26 Fla. L. Weekly Supp. 414b
Online Reference: FLWSUPP 2605TUNCInsurance — Personal injury protection — Attorney’s fees — Proposal for settlement — Nominal offer for settlement was made in good faith where insurer had reasonable basis to conclude that its exposure was nominal in suit challenging whether policy language allowed insurer to limit reimbursement pursuant to statutory fee schedules
OPEN MRI & CT OF SOUTH MIAMI, LLC d/b/a DELRAY DIAGNOSTICS, as assignee of Sevda Tuncer, Plaintiff, v. ALLSTATE INSURANCE COMPANY, Defendant. County Court, 15th Judicial Circuit in and for Palm Beach County. Case No. 50213SC009461XXXXMB. July 3, 2018. Nancy Perez, Judge. Counsel: Lindsay Karten, Deitsch & Wright, P.A., for Plaintiff. Gladys Perez Villanueva, Shutts & Bowen LLP, Miami, for Defendant.
ORDER GRANTING ALLSTATE’S RENEWED MOTIONFOR ENTITLEMENT TO ATTORNEY’S FEES ANDTO TAX COSTS AND ORDER DENYINGPLAINTIFF’S MOTION TO STRIKE
THIS CAUSE came before the Court upon Allstate’s Renewed Motion for Entitlement to Attorney’s Fees and to Tax Costs. Plaintiff, Open MRI & CT of South Miami, LLC d/b/a Delray Diagnostics (a/a/o Sevda Tuncer), was represented by Lindsay Karten, Esq., of Deitsch & Wright, P.A.; Defendant, Allstate Insurance Company, was represented by Gladys Perez Villanueva, Esq., of Shutts & Bowen. The Court heard argument of the Parties on the 26th day of June, 2018. At the hearing, Plaintiff conceded to the award of costs. The Court, being otherwise duly advised in the matter, GRANTS Defendant’s Motion for the following reasons and finds Defendant is entitled to an award of attorney’s fees and costs, reserving jurisdiction to determine amount.Facts
Plaintiff filed its complaint on July 30, 2013, seeking damages for breach of contract and asserting that Allstate’s policy language did not properly elect to limit reimbursement pursuant to section 627.736(5)(a)2., Florida Statutes (“Serridge issue”). Allstate served its proposal for settlement upon Plaintiff’s counsel on October 19, 2015. Plaintiff failed to respond to Allstate’s Proposal for Settlement within thirty (30) days of having been served with the proposal. Accordingly, the proposal was deemed rejected. On April 8, 2016, the Court granted Plaintiff’s Motion for Summary Judgment, denied Defendant’s Cross Motion for Summary Judgment, and entered Final Judgment in favor of Plaintiff, based upon Orthopedic Specialists v. Allstate Insurance Company, 177 So. 3d 19 (Fla. 4th DCA 2015) [40 Fla. L. Weekly D1918a]. This case was appealed to the Florida Supreme Court. Thereafter, the Court denied Allstate’s timely Motion for Rehearing, and Allstate appealed.
On January 26, 2017, the Florida Supreme Court decided Orthopedic Specialists v. Allstate Insurance Company, 212 So.3d 973 [42 Fla. L. Weekly S38a], in favor of Allstate, upholding the decisions of the First, Second, and Third District Courts of Appeal, and holding that “Allstate’s policy provided legally sufficient notice of Allstate’s election to use the permissive Medicare fee schedules identified in section 627.736(5)(a)2. to limit reimbursements.” On May 2, 2017, the Plaintiff filed a voluntary dismissal. The filing of a voluntary dismissal after a case has been adjudicated on the merits is a legal nullity; therefore, the Court granted Allstate’s Motion to Strike Plaintiff’s Notice of Voluntary Dismissal Without Prejudice and Motion to Vacate Final Judgment in favor of Plaintiff and for Entry of Final Judgment in favor of Allstate. On December 5, 2017, this Court entered a lengthy order and a final judgment in favor of Allstate. Shortly thereafter, Allstate filed its Renewed Motion for Entitlement to Attorney’s Fees and Costs.
