3 Fla. L. Weekly Supp. 628a
Insurance — Fire — Enforcement of settlement agreement — Appraisal provision of policy constituted an arbitration agreement — Arbitration decision cannot be reversed unless defendant claims that one of violations enumerated in section 682.13(1)(a)(e) has been committed — Insurer’s claim that arbitrator erred in awarding more damages than permitted by face amount of policy without merit where policy had provision permitting insured to recover more than the face amount under certain factual conditions — Insurer’s claim that appraisers factually erred in awarding more than face value of policy because insureds did not repair or replace the items as required by the policy in order for the policy limits to be exceeded does not entitle insurer to relief where insurer did not seek to modify or correct the award within 90 days of delivery of the appraiser’s decision
GEORGE WORMAND and ELSA WORMAND, Plaintiffs, v. UNITED STATES FIDELITY & GUARANTY CO., Defendants. 9th Judicial Circuit in and for Orange County. Case No. 95-2715. January 19, 1996. James C. Hauser, Judge.
ORDER
FACTS
This cause came to be heard before this court on the plaintiff’s motion to enforce a settlement agreement. The defendant insured the plaintiff’s residence and personal property for any damage caused by fire. After the plaintiff’s residence caught fire, the defendant admitted coverage, but disputed the amount of the loss.
The face amount of the policy establishes the following coverage:
Dwelling $360,000
Contents $251,000
Fair Rental Value $72,100
However the policy also has a rider which permits the plaintiff to recover the replacement cost of the dwelling1 or personal property,2 even if said sums exceed the policy limits. In order to obtain the excess coverage, the plaintiff is required to repair or replace the damaged dwelling or personal property.
The defendant tendered payments of $652,000, but this was not acceptable to the plaintiff and the plaintiff filed suit in circuit court. The defendant then moved to submit the disputed amount of damages for appraisal, as set forth in the policy. The appraisers found that the amount of damages sustained by the plaintiff, in addition to the amount previously paid by the defendant was $231,761, which was significantly greater than the face amount of the policy.
LAW
The insurance provision in the policy which permits that disputed property damage claims will be submitted for appraisal states in part the following:
If you and we fail to agree on the amount of the loss, either may demand an appraisal of the loss…The appraisers will separately set the amount of loss. If the appraisers submit a written report of an agreement to us, the amount agreed upon will be the amount of the loss… A decision by any two will set the amount of loss…3
Based on the language of the above clause, this court is persuaded that it is an arbitration agreement.4 An arbitration decision may not be reversed unless the defendant claims that one of the five enumerated reasons listed in Fla. Stat. 682.13(1)(a)(e) has been committed, such as the arbitrator was guilty of some sort of misconduct.5 The defendant has not alleged any such violation in this case.
Rather the defendant claims that the arbitrator erred in awarding more damages than permitted by the face amount of the policy. They cite to a Florida Supreme Court decision which reversed an arbitrator’s award because the amount exceeded the policy’s limits.6 However the basis for the Florida Supreme Court decision was that although the applicable policy limits may have been in dispute, the issue of the policy limits was never submitted to the arbitrator.
Meade is distinguishable from the case at bar. As previously stated, the policy had a provision permitting the insured to recover more than the face amount under certain factual conditions. It is clear that the appraisers took this into account when they made their decision.
The personal property award does not take into account depreciation deducted in arriving at the amount of loss and award in respect to $231,761 of the Personal Property loss calculated at A.C.U. Replacement cost policy provisions may apply to increase the amount payable. (emphasis added)
The defendant argues that the appraisers factually erred in awarding more than the face value of the policy because the plaintiff did not repair or replace the items as required by the policy, in order for the policy limits to be exceeded. However the defendant did not seek to modify or correct the award within 90 days of the delivery of the appraiser’s decision, as permitted under the law. As previously stated, the arbitrator’s decision must be affirmed, even if it is clearly wrong, unless the losing party can show a violation of Fla. Stat. 682.13.
A recent Florida Supreme Court case is illustrative of this point. An arbitration decision awarded attorney’s fees to the prevailing party, even though there was no basis in the contract or by statute that would permit such an award. If a trial court had made such a decision, it would have clearly been reversible error. However the Florida Supreme Court affirmed the arbitrator’s decision because the parties had agreed that any arbitration decision was final.7
The defendant, not the plaintiff, drafted the insurance policy. The defendant could have included in the policy language to the effect that if the amount awarded by the appraisers exceeded the face amount of the policy limits, then neither side would be bound the amount of the appraisal. At least one appellate court has enforced such a provision.8
Based on the above, this court rules that the settlement agreement must be enforced. This court reserves jurisdiction to determine whether the plaintiff is entitled to attorney’s fees and if so the amount of attorney’s fees.
