.

Legal Updates for Florida Coverage and Property Litigation

Appellate Court Reverses Fee Award, Clarifies ‘Judgment Obtained’ Under Florida’s Offer of Judgment Statute

SFR Services, LLC a/a/o John & Rose Zapisek v. Florida Department of Financial Services o/b/o Avatar Property and Casualty Insurance Company, Fla. 6th DCA, No. 6D2023-1050, L.T. Case No. 19-CA-001630, May 16, 2025

June 1, 2025

This case arises from a dispute regarding a Hurricane Irma homeowners’ insurance claim. SFR Services, LLC, a Florida restoration company, performed repairs for the homeowners, and in exchange the homeowners executed an agreement assigning their insurance benefits to SFR Services. Ultimately, SFR Services filed suit against the insurance company, seeking payment of its invoices in addition to recovering “damages, together with interest, costs and attorneys’ fees” under section 627.428, Florida Statutes.

During the underlying litigation, Avatar Property and Casualty Insurance Company, the homeowners’ insurance company, served a proposal for settlement (PFS) to SFR Services for $15,000, which included the language that the settlement amount was “exclusive of all taxable costs and attorneys’ fees.” SFR Services did not accept the PFS, and the matter proceeded to trial. 

At trial, the jury found in favor of SFR Services and concluded that the insurance company owed $20,000 in damages to SFR Services. The trial court subsequently reduced the damages amount to $9,000 to account for both the insurance policy’s applicable $6,000 hurricane deductible and to account for a prior directed verdict motion judgment for $5,000 regarding the interior damages. 

Afterwards, both the insurance company and SFR Services filed competing motions for attorneys’ fees and costs. The insurance company sought fees and costs under F.S. § 768.79(1), based on SFR Services’ rejection of the $15,000 PFS. Under Florida law, when a defendant serves a PFS that “is not accepted by the plaintiff, and if the judgment obtained by the plaintiff is at least 25 percent less than the amount of the offer, the defendant” is entitled to reasonable attorneys’ fees and costs “incurred from the date the offer was served.” F.S. § 768.79(7)(a). Regarding offers made by defendants to plaintiffs, “the term ‘judgment obtained’ means the amount of the net judgment entered, plus any post-offer collateral source payments received or due as of the date of the judgment, plus any post-offer settlement amounts by which the verdict was reduced.” F.S. § 768.79(7).

Thus, the insurance company argued that the final damages amount ($9,000) plus SFR Service’s pre-offer interest ($1,364.93) was 25% less than the $15,000 PFS, triggering fee shifting under the statute. In response, SFR Services argued that its pre-offer attorneys’ fees and costs also had to be factored in, in order to calculate the correct “judgment obtained.” By doing so, SFR Services argued that this would place the “judgment obtained” above the $11,250 threshold, thereby eliminating the fee triggering. 

After a hearing, the trial court sided with the insurance company and concluded that the “judgment obtained” by SFR Services, exclusive of taxable costs and attorneys’ fees, was $9,000. Because this $9,000 amount was less than the $11,250 threshold (at least 25% less than the $15,000 PFS), the trial court determined that the insurance company was entitled to recover its attorneys’ fees and costs incurred from the date the PFS was served. SFR Services subsequently appealed. 

Upon appeal, the Sixth District Court of Appeals agreed with SFR Services and determined that the trial court erred by not applying the Florida Supreme Court’s decision in White v. Steak & Ale of Fla., Inc. when calculating the “judgment obtained.”

In the White decision, the Florida Supreme Court held “that the ‘judgment obtained’ . . . includes the net judgment for damages and any attorneys’ fees and taxable costs that could have been included in a final judgment if such final judgment was entered on the date of the offer.” Id., 816 So. 2d at 551. This judgment calculation (which includes pre-offer attorneys’ fees and costs as of the date of the PFS offer) has become known as the White formula. Application of the White formula does not turn on whether the PFS includes attorneys’ fees or costs. Id. at 552.

Thus, the appellate court concluded that the trial court erred in failing to apply the White formula in calculating the “judgment obtained” because they failed to include the pre-offer attorneys’ fees or costs amount incurred by SFR Services. As of the date of the offer, SFR Services had incurred $2,384.90 in costs. Following the White formula and factoring this amount into the $9,000 damages amount, “the judgment obtained” was not “at least 25 percent less than the amount of the [$15,000.00] offer.” F.S. § 768.79(7)(a). Thus, the District Court determined that the insurance company was not entitled to attorneys’ fees and costs under the offer of judgment statute.

The final judgment in favor of the insurance company was reversed, and the case was remanded to the trial court for proceedings consistent with this opinion. 

 

Legal Update for Florida Coverage & Property Litigation – June 2025 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 © 2025 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.

