17 Fla. L. Weekly Supp. 201a
Online Reference: FLWSUPP 1703GRE2Insurance — Personal injury protection — Attorney’s fees — Justiciable issues — Where accident occurred after insured’s policy was cancelled for nonpayment of premiums, prevailing insurer is entitled to award of attorney’s fees and costs pursuant to section 57.105 — Proposal for settlement — Insurer is also entitled to attorney’s fees and costs where plaintiff failed to accept proposal for settlement within 30 days
CYNTHIA GREEN, Plaintiff, v. UNITED AUTOMOBILE INSURANCE COMPANY, a Florida corporation, Defendant. County Court, 11th Judicial Circuit in and for Miami-Dade County. Case No. 08-05000 SP 05. December 9, 2009. Shelley Kravitz, Judge. Counsel: Aubrey Rudd, for Plaintiff. Majid Vossoughi, for Defendant.
ORDER GRANTING DEFENDANT’S MOTION FOR ATTORNEY’S FEES AND COSTS
THIS CAUSE came before the Court on the 12th day of November 2009 on Defendant’s Motion for Attorney’s Fees and Costs and was heard at 11:00 A.M. at the Miami-Dade County Courthouse, 73 West Flagler Street, Miami, Florida 33131. Majid Vossoughi, Esq., appeared on behalf of the Defendant, United Automobile Insurance Company, and Aubrey G. Rudd, Esq., appeared on behalf of the Plaintiff, Cynthia Green. This Court reviewed Defendant’s Motion for Attorney’s Fees and Costs and having heard argument from counsel for both parties and being otherwise fully advised in the premises makes the following factual findings and conclusions of law.
FACTUAL FINDINGS
1. On 02/29/08, and prior to the filing of the instant lawsuit, Defendant corresponded with the Plaintiff, Cynthia Green, and advised that Defendant’s policy of insurance with Jadean Liburd, the policy of insurance under which Plaintiff claims PIP benefits, was not in effect at the time of Plaintiff’s alleged accident of 05/18/07 and that same was cancelled prior to the date of Plaintiff’s alleged accident.
2. On 03/17/08 Plaintiff, Cynthia Green, filed its Complaint against Defendant alleging Breach of Contract for non-payment of PIP benefits. Specifically, Plaintiff alleged that the Defendant failed to pay PIP benefits in violation of Florida’s No-Fault Law for services rendered by Comprehensive Healthcare Centers.
3. Defendant disclaimed liability for PIP benefits and asserted that the policy of insurance issued to Jadean L. Liburd expired at 12:01 A.M. on 05/07/07 and prior to Plaintiff’s alleged accident of 05/18/07 for non-payment of additional premiums. Accordingly, Defendant claimed that at the time of the accident of 05/18/07 there was no contract of insurance with Defendant that would otherwise inure to the benefit of Plaintiff.
4. On 05/13/08 and in an effort to terminate the litigation in this matter, counsel for Defendant corresponded with counsel for Plaintiff and notified Plaintiff and counsel for Plaintiff that the loss alleged within the Complaint occurred outside of Defendant’s policy period due to cancellation of the policy of insurance for non-payment of additional premiums pursuant to Fla. Stat. 627.7282.
5. On 09/23/08, Defendant served Plaintiff with a proposal for settlement pursuant to Fla. R. Civ. Pro. 1.442 and Fla. Stat. 768.79; however, Plaintiff did not accept the proposal within thirty (30) days causing it to be considered rejected under the applicable rule and statute.
6. On 10/09/08, Defendant furnished Plaintiff with a copy of Defendant’s entire claim file excluding privileged documents as well as a copy of Defendant’s entire underwriting file. Defendant also provided sworn responses to Interrogatories which once again re-iterated and notified Plaintiff that Defendant’s policy of insurance expired on 05/07/07 and prior to Plaintiff’s alleged accident of 05/18/07 and that there was no contract of insurance with Defendant that would otherwise inure to the benefit of Plaintiff.
7. On 02/17/09, Defendant served Plaintiff with its Motion for Final Summary Judgment and Motion for 57.105 Attorney’s Fees along with correspondence pursuant to Fla. Stat. 57.105 seeking dismissal of the action within twenty (21) days without further litigation. Defendant, once again, placed Plaintiff on notice that its alleged breach of contract action fails as a matter of law since at the time of the alleged accident there was no contract of insurance that would inure to the benefit of Plaintiff.
