21 Fla. L. Weekly Supp. 392a
Online Reference: FLWSUPP 2105JMORInsurance — Attorney’s fees — Offer of judgment — No abuse of discretion in finding that insurer had good faith basis for making nominal offer of judgment where, at time of offer, insurer had medical report and peer review as support for belief that reasonable, related and necessary amount of bills was below insured’s deductible — Fact that offer of judgment was made prior to insurer amending pleadings to include affirmative defense of no bona fide dispute on which it ultimately prevailed does not preclude award of attorney’s fees where insured, who had not been billed by medical provider prior to expiration of statute of limitations, was aware at all times that there was no bona fide dispute justifying his action
JESUS MORENO, Appellant, vs. UNITED AUTOMOBILE INSURANCE COMPANY, a Florida Corporation, Appellee. Circuit Court, 11th Judicial Circuit (Appellate) in and for Miami-Dade County. Case No. 12-285 AP. L.C. Case No. 05-1501 SP 24-01. December 20, 2013. An appeal from the County Court for Miami-Dade County, Rodney Smith, Judge. Counsel: Christian Carranzana, for Appellant. Thomas L. Hunker, for Appellee.
(Before MUIR, LOPEZ and GAYLES, JJ.)
(GAYLES, Judge.) In this appeal from an order awarding attorney’s fees pursuant to a rejected offer of judgment, the Appellant, Jesus Moreno, argues that the trial court abused its discretion. Mr. Moreno maintains that Appellee United Automobile Insurance Company is not entitled to a fee award based on its rejected offer of judgment since the offer was made prior to United amending its pleadings to include the defense upon which it ultimately prevailed. Because this Court finds that the issue upon which United prevailed was well known to Mr. Moreno at all points of the litigation, we uphold the lower court’s attorney’s fee award and affirm the decision below.
Factual Background and Procedural Posture
Jesus Moreno was injured in a motor vehicle accident on June 9, 2000, and sought medical treatment from PF Medical Center for his injuries from June 17, 2000, through October 14, 2000. United Automobile Insurance Company, his insurer, completed an examination under oath, an independent medical exam, and peer review report, but did not pay the medical bills for Mr. Moreno’s care. At some point after Mr. Moreno’s treatment, PF Medical Center was administratively dissolved.
On July 7, 2005, Mr. Moreno filed the instant declaratory relief action, alleging his rights under his policy were in doubt. He sought a declaratory judgment that his bills were reasonable, related and necessary and, therefore, covered by insurance. United filed its answer and affirmative defenses, and eventually served a nominal $100 offer of judgment, pursuant to Florida Rule of Civil Procedure 1.442 and section 768.79, Florida Statutes (2001). Mr. Moreno rejected the offer of judgment. Thereafter, United deposed Mr. Moreno and his mother, the named insured. Both confirmed that in the five years following Mr. Moreno’s treatment, neither received a bill from PF Medical Center, or was contacted by PF Medical Center for payment within the statutory period. Thereafter, United amended its pleadings to assert there was no bona fide dispute between the parties as the dissolved PF Medical Center never sought to collect bills from Mr. Moreno within the statute of limitations period.
United then filed a motion for summary judgment which asserted, in part, that because Mr. Moreno did not and will not owe any money to the defunct medical provider, an award of money damages would constitute an unjust windfall. The lower court denied the motion. At trial, a jury entered a verdict in Mr. Moreno’s favor. On appeal, a panel of this Circuit reversed the verdict and remanded for entry of final judgment in favor of United, holding that the declaratory action was improper because Mr. Moreno failed to prove the existence of a bona fide controversy and the need for a declaration of rights under his policy. United Auto v. Moreno, 18 Fla. L. Weekly Supp. 956a (Fla. 11th Cir. Ct. Aug. 10, 2011).
On remand, United filed a motion for attorney’s fees based on its rejected offer of judgment. Mr. Moreno opposed the motion and argued that United could not recover attorney’s fees based on the rejected offer because that offer was presented before United’s pleadings were amended to put forth its affirmative defense that there was no bona fide dispute — the defense upon which United ultimately prevailed. United countered that regardless of when it obtained the knowledge that there was no bona fide dispute, it nonetheless had a good faith basis to believe its damages were zero or nominal based on its peer review indicating that Mr. Moreno’s compensable bills were below the policy deductible. The lower Court determined that the offer was made in good faith and entered a final judgment awarding attorney’s fees to United. This appeal followed.
