18 Fla. L. Weekly Supp. 882a
Online Reference: FLWSUPP 1809WALT
Insurance — Personal injury protection — Motion for final judgment is denied as unnecessary where insurer’s payment of benefits at issue, attorney’s fees, and costs pursuant to settlement has rendered case moot — No merit to argument that medical provider needs judgment in its favor in order to pursue bad faith claim
PHYSICIANS GROUP LLC., As assignee of Charmain Walters, Plaintiff, v. USAA GENERAL INDEMNITY COMPANY, Defendant. County Court, 13th Judicial Circuit in and for Hillsborough County, Civil Division. Case No. 10-CC-017468, Div. L. April 14, 2011. Honorable Joelle Ann Ober, Judge.
ORDER DENYING PLAINTIFF’S MOTION FOR FINAL JUDGMENT, DENYING DEFENDANT’S MOTION FORSANCTION IN ACCORDANCE WITH SECTION 57.105,AND ORDER GRANTING DEFENDANT’S MOTIONFOR DISMISSAL WITH PREJUDICE
This matter came on to be heard on the Plaintiff, Physicians Group, LLC, Motion for the Entry of a Final Judgment as against the Defendant, USAA, and Defendant’s Motion for Sanctions and after reviewing the court file, reviewed the applicable case authority, and having heard argument of counsel it is ORDERED AND ADJUDGED:
1. There is no dispute that after suit was filed USAA fully paid the benefits claimed due, including interest. Upon payment, USAA stipulated that Plaintiff was entitled to an award of a reasonable attorney’s fees and costs. Later the amount of attorney’s fees and taxable costs were agreed to and paid in full by the Defendant, USAA, without exception being taken the Plaintiff. Thus, there is nothing that remains due or owing by the Defendant to the Plaintiff in the instant litigation.
2. Notwithstanding the foregoing, the Plaintiff asserts that it is entitled to the entry of a judgment in its favor based upon the settlement, although it has provided this Court with no authority for its contention. The Defendant, in turn, points out that because the matter is settled it is therefore moot and accordingly the Court has no jurisdiction other than to enter a dismissal with prejudice. The Court agrees with the Defendant, but denies the Defendant’s Motion for Sanctions.
3. In this ruling, the Court is aware that for the limited purpose of imposing attorney’s fees under Section 627.428, Florida Statutes in a case that was contested and then later settled by an insurer after suit is filed that in Wollard v. Lloyd’s and Companies of Lloyd’s, 439 So. 2d 217, 218 (Fla. 1983) the Supreme Court of Florida created the “legal fiction” that the settlement of a disputed case is the “functional equivalent of a confession of judgment or verdict in favor of the insured” for purposes of holding that when an insurer settles a disputed case, the Plaintiff is entitled to an award of attorney’s fees. Nevertheless that the holding of Wollard does not support the Plaintiff’s contention that an actual judgment should be entered against the insurer in a disputed claim it settled. The settlement of an insurance claim by an insurer after suit is filed is not the equivalent of an adjudication on the merits.
4. Rather, the import of Wollard is that it distinguished the holding in American Home Assurance Co. v. Keller Industries, 347 So. 2d 767 (Fla. 3d DCA 1977), cert. dismissed, 367 So. 2d 1124 (Fla. 1979) and the decisions of four other district courts of appeal. In Keller Industries, the Third District adopted the rule that “a negotiated settlement between an insured and his insurer does not entitle the insured to attorney’s fees pursuant to Section 627.428, Florida Statutes (1979)1.” The Third District had required entry of a judgment in favor of the insured on the claim under the insurance policy as a condition precedent to the award of attorney’s fees. Thus, in the absence of a judgment in favor of the insured, the appellate court ruled that the trial court is without jurisdiction to award attorney’s fees.
5. In contrast, the Fourth District in Cincinnati Ins. Co. v. Palmer, 297 So. 2d 96 (Fla. 4th DCA 1974) which quoted the language of section 627.428 but reasoned:
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 insured or beneficiary at some point after suit is filed but before final judgment is entered, thereby making unnecessary the entry of a final judgment. . . . We think the statute must be construed to authorize the award of an attorney’s 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 judgment for the loss claimed is thereafter entered favorable to the insured or beneficiary due to the insurer voluntarily paying the loss before such judgment can be rendered. After all, such voluntary payment is the equivalent of a confession of judgment against it.
297 So. 2d at 99.
6. The Supreme Court in Wollard court agreed with the policy reasoning expressed in the holding of Palmer.
[T]he statutory obligation for attorney’s fees cannot be avoided simply by paying the policy proceeds after suit is filed but before a judgment is actually entered because to so construe the statute would do violence to its purpose, which is to discourage litigation and encourage prompt disposition of valid insurance claims without litigation.
Gibson v. Walker, 380 So. 2d at 533.
7. In Wollard, the Supreme Court further explained:
When the insurance company had 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 exalts form over substance to the detriment of public policy, and such a result is clearly absurd.
