20 Fla. L. Weekly Supp. 1232a
Online Reference: FLWSUPP 2012PEREInsurance — Personal injury protection — Attorney’s fees — Proposal for settlement — Language of rule 1.442(d) and section 768.79(3) providing that proposal for settlement shall not be filed “unless necessary to enforce” provisions of rule and statute does not mandate that party must file proposal for settlement prior to time it seeks to enforce entitlement to attorney’s fees — Fact that insurer did not file proposals for settlement until day after hearing on motion for entitlement to attorney’s fees does not invalidate proposals — Ambiguity — Proposal that specified how much insurer was offering for each of two counts was not ambiguous for failing to include a total amount offered for both counts — Good faith offer — $100 settlement proposal was made in good faith where insurer had reasonable basis to believe that it was not liable for loss based on fact that vehicle that insured was driving at time of accident belonged to her mother and was not covered under insured’s PIP policy, case law and grant of insurer’s original motion for summary judgment on coverage issue by predecessor judge
ROSAIDA PEREZ, Plaintiff, v. UNITED AUTOMOBILE INSURANCE COMPANY, Defendant. County Court, 11th Judicial Circuit in and for Miami-Dade County. Case No. 00-264 CC 24. May 3, 2013. Honorable Rodolfo Ruiz, Judge. Counsel: Scott J. Jontiff, Miami, for Plaintiff. Paula Ferris, Office of the General Counsel-Trial Division, Miami, for Defendant.
ORDER GRANTING DEFENDANT’S MOTIONFOR ENTITLEMENT TO ATTORNEY’S FEES
THIS CAUSE came before the Court on January 15, 2013 on Defendant’s, UNITED AUTOMOBILE INSURANCE COMPANY (“United”), Motion for Entitlement to Attorney’s Fees. The Court having heard argument of counsel, as well as reviewed the file and procedural history, including hearing transcripts, pleadings, relevant legal authority, and supplemental documents, and being otherwise fully advised in the premises, ORDERS and ADJUDGES that United’s Motion for Entitlement to Attorney’s Fees is hereby GRANTED pursuant to its Proposal for Settlement dated December 11, 2008.
BACKGROUND
On August 29, 1999, Rosaida Perez (“Perez”) was involved in an automobile collision while driving a 1996 Mercury Villager (the “Mercury”) owned by and registered to her husband, Luis Perez, and her mother, Luisa Corzo. Perez allegedly sustained injuries requiring medical treatment, and submitted bills for payment of her personal injury protection (“PIP”) benefits to United. However, United denied PIP coverage given that the policy at issue did not insure the Mercury involved in the accident, and notified Perez that there was no coverage for the subject loss pursuant to Section 627.736(2)(a) of the Florida Statutes. See Fla. Stat. § 627.736(2)(a) (2012) (“Any insurer may exclude benefits . . . [f]or injury sustained by the named insured and relatives residing in the same household while occupying another motor vehicle owned by the named insured and not insured under the policy . . .”) (emphasis added). Suit was subsequently filed in this matter on January 27, 2000, and United answered the complaint on February 29, 2000 asserting that there was no coverage for the subject loss.
