8 Fla. L. Weekly Supp. 419a
Attorney’s fees — Insurance — Where insured’s initial complaint against insurer was dismissed for failure to prosecute, insured filed second complaint through same counsel, and insurer settled second case, error to award insured attorney’s fees and costs for first litigation — Where first case was dismissed for failure to prosecute, there was no adjudication on the merits and no prevailing party for purposes of section 627.428(1), and awarding fees as to that case was an abuse of discretion — Following involuntary dismissal of initial action, trial court in subsequent action is without authority to award costs in initial action — Abuse of discretion to award attorney’s fees as to dismissed case when insured’s attorneys could not properly bill insured for those hours
ALLSTATE INDEMNITY CO., Appellant, vs. ROBERTO VAZQUEZ, Appellee. Circuit Court, 11th Judicial Circuit (Appellate) in and for Miami-Dade County. Case No. 00-339 AP. L.T. Case No. 99-10625 CC 25. Opinion filed May 1, 2001. On appeal from the County Court for Miami-Dade County, Florida, The Honorable Catherine A. Pooler, presiding. Counsel: Jacqueline G. Emanuel, for Appellant. Mari Sampedro-Iglesia, for Appellee.
(Fredricka G. Smith, Celeste H. Muir, and Eleanor Schockett, JJ.)
(SCHOCKETT, J.) Appellee, Roberto Vazquez, filed a Personal Injury Protection (“PIP”) suit against Appellant, Allstate Insurance Co. (“Allstate”), on October 30, 1997. Attorney Armando A. Brana (“Brana”) filed the original complaint, Case No. 97-8166 CC 25(2). On December 26, 1997, attorney Amado Alan Alvarez (“Alvarez”) filed a notice of appearance as co-counsel in the matter. On May 07,1998, Allstate served a Proposal for Settlement. Thereafter, no further record activity occurred in the case. On November 24,1999, Allstate moved to dismiss for lack of prosecution in accordance with Rule 1.420(e), Fla. R. Civ. P. The motion was granted without prejudice on December 30, 1999.
On December 30, 1999, Appellee filed a new PIP complaint and other papers against Allstate. Alvarez filed this suit which appears under Case No. 99-10625 CC 25(2). Allstate filed its notice of appearance in the matter on January 25, 2000. On January 26, 2000, Allstate agreed to settle the case by paying the outstanding medical bills and stipulated to Appellee’s entitlement to reasonable attorneys fees and costs. On February 07, 2000, Allstate forwarded a settlement check which covered the outstanding medical bills and interest to Alvarez.
On March 09, 2000, Appellee filed a Motion for Attorneys’ Fees and Costs which included an itemized statement for work performed by both Brana and Alvarez. The itemization spanned work beginning on October 29,1997 and ending on January 27, 2000. On May 02, 2000, the attorneys’ fees hearing was heard before the trial court, which conducted the hearing in accordance with Florida Patient’s Compensation Fund v. Rowe, 472 So. 2d 1145 (Fla. 1985). The trial court awarded Appellee attorneys’ fees and costs for both Brana and Alvarez from October 29, 1997 and January 27, 2000.
Allstate timely appealed and disputes the entitlement to attorneys’ fees for both Brana and Alvarez which took place during the course of the first litigation which was dismissed for failure to prosecute.
“The award of attorneys’ fees is within the sound discretion of the trial judge and, in the absence of a clear showing of an abuse of such discretion, an appellate court will not substitute its judgment for that of the trial judge.” Morales v. Allstate Ins. Co., 6 Fla. L. Weekly Supp. 403a (11th Judicial Cir. March 26,1999) quoting All-Star Ins. Corp. v. Scandia, Inc., 353 So. 2d 171,172 (Fla. 3d DCA 1977). In Applegate v. Barnett Bank of Tallahassee, 377 So. 2d 1150, 1152 (Fla. 1979), the Florida Supreme Court held that: “In appellate proceedings the decision of a trial court has the presumption of correctness and the burden is on the appellant to demonstrate error.” See Thomas v. Perkins, 723 So. 2d 293 (Fla. 3d DCA 1998).
“Statutes authorizing an award of attorney’s fees are in derogation of the common law; therefore, such statutes must be strictly construed.” Oruga Corp., Inc. v. AT&T Wireless of Florida, Inc., 712 So. 2d 1141, 1142 (Fla. 3d DCA 1998) (citations omitted). Section 627.736(8), Fla. Stat. (2000), provides for attorney’s fees in matters concerning PIP benefits. That section provides: “Applicability of Provision Regulating Attorney’s Fees. With respect to any dispute under the provisions of ss. 627.730-627.7405 between the insured and the insurer, the provisions of s. 627.428 shall apply.”
Section 627.428(1), Fla. Stat. (2000), provides for attorney’s fees as follows:
Upon rendition of a judgment or decree by any of the courts in 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.
