27 Fla. L. Weekly Supp. 533a
Online Reference: FLWSUPP 2706BELLInsurance — Homeowners — Attorney’s fees — Prevailing party — Where insurer made no payment on insured’s claim because it valued damage to home at less than amount of deductible, insurer was unaware of any dispute as to valuation of damage until insured filed suit, and once suit was filed insurer invoked appraisal process and paid amount of appraised damage less deductible, insurer neither breached policy nor made confession of judgment — Insured’s motion for attorney’s fees and costs is denied
KATHY BENTLEY-BELL as Personal Representative of the ESTATE OF KATHLEEN BENTLEY, Plaintiff, v. STATE FARM FLORIDA INSURANCE COMPANY, Defendant. County Court, 4th Judicial Circuit in and for Duval County. Case No. 2018-CC-005111, Division N. August 1, 2019. Gary P. Flower, Judge. Counsel: Nicolle Von Roenn, Morgan and Morgan, Jacksonville, for Plaintiff. Lynn S. Alfano and Robert A. Kingsford, Alfano Kingsford, P.A., Maitland, for Defendant.
ORDER ON PLAINTIFF’S MOTIONFOR ATTORNEY’S FEES AND COSTS
THIS CAUSE, having come to be heard on May 6, 2019 on Plaintiff’s September 19, 2018 Motion for Attorney’s Fees and Costs and Supporting Memorandum of Law, and the Court having reviewed the record, heard argument of counsel, and being otherwise duly advised in the premises, it makes the following factual findings:
I. Factual Background
Plaintiff’s claim arose as a result of damage sustained to Plaintiff’s home following Hurricane Irma in September 2017. Plaintiff made a claim for damages with her insurer, Defendant, State Farm Florida Insurance Company on or around October 28, 2017. Defendant accepted coverage of Plaintiff’s claim, adjusted the claim, and prepared an estimate of damage that was below the Plaintiff’s deductible.
Defendant communicated its claim decision to the Plaintiff with its November 15, 2017 letter to the Plaintiff. Plaintiff subsequently filed this lawsuit on May 15, 2018, before Plaintiff or her counsel communicated to Defendant any disagreement with Defendant’s adjustment of the loss. On June 4, 2018, Defendant requested a copy of any estimates and expert or contractor reports in support of Plaintiff’s lawsuit and further advised that Defendant was unaware of any dispute between the parties and wished to have an opportunity to consider any competing estimates or opinions. No response was received. On June 25, 2018, Defendant, having received no response, sent follow-up correspondence to Plaintiff’s counsel demanding appraisal of the subject claim and named its appraiser.
On August 14, 2018, the parties entered into a Joint Stipulation to Abate Litigation Pending Completion of Appraisal whereby the parties agreed to proceed with appraisal of this claim in accordance with the terms of the subject policy.
On August 23, 2018, Defendant issued an appraisal award for $14,378.98, minus the $3,659.97 non-recoverable depreciation, amounting to an actual cash value of $10,719.19. On September 11, 2018, Defendant advised the Plaintiff that it was issuing a check to Plaintiff in the amount of $6,691.19, which is the actual cash value of the award, minus the $4,028.00 deductible. The Defendant promptly tendered a check for the amount of the appraisal award.
II. The Issue
The issue before this court is to determine whether or not the insurer’s act in paying the appraisal amount, after the lawsuit was filed, constituted a confession of judgment so as to require the insurer to pay the insured’s attorney’s fees under section 627.428, Florida Statutes, which provides for an award of attorney’s fees to an insured that prevails against an insurance company. Section 627.428, Fla. Statutes provides in pertinent part:
(1) 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.
(3) When so awarded, compensation or fees of the attorney shall be included in the judgment or decree rendered in the case.
Two particular clauses of the policy are pertinent to the issue before the Court. The first provides that either party can demand appraisal “if you and we fail to agree on the amount of loss.” Such demands “must be in writing.”
The policy also provides that, “Appraisal is a non-judicial proceeding and neither party will be awarded attorney fees or be subject to an entry of judgment in a court. We do not waive any of our rights by submitting to an appraisal.”
In this case, Defendant properly demanded appraisal in writing after the lawsuit was filed and Plaintiff stipulated to go to appraisal.1
III. The Position of the Parties
The Plaintiff contends that the Defendant breached its contract with Plaintiff by incorrectly denying coverage, and is therefore required to pay Plaintiff’s reasonable attorney’s fees pursuant to Section 627.428, Florida Statutes. The Plaintiff cites to the Florida Supreme Court’s decision in Johnson v. Omega Insurance Co., 200 So.3d 1207 (Fla. 2016) [41 Fla. L. Weekly S415a] in support of the Plaintiff’s claim.