Ultimately, United’s third motion for summary judgment as to coverage was granted by a predecessor judge of this Court on July 6, 2012. The Court, analyzing the statutory language of Section 627.736(2)(a), and relying on Guerrero v. United Auto. Ins. Co., 9 Fla. L. Weekly Supp. 224b (Fla. 11th Cir. Ct. App. Feb. 12, 2002) and Quality Med. Group, Inc. v. United Auto. Ins. Co., 16 Fla. L. Weekly Supp. 821a (Fla. 11th Cir. Ct. App. Jul. 8, 2009), found that the subject policy was not intended to cover, and did not in fact cover, the Mercury driven by Perez. See Perez v. United Auto. Ins. Co., 19 Fla. L. Weekly Supp. 877b at 3 (Fla. 11th Miami-Dade Cty. Ct. Jul. 11, 2012). Consequently, the clear language of the subject policy excluded coverage. Id. at 4. Final Judgment for United was subsequently entered on July 27, 2012, and United served its Motion for Entitlement to Attorney’s Fees on August 2, 2012 (“Motion for Entitlement”) seeking an award of attorney’s fees pursuant to its proposals for settlement.Proposals for Settlement
During the pendency of this action, United served two proposals for settlement pursuant to Section 768.79 of the Florida Statutes and Rule 1.442 of the Florida Rules of Civil Procedure. The first proposal was submitted on December 11, 2008 (the “2008 Proposal”) and offered a total amount of $100.00 for Count I, broken down into $50.00 to settle all PIP benefits at issue and interest thereon, and $50.00 to resolve all claims for attorney’s fees and costs pled as part of Count I. The 2008 Proposal further offered $10.00 to settle all claims for attorney’s fees and costs pled as part or Count II, and nothing was offered for damages under Count II. A second proposal for settlement was submitted on April 1, 2011 (the “2011 Proposal,” and together with the 2008 Proposal, the “Proposals”) in the total amount of $100.00. Pursuant to the 2011 Proposal, $50.00 was offered for attorney’s fees and costs, and $50.00 was offered for PIP benefits. Plaintiff did not accept either proposal for settlement.
ANALYSIS AND CONCLUSIONS OF LAW
Plaintiff disputes United’s entitlement to fees because (1) the Proposals were not timely filed with the Court before the January 15, 2013 hearing on this matter and therefore did not comply with Section 768.79 and Rule 1.442; (ii) the 2008 Proposal did not comply with Rule 1.442 because the offer did not contain a total amount; and (iii) the Proposals were not made in good faith. The Court shall address each of the aforementioned arguments in turn.
(i) United’s failure to attach the Proposals to its timely filed Motion for Entitlement does not invalidate the Proposals.
In this case, it is undisputed that Plaintiff was properly served with the Proposals and United timely filed its Motion for Entitlement under Rule 1.525. See Fla. R. Civ. P. 1.525 (“Any party seeking a judgment taxing costs, attorneys’ fees, or both, shall serve a motion no later than 30 days after filing of the judgment”). However, the Proposals themselves were not filed with the Court until after the hearing on the Motion for Entitlement. Plaintiff maintains that pursuant to Rule 1.442(d) and Section 768.79(3) proposals must be filed prior to the time a party seeks to enforce an entitlement to attorneys’ fees, and therefore United’s Motion for Entitlement must be denied. See Fla. R. Civ. P. 1.442(d) (“A proposal shall be served on the party or parties to whom it is made but shall not be filed unless necessary to enforce the provisions of this rule.”) (emphasis added); Fla. Stat. § 768.79(3) (2012) (“The offer shall be served upon the party to whom it is made, but it shall not be filed unless it is accepted or unless filing is necessary to enforce the provisions of this section.”) (emphasis added).
There is no question that the offer of judgment statute is penal in nature and cannot be extended by construction. Campbell v. Goldman, 959 So. 2d 223 (Fla. 2007) [32 Fla. L. Weekly S320a] (explaining that strict construction of the language in Section 768.79 and Rule 1.442 is applicable to both the substantive and procedural portions of the statute). Consequently, Section 768.79 and Rule 1.442 must be strictly construed in favor of the one against whom the penalty is imposed. Sarkis v. Allstate Ins. Co., 863 So. 2d 210, 223 (Fla. 2003) [28 Fla. L. Weekly S740a]; see also Willis Shaw Express, Inc. v. Hilyer Sod, Inc., 849 So. 2d 276, 278 (Fla. 2003) [28 Fla. L. Weekly S225a] (holding that the language of Rule 1.442 “must be strictly construed because the offer of judgment statute and rule are in derogation of the common law rule that each party pay its own fees.”).