“A court shall award a reasonable sum to compensate the insured’s attorney for prosecuting the suit when a judgment is entered against the insurer in favor of the insured.” FIGA v. R.V.M.P. Corp., 681 F. Supp. 806, 807-08 (S.D. Fla. 1988). Awards of attorney’s fees under § 627.428, Fla. Stat., “by successful claimants under insurance policies, are to be determined not from the point of view of the lawyer and client, but from that of the presiding judge.” Schneider v. National Cas. Co., 623 So. 2d 798, 800 (Fla. 3d DCA 1993).
“Dismissal of a cause of action under the provisions of Rule 1.420(e) is not an adjudication on the merits thereof.” Kohly v. Wallach, 580 So. 2d 880, 881 (Fla. 3d DCA 1991). See O.A.G. Corp. v. Britamco Underwriters, Inc., 707 So. 2d 785 (Fla. 3d DCA 1998) (there is no prevailing party for purposes of § 627.428, Fla. Stat., where a complaint is dismissed without prejudice because the matter is not adjudicated on the merits). The first case was dismissed for failure to prosecute in accordance with Rule 1.420(e), Fla. R. Civ. P. Therefore, the first case was not adjudicated on its merits. Accordingly, there was no prevailing party for purposes of § 627.428(1), Fla. Stat. (2000).
Under Rule 1.420(d), Fla. R. Civ. P., a “cost award must be made in the same action in which a dismissal is obtained.” Billington v. L.B.A. Associates, Inc., 777 So. 2d 1151, 1153 (Fla. 3d DCA 2001). According to the Billington case, following the involuntary dismissal of an initial action, a trial court in a subsequent action is without jurisdiction or authority to award costs in the initial action.
Allstate does not contest that Appellee is entitled to attorney’s fees in the second case as provided for in § 627.428(1), Fla. Stat., as Appellee clearly prevailed in that suit. “When the insurance company has agreed to settle a disputed case, it has, in effect, declined to defend its position in the pending suit. Thus, the payment of the claim is, indeed, the functional equivalent of a confession of judgment or a verdict in favor of the insured.” Wollard v. Lloyd’s and Companies of Lloyd’s, 439 So. 2d 217, 218 (Fla. 1983); Central Magnetic Imaging v. State Farm Mut. Auto. Ins. Co., 745 So. 2d 405 (Fla. 3d DCA 1999); O.A.G. Corp., supra. While Allstate submitted a Proposal for Settlement on May 07, 1998, Appellee never acted upon the Proposal and no payment was made to Appellee in the first case. Thus, Allstate did not submit a confession of judgment or a verdict in Appellee’s favor. Therefore, as to the dismissed case, there was no rendition of a judgment or decree against Allstate and so Appellee is not entitled to attorneys’ fees in that matter. Awarding attorneys’ fees as to the dismissed case when Appellee did not prevail in that matter was an abuse of discretion requiring reversal.
In the Rowe case, the Florida Supreme Court adopted the lodestar process for a trial court to follow when it determines a reasonable award of attorneys fees. The Florida Supreme Court admonished attorneys to remember that: “Counsel is expected, of course, to claim only those hours that he could properly bill to his client. Id., 472 So. 2d at 1150. At the hearing to determine attorneys fees, Appellant argued that an attorney could not properly bill his own client for work performed but where the attorney failed to prosecute a case resulting in its dismissal for lack of prosecution.
In The Florida Bar v. Morrison, 669 So. 2d 1040 (Fla. 1996), the Florida Supreme Court addressed a matter where an attorney, among other shortcomings, failed to exercise reasonable diligence and promptness in representing a client (Rule 4-1.3, R. Regulating Fla. Bar) resulting in dismissal without prejudice of the client’s case. The case was refiled and again dismissed for failure to prosecute. The attorney in that matter collected $32,500 in attorney’s fees and failed to refund the fees to the client at the end of the case. The Florida Supreme Court upheld the referee’s findings that the attorney’s actions in failing to exercise reasonable diligence and promptness violated Rule 4-1.3, R. Regulating Fla. Bar. The attorney was suspended and ordered to make restitution to the former client of the $32,500 in attorney’s fees previously collected. See The Florida Bar v. Duval, 363 So. 2d 805 (Fla. 1978).
Appellee’s attorneys could have motioned the trial court for reinstatement of the dismissed case upon a showing of good cause for the delay. Rule 1.420(e), Fla. R. Civ. P., Author’s Comments. Neither attorney opted for such a motion. Instead, Alvarez filed a second complaint which Allstate settled in about 45 days. Appellee’s attorneys should not be rewarded for their combined lack of reasonable diligence. Awarding attorneys’ fees as to the dismissed case when Appellee’s attorneys could not properly bill Appellee for those hours was an abuse of discretion requiring reversal.
Accordingly, we reverse the trial court’s grant of attorneys’ fees and costs to Appellee as to the first action which was involuntarily dismissed for lack of prosecution. We remand this matter for further proceedings consistent herewith.
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