25 Fla. L. Weekly Supp. 414a
Online Reference: FLWSUPP 2505MESAInsurance — Personal injury protection — Attorney’s fees — Proposal for settlement — Insurer prevailing on ground that presuit demand letter was defective — Trial court erred in denying insurer’s motion for attorney’s fees based on provider’s rejection of proposed settlement without finding that proposal for settlement was not made in good faith
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Appellant, v. MANY HEALTH, INC., (a/a/o Omar Mesa), Appellee. Circuit Court, 11th Judicial Circuit (Appellate) in and for Miami-Dade County. Case No. 13-456 AP. L.T. Case No. 12-007411 CC 05. June 19, 2017. An appeal from a decision of the County Court, Civil Division, Miami-Dade County. Counsel: Nancy W. Gregoire, Kirshbaum, Birnbaum, Lippman & Gregoire, PLLC, and Michael A. Rosenberg, Roig, Tutan, Rosenberg, Martin & Stoller, P.A., for Appellant. Marlene S. Reiss, Law Offices of Marlene S. Reiss, P.A., for Appellee.
(Before BAGLEY, THOMAS, and SMITH, JJ.)
(SMITH, Judge.) Appellee/plaintiff below Many Health, Inc. (Many Health or the provider), as assignee of the insured, Omar Mesa, sued appellant/defendant below State Farm Mutual Automobile Insurance Company (State Farm or the insurer) in April 2012, alleging entitlement to the insured’s PIP benefits. Many Health relied on a November 2011 statutory presuit demand letter. State Farm denied any liability to the provider for PIP benefits other than those already paid. The insurer contended that it already paid the provider an appropriate and allowable amount under the PIP statute and the policy; that the presuit demand letter was invalid; and, that State Farm was not obligated to pay any benefits for treatment after an October 2, 2011 independent medical examination (an IME).
In July 2012, the provider moved for partial summary judgment, arguing its presuit demand letter satisfied the PIP statute even though it claimed an inaccurate amount. State Farm, while holding the position that the presuit demand letter was defective, still proposed a settlement of $500, representing $300 in damages and $200 in attorney’s fees and costs.
In November 2012, the provider rejected the proposed settlement and moved to abate the proceedings and for leave to amend, realizing the problems with the presuit demand. The Court granted the motion to abate, giving the provider the opportunity to serve a second presuit demand letter and an amended complaint. The second presuit demand letter contained the same errors that the first one contained.
In April 2013, State Farm moved for final summary judgment on the issue regarding the defective demand letter. The provider responded with a motion for final summary judgment on the issue of reasonable, related, and necessary, and a motion for partial summary judgment on State Farm’s consideration of the statutory fee schedules in determining a reasonable reimbursement, and a second motion to abate the proceedings and for leave to amend. In July 2013, the Court denied the second motion to amend. On August 6, 2013, the Court granted the summary judgment motion regarding the defective demand letter, and in September, entered a final judgment order.
Subsequently, State Farm moved for attorney’s fees, citing its offer of judgment. The provider opposed the motion, arguing it had been made in bad faith. A hearing was held before the trial court on November 25, 2013 and the parties argued their positions. The provider contended it should have been allowed to file a third demand letter, and that State Farm would have been exposed to liability because of its use of the Medicare Part B fee schedule. State Farm’s position was that at the time the proposal was made, it had a reasonable basis to believe that its exposure was minimal in light of the invalid second presuit demand letter. At the conclusion of the hearing, the Court denied the insurer’s motion for entitlement to fees and costs. This appeal followed.
The issue before this Court is whether or not the trial court erred in denying State Farm’s motion for attorney’s fees and costs. We conclude that it did because the trial court did not expressly make a finding of bad faith or lack of good faith on the part of State Farm.