8. By means of an affidavit from its Underwriting Supervisor, Jorge De La O, and in support of its motion for summary judgment, Defendant authenticated the documents relied upon by the Defendant and notified Plaintiff that statutory notices pursuant to Fla. Stat. 627.7282 were provided to Defendant’s insured, that the insured was notified of additional premiums due under the policy in the amount of $422.18, that the insured was notified that failure to pay the additional premium will result in cancellation of his policy , and that the insured failed to pay the additional premiums due under his policy resulting in the cancellation of the policy prior to Plaintiff’s alleged loss. Defendant further advised Plaintiff, under oath, that no other policies of insurance issued by Defendant inure to the benefit of the Plaintiff.
9. Despite the foregoing, Plaintiff did not avail itself of the twenty (21) day safe harbor provision of Fla. Stat. 57.105 and failed to and/or refused to dismiss its Complaint.
10. On 03/17/09 Defendant reserved and filed its previously served Motion for Final Summary Judgment and Motion for 57.105 Attorney’s Fees with the Court and a hearing on said motion was coordinated and set for 05/07/09 @ 2:00 P.M.
11. On 05/07/09 this Court granted Defendant’s Motion for Final Summary Judgment and on 06/08/09 this Court entered Final Judgment in Favor of Defendant reserving jurisdiction to award Defendant attorney’s fees and costs. On 06/09/09 Defendant served Plaintiff with Defendant’s Motion for Attorney’s Fees and Costs.
12. Defendant asserts that it is entitled to an award of attorney’s fees and costs pursuant to Fla. Stat. 57.105 as well as previously served and rejected Offer of Judgment pursuant to Fla. Stat. 768.79. This Court agrees.
LEGAL ANALYSIS
1. Fla. Stat. 57.105 provides:
(1) Upon the court’s initiative or motion of any party, the court shall award a reasonable attorney’s fee to be paid to the prevailing party in equal amounts by the losing party and the losing party’s attorney on any claim or defense at any time during a civil proceeding or action in which the court finds that the losing party or the losing party’s attorney knew or should have known that a claim or defense when initially presented to the court or at any time before trial:
(a) Was not supported by the material facts necessary to establish the claim or defense; or
(b) Would not be supported by the application of then-existing law to those material facts.
However, the losing party’s attorney is not personally responsible if he or she has acted in good faith, based on the representations of his or her client as to the existence of those material facts. If the court awards attorney’s fees to a claimant pursuant to this subsection, the court shall also award prejudgment interest.
(2) Paragraph (1)(b) does not apply if the court determines that the claim or defense was initially presented to the court as a good faith argument for the extension, modification, or reversal of existing law or the establishment of new law, as it applied to the material facts, with a reasonable expectation of success.
(3) At any time in any civil proceeding or action in which the moving party proves by a preponderance of the evidence that any action taken by the opposing party, including, but not limited to, the filing of any pleading or part thereof, the assertion of or response to any discovery demand, the assertion of any claim or defense, or the response to any request by any other party, was taken primarily for the purpose of unreasonable delay, the court shall award damages to the moving party for its reasonable expenses incurred in obtaining the order, which may include attorney’s fees, and other loss resulting from the improper delay.
2. Fla. Stat. 57.105 provides for the basis of sanctions against parties and attorneys who assert a frivolous claim or defense or pursue litigation for purposes of delay. The purpose of the statute is to “discourage baseless claims, stonewall defenses, and sham appeals in civil litigation by placing the price tag of attorney’s fees awards on the losing party.” Murphy v. WISU Props., Ltd., 895 So.2d 1088, 1093 (Fla. 4th DCA 2004); Muckenfuss v. Deltona Corp., 508 So.2d 340, 341 (Fla. 1987) [quoting Whitten v. Progressive Cas. Ins. Co., 410 So.2d 501 (Fla. 1982)].
3. Use of the word “shall,” in context of statute establishing attorney fees for frivolous claims to be paid in equal amounts by the losing party and the losing party’s attorney, evidences the legislative intention to impose a mandatory penalty in the form of a reasonable attorney’s fee once the determination has been made that there was a complete absence of a justiciable issue raised by the losing party. Morton v. Heathcock, 913 So.2d 662 (Fla. 3rd DCA 2005), rehearing denied, review dismissed 925 So.2d 1031; Wright v. Acierno, 437 So.2d 242 (Fla. 5th DCA 1983); Debra, Inc. v. Orange County, App. 445 So.2d 404 (Fla. 5th DCA 1984).
