27 Fla. L. Weekly Supp. 730a
Online Reference: FLWSUPP 2708ROSIInsurance — Personal injury protection — Complaint — Amendment — Motion to amend complaint to correct amount in controversy following confession of judgment for amount alleged in original complaint is granted, and motions to dismiss, enforce confession of judgment, and enter final judgment are denied — Amount in controversy is merely allegation and is not dispositive of issue of damages, confession of judgment did not exhaust policy limits, and request to amend complaint is the first request by medical provider and comes early in litigation
MENTOR CHIROPRACTIC REHAB CENTER INC., a/a/o Nadia Rosin, Plaintiff, v. PROGRESSIVE AMERICAN INSURANCE COMPANY, Defendant. County Court, 7th Judicial Circuit in and for Volusia County. Case No. 2019 10209 CODL, Division 73 (MILLER). July 16, 2019. A. Christian Miller, Judge. Counsel: Olivia H. Miller and Chad A. Barr, Law Office of Chad A. Barr, P.A., Altamonte Springs, for Plaintiff. Robert Lyerly and Rebecca Bench, Maitland, for Defendant.
ORDER DENYING DEFENDANT’S MOTION TO DISMISS,MOTION TO ENFORCE CONFESSION OF JUDGMENT,AND MOTION FOR ENTRY OF FINAL JUDGMENT ANDGRANTING PLAINTIFF’S MOTION TO AMEND COMPLAINT
This matter is before the court on the Defendant’s Motion to Dismiss, Motion to Enforce Confession of Judgment, and Motion for Entry of Final Judgment, as well as the Plaintiff’s Motion to Amend Complaint [sic]. The court has reviewed the motions and conducted a hearing on the motions on May 13, 2019. After consideration of the matters presented, the court denies the Defendant’s Motion and Grants the Plaintiff’s Motion for the reasons expressed below.
I. FACTS AND PROCEDURAL HISTORY
The Plaintiff is a medical provider who treated Nadia Rosin, one of the Defendant’s insureds. Pursuant to an assignment of benefits, Plaintiff submitted its bills to Defendant for payment directly. After Defendant declined to pay its bills in full, Plaintiff sent Defendant a presuit demand letter as required by the PIP statute. Thereafter, Plaintiff filed this lawsuit.
Based upon the amount alleged in controversy, this case was scheduled for a small claims pretrial conference on February 20, 2019. Eight days before the pretrial conference, Defendant filed a document titled “Defendant’s Notice of Confession of Judgment.” In this Notice of Confession, Defendant alleged it had confessed judgment to the Plaintiff roughly one month prior for $212.15, and recognized Plaintiff’s entitlement to reasonable attorneys’ fees and costs.
Approximately one month after the pretrial conference, the Plaintiff filed its Motion to Amend Complaint [sic] seeking to “correct the amount in controversy.” Approximately two weeks later, Defendant filed its Motion to Dismiss, Motion to Enforce Confession of Judgment, and Motion for Entry of Final Judgment.
II. CONFESSION OF JUDGMENT DOCTRINE
The confession of judgment doctrine is a legal fiction. See Tampa Chiro. Ctr. Inc. v. State Farm Ins. Co., 141 So.3d 1256, 1258 (Fla. 5th DCA 2014) [39 Fla. L. Weekly D1441a]. The rationale behind the doctrine is to prevent insurers from avoiding statutory attorney’s fees provisions “simply by paying the policy proceeds after suit is filed but before a judgment is actually entered.” Id. The Tampa Chiropractic case further recognized that to require an actual judgment (before the right to statutory attorney’s fees is triggered) “would do violence to [section 627.478, Florida Statutes’,] purpose, which is to discourage litigation and encourage prompt disposition of valid insurance claims without litigation.” Id. at 1258-59. Given the purpose of the doctrine, and the result of its application (entitlement to attorney’s fees against insurers in favor of insureds), it can be said, then, that the confession of judgment doctrine is designed to protect insureds. Rephrased, it is intended to act as a shield.
In this case, however, the Defendant is attempting to use the confession of judgment doctrine to prevent the Plaintiff from seeking any damages above the amount of their confessed judgment. In doing so, the Defendant is attempting to convert the confession of judgment doctrine from its intended purpose as a shield for insureds into a sword against insureds (and their assignees). The Defendant’s intended use is repugnant to the doctrine’s purpose, despite Defendant’s agreement on the face of the confession that Plaintiff is entitled to reasonable attorney’s fees.
Defendant cites primarily to the case of Geico Casualty Company v. Barber, 147 So.3d 109 (Fla. 5th DCA 2014) [39 Fla. L. Weekly D1727a]. In that case, Barber sued Geico to recover uninsured motorist benefits. Id. at 110. Although Geico initially denied the claim, it served a proposal for settlement on Barber in the amount of the underlying UM policy’s limits after the lawsuit was filed. Id. When Barber rejected the offer, Geico then filed a confession of judgment and moved the trial court to enter final judgment. Id. at 110-111. Although the trial court eventually entered final judgment on the UM claim, it also granted1 Barber’s motion to amend his complaint to assert separate claims for UM benefits and a declaratory judgment to determine liability and total amount of damages. Id. at 111. Geico then sought certiorari review of the trial court’s rulings that allowed Barber to amend his complaint. Id.
