24 Fla. L. Weekly Supp. 151a
Online Reference: FLWSUPP 2402LEBEInsurance — Attorney’s fees — Prevailing party — Confession of judgment — Insurer’s payment of medical bills after plaintiff filed suit was functional equivalent of confession of judgment — Where insurer withheld payment based on requests for documents that were not required under terms of policy, insurer’s withholding of payment was unreasonable, and plaintiff is entitled to award of attorney’s fees and costs — Because insurer denied plaintiff’s entitlement to attorney’s fees and costs, plaintiff is also entitled to award of fees and costs for litigating entitlement issue
ANTHONY LEBER, Plaintiff, v. CITIZENS PROPERTY INSURANCE CORPORATION, Defendant. County Court, 9th Judicial Circuit in and for Orange County. Case No. 2014-SC-12953-O. December 8, 2015. Final judgment on Attorney’s Fees January 7, 2016. Tina Caraballo, Judge. Counsel: Michael B. Brehne, and Jordan V. Fosky, Law offices of Michael B. Brehne, P.A., for Plaintiff.
ORDER GRANTING PLAINTIFFSENTITLEMENT TO ATTORNEY FEES AND COSTS
THIS CAUSE came before the Court this date on November 2, 2015, on Plaintiff’s Entitlement to Attorney Fees and Costs, and the Court having heard the arguments of counsel, reviewed the file and being otherwise fully advised on the premises makes the following findings of facts and conclusions of law:
FACTS OF THE CASE
This was an action for declaratory relief and breach of contract. On July 24, 2011, Plaintiff was injured by a dog owned by Defendant’s insured. Defendant issued a policy of insurance that affords “medical payment coverage” to “others” injured by animals owned by their insureds. Plaintiff incurred medical bills as a result of his injuries and was afforded coverage under the policy’s Medical Payments provision.
On September 19, 2013, Plaintiff submitted his medical bills to Defendant seeking reimbursement pursuant to Defendant’s policy provisions. Defendant received the demand but failed to make payment.
Instead of making payment, Defendant vigorously defended the suit denying Plaintiff’s entitlement to maintain this lawsuit and or to receive medical payments. They also made further demands upon Plaintiff by requiring a release be signed before they would make payment.
After a series of motions and hearings, Defendant finally delivered the $2,000.00 check made payable directly to Plaintiff, Anthony Leber. Defendant did not have Plaintiff sign a release, did not receive a W9 from the law firm, did not include attorney’s fees and costs and required no further instructions about who to make payment to.
Following payment, Plaintiff subsequently filed their Motion for Attorney’s Fees and Costs. Following the payment, Defendant disputed Plaintiff’s entitlement to attorney fees.CONCLUSIONS OF LAW
I.
THE PLAINTIFF IS ENTITLED TO ATTORNEY FEES AND COSTS BECAUSE THE PLAINTIFF IS THE PREVAILING PARTY
Fla. Stat. § 627.428(1) states:
Upon the rendition of a judgment or decree by any of the courts of this state against an insurer and in favor of any named or omnibus insured or the named beneficiary under a policy or contract executed by the insurer, the trial court or, in the event of an appeal in which the insured or beneficiary prevails, the appellate 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 the recovery is had.
The statute clearly provides that attorney’s fees shall be pronounced against an insurer when judgment is rendered in favor of any named or omnibus insured. Wollard v. Lloyd’s & Companies of Lloyd’s, 439 So. 2d 217 (Fla. 1983). Additionally, Fla. Stat. 57.041(1) states in part: The party recovering judgment shall recover all of his or her legal costs and charges which shall be included in the final judgment.
Once an insurance company has agreed to settle a disputed case, it has in effect, declined to defend its position in the pending suit. Wollard v. Lloyd’s & Companies of Lloyd’s, 439 So. 2d 217 (Fla. 1983); Ivey v. Allstate Ins. Co., 774 So. 2d 679 (Fla. 2000) [25 Fla. L. Weekly S1103a]; Mercury Ins. Co. of Fla. v. Cooper, 919 So. 2d 491 (Fla. 3d DCA 2005)[30 Fla. L. Weekly D2648a] (Wells, J., specifically concurring; Shepherd, J., dissenting); cf. Basik Exports & Imports, Inc. v. Preferred Nat’l Ins. Co., 911 So. 2d 291 (Fla. 4th DCA 2005)[30 Fla. L. Weekly D2359a].
Payment of the claim is the functional equivalent of a confession of judgment or a verdict in favor of the insured. Wollard v. Lloyd’s & Companies of Lloyd’s, 439 So. 2d 217, 218 (Fla. 1983). Florida law states that it is the insurer’s unilateral decision to settle an insurance case which triggers the insured’s entitlement to attorney fees under the statute. Mercury Ins. Co. of Fla. v. Cooper, 919 So. 2d 491, 493 (Fla. 3d DCA 2005)[30 Fla. L. Weekly D2648a]. The Defendants could have avoided triggering §627.428(1) by simply refusing to settle the claim or by denying coverage under the policy. Id. at 493. However, by paying Plaintiff’s claim, Defendants elected to “chose the precise legal conduct which has been held, under Florida law, to trigger an insured’s entitlement to attorney’s fees and costs under section 627.428(1).” Id. at 493.
