IN THE SUPREME COURT OF FLORIDA Case No. SC08- Lower Tribunal No. 3D07-477 BEATRICE PERAZA, Appellant, vs. CITIZENS PROPERTY INSURANCE CORPORATION, Appellee. On Review of a Decision of the Third District Court of Appeal PETITIONER S JURISDICTIONAL BRIEF AND APPENDIX Thomas J. Korge, Esq. Korge & Korge 230 Palermo Avenue Coral Gables, Florida 33134 Attorney for Petitioner, Beatrice Peraza
TABLE OF CONTENTS TABLE OF AUTHORITIES... i STATEMENT OF THE CASE AND FACTS... 1 SUMMARY OF ARGUMENT... 1 ARGUMENT... 3 Conflict with the Fourth District Court s Decision... 3 Conflict with the Florida Supreme Court s Decisions... 5 CONCLUSION... 9
FLORIDA CASES TABLE OF AUTHORITIES Allstate Insurance Co. v. Suarez, 786 So.2d 645, 646 (3d DCA 2001), affd. per curiam, 833 So.2d 762 (Fla. 2002)... 7 Burnett v. Clarendon Select Insurance Co., 920 So.2d 188 (Fla. 5th DCA 2006)... 7 Fewox v. McMerit Construction Co., 556 So.2d 419, 423-424 (2d DCA 1989)... 4 Insurance Co. of North America v. Lexow, 602 So.2d 528, 531 (Fla. 1992). 8 Peraza v. Citizens Property Ins. Corp., No. 3D07-477 (Fla. 3d DCA November 21, 2007)... passim Travelers Indemn. Ins. Co. v. Meadows MRI, 900 So.2d 676 (Fla. 4th DCA 2005)... passim Wiggins v. Wiggins, 446 So.2d 1078 (Fla. 1984)... passim Wilson v. Rose Printing Company, Inc., 624 So.2d 257, 258 (Fla. 1993)... 6 Wollard v. Lloyds and Companies of Lloyds, 439 So.2d 217, 218 (Fla. 1983), quashing 420 So.2d 940 (Fla. 3d DCA 1982)... passim FLORIDA STATUTES 627.428(1), Fla. Stat. (2006)... passim FLORIDA LAWS Ch. 2007-90, 11, at 35, Laws of Fla.... 8 FLORIDA RULES Rule 1.420(d)... 1, 2, 6 i
STATEMENT OF THE CASE AND FACTS After denying the amount of a hurricane loss claimed by Beatrice Peraza ( Peraza ), Citizens Property Insurance Corporation ( Citizens ) petitioned the trial court to appoint a neutral umpire to decide the loss amount by appraisal. Peraza was thus forced to hire an attorney to protect her interests in court. After the court appointed an umpire, but before the umpire rendered an award in favor of Peraza, Citizens voluntarily dismissed its petition under Florida Rule of Civil Procedure 1.420(d), making Peraza the prevailing party as a matter of law. Peraza timely moved to tax costs, including a reasonable attorney s fee under section 627.428(1), Florida Statutes (2006), but only for costs and fees incurred solely in the court proceeding. The trial court denied the motion. The Third District Court held that the order appointing an umpire did not amount to an order against Citizens and in favor of Peraza for purposes of section 627.428(1), and therefore decided that Peraza is not entitled to the award of an attorney s fee. Peraza v. Citizens Property Ins. Corp., No. 3D07-477 (Fla. 3d DCA November 21, 2007), slip opinion p.3. Appendix 1. SUMMARY OF ARGUMENT The Third District Court s decision in this case expressly and directly conflicts with the Fourth District Court s decision in Travelers Indemn. Ins. 1
Co. v. Meadows MRI, 900 So.2d 676 (Fla. 4th DCA 2005), on the same question of law. In Travelers Indemn. Ins. Co., the Fourth District Court decided that under section 627.428(1), an insured is entitled to an award of an attorney s fee necessarily incurred during an appraisal to resolve a disputed valuation estimate. However, the Third District Court decided that Peraza is not entitled to an award for her attorney s fee necessarily incurred during an appraisal to resolve a disputed valuation estimate. The Third District Court s decision also expressly and directly conflicts with this Court s decisions in Wiggins v. Wiggins, 446 So.2d 1078 (Fla. 1984), and Wollard v. Lloyds and Companies of Lloyds, 439 So.2d 217, 218 (Fla. 1983), quashing 420 So.2d 940 (Fla. 3d DCA 1982), on the same question of law. In Wiggins, this Court decided that an attorney s fee must be awarded upon any voluntary dismissal under rule 1.420(d) if a statute authorizes the award of an attorney s fee. In Wollard, this Court decided that the statutory criteria to award an attorney s fee under section 627.428(1) do not require entry of an order or judgment in favor of the insured if the insured prevails by settlement or otherwise in the attendant court proceeding. However, the Third District Court decided that Peraza is not entitled to an attorney s fee award under section 627.428(1) upon Citizens voluntary dismissal before the umpire had entered an award in favor of Peraza because 2
... the order [appointing the umpire] did not amount to an order against Citizens and in favor of Peraza and thus failed to satisfy the statutory criteria of section 627.428(1). Peraza, supra at slip opinion, p. 3. ARGUMENT Conflict with the Fourth District Court s Decision The Peraza decision conflicts with the Fourth District Court s decision in Travelers Indemn. Ins. Co., supra. In Travelers Indemn. Ins., the court affirmed an award under section 627.428(1) of attorney s fees incurred by an insured during an insurance loss appraisal. Meadows sought recovery under its insurance policy with Travelers for a loss from damage to Meadow s MRI equipment. Travelers admitted coverage, but disputed the loss amount, paid a lesser amount, and demanded to resolve the disputed excess amount by an appraisal. Before the appraisal began, Meadow s counsel sent Travelers a letter asking about the appraisal procedures, including entitlement to attorney s fees, and threatening a declaratory judgment action if Travelers did not promptly respond. Travelers did not respond. Both parties selected their appraisers. Meadows then filed a declaratory suit to assure, among other things, that Meadows would be entitled to attorney s fees under section 627.428(1) should Meadows prevail in the appraisal. The appraisal resulted in Travelers owing Meadows a 3
