25 Fla. L. Weekly Supp. 490a
Online Reference: FLWSUPP 2505ARIEInsurance — Attorney’s fees — Proposal for settlement — Service by e-mail — Where insurer’s proposal for settlement was not served on medical provider by e-mail as required by rule 2.516, insurer failed to satisfy requirement of rule 1.442 that proposal be served on provider — Furthermore, nominal proposal was not made in good faith where, although insurer ultimately prevailed, its likelihood of success was no more than 50-50 — Insurer’s motion for attorney’s fees is denied
SOUTH FLORIDA DIAGNOSTIC GROUP (a/a/o Guillermo Ariel, Plaintiff, v. UNITED AUTOMOBILE INSURANCE COMPANY, Defendant. County Court, 17th Judicial Circuit in and for Broward County. Case No. 14-19804 COCE 53. May 26, 2017. Robert W. Lee, Judge. Counsel: Wajih A. Shirazi and Antonella Dos Santos, Dos Santos & Shirazi, L.L.C., Miami, for Plaintiff. Rashad El-Amin, Miami, for Defendant.
ORDER DENYING DEFENDANT’S MOTION FORENTITLEMENT TO ATTORNEY’S FEES(Rule 1.442/Fla. Stat. §768.79)
This cause came before the Court on May 25, 2017 for hearing of the Defendant’s Motion for Attorney’s Fees and Costs (Entitlement Only), and the Court’s having considered the Motion and the entire Court file; received evidence; heard argument; considered the relevant legal authorities; and been sufficiently advised in the premises, the Court finds as follows:
Background.
1. This case was filed on October 15, 2014. The Defendant filed its first paper in this case on November 3, 2014. Thereafter, on December 12, 2014, the Defendant filed a Motion for Enlargement of Time to respond to the Statement of Claim.
2. On April 30, 2015, the Defendant State Farm served Plaintiff with its Proposal for Settlement pursuant to Rule 1.442, Fla. R. Civ. P., and Fla. Stat. §768.79. The proposal was for $500.00 total, broken down as $250.00 in damages and $250.00 in attorney’s fees and court costs.
3. Almost six months after serving its Proposal for Settlement, the Defendant filed its Answer and Affirmative Defenses.
4. There is no dispute that Plaintiff received the proposal for settlement and failed to accept it within thirty (30) days of receipt. However, the Plaintiff contends that the Notice of Service failed to strictly comply with the service requirements set forth in Rules 1.442 and 2.516(b) by failing to serve the Proposal by email.
5. The case ultimately proceeded to jury trial, with a jury verdict in favor of the Defendant.
6. Because United Automobile was the prevailing party, and because United Automobile had an expired Proposal for Settlement, the Defendant timely filed its Motion for Entry of Judgment and Incorporated Motion for Entitlement to Attorney’s Fees on April 10, 2017.
7. At the hearing, the Plaintiff advised the Court that it is disputing Defendant’s entitlement to attorney’s fees, claiming that United Automobile’s proposal for settlement was not made in good faith. The Plaintiff also argued that the Defendant’s proposal was technically deficient because it was not served properly. Under Florida law, the statute and rule providing for proposals for settlement are in derogation of common law and thus must be strictly construed. Campbell v. Goldman, 959 So.2d 223, 227 (Fla. 2007) [32 Fla. L. Weekly S320a]. As noted by the Florida Supreme Court, “strict construction is applicable to both the substantive and procedural portions of the rule and statute.” Id. The rule requires that the Proposal for Settlement be “served” on the opposing party. Rule 1.442(b), (d). The Defendant did not serve it by e-mail on the Plaintiff. Service of documents is controlled by rule 2.516. The rule specifically provides that “[a]ll documents required or permitted to be served on another party must be served by e-mail, unless this rule otherwise provides.” Rule 2.516(b)(1). No exception to service by e-mail exists for this case. As a result, the Proposal for Settlement was not “served” on the Plaintiff as required by rule 1.442, and the Court cannot excuse this “mere technical violation.” See Campbell, 959 So.2d at 226. See also Milton v. Reyes, 22 So.3d 624, 625 (Fla. 3d DCA 2009) [34 Fla. L. Weekly D2050a]; Wheaton v. Wheaton, 42 Fla. L. Weekly D411b (Fla. 3d DCA 2017). The Court recognizes that the Second District Court of Appeal disagrees with the Wheaton holding, but this Court finds the Wheaton decision to be better reasoned. See Boatright v. Philip Morris USA Inc., 42 Fla. L. Weekly D842a (Fla. 2d DCA 2017).
8. The Court also agrees with the Plaintiff that the Defendant’s Proposal was not made in good faith. A nominal proposal for settlement is invalid if it is not made in good faith. Under Florida law, absent a finding that a party’s offer of judgment was not made in good faith, the offeror is entitled to its attorney’s fees. The issue of good faith is determined by asking whether at the time the offer was made, the offeror (here, the Defendant) had a good faith reason to believe its exposure to liability was nominal. The Court finds United Automobile’s offer in this case was for a nominal amount — indeed, the Defendant does not dispute this point. Nevertheless, Florida courts have upheld nominal proposals for settlement, as long as made in good faith. See, e.g., State Farm Mutual Auto. Ins. Co. v. Marko, 695 So.2d 874, 876 (Fla. 2d DCA 1997) [22 Fla. L. Weekly D1505c] (holding offer of judgment for $1.00 to be in good faith when secondary insurer believed liability would not exceed primary policy limits).
9. The critical issue is therefore whether United Automobile made its nominal offer in good faith. In determining whether an offer was made in good faith, a court must consider whether the offer bears a reasonable relationship to the amount of damages suffered and arose out of a realistic assessment of liability. Eagleman v. Eagleman, 673 So.2d 946, 948 (Fla. 4th DCA 1996) [21 Fla. L. Weekly D1192a].
10. In the instant case, the Court finds that, at best, the Defendant’s likelihood of success was no more than 50-50.
11. Moreover, based on the record in this case, and as well argued by Plaintiff at the hearing, at the time the Defendant made the offer in this case, it simply did not have a realistic reasonable foundation upon which to believe that its exposure to liability was nominal. See State Farm Mutual Automobile Ins. Co. v. Sharkey, 928 So.2d 1263, 1264 (Fla. 4th DCA 2006) [31 Fla. L. Weekly D1445a]. While ultimately the jury rendered a verdict for the Defendant at trial, such an action does not result in an automatic finding that the Defendant’s offer was in good faith. Indeed, it is clearly possible to win a trial without having made a “realistic assessment” of a case. To engage in an “after-the-fact” analysis rather than an “at-that-time” analysis would in essence amount to the rule becoming nothing more than a fee shifting mechanism in PIP cases.
12. As a result, because the Court finds that the Defendant’s Proposal for Settlement was not made in good faith, and because the Defendant failed to properly serve its Proposal for Settlement on the Plaintiff, the Defendant’s Motion for Attorney’s Fees is DENIED. The Defendant is, however, entitled to an award of taxable costs.