4. This Court further finds that Defendant is the “prevailing party” for purposes of a fee award as the Court entered Final Judgment in favor of the Defendant on 06/08/09.
5. For purposes of award of attorney fees for asserting frivolous claim or defense, frivolousness is measured when the claim or defense is initially presented. Carnival Leisure Industries, Ltd. v. Holzman, 660 So.2d 410 (Fla. 4th DCA 1995).However, under amended version of statute authorizing attorney fees for frivolous claims, a party may be subject to fees if a claim is not dropped or dismissed when it becomes evident it is no longer justiciable, even though it may not have been frivolous when filed. Albritton v. Ferrera, 913 So.2d 5 (Fla. 1st DCA 2005).
6. In the instant matter Plaintiff’s claim for PIP benefits was unsupported by material facts to establish a claim for PIP benefits under Defendant’s policy of insurance from inception. The policy of insurance sued upon was cancelled as of 12:01 A.M. on 05/07/07 for non payment of additional premiums and prior to Plaintiff’s alleged accident of 05/18/07. The accident in the instant matter had occurred outside of Defendant’s policy period, nevertheless Plaintiff attempted to state a cause of action for breach of contract despite the non-existence of a policy of insurance on the date of the accident.
7. Plaintiff’s claim was not only unsupported by material facts necessary to establish the claim, but it was also unsupported by application of then existing law to those material facts. A cause of action for breach of contract has three elements: (i) a valid contract; (ii) a material breach; and (iii) damages. J.J. Grumberg Co., v. Janis Services, Inc., 847 So.2d 1048 (Fla. 4th DCA 2003). Under no circumstances was Plaintiff to establish a cause of action for breach of contract when there was no contract of insurance that would have otherwise inured to Plaintiff’s benefit on the date of its alleged loss. Significantly, Plaintiff was also notified of lack of coverage both prior to and subsequent to filing suit.
8. Accordingly, this Court finds that the Defendant is entitled to reasonable attorney’s fees and costs pursuant to Fla. Stat. 57.105.
9. Fla. Stat. 768.79(1) provides in pertinent part:
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’s fees incurred by her or him or on the defendant’s behalf pursuant to a policy of liability insurance or other contract 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.
10. Pursuant to Fla. Stat. 768.79(1), a defendant is entitled to an award of reasonable costs and attorney’s fees if the defendant’s offer of judgment is not accepted and if the judgment ultimately obtained is one of no liability or is at least twenty-five percent less than the offer. See Fla. Stat. 768.79; see also; Disney v. Vaughen, 804 So. 2d 581, 583 (Fla. 5th DCA 2002) (under §768.79, a defendant in any civil action for damages is entitled to reasonable costs and attorney’s fees if the defendant’s offer of judgment is not accepted and if the judgment is for no liability or is at least 25% less than the offer); see also; U.S. Security Ins. Co. v. Cahuasqui, 760 So. 2d 1101, 1103 (Fla. 3rd DCA 2000); Nichols v. State Farm Mutual, 2003 WL 21359343 (Fla. App. 5th DCA June 13, 2003) [28 Fla. L. Weekly D1404a] (offer of Judgment statute which entitles the defendant to reasonable costs and attorney’s fees is applicable to “any civil action”, which includes PIP actions); Tran v. State Farm Fire & Casualty Co., 860 So. 2d 1000 (1st DCA 2003) (“Section 768.79, Florida Statutes, applies to cases brought pursuant to section 627.736, Florida Statutes, and to cases pending in small claims court”).
11. On 09/23/08 Defendant served upon counsel for Plaintiff a proposal for settlement and same was not accepted within thirty (30) days, causing it to be considered rejected under the applicable rule and statute. The Plaintiff did not accept the proposal within (30) days, rather it chose to engage in litigation over a claim that had no merit at its inception.
12. On 06/08/09 this Court entered final judgment in favor of the Defendant [16 Fla. L. Weekly Supp. 753a] and, accordingly, this Court finds that Defendant is also entitled to reasonable attorney’s fees and costs pursuant to Fla. Stat. 768.79.
13. Based on this Court’s analysis set forth above, it is
ORDERED AND ADJUDGED that Defendant’s Motion for Attorney’s Fees & Costs is Granted. If the parties are not able to agree on the amount, Defendant’s attorney may request that the Court set the matter for evidentiary hearing.