On appeal, the Fifth District Court of Appeal agreed with Geico’s argument that once it confessed judgment, the trial court lacked jurisdiction to take any action other than to enter judgment in the amount of the policy limits in favor of Barber. Id. The Court quoted extensively from its own opinion in Fridman2, wherein it stated “[w]here no dispute exists as to the policy limits or available coverage and such limits are made known to the insured, the amount of the judgment against the insurer may not exceed the policy limits.” Id. (internal citation omitted). In further analysis, the Barber Court also reasoned that “when [an insurer] agree[s] to the entry of a judgment against it in the amount of the policy limits, the issues between the parties, as framed by the pleadings, became moot because the trial court could not provide any further substantive relief to [an insured].” Id. (emphasis added).
The facts of this case are distinguishable from Barber and its underlying rationale. Here, the Defendant tendered a confession of judgment in the amount of $222.15. This is nowhere near the $10,000.00 policy limits on a PIP insurance policy. Unlike in Barber, the Defendant’s liability could exceed its confession of judgment, depending upon the proof at trial. As a result, unlike in Barber, the issues between the parties are not mooted by the Defendant’s confession of judgment. Put simply, it would be contrary to the purpose of the doctrine to allow the Defendant to use a confession of judgment as a sword to cut off Plaintiff’s action at the amount of damages it initially claims in its Statement of Claim. This is especially so in light of Plaintiff’s pending Motion to Amend Complaint [sic] and Florida’s well-established policy in favor of liberally allowing amendment of pleadings. This point will be discussed in more detail in section III below.
Defendant also cites a number of county and circuit court opinions addressing confessions of judgment and resulting final judgments under similar circumstances as the case at bar. See Bretz Chiro. Clinic v. Geico Gen. Ins. Co., 26 Fla. L. Weekly Supp. 620a (Fla. 12th Cir. App. 2018); Douglas Price, P.A. d/b/a Florida Pain, Trauma & Injury Clinic a/a/o Dickenson Chery v. MGA Ins. Co., Inc., 21 Fla. L. Weekly Supp. 976a (Fla. Hillsborough Cty. Ct. May 9, 2014); Chirocare of Sunrise, LLC a/a/o Diosky De La Cruz v. Geico Gen. Ins. Co., Case No. CONO17005436 (Fla. Broward Cty. Ct. Apr. 13, 2018) [27 Fla. L. Weekly Supp. 202a]; Bauman Chiro. Clinic of NW Fla. a/a/o Katherine Kritzer v. Geico Gen. Ins. Co., Case No. 2018-SC-002340-O (Fla. Orange Cty. Ct. Apr. 11, 2019); Fla. Hosp. Med. Ctr. a/a/o Brandon Moody v. Geico Indem. Co., Case No. 2018-SC-004385-O (Fla. Orange Cty. Ct. April 18, 2019); North Orlando Chiro. Care, LLC a/a/o Joseph A. Sherone v. Geico Indem. Co., Case No. 2018-SC-005430-O (Fla. Orange Cty. Ct. Apr. 18, 2019); Chirocare of Coconut Creek LLC v. Progressive Select Ins. Co., Case No. COCE18028879 (Fla. Broward Cty. Ct. May 28, 2019); and Preziosi West/East Orlando Chiro., LLC a/a/o Phaniel Saintfleur v. Progressive Select Ins. Co., Case No. 2018-31065 COCI (Fla. Volusia Cty. Ct. June 26, 2019).
Of the county and circuit court cases cited, only Bretz, Florida Hospital Medical Center, Chirocare of Sunrise, Chirocare of Coconut Creek, and Preziosi explicitly refer to the Barber case in their opinions. Unfortunately, none of these four cases address the factual distinction between Barber and the cases before them — that the confessions of judgment (presumably) were well under the policy limits and thus the possibility existed that the insurers could be found liable for amounts in excess of their confessions but within their policy limits if the cases proceeded to trial. While this court respects the authorities cited and certainly their authors, it must respectfully disagree with the conclusions reached about the impact of a confession of judgment in this factual setting.
III. PLEADING DAMAGES
This case is currently governed by Florida’s Small Claims Rules. Rule 7.050(a)(1) sets forth the pleading requirements for Plaintiff’s Statement of Claim as follows, “[a]ctions are commenced by the filing of a statement of claim in concise form, which shall inform the defendant of the basis and the amount of the claim.” (emphasis added) Not surprisingly, there are no District Court or Florida Supreme Court cases discussing whether or not a plaintiff is limited by the amount of damages pled in a statement of claim. However, there are multiple sources of authority and guidance interpreting the corollary rule under the Rule 1.110(b).