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1Coverage A
2Personal Property Replacement Cost
3Paragraph __ of the Conditions Section of the insurance policy.
4Intracoastal Ventures Corp. v. Safeco Insurance Co. of America, 540 So.2d 162 (Fla. 4th DCA 1989); U.S. Fire Insurance Co. v. Franko, 443 So.2d 170 (Fla. 1st DCA 1984).
5Schnurmacher Holding Inc. v. Noriega, 542 So.2d 1327 (Fla. 1989); The Keys Co. v. Gomez, 590 So.2d 954 (Fla. 3d DCA 1992).
6Meade v. Lumberman’s Mutual Casualty Co., 423 So.2d 908 (Fla. 1982).
7Turnberry Associates v. Service Station Aid Inc., 651 So.2d 1173 (Fla. 1995).
8Berger v. Fireman’s Fund Insurance Co., 515 So.2d 997 (Fla. 3d DCA 1987).
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7. The court finds that, at the outset of the handling of the case, the Plaintiff’s chances of success were less than 50%, and that a multiplier of 2.0 is appropriate. At the outset of this case the Plaintiff faced the following facts:
ù This was a “minor” rear-end collision.
ù Plaintiff admitted that she was not hurt at the time of the accident.
ù Plaintiff drove her car to work after the accident.
ù Plaintiff did not experience any pain for at least 30 days after accident.
ù At the time she began experiencing pain, Plaintiff did not associate the pain with the automobile accident.
ù Plaintiff did not seek medical attention until approximately 18 months after the accident.
ù Plaintiff presented to Dr. Harris with complaints of mid-back pain due to lifting luggage.
ù Plaintiff’s intake form with Dr. Harris states that the pain began 3 weeks prior.
ù Plaintiff admitted that she was self-manipulating her own neck numerous times per day every day.
ù IME concluded that Plaintiff’s pain was “solely and totally a function of her habit of excessive self-manipulation.”
ù Plaintiff’s pain was possibly due to her waitressing and working at a computer.
ù The Defendant put forth an expert chiropractic witness who through his own testimony acknowledged that he had “never lost a PIP case” when testifying for an insurance company.
8. Plaintiff’s attorney undertook the representation of Plaintiff on the basis that if the Plaintiff did not prevail, he would receive no fee, and that if the Plaintiff did prevail, he would accept as his fee and costs whatever the Court awarded. The Plaintiff was a single mother who indicated during the trial that she could not afford to seek medical care because the cost was prohibitive. It is unlikely that she would have been able to pay for an attorney to represent her on an hourly rate, nor afford the cost of litigation. Thus, counsel for the Plaintiff was unable to mitigate the risk of non-payment in any way.
9. A reasonable attorney’s fee for the Plaintiff’s attorneys for the underlying claim is therefore calculated as follows: 151.72 hours x $150 per hour x 2.0 = $45,516.
10. The Court further finds that $4,172.19 is due and payable to the Plaintiff’s attorneys as and for costs associated with the prosecution of the Plaintiff’s claim.
11. Plaintiff’s attorneys are entitled to interest on the attorney’s fees at 8% from the date of the verdict through the date of the fee hearing (98 days) on $45,516: $977.66. Orlando Regional Med. Ctr. Inc. v. Chmielewski, 573 So.2d 876 (Fla. 5th DCA 1990).
12. Plaintiff’s expert witness on attorneys fees, Mr. Clayton Simmons, is entitled to be compensated for the time he expended in preparing to testify and testifying in this case. Mr. Simmons expended 1 hour in this case, and a reasonable hourly rate for Mr. Simmons is $160 per hour. See Stokus v. Phillips, 651 So.2d 1244 (Fla. 2d DCA 1995).
It is therefore, ORDERED AND ADJUDGED that:
1. Plaintiff’s attorneys shall have and recover from the Defendant, CAPITAL ENTERPRISE INSURANCE COMPANY, the sum of $45,516.00 as attorney’s fees, together with the sum of $4,172.19 as and for costs associated in this matter.
2. Plaintiff’s attorneys shall have and recover from the Defendant, CAPITAL ENTERPRISE INSURANCE COMPANY, interest on the attorneys fees at 8% from the date of the verdict through the date of the fee hearing in the amount of $977.66.
3. Plaintiff’s expert witness on attorneys fees, Clayton Simmons, Esquire, shall have and recover from the Defendant, CAPITAL ENTERPRISE INSURANCE COMPANY, fees in the amount of $160.00 for the time expended in this case.
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