The Serridge issue was pending in the Florida Supreme Court at the time this Court heard the parties’ summary judgment on February 17, 2016. Additionally, on February 13, 2015, in South Florida Wellness, Inc. (a/a/o Florencio Sanchez) v. Allstate Insurance Company, 89 F. Supp. 3d 1338 (S.D. Feb. 13, 2015), the federal court had dismissed with prejudice the plaintiff’s “Serridge issue” complaint, finding that Allstate’s language unambiguously provides notice of Allstate’s election to use subsection (5)(a)(2) fee schedules. In March of 2015, the First District Court of Appeal decided Allstate Fire & Casualty Insurance Company v. Stand-Up MRI of Tallahassee, 188 So. 3d 1 (Fla. 1st DCA 2015) [40 Fla. L. Weekly D693b], agreeing with Allstate that its policy provided sufficient notice of its election to limit reimbursements by use of the fee schedules and was appealed. On August 19, 2015, the Fourth District Court of Appeal issued its opinion in Serridge and certified conflict with the First District Court of Appeal. Orthopedic Specialists (a/a/o Kelli Serridge) v. Allstate Insurance Company, 177 So. 3d 19 (Fla. 4th DCA 2015) [40 Fla. L. Weekly D1918a], reversed 212 So. 3d 973 (Fla. 2017) [42 Fla. L. Weekly S38a]. This Court now addresses Allstate’s Renewed Motion for Entitlement to Attorney’s Fees and to Tax Costs.Law and Analysis
Plaintiff challenged Allstate’s proposal for settlement, arguing that it was a nominal offer, not made in good faith because, at the time the offer was made, the Fourth District Court of Appeal’s decision in Serridge was binding. While there is no dispute that under the doctrine in Pardo v. State, 596 So. 2d 665 (Fla. 1992), this Court was bound to enter a final judgment in favor of Plaintiff, that does not answer the question. This Court Must apply the specific standard pertaining to nominal offers of proposals for settlement.
The legislature “created a mandatory right to attorney’s fees, if the statutory prerequisites [of section 768.79] have been met.” TGI Friday’s Inc. v. Dvorak, 663 So. 2d 606, 611 (Fla. 1992). The “sole basis on which the court can disallow an entitlement to fees” is only if it determines that a qualifying offer ‘was not made in good faith.’ ” Id. at 612. “The rule is that a minimal offer can be made in good faith if the evidence demonstrates that, at the time the offer was made, the offeror had a reasonable basis to conclude that its exposure was nominal.” Citizens Property Ins. Corp. v. Perez, 164 So. 3d 1 (Fla. 4th DCA 2014) [39 Fla. L. Weekly D1271c].
Once a defendant shows entitlement to costs and attorney’s fees, the offeree has the burden to show that the offer was not made in good faith. The determination of whether an offer was served in good faith turns entirely on whether 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] (citations omitted). Offers are not suspect because they are nominal, as long as the offer bears a “realistic assessment of liability.” Land & Sea Petroleum, Inc. v. Business Specialists, Inc., 53 So. 3d 348 (Fla. 4th DCA 2011) [36 Fla. L. Weekly D136d].
The question of good faith is answered by analyzing the facts and circumstances surrounding the offer from Allstate’s viewpoint. See Levine v. Harris, 791 So. 2d 1175 (Fla. 4th DCA 2001) [26 Fla. L. Weekly D1824a]. That is, “good faith,” is, by its very nature, determined by the subjective motivations and beliefs of the pertinent actor. Therefore, so long as the offeror has a basis in known or reasonably believed fact to conclude that the offer is justifiable, the ‘good faith’ requirement has been satisfied.” Dep’t of Highway Safety & Motor Vehicles, Florida Highway Patrol v. Weinstein, 747 So. 2d 1019, 1021 (Fla. 3d DCA 1999) [24 Fla. L. Weekly D2799b] (emphasis added).
Given the facts and circumstances surrounding Allstate’s offer, this Court finds that its offer satisfied the good faith requirement of Florida law. Allstate never wavered from its position that the same policy language and statute at issue here permitted it to limit reimbursements pursuant to the fee schedules in Florida’s No-Fault Statute. It maintained that position in litigation throughout the Florida’s appellate courts1 and, ultimately, the Florida Supreme Court. See Land & Sea Petroleum, Inc. v. Business Specialists, Inc., 53 So. 3d 348 (Fla. 4th DCA 2011) [36 Fla. L. Weekly D136d]. Importantly, on October 19, 2015, when Allstate made its proposal for settlement: 1) the issue had been pending in four appellate courts, evidencing Allstate’s conviction in the correctness of its position; 2) the sole case pending in the Florida Supreme Court, Stand-Up MRI, was in Allstate’s favor and the motion to stay pending Serridge had been denied; 3) the Federal District Court had dismissed with prejudice the class action, ruling in favor of Allstate; 4) the First District Court of Appeal had sided with Allstate; 5) the Fourth District’s opinion in Serridge certified the question to the Florida Supreme Court, based on the conflict with the First District Court of Appeal.