Firm Highlights

business meeting photo

Result

Summary Judgment Obtained in Insurance Coverage Case

Thought Leadership

Florida Supreme Court Rules Florida Statute §627.70152 Does not Apply Retroactively

In a decision that resolves years of appellate uncertainty and confirms that insurers and insureds alike can rely on the legal framework in place when a policy is issued, the Supreme Court of Florida last week found that Florida Statute §627.70152, which involves an insured’s requirement to provide an insurer with pre-suit notice before filing a suit, cannot be applied retroactively. In Universal Property & Casualty Insurance Company v. Hughes, the Court was presented with the issue of whether the statutory pre-suit notice requirement applied retroactively and whether it would apply to a breach of contract of an insurance policy that was issued before the statute went into effect. Before the Court was an appeal from a homeowner, Ms. Hughes, who sued her insurance carrier, Universal Property & Casualty Insurance Company (Universal) for breach of contract under an insurance policy that was in effect from April 24, 2019 through April 24, 2020. During the policy period, Ms. Hughes suffered a loss and, on May 29, 2019, made a claim for water damage. The carrier investigated the loss and issued payment; Ms. Hughes disputed the payment, finding the amount insufficient for repairs. On July 1, 2021, Florida Statute §627.70152 went into effect, which required insureds to provide notice of intent to initiate litigation against the carrier prior to filing a lawsuit; if an insured filed the lawsuit without complying with §627.70152, a court must dismiss the case without prejudice. On August 4, 2021, Ms. Hughes filed her lawsuit against Universal for breach of contract. Universal moved to dismiss based on her failure to comply with §627.70152. Ms. Hughes contended the notice requirement could not be applied retroactively. The trial court disagreed and dismissed the lawsuit without prejudice, and Ms. Hughes appealed. During the appeal, the Fourth District Court of Appeal, in Cole v. Universal Property & Casualty, 363 So. 3d 1089 (Fla. 4th DCA 2023), ruled that Florida Statute §627.70152 did apply retroactively to policies issued before the effective date of §627.70152. However, the Sixth District Court agreed with Ms. Hughes and overturned the trial court’s ruling, finding the statute could not retroactively apply to policies issued prior to the statute effective date. Thereafter, the other district courts weighed in, with the Third District Court agreeing with the Fourth District Court, and the First, Second and Fifth District Courts agreeing with the Sixth District Court. In resolving the conflict amongst the district courts, the Supreme Court advised “as a general rule, ‘the statute in effect at the time an insurance contract is executed governs substantive issues arising in connection with that contract.’ Hassen v. State Farm Mut. Auto. Ins. Co., 674 So. 2d 106, 108 (Fla. 1996). The Court applied the two-step test when deciding whether a statute has retroactive application: “First, the Court must ascertain whether the Legislature intended for the statute to apply retroactively. Second, if such an intent is clearly expressed, the Court must determine whether retroactive application would violate any constitutional principles.” Menendez v. Progressive Exp. Ins. Co., 35 So. 3d 873, 877 (Fla. 2010). In analyzing the Legislature’s intent, the Court must determine whether the Legislature has manifested a clear command for retroactivity in the statutory text.  In review of the statutory text, the Court found nothing in the language of the statute to indicate that the phrase “all suits” was serving another purpose of expanding its reach to suits based on policies that both predate and postdate the enactment of the statute. Buis v. Universal Prop. & Cas. Ins. Co., 394 So. 3d 738, 741 (Fla. 2d DCA 2024). Further, the Court noted the statute has an effective date, which has long been considered to be evidence against retroactive application of a statute. The Court concluded that, on its face, no provision of §627.70152 speaks to application of the statute to insurance policies issued before the statute’s effective date and therefore, the Legislature did not clearly command retroactivity of the statute to include insurance policies issued prior to the enactment of the statute. The Court briefly reviewed Universal’s argument that the presuit notice requirement was procedural, not substantive, and therefore should be applied retroactively; however, the Court agreed with the Sixth District Court’s finding that, in its entirety, §627.70152 transformed an insured’s ability to sue an insurance company under a property insurance policy and an insurer’s obligations to respond to and pay insurance claims, thus making the requirement a substantive change. The Court thereby upheld the decision of the Sixth District and disapproved the decision of the Fourth District in Cole.

Event

CLM 2026 Focus Conference

Allison joins three insurance industry leaders to discuss how cyber coverage disputes, the growing impact of social inflation on bodily injury claim valuation, and the use of artificial intelligence are reshaping the bad faith landscape. The panel will examine emerging sources of extra-contractual exposure, including evolving cyber insurance coverage issues and the challenges of accurately valuing bodily injury claims. Practical approaches to claim evaluation using AI, along with defense strategies designed to help prevent or successfully defend against bad faith litigation, will also be addressed. 

