avoIdIngPre-suItattorneyfeesByConsIderIngPre-suItsettLement
Trial & litigation Section Chair : JasonWhittemore – WagnerMcLaughlinWhittemore
arecentfloridacaseheld thatPlaintiffsarenotentitled toattorneyfeesifaninsurer tendersthepolicylimitin responsetoanoticeofIntent toInitiateLitigation .
Arecent Florida case1 held that Plaintiffs are not entitled to attorney fees if an insurer tenders the policy limit in response to a Notice of Intent to Initiate Litigation (“ NOI ”). Tendering policy limits to an insured in response to an NOI under section 627.70152 , Florida Statutes ( 2021 ), precludes policyholders from recovering pre-suit attorney ’ s fees from their property insurance company in a subsequently filed litigation for the same claim .
In Vazquez , Citizens Property Insurance Corporation (“ Citizens ”) issued a homeowners ’ insurance policy with effective coverage dates beginning on December 30 , 2019 , and ending on December 30 , 2020 . The policy contained a $ 10,000 coverage limit for covered losses caused by accidental discharge of water from a plumbing system .
Plaintiffs ’ home sustained an accidental discharge of water in June of 2020 . Citizens acknowledged coverage and issued payment in the amount of $ 3,517.70 . Plaintiffs filed an NOI with demand of $ 7,482.30 , which included $ 3,982.30 in damages and $ 3,500 for attorney ’ s fees . Citizens timely acknowledged receipt of the NOI and issued payment in the amount of $ 6,482.30 ,
which represented the remainder of the $ 10,000 policy limit .
Despite having received policy limits which exceeded plaintiffs ’ demand , the insureds filed suit for breach of contract demanding full payment for damages to the insureds ’ property and attorney fees . The Complaint alleged that Citizens breached the contract when it initially underpaid the claim and then breached again when it did not issue payment for plaintiff ’ s attorney ’ s fees in response to the NOI .
Prior to serving the lawsuit , plaintiffs moved for attorney fees pursuant to section 627.70152 , Florida Statute . Plaintiffs asserted that while Citizens had paid the full amount of damages , it completely ignored their attorney ’ s fees request . They went on to assert Plaintiffs were entitled to those fees , arguing that the clear intent of section 627.70152 , Florida Statute , was to require payment of attorney ’ s fees when the claimant has to file an NOI . The trial court agreed and awarded plaintiffs $ 13,500 in attorney ’ s fees . Citizens appealed .
On appeal , the Fourth District Court of Appeal reversed the award of attorney ’ s fees , holding that plaintiffs were not entitled to attorney ’ s fees because the trial court did not render a judgment against Citizens on the contract claim nor did Citizens confess judgment . The court concluded that Citizen ’ s pre-suit payment in response to the NOI did not amount to a confession of judgment . Although settlement of a lawsuit can be seen as a confession of judgment , the confession of judgment doctrine applies only when an insured must sue for benefits . Here , Plaintiffs did not have to sue to recover benefits and resolve the dispute . Citizens even issued payment in response to the NOI which exceeded plaintiffs ’ demand . The court concluded that Citizens ’ pre-suit settlement was not a confession of judgment and therefore did not trigger entitlement to attorney ’ s fees .
1
Citizens Property Insurance Corporation , v . Vazquez , No . 4D22-1611 , 2023 WL 4917156 ( Fla . 4th DCA Aug . 2 , 2023 ).
Author : Amy Currotto - Banker Lopez Gassler
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