The Offer of Judgment Statute
Pursuant to section 768.79(1), Florida Statutes (2001), a party has the right to attorney’s fees when a party: 1) serves a demand or offer of judgment, and (2) recovers a judgment at least twenty-five percent more or less than the demand or offer. See also Levine v. Harris, 791 So. 2d 1175, 1177 (Fla. 4th DCA 2001) [26 Fla. L. Weekly D1824a]. The sole basis on which a court can disallow an entitlement to an award of fees is if it determines that a qualifying offer was not made in good faith. Id. A good faith offer is one where the offeror had a reasonable foundation upon which to make the offer. Hall v. Lexington Ins. Co., 895 So. 2d 1161, 1166 (Fla. 4th DCA 2005) [30 Fla. L. Weekly D466a].
The standard of review on a finding that an offer of settlement was made in good faith is whether the trial judge abused its discretion. Harris, 790 So. 2d at 1177-78. In the instant matter, the lower court did not abuse its discretion in finding that United had a good faith basis for making its nominal offer of judgment. At the time of the offer, United had the medical report and peer review of its two experts as support for the belief that the reasonable, related and necessary amount of Mr. Moreno’s bills was below his deductible. Thus, United had a reasonable basis to believe that its liability was zero or nominal, and thus made its offer in good faith.
Mr. Moreno asserts, however, that the definitive issue on appeal is not simply the good faith basis for United’s offer, but instead, whether United is entitled to attorney’s fees based on an offer of judgment made prior to United amending its pleadings to include the defense upon which it ultimately prevailed. This involves a determination of whether the trial court abused its discretion by allowing the fee award. Segundo v. Reid, 20 So. 3d 933 (Fla. 3d DCA 2009) [34 Fla. L. Weekly D1995a]. The offer of judgment statute is instructive in this regard, stating that the court must consider, among other factors, “all [ ] relevant criteria” when determining the reasonableness of a fee award. Section §768.79(7)(b), Fla. (2001).
Mr. Moreno likens the instant facts to those of Segundo v. Reid, 20 So. 3d 933 (Fla. 3d DCA 2009) [34 Fla. L. Weekly D1995a], where the Third District Court of Appeal applied the offer of judgment statute’s “all [ ] relevant criteria” language to reverse an inappropriate fee award. There, the plaintiff, an injured motorist, made a $10,000 settlement offer. At the time of the offer, the plaintiff sought damages for only his neck and back injuries. The defendant rejected the offer. After the offer expired, the plaintiff amended his claim to include damages for a shoulder injury that he did not previously realize was connected to the subject accident. The plaintiff subsequently recovered a $13,775 judgment after trial — an amount greater than 25% of his offer. The trial court awarded the plaintiff attorney’s fees, but the appellate court reversed, finding that once the amount of money pertaining to the shoulder injury was removed from the total damages award, the plaintiff’s recovery was actually below the 25% cut-off entitling him to fees. The Reid court held that although the plaintiff’s offer was made in good faith, the trial court should have considered the actual damages awarded by the jury and the relationship between the award and the plaintiff’s proposal for settlement under the “all other relevant criteria” provision contained in section 768.79(7)(b). Reid, 20 So. 3d at 938. The court further explained that “requir[ing] the defendant to pay attorney’s fees as a sanction for ‘unreasonably’ rejecting the plaintiff’s proposal for settlement would penalize the defendant for damages not pled nor proven until after the proposal for settlement was rejected. . . .” Id.
Mr. Moreno misapprehends Reid, which is not analogous to the instant facts. In Reid, the defendant rejected the offer of judgment at a time when neither party was aware of crucial new information that ultimately affected the outcome of the litigation. In contrast, Mr. Moreno was aware from the inception of this declaratory action that he had not been billed or contacted by his medical provider in the five years following his medical treatment. Thus, unlike the Reid plaintiff with his recently discovered shoulder injury, Mr. Moreno was aware at all times there existed no bona fide dispute justifying his declaratory action. As such, this Court finds that based on the particular facts and circumstances surrounding this case, the lower court did not abuse its discretion in awarding attorney’s fees in favor of United.
Therefore, the lower court’s ruling is AFFIRMED. United’s motion for appellate attorney’s fees is Granted. This matter shall be REMANDED to the lower court to set a reasonable amount for United’s appellate attorney’s fees. (MUIR and LOPEZ, JJ., concur.)
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