However, the Florida Supreme Court has held that a party may not be precluded from recovering attorney’s fees and costs due to the timing of filing its proposals for settlement. Frosti v. Creel, 979 So. 2d 912, 916 (Fla. 2008) [33 Fla. L. Weekly S199b]. In Frosti, the Court addressed the premature filing of a proposal for settlement before the entry of Final Judgment. Id. The Court noted that “[n]o decision from this Court or a district court of appeal has defined ‘necessary to enforce’ as it is used in rule 1.442 or section 768.79.” Id. at 915. More importantly, the Court went on to hold that “[n]either the rule nor the statute unambiguously defines when a proposal for settlement should be filed.” (emphasis added) Id. at 916. Hence, the Court ultimately found that the trial court erred in denying the timely filed motion for attorney fees under Rule 1.525 based on the premature filing of proposals for settlement. Id.
In this case, although United’s Proposals were not part of the record when their Motion for Entitlement was heard on January 15, 2013 (after which this Court reserved ruling), United subsequently cured this deficiency in the record by filing the Proposals at issue on January 16, 2013 in support of their Motion. Moreover, although the instant ease is slightly different from Frosti given that the Proposals were filed a day after the Motion for Entitlement was heard and not prematurely, Frosti nevertheless stands for the proposition that “necessary to enforce” as used in Rule 1.442 or Section 768.79 does not mandate that a proposal “must” be filed prior to the time a party seeks to enforce an entitlement to attorney’s fees. Consequently, strict construction of the language contained in both Rule 1.442 and Section 768.79 does not invalidate United’s Proposals simply because they were filed shortly after United’s Motion for Entitlement was heard by this Court.
(ii) United’s 2008 Proposal is unambiguous and therefore valid.
Plaintiff posits that United’s failure to identify the “total amount” offered pursuant to its 2008 Proposal renders said proposal ambiguous and invalid pursuant to Rule 1.442(c)(2)(d) and Section 768.79(2)(d). See Fla. R. Civ. P. 1.442(c)(2)(D) (“A proposal shall . . . state the total amount of the proposal and state with particularity all nonmonetary terms of the proposal”); Fla. Stat. § 768.79(2)(d) (2012) (“An offer must . . . [s]tate its total amount.”). The 2008 Proposal provides, in pertinent part, as follows:
4.) The total amount of this Proposal for Count I is ONE HUNDRED DOLLARS ($100.00). The amount of $50.00 dollars is offered to settle all PIP benefits at issue and interest thereon and $50.00 is offered to resolve all claims for attorney’s fees and costs which are pled as part of the legal claim in the above styled lawsuit for Count I.
5.) The total amount of this Proposal for Count II is TEN DOLLARS ($10.00). There being no damages in Count II, zero is offered for damages, the amount of $10.00 dollars is offered to settle all claims for attorney’s fees and costs which are pled as part of the legal claim in the above styled lawsuit for Count II.
In State Farm Mut. Auto. Ins. Co. v. Nichols, 932 So. 2d 1067 (Fla. 2006) [31 Fla. L. Weekly S358a], the Florida Supreme Court addressed the requirement that a proposal be free of ambiguity. The Court, agreeing with the Second District’s reasoning in Lucas v. Calhoun, 813 So. 2d 971 (Fla. 2d DCA 2002) [27 Fla. L. Weekly D453c], explained that Rule 1.442 “ ‘intends for a proposal for judgment to be as specific as possible, leaving no ambiguities so that the recipient can fully evaluate its terms and conditions.’ ” Id. at 1079 (quoting Lucas, 813 So. 2d at 973). However, the Court proceeded to qualify the absence of ambiguity within a settlement proposal by stating as follows:
We recognize that, given the nature of language, it may be impossible to eliminate all ambiguity. The rule does not demand the impossible. It merely requires that the settlement proposal be sufficiently clear and definite to allow the offeree to make an informed decision without needing clarification. If ambiguity within the proposal could reasonably affect the offeree’s decision, the proposal will not satisfy the particularity requirement.
Id. (emphasis added).
Consequently, a settlement proposal will not be considered ambiguous unless the ambiguity reasonably affects the offeree’s decision. See Nichols., 932 So. 2d at 1079 (cautioning that Rule 1.442 was designed to “prevent ambiguity, not breadth,” and is not intended to prevent the use of expansive language in general releases).
