6 Fla. L. Weekly Supp. 645a
Attorney’s fees — Insurance — Personal injury protection — Motion to assess attorney’s fees and costs by insurer, who made offer of settlement in action brought by insured to recover PIP benefits for three medical tests performed in connection with automobile accident, granted — Motion was timely filed where, pursuant to Rule 1.442(a), motion was made within 30 days after return of verdict in jury trial — Rule 1.442(a) supersedes statute providing that court shall determine entitlement to attorney’s fees upon motion made within 30 days after entry of judgment — Defendant’s offer of settlement did not have to include actual fees and costs incurred by plaintiff as of date of offer — Section 627.428 does not preclude award of attorney’s fees to insurer under section 768.79 — There is no direct conflict between two statutes — Section 768.79 and Rule 1.442 give court discretion to disallow award of costs and attorney’s fees if it determines that offer was not made in good faith — Plaintiff failed to prove that defendant’s offer was made in bad faith, where defendant engaged in discovery by obtaining plaintiff’s medical records and deposing her treating physician prior to filing its proposal of settlement, and defendant made nominal offer based on physician’s testimony that tests in question were not necessary — There was reasonable foundation for nominal offer of $1.00
STACI HARDY, Plaintiff, vs. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant. County Court in and for Escambia County. Case No. 98-1351-CC-12. July 30, 1999. G.J. Roark, III, Judge. Counsel: Michael S. Burtt, for Plaintiff. W. Joel Boles, for Defendant.
ORDER ON DEFENDANT’S MOTION TO ASSESS ATTORNEY’S FEES AND COSTS
THIS CAUSE came before the Court on Defendant’s Motion to Assess Attorney’s Fees and Costs pursuant to §768.79 and §57.041, Florida Statutes. The Court, having heard the evidence and argument thereon, finds as follows:
FINDING OF FACTS
1. On April 1, 1998, Plaintiff, Staci Hardy, brought an action against Defendant, State Farm Mutual Automobile Insurance Company, to recover Personal Injury Protection benefits for medical treatment rendered in connection with an automobile accident. At issue were three tests performed by the Accident and Pain Center. The total amount sought was $204.00.
2. On December 3, 1998, Defendant served a Proposal of Settlement pursuant to §768.79, Florida Statutes. The amount of the offer was $1.00.
3. Prior to filing its Proposal for Settlement, Defendant secured Plaintiff’s medical records and took the deposition of her treating physician, Dr. James Graves. Dr. Graves indicated that the tests at issue were helpful but not necessary in the treatment of Plaintiff.
4. On April 20, 1999, a verdict was rendered in favor of Defendant on all issues. On April 23, 1999, Defendant filed its Motion to Assess Attorney’s Fees and Costs pursuant to §678.79 and §57.041, Florida Statutes. On April 27, 1999, the Court entered judgment for Defendant based on the jury verdict. Plaintiff opposed Defendant’s motion, and filed a notice of appeal on May 25, 1999.
ISSUES
The issues raised by this motion all involve §768.79, Florida Statutes, and are as follows:
1. Whether Defendant’s Motion to Assess Attorney’s Fees and Costs was timely filed.
2. Whether Defendant’s offer was required to include the attorney’s fees and costs incurred by Plaintiff as of the date the Proposal for Settlement was filed.
3. Whether a Defendant insurer can collect attorney’s fees in an action under §627.428, Florida Statutes.
4. Whether the offer made by Defendant was made in good faith.
CONCLUSIONS OF LAW
Plaintiff contends that, since the offer was made pursuant to §768.79, the provisions of paragraph (6) of that section control the filing of the motion. Paragraph (6) provides that “upon motion made . . . within 30 days after entry of judgment” the Court shall determine the entitlement to and amount of fees and costs. Since Defendant’s motion preceded the entry of judgment, Plaintiff contends that it was untimely.
Rule 1.442(a), FRCP, by its terms applies to all proposals for settlement and supersedes all provisions of the rules and statutes which are inconsistent. Paragraph (g) requires that the motion be made within 30 days after return of the verdict in a jury action. Accordingly, the motion was timely filed.
Plaintiff next contends that Defendant was required to include in the offer the attorney’s fees and costs incurred by Plaintiff as of the date of the offer. In support of this position Plaintiff cites Danis Industries Corporation et al. v. Ground Improvement Techniques, Inc., et al., 645 So.2d 420 (Fla. 1994) and DeSalvo v. Scottsdale Insurance Company, 705 So.2d 694 (Fla. 1st DCA 1998). In Danis, the parties were apparently proceeding under §627.428, and in DeSalvo, only the losing party filed an offer of judgment. The holding in each case was that an offer of settlement must include all damages, attorney’s fees and costs. The many cases which hold that a nominal offer of judgment is sufficient for sanctions under §768.79 support Defendant’s position that actual fees and costs do not have to be included in an offer of judgment. See, Quest Air South, Inc. v. Marlene Weisman, 24 Fla.L.Weekly D245 (Fla. 4th DCA January 20, 1999); O’Neil v. Wal-Mart Stores, Inc., 602 So.2d 1342 (Fla. 5th DCA 1992); State Farm Mutual Automobile Insurance Company v. Marko, 695 So.2d 874 (Fla. 2d DCA 1997).