significant balance, which was timely paid once determined. After receiving payment of the award, Meadows filed a motion to confirm and the trial court entered a final judgment confirming the award. Subsequently, the trial court also awarded Meadows an attorney s fee under section 627.428(1). follows: Affirming the attorney s fee award, the Fourth District Court stated as Given that the goal of section 627.428(1) is to place Meadows in the place it would have been if Travelers had seasonably paid the claim without causing Meadows to retain counsel and incur obligations for attorney s fees, taken in conjunction with the rule of law that Meadows could have recovered any attorneys fees incurred in reaching a settlement of its lawsuit, had a settlement been reached, we see no reason for not extending section 627.428(1) to cover an award of attorney s fees associated with an expensive and drawn out appraisal due to Travelers disputed value estimation. See Fewox v. McMerit Construction Co., 556 So.2d 419, 423-424 (2d DCA 1989) ( The legislative policy underlying section 627.428 is served by requiring insurers to pay attorney s fees to a prevailing insured or beneficiary, regardless of whether the insurers contest coverage through arbitration or in the trial court. To hold otherwise would be to allow insurers to avoid paying attorney s fees in contested coverage cases merely by choosing arbitration. ). Were this court to rule otherwise, Meadows would not be made whole as it would have to apply a portion of the policy proceeds to compensate its attorneys. 4
Id., at 900 So.2d 679 (emphasis added). Thus, the Fourth District Court held that under section 627.428(1), the trial court must award attorney s fees necessarily incurred by the prevailing insured in the appraisal process. In this case, Peraza sought recovery under her insurance policy for windstorm damage to her residence. Citizens admitted coverage, but disputed the loss amount and demanded to resolve the disputed amount by appraisal. Both parties selected their appraisers and Citizens asked the trial court to appoint a neutral umpire. Before the court-appointed umpire rendered a decision in favor of Peraza, Citizens voluntarily dismissed its petition. Because the purpose of section 627.428 is to place Peraza in the position she would have been if Citizens had timely paid the claim, and because Peraza was forced to hire an attorney to recover the benefit of her policy in the attendant court proceeding, Peraza is entitled to an award of an attorney s fee under the holding of Travelers Indemn. Ins. Co, supra. The Third District Court s decision thus expressly and directly conflicts with the Fourth District Court s decision in Travelers Indemn. Ins., supra. Conflict with the Florida Supreme Court s Decisions The Peraza decision also conflicts with this Court s decisions in Wiggins v. Wiggins, 446 So.2d 1078 (Fla. 1984), and Wollard v. Lloyds and Companies of Lloyds, 439 So.2d 217, 218 (Fla. 1983), quashing 420 So.2d 5
940 (Fla. 3d DCA 1982). In Wiggins, this Court held that an attorney s fee must be awarded, along with costs, upon any voluntary dismissal under rule 1.420(d) if a statute authorizes the court to award an attorney s fee. Because the non-dismissing party is treated as the prevailing party upon any voluntary dismissal, the non-dismissing party was entitled as a matter of law to an attorney s fee award against the dismissing party pursuant to the statute. See also Wilson v. Rose Printing Company, Inc., 624 So.2d 257, 258 (Fla. 1993) (where an agreement provides for an award of attorney s fees to the prevailing party, a non-dismissing party is the prevailing party entitled to an attorney s fee award under the agreement). In Wollard, this Court held that an order need not be formally entered in favor of the insured before an attorney s fee may be awarded under section 627.428(1) where the insured had prevailed by settlement. In this case, due to Citizens voluntary dismissal, Peraza is the prevailing party as a matter of law. See, e.g., Wiggins v. Wiggins, supra. Section 627.428(1) awards attorney s fees upon any judgment in favor of the insured and against the insurer. The Third District Court denied an attorney s fee because the order merely granted Citizens petition to appoint an umpire. The district court thus confused the form of the order with the substantive relief sought in the court proceeding, viz. adjudication of the 6