The insurer argues that the Court was incorrect when it denied the motion for attorneys’ fees because of conjecture that the provider might have prevailed if it had been allowed to amend the presuit demand letter a second time and if that that third presuit demand letter had been valid. When State Farm offered the attorney’s fees proposal, the provider’s presuit demand letter was invalid. That gave State Farm a reasonable basis to believe that its exposure to liability at that time was minimal, it argues. As the Court used the wrong standard in rejecting the motion, State Farm asserts the standard of review is de novo. Miami-Dade County v. Ferrer, 943 So. 2d 288, 290 (Fla. 3d DCA 2006) [31 Fla. L. Weekly D2977a].
Further, State Farm contends that just because it used statutory fee schedules in determining the reasonableness of its reimbursement rates that does not diminish the validity of its proposal for settlement. Whether an insurer elected in its contract a certain reimbursement method is an issue that notifies the insured of the manner in which the parties to the contract agree that payments will be made. DCI MRI, Inc. v. Geico Indemnity Co., 79 So. 3d 840 (Fla. 3d DCA 2012) [37 Fla. L. Weekly D170e]. It does not necessarily govern in a proposal for settlement, when the insurer is offering a reasonable amount in payment. To determine reasonableness, an insurer can consult, reference, apply, or utilize the fee schedule, as long as the resulting reimbursement amount is reasonable, State Farm contends. MRI Associates of St. Pete, Inc. v. State Farm Mut. Auto. Ins. Co., 755 F. Rupp. 2d 1205 (M.D. Fla. 2010).
In State Farm Mut. Auto. Ins. Co. v. Nichols, 932 So. 2d 1067, 1070 (Fla. 2006) [31 Fla. L. Weekly S358a], the Florida Supreme Court held that an insurer is entitled to recover attorney’s fees under §768.79, Fla. Stat. (2008) and Fla. R. Civ. P. 1.442, dealing with proposals for settlement. If a proposal for settlement was not made in good faith, then the Court can disallow an award of costs and fees. §768.79(7)(a), Fla. Stat. (2008); Fla. R. Civ. P. 1.442(h). However, once a proposal for settlement satisfies the statutory prerequisites, this is the only discretion afforded a trial court, and the decision must be supported by an express finding that the offer was not made in good faith. Allstate Ins. Co. v. Staszower, 61 So. 3d 1245, 1248-49 (Fla. 4th DCA 2011) [36 Fla. L. Weekly D1114a]; State Farm Ins. Co. v. Reyes, 137 So. 3d 1122 (Fla. 3d DCA 2014) [39 Fla. L. Weekly D656a]. Furthermore, a nominal offer is appropriate and can be made in good faith when a defendant has a reasonable basis to believe that its exposure to liability is minimal. O’Neil v. Wal-Mart Stores, Inc., 602 So. 2d 1342, 1344 (Fla. 5th DCA 1992). It is the burden of the offeree, or the provider, who must demonstrate that an offeror’s proposal was not made in good faith, which must be supported by substantial competent evidence. Sharaby v. KLV Gems Co., Inc., 45 So. 3d 560, 563 (Fla. 4th DCA 2010) [35 Fla. L. Weekly D2300a]. In this matter, in the trial court’s order, there was no finding that the proposal was not made in good faith. See, South Florida Diagnostic Group (a/a/o Guillermo Ariel) v. UAIC, (14-19804 COCE 53 Broward Cty. Ct., May 26, 2017) [25 Fla. L. Weekly Supp. 490a] (order denying defendant’s motion for entitlement to attorney’s fees where trial court expressly finds that the proposal was not made in good faith and the proposal was not properly served.) Conversely, at the hearing, the trial court expressly declined to make such a finding the offer was not made in good faith. As such, the order should be reversed, State Farm correctly argues.
Based on the foregoing, we reverse the trial court as it failed to expressly find that State Farm’s proposal for settlement was not made in good faith. We remand to the trial court for a determination of attorney’s fees and costs for State Farm, as well as appellate attorney’s fees for being the prevailing party in this action. (BAGLEY and THOMAS, JJ., concur.)