Plaintiff further contends that an insurer cannot collect attorney’s fees in an action falling under §627.428, even if Defendant has filed an offer of judgment and would otherwise be entitled thereunder. Seeming to support this contention is Danis, supra, which held that under §627.428, only the insured has the right to attorney’s fees as the prevailing party. As pointed out above, there is no evidence that Danis involved an offer of judgment; the Court merely indicated that an insurer can insulate itself from the insured’s fees at the point in time it offers the full amount the insured would be entitled to recover at the time an offer of settlement is made.
Additionally, Plaintiff points out that if there is a conflict between §627.428 and §768.79, that the former controls. §768.71, Florida Statutes. Since §768.79 was promulgated to end frivolous law suits, and §627.428 to ensure valid claims were paid, there is not a direct conflict between the two statutes. See, Deltona House Rentals, Inc. v. Cloer, 24 Fla.L.Weekly D1420 (Fla. 5th DCA June 18, 1999); Danis, supra. This issue was addressed directly by the 5th District Court of Appeal in Weesner v. United Services Automobile Association, 711 So.2d 1192 (Fla. 5th DCA 1998), where the Court rejected the arguments of the insured that §627.428 precludes attorney’s fees to an insurer under §768.79. Since this Court is aware of no other equivalent authority to the contrary, it finds that the provisions of §768.79 and Rule 1.442 are applicable to this case, and Defendant is not precluded from recovering sanctions under §768.79.
The final issue is whether the offer was made in good faith. Both §768.79 and Rule 1.442 give the Court discretion to disallow an award of costs and attorney’s fees if it determines that the offer was not made in good faith. This is not unbridled discretion; the Court must consider whether the offer bears a reasonable relationship to damages suffered and a realistic assessment of liability. Evans v. Piotraczk, 23 Fla.L.Weekly D2725 (Fla. 5th DCA December 11, 1998). The burden of proving the absence of good faith is on the offeree. Allstate Insurance Company v. Manasse, 715 So.2d 1079 (Fla. 4th DCA 1998). The reasonableness of an offeree’s rejection of an offer is not a consideration. Id.; City of Neptune Beach v. Smith, 1999 WL 162981 (Fla.App. 1 Dist.). Even an offer made for the sole purpose of creating a right to attorney’s fees is not a bad faith offer solely for that reason. Lieff v. Sandoval, 24 Fla.L.Weekly D227 (Fla. 3rd DCA January 20, 1999).
Nominal offers are not prima facie evidence of bad faith and an offer of $1.00 is enforceable under §768.79 if based on a reasonable assessment of liability. O’Neil, supra; Marko, supra. Acceptance of such an offer may allow an offeree to salvage future expenditures in a weak case and avoid exposure for the offeror’s fees and costs. O’Neil, supra. Where an offer is made prior to the commencement of discovery, and is without a reasonable foundation, that offer is subject to scrutiny by the trial court. Fox v. McCaw Cellular Communication of Florida, 23 Fla.L.Weekly D2687 (Fla. 4th DCA December 9, 1998); Eagleman v. Eagleman, 673 So.2d 946 (Fla. 4th DCA 1996). In determining whether an offer was made in good faith, the Court must consider the facts and circumstances surrounding the offer. Fox, supra. The common thread running through the District Court decisions reviewed by the Court is that the nominal offerors in those cases had a reasonable basis to conclude that their exposure was limited or nonexistent. Id.
In this case Defendant engaged in discovery by obtaining Plaintiff’s medical records and deposing her treating physician prior to filing its Proposal of Settlement. Based on the physician’s testimony that the tests in question were not necessary, Defendant offered the nominal amount of $1.00. There was a reasonable foundation for that offer. See, Donohoe and TBM Staffing, Inc. v. Starmed Staffing, Inc., 24 Fla.L.Weekly D1282 (Fla. 2d DCA May 28, 1999). Accordingly the Court finds that Plaintiff has failed to prove that Defendant’s offer was made in bad faith, and the Court holds that it was not.
Therefore, IT IS ORDERED AND ADJUDGED that Defendant’s Motion be granted. The Court reserves jurisdiction over the amount of fees and costs to be awarded.
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