The “Serridge issue” legal battle highlighted Allstate’s reasonable belief that its exposure was nominal. Allstate’s assessment of its liability when making the proposal for settlement was, realistic. The argument that Allstate lacked any reasonable basis for believing that it would prevail ignores the fact that it prevailed.2 “To accept in the same case in which a party did prevail the notion that there was no reasonable basis for that party prevailing would require self-contradiction” that this Court does not accept under these circumstances. See McMahan v. Toto, 311 F. 3d 1077 (11th Cir. Ct. App. 2002) [16 Fla. L. Weekly Fed. C8b].
Finally, Plaintiff relies upon an order entered in Spine Orthopedic Center (Mahmoud Ahmad) v. Allstate Insurance Company, Case No. 50-2013-011494-XXXX-MB, which is currently on appeal, Case No. 18-0008AP claiming the issue was novel and therefore the offer was not in good faith. This Court respectfully disagrees. Initially, in both Deltona House Rentals, Inc. v. Cloer, 734 So. 2d 586 (Fla. 5th DCA 1999) [24 Fla. L. Weekly D1420c], and Schmidt v. Fortner, 629 So. 2d 1036 (Fla. 4th DCA 1993), the appellate courts reversed the denial of the award of fees. Moreover, this Court relies upon more recent opinions from the Fourth District Court of Appeal, including Citizens Property Ins. Co. v. Perez, 164 So. 3d 1 (Fla. 4th DCA 2014) [39 Fla. L. Weekly D1271c]. See also Levine v. Harris, 791 So. 2d 1175 (Fla. 4th DCA 2001) [26 Fla. L. Weekly D1824a](discussion of Eagleman v. Eagleman, 673 So. 2d 946 (Fla. 4th DCA 1996) [21 Fla. L. Weekly D1192a] (“The creation of the right to attorney’s fees is the reason. . .why any litigant makes an offer under section 768.79. It is the carrot held out by the statute to encourage settlements. If we were to conclude that it is bad faith to utilize section 768.79 to obtain the right to attorney’s fees, then the legislative inducement, the reason section 768.79 exists, disappears into a judicial black hole.” Citing Lieff v. Sandoval, 726 So. 2d 335, 336 (Fla. 3d DCA 1999) [24 Fla. L. Weekly D227b]). This Court finds the legal issue was not novel or complex. Although this Court notes that there were conflicting appellate rulings.
Accordingly, the facts and circumstances surrounding Allstate’s offer demonstrate that, at the time the offer was made, Allstate had a reasonable basis to conclude that exposure was nominal. Defendant’s Renewed Motion for Entitlement to Attorney’s Fees is hereby GRANTED and this Court reserves jurisdiction to determine the amount and Plaintiff’s Motion to Strike is DENIED.
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1It is noteworthy that the precise issue herein had been appealed by Allstate throughout the State of Florida at the time this case was filed, evidencing its commitment to the propriety of its policy language. See First District Court of Appeal Docket, Allstate Fire and Casualty v. Stand-Up MRI of Tallahassee, Case No. 1D14-1213 (Notice of Appeal filed March 19, 2014) [40 Fla. L. Weekly D693b]; Second District Court of Appeal Docket, Allstate Indemnity Company v. Markley Chiropractic & Acupuncture, LLC, Case No. 2D14-3818 (Notice of Appeal filed August 13, 2014) [41 Fla. L. Weekly D793b]; Third District Court of Appeal Docket, Florida Wellness & Rehabilitation v. Allstate Fire & Casualty Ins. Co., Case No. 3D15-151 (Notice of Appeal filed January 15, 2015) [41 Fla. L. Weekly D1619c]; Fourth District Court of Appeal Court Docket, Orthopedic Specialists v. Allstate Ins. Co., Case No. 4D14-287 (Notice of Appeal filed January 28, 2014) [40 Fla. L. Weekly D1918a].
2Allstate had prevailed in the First, Second, and Third District Courts of Appeal. See Florida Wellness & Rehab. Center v. Allstate Fire & Casualty Ins. Co., 201 So. 3d 163 (Fla. 3d DCA 2016) [41 Fla. L. Weekly D1619c]; Allstate Indemnity Company v. Markley, Case No. 2D14-3818, 2016 WL 123853 (Fla. 2d DCA Mar. 30, 2016) [41 Fla. L. Weekly D793b]; and Allstate Fire and Casualty Insurance, Etc., v. Stand-Up MRI of Tallahassee, P.A., 188 So. 3d 1 (Fla. 1st DCA 2015) [40 Fla. L. Weekly D693b].
