Third DCA Rules that New Parties May Not Serve Proposals for Settlement until Ninety Days after Being Joined to the Lawsuit
Design Home Remodeling Corp. v. Santana, et al., 39 Fla. L. Weekly D1862A (Fla. 3d DCA 2014).
Sixty days after Plaintiffs, Rene Santana and Maritza Torres, filed an amended complaint alleging premises liability against an additional defendant, Design Home Remodeling Corp. (“Design Home”), Design Home served each plaintiff with a proposal for settlement. See Design Home Remodeling Corp. v. Santana, et al., 39 Fla. L. Weekly D1862A (Fla. 3d DCA 2014). After obtaining summary final judgment three years later, Design Home filed a motion for attorney fees based on the proposals for settlement only to have the trial court deny the motion due to the premature nature of the proposals for settlement. Id.
Florida Rule of Civil Procedure 1.442 states that proposals for settlement may be served “no earlier than 90 days after the action has commenced.” Id. In 2007, the Florida Supreme Court issued an opinion which “plainly and unambiguously rejects the notion that a failure to comply with the requirements of rule 1.442 and section 768.79 can be considered a “mere technical violation” thus preserving the validity of a proposal for settlement.” Id. citing Campbell v. Goldman, 959 So.2d 223, 225 (Fla. 2007). Since Design Home was not included as a party in the lawsuit until the filing of the amended complaint, the proposals for settlement violated the express ninety-day requirement and were invalid. Id.
An Insured’s Discovery Misrepresentation is Not Sufficient to Void a Liability Insurance Policy
GEICO v. Rodriguez, et al., 39 Fla. L. Weekly D1937a (Fla. 3d DCA 2014).
The Third DCA recently decided a complicated case involving an insured’s discovery misrepresentations and an insurer’s attempt to void his coverage policy. See GEICO v. Rodriguez, et al., 39 Fla. L. Weekly D1937a (Fla. 3d DCA 2014). The insured, an eighty-three (83) year old, Oswaldo Blanchard, struck two pedestrians with his vehicle in Miami. At deposition, Mr. Blanchard testified that he had no physical impairments at the time of the accident which would have prevented him from being a safe driver. However, subsequent discovery revealed that he was legally blind and had been advised by his treating physicians that he should not drive. Plaintiffs’ counsel then successfully filed a motion for sanctions against the insured for fraud on the court.
Over a year later, GEICO issued a reservation of rights arguing that the insured’s misrepresentations at deposition voided the liability insurance policy under the policy’s “Fraud and Misrepresentation” provision. After the insured died, disputes arose between his Estate and GEICO which led to the Estate obtaining independent counsel and proceeding to the entry of consent judgments. On appeal, GEICO argued that it was not responsible for the sanctions judgment and the insured’s policy was void for his misrepresentations at deposition.
The Third DCA found that “Nothing in the record indicates that Blanchard’s deposition testimony was, in any way, related to the insurance GEICO was providing Blanchard.” As such, the Third DCA held that “Blanchard’s misrepresentations during the deposition – – even though they were characterized by the trial court as a “fraud on the court” – – are not the type of misrepresentation contemplated by the “Fraud and Misrepresentation” provision in the Geico policy which would authorize Geico to void coverage under the policy ab initio.” While the Third DCA acknowledged that, had Mr. Blanchard misrepresented a material fact in order to obtain the insurance policy, the insurance policy could be void, the Court held that to void the insurance policy for misrepresentations of a fact involving the accident itself “would expand the provision far beyond its intended scope and could, conceivably, produce absurd results.” Recognizing that sanctions constituted an additional cost of litigation, GEICO was required to cover the sanctions imposed on Mr. Blanchard.
5th DCA Holds that Confession of Judgment by Insurance Company is Not a Judgment or Decree for Purposes of Attorneys’ Fees Pursuant to § 627.428, Fla. Stat. (2009)
Omega Ins. Co. v. Johnson, 39 Fla. L. Weekly D1911a (Fla. 5th DCA 2014).
The Fifth DCA recently sided with Omega Insurance Company as it appealed an order awarding attorneys’ fees pursuant to Florida Statute 627.428. See Omega Ins. Co. v. Johnson, 39 Fla. L. Weekly D1911a (Fla. 5th DCA 2014). After Ms. Johnson filed a homeowners’ insurance claim alleging structural damage due to a sinkhole, Omega commissioned a professional engineering firm to survey the property. Id. After Omega’s engineers opined that the structural damage was not caused by a sinkhole, Omega provided Ms. Johnson a copy of the report, denied her claim for benefits, and heard nothing further from her. Id. However, Ms. Johnson proceeded to retain her own engineer who determined that a sinkhole had caused the structural damage and then filed suit against Omega for unpaid benefits. Id.
At Omega’s request, the litigation was stayed and a neutral evaluator assigned pursuant to section 627.7074. Id. Once the neutral evaluator determined that a sinkhole had caused Ms. Johnson’s structural problems, Omega tendered the policy benefits and the Court determined that, in doing so, Omega had confessed judgment. Id. On motion, the trial court ordered Omega to pay Ms. Johnson’s attorneys’ fees as the statute authorizes attorneys’ fees “upon rendition of a judgment or decree by any of the courts of this state” as a way to encourage pre-suit payment of insurance benefits. Id.
On appeal, Omega argued that, in relying on its engineer’s report in initially denying Ms. Johnson’s application for benefits, complying with the applicable statutes regarding a neutral evaluation, and satisfying Ms. Johnson’s claim upon receiving the opinion of the neutral evaluator, it was not obligated to pay attorneys’ fees to Ms. Johnson. The Fifth DCA agreed that “a tender of policy benefits or a settlement agreement is not a judgment or decree rendered by a court” as required by the statute. Id. (internal citations omitted). The Fifth DCA continued that it did not believe that “under the circumstances of this case, Omega’s actions in investigating and handling Johnson’s claim pursuant to the pertinent statutory provisions contained in chapter 627, and in relying on the presumptively correct report it commissioned to deny the claim, establish a wrongful or unreasonable denial of benefits that forced Johnson to file suit to obtain her policy benefits.” Id.