In this case, Defendant confessed judgment by making payment to Plaintiff on February 12, 2105. Therefore, the Plaintiff is the prevailing party on the significant issue of this case and Plaintiff is entitled to recover his reasonable attorney’s fees and costs.Defendant Unreasonably Withheld Payment Under the Policy
Defendant argues that they did not “unreasonably” withhold payment, this Court disagrees and rules that the facts as recited above supports this Court’s ruling that their conduct was unreasonable. A condition precedent to an award of attorney’s fees under the confession of judgment rule is whether the insurance company unreasonably withheld payment under the insurance policy. Wollard v. Llovd’s & Companies of Lloyd’s, 439 So. 2d 217, 219 (Fla. 1983) (footnote 2); Clifton v. United Cas. Ins. Co. of Am., 31 So. 3d 826 (Fla. 2d DCA 2010) [35 Fla. L. Weekly D364e]; See, Beverly v. State Fla. Ins. Co., 50 So. 3d 628 (Fla. 2d DCA 2010) [35 Fla. L. Weekly D2373b] and Hill v. State Farm Fla. Ins. Co., 35 So. 3d 956 (Fla. 2d DCA 2010) [35 Fla. L. Weekly D1041a].
Accordingly, the confession of judgment rule operates to “penalize an insurance company for wrongfully causing it’s insured to resort to litigation in order to resolve a conflict with its insurer when it was within the company’s power to resolve it.” First Floridian Auto & Home Ins. Co. v. Myrick, 969 So. 2d 1121, 1121 (Fla. 2d DCA 2007)[32 Fla. L. Weekly D2672a] (quoting Bassette v. Standard Fire Ins. Co., 803 So. 2d 744, 746 (Fla. 2d DCA 2001)[26 Fla. L. Weekly D1670b]).
In this case, the Defendant wrongfully withheld payment from Plaintiff for nearly seventeen (17) months, even though it was their obligation and within their direct power to pay Plaintiff. Defendant was at all times in the position to issue the check to comply with the policy terms and conditions. While Defendant claims to have required various documents and direction for payment none of their requests were required under the policy terms. Any payment issued to Plaintiff, his counsel or both would have been equally reasonable payment options which would have absolved Defendant of any argument of wrong doing. However, Defendant failed to do anything and made no payment.
The Defendant withholding payment based on requests for documents not required under the policy or statute is wrongful. See, Tampa Chiro Center, Inc. v. State Farm, 141 So. 3d 1256 (5th DCA 2014)[39 Fla. L. Weekly D1441a] (Fees awarded to Plaintiff when Defendant unreasonably withheld payment based on its contention that the scope of its document request was proper under §627.736(6)(b)).
In addition, the burden is on the Defendant to verify claims and they cannot shift the burden to the Plaintiff. See, Palmer v. Fortune Ins. Co., 776 So. 2d 1019 (5th DCA 2001) [26 Fla. L. Weekly D278a] (Fortune attempted to shift the burden to Palmer by stating there was incorrect information in the documents submitted and that counsel “dragged his heels” in furnishing the police report. Fortune should have paid the claim or denied it — Fortune did neither, it simply continued its “investigation”).
Failing to make payment for 17 months by attempting to shift the burden to Plaintiff based upon improper requests cannot, under the circumstances, be considered reasonable. This is because Defendant knew there was coverage, had the bills and knew how to issue a check for reimbursement, but simply chose not to. Defendant’s “Red Herring” argument that Plaintiff somehow “confused” them about how to make payment is disingenuous at best. This was evidenced by their ability to make payment without repeat bill submission, without including the firm as a payee, without tax information and without any signed release 17 months after their initial receipt of the claim and only after Plaintiff was forced to file suit to recover the benefits.Plaintiff is Entitled To Attorney Fees And CostsFor Litigating Plaintiff’s Entitlement To Fees
The Florida Supreme Court has ruled that attorney’s fees may be awarded under §628.428 for litigating the issue of entitlement to attorney’s fees, but not for litigating the amount of attorney’s fees. State Farm Fire & Cas. Co. v. Palma, 629 So. 2d 830 (Fla. 1993); see also, Lugassy v. Independent Fire Ins. Co., 636 So. 2d 1332 (Fla. 1994).
There is no question that the Defendant has denied Plaintiff’s entitlement to attorney’s fees and costs up to and including the date of the entitlement hearing. Because Defendant has clearly failed to acquiesce to Plaintiff’s entitlement to attorney’s fees and costs, fees are awarded to Plaintiff for being required to litigate entitlement to attorney’s fees and costs pursuant to the holding of Lugassy v. Independent Fire Insurance Co., 636 So. 2d 1332, 1336 (Fla. 1994) and State Farm Fire and Cas. Co. v. Palma, 629 So. 2d 830 (Fla. 1993).
WHEREFORE it is hereby ORDERD and ADJUDGED:
Plaintiff’s Motion for Attorney’s Fees and Costs and Plaintiff’s Motion for Entitlement to Attorney’s Fees and Costs is hereby GRANTED. This Court reserves jurisdiction to determine the amount of Plaintiff’s attorney’s fees and costs and enter such other orders as are necessary. [Editor’s note: Final judgment on attorney’s fees published below.]
__________________FINAL JUDGMENT RESOLVINGPLAINTIFF’S ATTORNEY’S FEES & COSTS
THIS CAUSE having come before the Court upon the Joint Stipulation Resolving Plaintiff’s Attorney’s Fees and Costs filed by Plaintiff, ANTHONY LEBER, and Defendant, CITIZENS PROPERTY INSURANCE CORPORATION, and the Court having been advised in the premises, it is hereby
ORDERED AND ADJUDGED as follows:
1. As a result of the Order Granting Plaintiff’s Entitlement to Attorney Fees and Costs, the Plaintiff is entitled to entry of Judgment for attorney’s fees and costs pursuant to Florida Statutes § 627.428 and 57.041(1).
2. Plaintiff, ANTHONY LEBER, shall recover and has agreed to accept $35,000.000 from Defendant, CITIZENS PROPERTY INSURANCE CORPORATION, to resolve all attorney’s fees and costs.