Here, United’s failure to simply add the two amounts offered for each count and provide a total sum cannot be said to have “reasonably affected” the Plaintiff’s ability to make an informed decision. United’s decision to specify how much it was offering for each individual count instead of giving a total amount did not create an ambiguity; to the contrary, such itemization enables the Plaintiff to more accurately determine whether to accept or reject the proposal. See Miami-Dade County v. Ferrer, 943 So. 2d 288, 290 (Fla. 3d DCA 2006) [31 Fla. L. Weekly D2977a] (“[A] proposal for settlement should be as specific as possible, leaving no ambiguities, so that the recipient can fully evaluate its terms and conditions.”) (quoting Connell v. Floyd, 866 So. 2d 90, 92 (Fla. 1st DCA 2004) [29 Fla. L. Weekly D175b]). Moreover, Paragraph 9 of the 2008 Proposal clearly states that the terms are “non-severable and cannot be accepted by the Plaintiff without acceptance by the Plaintiff of all the terms herein.” Connell, 866 So. 2d at 92 (noting that a proposal for settlement must be clear which of the outstanding claims are to be extinguished). Consequently, the 2008 Proposal is unambiguous and valid, thereby satisfying Rule 1.442 and Section 768.79.
(iii) United’s 2008 Proposal was made in good faith.
Finally, and most importantly, Plaintiff argues that United should lose its entitlement to an award of fees because the Proposals at issue were not made “in good faith.” See TGI Friday’s Inc. v. Dvorak, 663 So. 2d 606, 612 (Fla. 1995) [20 Fla. L. Weekly S436a] (explaining that a court has the discretion to disallow an entitlement to an award of attorney’s fees if the offeror’s intention have been shown to be “not in good faith”). The “issue of ‘good faith,’ is by its very nature, determined by the subjective motivations and beliefs of the pertinent actor . . . so long as the offeror has a basis in known or reasonably believed fact to conclude that the offer is justifiable, the ‘good faith’ requirement has been satisfied.” Dept. of Highway Safety Motor Vehicles v. Weinstein, 747 So. 2d 1019, 1021 (Fla. 3d DCA 1999) [24 Fla. L. Weekly D2799b] (emphasis added); see also Donohoe v. Starmed Staffing, Inc., 743 So 2d 623, 624 (Fla. 2d DCA 1999) [24 Fla. L. Weekly D1282b] (“The obligation of good faith insists that the offeror have some reasonable foundation on which to base an offer.”) (citation omitted). Nominal offers, such as the Proposals in the instant case, may be made in good faith:
Offers, nominal or otherwise, must bear a reasonable relationship to the amount of damages or a realistic assessment of liability. The rule is that a minimal offer can be made in good faith if the evidence demonstrates that, at the time it was made, the offeror had a reasonable basis to conclude that its exposure was nominal. The offer need not equate with the total amount of damages that might be at issue.
State Farm Mut. Auto. Ins. Co. v. Sharkey, 928 So. 2d 1263, 1264 (Fla. 4th DCA 2006) [31 Fla. L. Weekly D1445a] (emphasis added) (citations omitted); see also Weinstein, 747 So. 2d at 1020 (explaining that although an offer may be nominal, if the record demonstrates that at the time the offer was made the offeror had a reasonable basis to conclude exposure was nominal or it was not liable at all, the case may be “worth no more than a nuisance amount to settle.”).
To determine whether United had a reasonable basis for extending its 2008 Proposal, the Court must consider all the surrounding circumstances when the offer was made. United contends that the following circumstances provided it with a reasonable basis to conclude it was not liable, thereby prompting the extension of a nominal offer: (1) the Guerrero decision, coupled with Plaintiff’s deposition testimony that the vehicle involved in the subject loss was owned by Perez’s mother, the named insured, and was not insured by United; (2) the Quality Med. Group decision; and (3) the granting of United’s original Motion for Summary Judgment as to coverage by a predecessor judge of this Court.