Complete Victory Obtained in a Workers’ Compensation Matter

Result

Complete Victory Obtained in a Workers’ Compensation Matter

Marshall Dennehey Named a Standout in Litigation by BTI Consulting Group

News

Marshall Dennehey Named a Standout in Litigation by BTI Consulting Group

Defense Victory Obtained in Workers’ Compensation Case

Result

Defense Victory Obtained in Workers’ Compensation Case

Bret E. Dubbert Joins Marshall Dennehey’s Orlando Office as Special Counsel in the Casualty Department

News

Bret E. Dubbert Joins Marshall Dennehey’s Orlando Office as Special Counsel in the Casualty Department

graphic announcing our 6 2027 Super Lawyers & Rising Stars

News

Marshall Dennehey Announces 2027 New Jersey Super Lawyers And Rising Stars

Thought Leadership

Commonwealth Court Reaffirms the Constitutionality of Act 111's IRE Provisions

In this case, the claimant sustained a work injury of January 6, 1994, which was acknowledged by Notice of Compensation Payable (NCP). After the claimant’s receipt of 104 weeks of temporary total disability benefits, the employer filed a Request for an Impairment Rating Examination (IRE). The IRE was performed in May 2023 and the IRE physician found that the claimant had a 5% whole person impairment, under the AMA Guides. The employer filed a Petition based on the IRE results, and the Petition was granted by the WCJ. During litigation, the claimant argued that the IRE provisions of Act 111 (Section 306(a.3) of the Act) were not applicable to her injury, since it predated June 24, 1996, the date Act 57 went into effect, and that the IRE provisions were unconstitutional. The Workers’ Compensation Judge (WCJ)) granted the Petition and the Board affirmed. On appeal to the Commonwealth Court, the claimant argued that Act 111 violated the nondelegation doctrine and that its retroactive application to the claimant’s injury was unconstitutional. The court rejected the arguments on the basis that they had already found the same arguments without merit in multiple, prior cases. The court also addressed an argument made by the claimant that Act 111 was procedurally defective under the Pennsylvania Constitution because it was only considered on two days in each House after having undergone amendments and reassignments. The court noted that the Pennsylvania Constitution requires every bill to be considered on three different days in each House. The claimant maintained that, according to the legislative history, the bill did not receive three separate days of consideration from each House when it was assigned a new bill number. The court pointed out, however, that the bill number, H.B. 1840 remained constant and was considered on three occasions by the House. Further, the court concluded that minor amendments to the bill were germane to its original subject, which was to modify the Act’s IRE process, in accordance with Protz II.

Thought Leadership

The Tolling Trap: Filing Alone Will Not Toll the Statute Without Good-Faith Service

The Eastern District of Pennsylvania recently reinforced a critical limitation on bad faith claims, holding that a timely filing alone will not preserve a cause of action absent a good-faith effort to serve the original process. The plaintiff had presented a claim for underinsured motorist benefits to his auto insurer. The insurer evaluated the claim and determined that the plaintiff’s accident-related damages did not exceed the bodily injury liability insurance limits of the at-fault driver and denied his claim. Among other claims, the plaintiff sought to present a claim for insurance bad faith under 42 Pa. C.S.A. § 8371, to which a two year statute of limitation applies. He first filed a praecipe for writ of summons before the expiration of the statute of limitation. However, the plaintiff did not attempt to serve the praecipe or writ until after the statute of limitations had expired. Additionally, the service failed as the plaintiff had mailed the original process to an incorrect address. Despite receipt of the Postal Service’s failure to deliver the original process, the plaintiff did not attempt to re-serve the writ. Two months later, the plaintiff filed a complaint and then successfully served that complaint. The insurer sought to dismiss the plaintiff’s bad faith claim as time-barred by the statute of limitations. The district court agreed. Though the plaintiff had filed a praecipe for a writ of summons prior to the expiration of the statute of limitations, the statute is only tolled if there is a good faith effort to serve that original process. In this case, the court determined that the plaintiff had failed to perform a “good faith effort to serve the original process”. Additionally, though the filing and service of a complaint can serve as alternative original process when the lawsuit is commenced by the filing of a praecipe for a writ of summons, the plaintiff filed his complaint after the statute of limitations had expired. The plaintiff’s bad faith claim was therefore determined to be barred by the statute of limitations and dismissed by the court, with prejudice. A key takeaway for the defense is not to assume that the statute of limitations has been successfully tolled by a plaintiff merely because a praecipe for a writ of summons or complaint has been filed prior to the expiration of the statute. A filed complaint or writ is only part of the equation. The defense should carefully review the docket and filings to confirm that the plaintiff also performed the requisite good faith effort to serve that original process. A thorough review of the docket may reveal that the plaintiff failed to make the good-faith service efforts necessary to toll the statute of limitations.