439 So. 2d at 218.
8. Thus, it is clear that while the Supreme Court in Wollard found the payment of the claim is the “functional equivalent of a confession of judgment,” nevertheless the sole and limited purpose of the Wollard legal fiction is that it was created to allow for attorney’s fees to be paid when a settlement occurs after a lawsuit is filed without a judgment actually being entered. See Basik Exports & Imports, Inc. v. Preferred Nat’l Ins. Co., 911 So. 2d 291 (Fla. 4th DCA 2005) [30 Fla. L. Weekly D2359a] (by using the legal fiction of a confession of judgment, our supreme court extended section 627.428’s application to situations where the insurer settles the first party claim against the insured before rendition of judgment); see also Central Magnetic Imaging v. State Farm Mut. Auto. Ins. Co., 745 So. 2d 405 (Fla. 3d DCA 1999) [24 Fla. L. Weekly D2438b](auto insurer’s payment of personal injury protection benefits in response to provider’s letter demanding arbitration acted as a settlement of the action and was equivalent to a confession of judgment, for purposes of determining entitlement to attorney’s fees). However, nowhere in the Wollard decision or in any case cited by the Plaintiff in this case did the Supreme Court require that the insurer file a document entitled “confession of judgment” nor did it instruct that when a settlement occurs that a final judgment should be entered against an insurer who simply settled a claim.
9. The Defendant has argued that insurers settle claims for a variety of reasons that have nothing to do with the merits of the claim. A judgment, however, is on the merits. Final judgments or orders “determine the rights and liabilities of all parties with reference to the matters in controversy and leave nothing of a judicial character to be done.” McGurn v. Scott, 596 So. 2d 1042, 1043 (Fla. 1992)(quoting Gore v. Hansen, 59 So. 2d 538, 539 (Fla. 1952) receded from on other grounds, Westgate Miami Beach, Ltd. v. Newport Operating Corp., ___ So. 3d ___, 2010 WL 5110237 (Fla. 2010) [35 Fla. L. Weekly S735a]. If the court grants Plaintiff’s Motion for Final Judgment, it would be rendering a ruling on the merits of this case. In Allstate Ins. Co. v. All Care Medical & Rehab Center, Inc., a/a/o Romulo Fernandez, 13 Fla. L. Weekly Supp. 1062b (Fla. 11th Jud. Cir. 2006) a de facto confession of judgment occurred when the insurer paid the claim in full after suit was filed, and no justiciable issue of law or fact on the merits of the case existed for determination when cross-motions for summary judgment regarding a demand letter issue were filed and summary judgment was entered in favor of the medical provider. The only remaining issue before the court was the entitlement and amount of attorney’s fees, which was not the subject of the summary judgment. The appellate court reversed the final summary judgment and remanded with instructions to the lower court to dismiss and reserve jurisdiction to address attorney’s fees and cost issues. Id.
10. The Plaintiff has argued that it needs a judgment in its favor “on the merits” in order to proceed with a possible bad faith claim arising out of the settlement. This is not correct. In Scott v. Progressive Express Ins. Co., 932 So. 2d 475 (Fla. 4th DCA 2006) [31 Fla. L. Weekly D1551a], the Fourth District held that a settlement of the insured’s PIP claim did not preclude a bad faith action for punitive damages. Thus, the fact that a PIP claim is settled without a judgment being entered will not preclude the insured from pursuing other remedies, if warranted.
11. Finally, by way of comparison the Defendant points out that in Erhardt v. Duff, 729 So. 2d 529 (Fla. 4th DCA 1999) [24 Fla. L. Weekly D943a] the Fourth District held that the execution of a release is an implicit part of a tender of payment. Analogously, dismissal of the suit is inherent and implicit when full payment of the benefits has been tendered along with a stipulation that Plaintiff is entitled to attorney’s fees.
12. Since USAA has paid the benefits at issue in the underlying matter and has paid the Plaintiff its attorney’s fees and costs the case is now moot and the entry of the Plaintiff’s Motion for Final Judgment is unnecessary.
WHEREFORE, it is ORDERED AND ADJUDGED the Plaintiff’s Motion for Entry of a Final Judgment based upon the post suit settlement by the Defendant, USAA, is DENIED. And although the Court agrees with Defendant that there is now legal authority for the entry of a final judgment in favor or the Plaintiff, the Defendant’s Motion for Sanctions is DENIED. Based upon the settlement of the Plaintiff’s claim, to include attorney fees and costs the exists no further actual controversy this matter is now moot. Therefore, as requested by the Defendant in its ore tenus motion to dismiss this matter is hereby DISMISSED WITH PREJUDICE.
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1§627.428(1), Florida Statutes provides that “upon the rendition of a judgment or decree by any of the court of this state against an insurer and in favor of an insured or the named beneficiary under a policy or contract. . . , the trial court, . . . . shall adjudge or decree against the insurer and in favor of the insured or beneficiary a reasonable sum as fees or compensation for the insured’s or beneficiary’s attorney prosecuting the suit in which recovery is had.”