loss amount by the appraisal of a court-appointed umpire. Disregarding the substantive relief sought, the district court therefore concluded that... the order did not amount to an order against Citizens and in favor of Peraza for purposes of section 627.428(1). Peraza, supra at slip op., p. 3. However, in Wollard supra, this Court held that an order or judgment in favor of the insured need not be formally entered before an attorney s fee award may be made under section 627.428(1) where the insured in fact prevailed. Similarly, in Wiggins, supra, the Court held that upon a voluntary dismissal, the non-dismissing party is the prevailing party entitled to an award of any attorney s fee otherwise authorized by statute though no order is ever entered in favor of the insured. 1 More fundamental, the Third District Court s decision effectively defeats the legislative policy for the allowance of an attorney s fee under section 627.428(1). The statute is intended... to discourage the contesting 1 In any event, and more to the point, in the absence of Citizen s voluntary dismissal, Peraza would have been entitled to a final judgment confirming the appraisal award subsequently entered by the umpire in her favor. See, e.g., Allstate Insurance Co. v. Suarez, 833 So.2d 762, 763 (Fla. 2002), affg. per curiam, 786 So.2d 645, 646 (3d DCA 2001) (affirming a final judgment entered to confirm an umpire s appraisal award); Burnett v. Clarendon Select Insurance Co., 920 So.2d 188 (Fla. 5th DCA 2006) ( [a]fter the circuit court enters a final judgment [confirming any appraisal award], Ms. Burnett will be able to obtain review of her claim that Clarendon Select waived its right to appraisal ) (emphasis added). 7
of valid claims against insurance companies and to reimburse successful insureds for their attorney s fees when they are compelled to defend or sue to enforce their insurance contracts. Insurance Co. of North America v. Lexow, 602 So.2d 528, 531 (Fla. 1992) (emphasis added). As this Court stated in Wollard v. Lloyds and Companies of Lloyds, supra: Requiring the plaintiff to continue litigation in spite of an acceptable offer of settlement merely to avoid having to offset attorney s fees against compensation for the loss puts an unnecessary burden on the judicial system, fails to protect any interest the insured s, the insurer s or the public s and discourages any attempt at settlement. This literal requirement of the statute exalts form over substance to the detriment of public policy, and such a result is clearly absurd. 439 So.2d 218 (emphasis added). Moreover, as the Legislature recently made clear, its public policy discouraging insurers from contesting valid claims also applies to Citizens. See ch. 2007-90, 11, at 35, Laws of Fla. (the statutory immunity provided to Citizens by section 627.351(6)... does not apply to the corporation in any pending or future action for benefits under a policy issued by the corporation; the corporation shall be liable to policyholders under s. 627.428 ) (emphasis added). As a result of the Third District Court s decision, however, an insured, like Peraza, cannot be made whole when her disputed insurance claim is 8
resolved in her favor and against the insurance company by a courtappointed umpire. Although she was unquestionably compelled to defend her insurance claim by engaging an attorney to represent her in the court proceeding initiated by Citizens, Peraza must pay her attorney s fee out her insurance recovery though she ultimately prevailed. So, instead of receiving an award of reasonable attorney s fees necessarily incurred to protect her interests in the court proceeding initiated by Citizens, an insured like Peraza will have to apply a portion of her favorable award to pay those fees. Accordingly, the district court s literal reading of the statutory criteria... exalts form over substance to the detriment of public policy, Wollard v. Lloyds and Companies of Lloyds, supra; and thus conflicts with this Court s decision in Wollard. CONCLUSION The Third District Court s decision in Peraza, supra, expressly and directly conflict with the Fourth District Court s decision in Travelers Indemn. Ins. Co, supra, and with this Court s decisions in Wiggins, supra, and Wollard, supra, on the same questions of law. Peraza was entitled to recover her attorney s fee when Citizens voluntarily dismissed its court petition prior to an award favorable to Peraza because she is presumed to have been the prevailing party for purposes of section 627.428(1) and 9
because the formal entry of a final judgment is not required for the court to award an attorney s fee under section 627.428(1). As a result of the Third District Court s decision, Peraza must pay her attorney s fees out of her insurance recovery even though she has prevailed both as a matter of law (and in fact) against Citizens, which refused to pay her entire loss. The court s decision thus exalts form over substance to the detriment of clear public policy intended to discourage insurance companies from contesting valid insurance claims, as Citizens did in this case. For these reasons, the Court should accept jurisdiction of this appeal. Respectfully submitted, KORGE & KORGE 230 Palermo Avenue Coral Gables, Florida 33134 Phone: (305) 444-5601 Fax: (305) 444-5633 Counsel for Petitioner By: THOMAS J. KORGE Fla. Bar No. 186923 10
CERTIFICATE OF SERVICE AND COMPLIANCE I HEREBY CERTIFY that a copy of the foregoing was sent on March 6, 2008, by U.S. mail to Shaun Marker, Esq., Powers, McNalis, Torres & Teebagy, P.O. Box 21289, West Palm Beach, Florida 33416-1289, and that this brief complies with the font requirements of Florida Rule of Appellate Procedure 9.210(a)(2). By: THOMAS J. KORGE 11