The primary purpose for pleading an amount in controversy in a complaint or statement of claim is to establish which court has jurisdiction over the action. See § 7:5 Jurisdictional allegations, Trawick, Fla. Prac. & Proc. § 7:5 (2018-2019 ed.) (“Jurisdictional allegations must be made in the initial pleading. In law actions the allegation must allege an amount in controversy within the jurisdiction of the court in which the action is filed, except for replevin, ejectment and statutory actions at law. The allegation is ‘This is an action for damages that exceed $15,000.00′ or ‘This is an action for damages that exceed $5,000 but do not exceed $15,000.’ For an action under the Small Claims Rules, the amount alleged should not exceed $5,000.”) Thus in this limited sense, the allegation of damages is “jurisdictional” in that it determines which court has jurisdiction (county or circuit) over the case.
However, it is merely an allegation, and is not dispositive on the issue of damages. The plaintiff’s actual damages are to be decided by the pleadings and the proof at trial. See Chasin v. Richey, 91 So.2d 811, 812 (Fla. 1957) (noting “in the ordinary case it is the facts alleged, the issues and proof, and not the form of the prayer for relief, which determine the nature of the relief to be granted.”) (emphasis added); see also Shirley v. Lake Butler Corp., 123 So.2d 267, 272 (Fla. 2d DCA 1960) (stating “every final judgment shall grant the relief to which the party in whose favor it is rendered is entitled, even if the party has not demanded such relief in his pleadings. . .An amendment of the prayer for relief is not necessary to obtain the substantive relief to which the claimant is entitled to under the pleadings and proof.”) (emphasis added). Furthermore, trial courts are even empowered to award monetary damages to a plaintiff that has not demanded any in their complaint. See Vista Centre Venture v. Unlike Anything, Inc., 603 So.2d 576, 578 (Fla. 5th DCA 1992) (upholding trial court’s setting of trial on money damages in declaratory judgment action where plaintiff did not specifically ask for them).
The Defendant’s argument that the Plaintiff is limited to the damages initially pled in the Statement of Claim (i.e. a “jurisdictional maximum”) once the Defendant confessed judgment is at odds with the cases cited above. Furthermore, Plaintiff has filed a Motion to Amend its Statement of Claim asking to amend on this exact issue — the amount of damages it is seeking. As both parties are well aware, Florida courts have long recognized strong public policy interests in favor of liberally allowing amendments to pleadings to allow cases to be addressed on their merits, absent abuse of the amendment process. See Dimick v. Ray, 774 So.2d 830, 833 (Fla. 4th DCA 2000) [26 Fla. L. Weekly D93a]. This is Plaintiff’s first request to amend, it was filed very early in the litigation, and the only requested change is to increase the damages allegation. It would almost certainly be an abuse of discretion to disallow an amendment of this type under this set of circumstances in any other case.
A secondary purpose of requiring a plaintiff to allege an amount in controversy is to enable the clerk to assess and collect the appropriate filing fee under Florida Statute § 34.041. The Defendant argues that Plaintiff or its counsel is intentionally undervaluing the damages in this case to pay a lower filing fee. As troubling as this allegation is to the court considering the ripple effects on the Clerk’s budgets, not to mention possible ethical considerations, Defendant has not cited any binding authority in support of its argument that the underpayment of filing fees acts as a cap on Plaintiff’s damages. Indeed, other statutes demonstrate that the legislature is aware of the difficulty in some cases of properly determining the amount in controversy and its effect on filing fees. See e.g. Florida Statute § 28.241(1)(a)2.b. (requiring a plaintiff in a mortgage foreclosure action to “estimate in writing the amount in controversy of the claim upon filing the action”) and c. (requiring the court to identify the actual value of the claim in its final disposition of the case and allowing the clerk of court to adjust and collect any additional fees accordingly). This court is unable to make that invited leap, and declines to do so of its own volition.
Accordingly, the Defendant’s Motion to Dismiss, Motion to Enforce Confession of Judgment, and Motion for Entry of Final Judgment is DENIED. The Plaintiff’s Motion to Amend Complaint [sic] is GRANTED. Upon filing of the amended Statement of Claim, the Plaintiff shall pay the difference in applicable filing fees to the Clerk of Court.
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1The trial court also denied Barber’s request to add a bad faith claim finding it was not ripe. Id. at 111.
2Interestingly, the Fifth District Court of Appeal’s decision in Fridman [v. Safeco Insurance Company of Illinois] was later quashed by the Florida Supreme Court, which held that the trial court did not err in denying a motion to confess judgment where a bad faith claim was contemplated because the insured is entitled to a determination of the full extent of its damages in the underlying action prior to proceeding with the bad faith claim.185 So.3d 1214, 1229-30 (Fla. 2016) [41 Fla. L. Weekly S62a]. Although no bad faith claim has been sought or mentioned here, the rationale behind the Supreme Court’s opinion in Fridman further supports this court’s conclusion that the confession of judgment doctrine is not intended to be used as a sword by an insurer to cutoff an insured’s right to seek the full measure of its damages as may be proven at a trial or otherwise.
