As the insurance carrier timely complied with its policy’s appraisal clause and issued payments and coverage in accordance with terms and conditions of its policy, insureds’ lawsuit was not a necessary catalyst to force its compliance with the policy.
The Third District Court of Appeals was asked to reverse a trial court’s order denying the insureds’ motion for attorney’s fees. The case stems from a September 2017 Hurricane Irma claim made by the insureds with their carrier, Citizens. Citizens initially investigated the claim and partially covered the loss. The insureds disagreed with the coverage determination and provided Citizens with their own repair estimate. Citizens did issue an additional payment on the loss. However, after the second payment, the insureds demanded appraisal in accordance with the terms of their policy, which Citizens accepted. Somehow, Citizens’ response agreeing to the appraisal was not received by the insureds and their attorney.
The insureds filed their lawsuit on July 10, 2018. However, Citizens filed a motion to compel appraisal and an answer and affirmative defenses that asserted it was actively participating in the appraisal process. The trial court entered an agreed order compelling appraisal and staying the litigation. On December 17, 2018, an appraisal award was entered that resulted in Citizens paying further proceeds to the insureds on their claim. The insureds then filed their motion for attorney’s fees, arguing the additional award in appraisal was the equivalent to a confession of judgment. Citizens filed a motion for summary judgment, alleging they timely complied with the policy’s appraisal clause and the insureds’ complaint was premature.
The trial court entered an order denying the insureds’ motion for attorney’s fees and granted Citizens’ motion for summary judgment based solely on the evidence and testimony introduced during the fees hearing. The insureds’ appealed, alleging the trial court erred and could only consider the parties’ competing affidavits submitted in support of the motion for summary judgment and the response.
The Third District affirmed the denial of the fees motion, stating: “Courts generally do not apply the [confession of judgment] doctrine where the insureds were not forced to sue to receive benefits; applying the doctrine would encourage unnecessary litigation by rewarding a race to the courthouse for attorney’s fees even where the insurer was complying with its obligations under the policy.”
The court further disagreed with the insureds that the trial court erred in its ruling. It held that the trial court is not limited to considering only the record material cited by the parties in a particular hearing, stating: “While the court need consider only the cited materials, . . . it may consider other materials in the record.” “[T]he trial court conducted the evidentiary hearing on insureds’ fees motion prior to the court hearing legal arguments on Citizens’ summary judgment motion.” Consequently, for purposes of rule 1.510(c)(1)(A) and (c)(3), the evidence introduced at the fees hearing plainly constituted “other materials” in the record which the trial court could consider in adjudicating Citizens’ summary judgment motion.
The court found that, as Citizens timely complied with the policy’s appraisal clause and issued payments and coverage in accordance with the terms and conditions of the policy, the insureds’ lawsuit was not a necessary catalyst to force Citizens’ compliance with the policy. The motion for summary judgment was affirmed and no attorney’s fees were awarded to the insured.
Legal Update for Florida Coverage & Property Litigation – May 2024 is prepared by Marshall Dennehey to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. We would be pleased to provide such legal assistance as you require on these and other subjects when called upon. ATTORNEY ADVERTISING pursuant to New York RPC 7.1 Copyright © 2024 Marshall Dennehey, all rights reserved. No part of this publication may be reprinted without the express written permission of our firm. For reprints or inquiries, or if you wish to be removed from this mailing list, contact tamontemuro@mdwcg.com.