Plaintiff does not dispute any of the contract language from the insurance policy, instead relying on the relevant statute and case law that generally supports attorney’s fees awards. In pointing to Johnson, Plaintiff contends that whether Defendant “knew” of the dispute prior to the lawsuit is irrelevant because the prevailing standard is whether Defendant’s decision was “incorrect,” not whether it was “wrongful” or that the breach was done “knowingly.” Johnson at 1214. This is in response to Plaintiff’s belief that Defendant attempted to create the additional element of “knowingly” or “wrongfulness” to a breach of contract action. Plaintiff also contends that the filing of the lawsuit was the catalyst that led Defendant to invoke appraisal, and points to the referenced statute that this in turn requires attorney’s fees to be paid by Defendant.
Plaintiff also points to Jerkins v. USF & G Specialty Ins. Co., 982 So. 2d 15 (Fla. 5th DCA 2008) [33 Fla. L. Weekly D763a], which held that the payment of an appraisal award acted as a “confession of judgment” in insured’s lawsuit, and thus, insureds were entitled to attorney’s fees.
The Defendant, State Farm, points to the terms of its insurance agreement with Plaintiff, stating that Plaintiff did not allow Defendant to go through the appraisal process, and therefore, Defendant did not breach. Defendant also points to Hill v. State Farm Fla. Ins. Co., 35 So. 3d 956, 961 [Fla. 2DCA 2010] [35 Fla. L. Weekly D1041a], which held that attorney’s fees “should normally be limited to the work associated with filing the lawsuit after the insurance carrier has ceased to negotiate or has breached the contract and the additional legal work necessary and reasonable to resolve the breach of contract.” Defendant later claims that Florida courts have routinely refused to apply the confession of judgment doctrine to award attorney’s fees to insureds who prematurely file suit when such insureds were not forced to file suit to receive insurance benefits, citing State Farm Fla. Ins. Co. v. Lorenzo, 969 So. 2d 393, 398 (Fla. 5th DCA 2007) [32 Fla. L. Weekly D1791e], and Goldman v. United Servs. Auto Ass’n, 244 So.3d 310 (Fla. 4th DCA 2018) [43 Fla. L. Weekly D854a].
IV. Analysis
In the present case, Defendant did not breach its contract with the Plaintiff, nor did it make what amounted to a “confession of judgment.” There was never a breakdown in the claims adjusting or communications process. The present dispute concerns the actual valuation of that damage, which Plaintiff did not contest at any time prior to filing suit six months after State Farm’s estimate. Plaintiff also failed to demand the appraisal that the insurance policy afforded.2 Until Plaintiff filed their complaint, Defendant was wholly unaware of any disagreement with the damage estimate. Once Defendant became aware of the dispute, it demanded appraisal and promptly paid Plaintiff in the sum of $14,378.98 minus the applicable deductible, thereby settling the suit according to the insurance policy provisions.
The present facts are nearly identical to those in Goldman, where the insured made a claim for a leak, the insurer valued the damage and paid the insured, and then the insured filed suit against the insurer without ever notifying the insurer that they disagreed with the appraisal amount. Goldman at 311. In both cases, the insurer demanded appraisal and subsequently increased the value of loss. Id. The only difference between Goldman and the present case is that the insured in Goldman received some amount of payout from its insurance policy prior to filing suit, whereas the Plaintiff here did not because the value of loss was less than the deductible. Id.
To award attorney’s fees in this case would be tantamount to basing decisions on whether the insured has a high or low deductible plan, rather than any dispute of material fact, such as what is present in Johnson and Bryant, which were disputes surrounding either the cause of the damage or what the policy would actually cover.3 Here, the only dispute, like in Goldman, is over the value of the loss and not the cause of loss or terms of the policy, which is a distinction without a difference, and the court is therefore bound to follow Goldman.
It benefits the parties to enforce contracts such as those in the case at bar in that they provide certainty and speedy resolution of claims, which also avoids the uncertainty inherent in litigation. On the contrary, efforts to bypass contractual appraisal clauses result in the reflexivity of litigation.
In this case, Plaintiff did not establish that State Farm breached the policy or caused the Plaintiff to have to resort to litigation to resolve a disagreement in the amount of the loss adjustment of which only the Plaintiff was aware.
Based on these findings, it is ORDERED and ADJUDGED that Plaintiff’s Motion for attorney’s fees and costs is DENIED.
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1It should be noted that there is no limitation of this clause to pre-litigation appraisal.
2The Court is not saying that the insured was required to demand appraisal, but that it would have put the insurer on notice that there was a dispute.
3In Johnson, the insurer knew that there was damage to the Plaintiff’s property, but the appraisal stated that the damage was not from a sinkhole, thus making the issue about the cause of the damage, not the value. Johnson v. Omega Insurance Co., 200 So.3d 1207 (Fla. 2016) [41 Fla. L. Weekly S415a]. In Bryant, the insurer knew that there was damage well above the sublimit value, but erroneously decided that the sublimit applied, therefore making the issue about the policy terms, rather than the value. Bryant v. GeoVera Specialty Insurance Company, 271 So.3d 1013 (Fla. 4th DCA 2019) [44 Fla. L. Weekly D1232a].
