee’s favor on appeal. Based on the above reasoning Appellee’s motion for appellate attorney’s fees lacks merit.
Appellant timely filed its motion for appellate attorney’s fees pursuant to rule 9.400(b), Florida Rules of Appellate Procedure. While section 627.428, Florida Statutes, appears to only allow for attorney’s fees to prevailing insureds and not to prevailing insurers, the Florida Supreme Court recently clarified this question. State Farm Mut. Auto. Ins. Co. v. Nichols, 932 So. 2d 1067, 1073-75 (Fla. 2006). The Florida Supreme Court held that when the insurer makes an offer to settle that includes damages, attorney’s fees, and costs that is later rejected by the insured, the insured can no longer claim the protection of section 627.428, and section 768.79, Florida Statutes, then applies. Nichols, 932 So. 2d at 1073. Additionally, the Florida Supreme Court held that the offer of judgment statute applies to both insureds and insurers. Id. at 1070, 1077. Appellate attorney’s fees are therefore recoverable under section 768.79, Florida Statutes. See Williams v. Brochu, 578 So. 2d 491, 495 (Fla. 5th DCA 1991) (holding a successful defendant on appeal is entitled to recover reasonable costs and attorney’s fees under section 768.79), abrogated on other grounds, White v. Steak & Ale of Fla., Inc., 816 So. 2d 546 (Fla. 2002). Therefore, because this appears to be exactly the type of situation contemplated by Nichols, Appellant’s Motion for Appellate Attorney’s Fees is granted.
Accordingly, it is hereby ORDERED and ADJUDGED that:
1) The trial court’s December 7, 2005, “Order Regarding November 3, 2005 Hearing” is REVERSED and REMANDED for a determination of appropriate fees and costs;
2) Appellee’s Motion for Sanctions is DENIED;
3) Appellee’s Motion for Appellate Attorney’s Fees is DENIED; and
4) Appellant’s Motion for Appellate Attorneys’ Fees is GRANTED. This matter is remanded to the trial court to determine the amount of appellate attorney’s fees due to Appellant.
