25 Fla. L. Weekly Supp. 503a
Online Reference: FLWSUPP 2506SALAInsurance — Personal injury protection — Attorney’s fees — Proposal for settlement — Good faith — Nominal offer — Insurer’s nominal offer was made in good faith where proposal for settlement was served after insurer had reviewed police report of accident at issue which showed that accident occurred prior to time coverage became bound and effective — Trial court erred in denying insurer’s motion for attorney’s fees after jury returned verdict finding claimant was not insured at time of accident
UNITED AUTOMOBILE INSURANCE COMPANY, a Florida corporation, Appellant, v. AFFILIATED HEALTHCARE CENTERS, INC., a/a/o Sergio Salas, Appellee. Circuit Court, 11th Judicial Circuit (Appellate) in and for Miami-Dade County . Case No. 14-197 AP. L.T. Case No. 08-05220 CC 26 (03). August 2, 2017. An appeal from a decision of the County Court, Civil Division, Miami-Dade County. Counsel: Michael J. Neimand, The Office of the General Counsel, United Automobile Insurance Company, for Appellant. Marlene S. Reiss, Law Offices of Marlene S. Reiss, P.A., for Appellee.
(Before BAGLEY, THOMAS, and SMITH, JJ. )
(THOMAS, Judge.) On September 9, 2008, Appellee/Plaintiff below, Affiliated Healthcare Centers, Inc. (“Affiliated Healthcare” or the provider), as assignee of Sergio Salas, filed a complaint against Appellant/Defendant below, United Automobile Insurance Company (“United Auto” or the insurer) for breach of contract for PIP benefits for an accident that occurred on November 19, 2007. The provider alleged coverage under a United Auto policy.
On October 13, 2008, United Auto filed a motion for summary judgment, alleging lack of insurance coverage on Mr. Salas. The motion asserted that according to the police report, the accident occurred on November 19, 2007 at 1:37 p.m. It further asserted that according to the application for insurance and the declarations page, the policy of insurance sued upon was not bound and effective until November 19, 2007 at 2:12 p.m., which was after the accident in question. The motion was not ruled upon because of the provider’s motion for continuance.
United Auto filed an answer on December 17, 2008, which denied that the treatment was reasonable, related, or necessary. It also reasserted its claim that there was no coverage as the loss occurred outside the policy period. Nevertheless, on December 18, 2008, United Auto filed its initial proposal for settlement, which offered the provider $500 to settle the case, which included medical benefits, interest, costs, and attorney’s fees. A second proposal for settlement was offered subsequently by United Auto. The second offer was also for $500, which broke down to $495 for attorney’s fees and $5 for medical benefits. The case was tried on January 13-14, 2014 before a jury. At the conclusion of the trial, the jury returned a verdict for United Auto, finding that at the time of the accident, the claimant was not insured by United Auto. A final judgment was entered in the insurer’s favor on April 17, 2014.
United Auto filed a motion for attorney’s fees based on the provider’s rejection of its proposal for settlement, pursuant to §768.79, Fla. Stat. (1997). The provider responded that the proposal for settlement was for a nominal amount and was not made in good faith based on an objective assessment of both parties’ positions. A hearing was held on April 15, 2014. United Auto’s argument was that even though its offer was nominal, it was entitled to attorney’s fees because at the time of the offer, United Auto had a reasonable basis to believe that it was not liable. The provider’s position is that United Auto did not have a reasonable basis for the offer and that there was a reasonable basis to believe that coverage did in fact exist. Also, the provider contended that the offer was not made in good faith since it was significantly less than the amount of damages and attorney’s fees that the provider was seeking at the time of the offer. On May 21, 2014, the trial court agreed with the provider and entered an order finding that the proposal for settlement was not made in good faith. This appeal followed.
The issue before this Court is whether or not the trial court’s order denying United Auto attorney’s fees should be affirmed, on the rationale that the insurer’s proposal for settlement was not made in good faith. We conclude that it should not, and that the trial court should be reversed.
Appellant United Auto argues that the trial court abused its discretion in denying its motion for entitlement to attorney’s fees, as the insurer had a good faith basis to support its nominal offers. To determine whether an offer is justified, the Court must consider whether the record demonstrates conclusively that, at the time the offer was made, the offeror had a reasonable basis to conclude that is exposure was nominal. Dep’t of Highway Safety & Motor Vehicles v. Weinstein, 747 So. 2d 1019, 1020 (Fla. 3d DCA 1999) [24 Fla. L. Weekly D2799b]. So long as the offeror had a reasonable basis in known or reasonably believed fact to conclude that the offer was justifiable, the good faith requirement has been satisfied. Id. at 1021.
Here, United Auto served its proposal for settlement after reviewing the police report of the accident, which showed it occurred at 1:37 p.m. As the insurance policy was not bound and effective until 2:12 p.m., United Auto believed there was no coverage for the accident. As such, it believed it had no liability. Since United Auto fully intended to settle the case if the offer was accepted, the offer was made in good faith. Additionally, because the provider failed to present any evidence that the insurer’s offer was not made in good faith, the trial court’s denial of United Auto’s entitlement to attorney’s fees was erroneous. Pacer Technology v. Lee Pharmaceuticals, Inc., 737 So. 2d 1238 (Fla. 3d DCA 1999) [24 Fla. L. Weekly D1812f].
United Auto correctly notes that good faith is determined by the subjective motivations and beliefs of the offeror, rather than by an objective assessment of both parties’ positions. Dep’t of Highway Safety & Motor Vehicles v. Weinstein, 747 So. 2d 1019 (Fla. 3d DCA 1999) [24 Fla. L. Weekly D2799b]. As discussed previously, United Auto relied on the information it had from the police report which stated that the accident happened before the time the policy became effective. This caused United Auto to conclude that there was no coverage in effect, so that the case was worth no more than a nuisance amount to settle.
Accordingly, we reverse the trial court’s denial of an award of attorney’s fees to United Auto, and remand to the trial court for a determination of same, as well as for an award of appellate attorney’s fees as the prevailing party in this appeal. (BAGLEY and SMITH, H., concur.)
