7 Fla. L. Weekly Supp. 352a
Insurance — Personal injury protection — Attorney’s fees — Offer of settlement — Motion to strike insurer’s proposal for settlement denied — Court cannot find any legally compelling reason why offer of settlement is not valid in PIP cases
MRI of Jacksonville, Plaintiff, vs. State Farm Mutual Automobile Insurance Company, Defendant. County Court, 15th Judicial Circuit in and for Palm Beach County, Civil Division. Case No. MC 99-14944 RF. February 29, 2000. Robert S. Schwartz, Judge. Counsel: Bruce H. Schiller, for Plaintiff. Cymonie S. Rowe, for Defendant.
ORDER DENYING MOTION TO STRIKE
THIS MATTER WAS BEFORE THE COURT pursuant to the Defendant’s motion to strike Defendant’s proposal for settlement and the Court having heard argument of counsel, reviewed the court file and case law, hereby denies the motion.
The so called PIP statute, F.S. 627.736, has a provision applicable to it under section F.S. 627.428 allowing for the recovery of attorney fees to the insured upon a rendition of a judgment in its favor. The public policy of such a provision is obvious, the Insurance Company is in a much stronger financial position than an insured and without the ability to recoup costs, the Insurance Companies could deny many if not all claims with impunity, due to the cost of litigation. An unscrupulous Insurance Company (or a company acting in good faith, might still have a strong incentive to find reason to deny coverages without any intent or policy to do so) could “nickel and dime” an insured to death by cutting and denying legitimate claims; if an insured were to take the company to court, the cost to the insured, even if they prevailed, could many, if not most tunes negate the benefit of winning. The Insurance Company, if it lost one case, even for what might appear to be a significant amount of money to an individual, could quickly make up the loss by the continuation of the policy of non-payment or the cutting of the amount of payment, for legitimate claims. However, with the attorney fee statute and the case law that has sprung up around the fees, calling for various multipliers, etc., a loss can quickly add up to many thousands of dollars per case, with much less danger to the insured in bringing the suit.
Therefore, the public policy is a sound one. However, if there were no provision for reimbursing a Defendant for its fees, for an unreasonable refusal to settle, there is little reason for a Plaintiff to settle. If the Defendant has an arguable case for over payment or improper payments demanded, etc., but it can’t make a reasonable offer for settlement and have a chance of recouping the costs if they prevail or partially prevail in relation to their offer, there is no way to limit the waste of resources, both judicial and financial. An unscrupulous attorney has no incentive, in an arguable case, to settle; the incentive is to raise the costs as much as possible.
Either way everyone who has insurance pays in raised insurance costs when, either insurance companies pay unnecessary, inflated or fraudulent claims to avoid paying many multiple thousands of dollars in attorney fees or if they refuse to pay and lose at trial. Therefore, the public policy interest would seem to allow the Defendants to limit their losses in those legitimate cases of refusing to pay inflated or fraudulent claims.
By having both of these statutory provisions available, both the parties are covered from the wrong-doing of the other. Therefore the question for this court comes down to whether the case law or the statutory law makes the recouping of attorney fees a “one way street” clearly enough, that the court can invalidate a statutory provision allowing the making of offer of judgment.
The county court cases are divided on this issue and no higher cases seem to be directly on point. In Palm Beach County, so far, this court is aware of Judge Marx’s ruling in favor of the Plaintiff’s motion and Judge Perez’s ruling denying the Plaintiff’s point of view.
However, the court cannot find any legally compelling reason why an offer of settlement is not valid in PIP cases. See, generally, Scottsdale v. DeSalvo, 24 Fla. L.Weekly S422 (Fla. 1999).
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