(1) The Guerrero Decision and Plaintiff’s Deposition Testimony
The facts in Guerrero are analogous to those in the instant case. Guerrero and his mother were named insureds of 1990 Ford Probe owned by his mother, and Guerrero was injured while driving a 1986 Mercury Sable which was not insured by United. Guerrero, 9 Fla. L. Weekly Supp. 224b at 1. United, claiming that the 1986 Mercury Sable was owned by Guerrero’s mother and not insured by United, denied coverage pursuant to Section 627.736(2)(a) of the Florida Statutes. The Eleventh Judicial Circuit for Miami-Dade County, in its appellate capacity, recognized that summary judgment pursuant to Section 627.736(2)(a) would be proper if Guerrero’s mother owned the 1986 Mercury Sable, but reversed the entry of summary judgment due to a disputed question of material fact. Id. at 2.
At the time United served its 2008 Proposal, the Guerrero opinion had been issued and United had good reason to believe that the 1996 Mercury vehicle at issue in the instant case was owned by Perez’s mother. This reasonable belief had been established at Plaintiff’s own deposition, where Perez repeatedly asserted and admitted the 1996 Mercury vehicle involved in the accident was owned by her mother, the named insured, and was not insured by United. See Perez, 19 Fla. L. Weekly Supp. 877b at 3. Moreover, the policy of insurance applicable to Perez unambiguously defined “owner” as one who holds “legal title,” thereby further strengthening United’s belief that its denial of coverage under Section 627.736(2)(a) would ultimately be upheld. Id. Consequently, the holding in Guerrero, when combined with the facts elicited by United, created a reasonable foundation that exposure in the instant case would be nominal or non-existent.
(2) The Quality Med. Group Decision
The decision in Quality Med. Group similarly provided a foundation for United’s 2008 Proposal. Like Guerrero, the case dealt with a plaintiff who sustained injuries while driving a 1993 Mitsubishi owned by and registered to his wife, which was not insured pursuant to the applicable policy of insurance. See Quality Med. Group, 15 Fla. L. Weekly Supp. 98a at 1. Explaining that Section 627.736(2)(a) provides “no coverage for injury sustained by the named insured while occupying another motor vehicle owned by the named insured and not insured under the policy,” the Court granted final summary judgment regarding coverage in favor of United. Id. at 3. The Court went on to cite Guerrero in support of its ruling, while also noting that “owner” was unambiguously defined under the insurance policy at issue as the person holding legal title to the vehicle. Id. Consequently, Quality Med. Group reinforced United’s reasonable belief that there was no coverage for the loss in the case sub judice, thereby prompting the 2008 Proposal.
(3) Prior Ruling on United’s Motion for Summary Judgment
Finally, prior to submitting its 2008 Proposal, United had already received a favorable ruling on its initial Motion for Summary Judgment regarding coverage from a predecessor judge of this Court. On February 27, 2002, the Honorable Jeffrey Swartz granted Defendant’s Motion for Summary Judgment, finding that Perez was not afforded coverage under United’s policy of insurance. However, said Order was subsequently set aside given Plaintiff’s filing of an amended complaint prior the entry of a final judgment, as Judge Swartz decided to allow Perez an opportunity to argue that coverage existed under Plaintiff’s theory that the subject policy should be reformed to include Perez as a named insured.
Despite the Court’s decision to permit Plaintiff to amend her complaint, the original order granting United’s Motion for Summary Judgment under Section 627.736(2)(a) clearly contributed to United’s reasonable belief that it would ultimately prevail on the issue of coverage. When combined with all of the aforementioned circumstances, the Court concludes that the 2008 Proposal was made in good faith, and need not address the merits of the 2011 Proposal. See Bosem v. Commerce Indus. Ins. Co., 35 So. 3d 944, 946 (Fla. 3d DCA 2010) [35 Fla. L. Weekly D892a] (holding that where no evidence is presented that the offer was not made in good faith, the movant is entitled to a fee award).CONCLUSION
For the foregoing reasons, United’s Motion for Entitlement to Attorney’s Fees is GRANTED pursuant to its Proposal for Settlement dated December 11, 2008.
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