FORTUNE INSURANCE COMPANY, APPELLANT,
v.
ANGEL E. BRITO, APPELLEE
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Fortune Insurance Company appealed an attorney's fee award to an insured after denying a PIP claim and later settling for $2,000. The court held that an insurer cannot escape attorney's fees liability under Florida Statutes section 627.428 merely by settling before judgment, as settlement functions as a confession of judgment, but remanded because the trial court failed to make specific findings justifying the $8,000 fee award.
An insurer cannot avoid attorney's fees liability simply by settling before judgment, as settlement constitutes the functional equivalent of a confession of judgment. However, the trial court must make specific findings on the record supporting the reasonableness of the fee award, and the absence of such findings requires remand for an evidentiary hearing.
[1] An insurer's payment of a claim is the functional equivalent of a confession of judgment for purposes of awarding attorney's fees to an insured who has settled a claim.
[2] A trial court must make specific findings to justify an award of attorney's fees.
Previewing 2 of 3 headnotes on this case. FLexlaw’s editorially structured points of law — every proposition, pinpointed — are reserved for members.
Join FLexlaw to unlock all legal intelligence“the payment of a claim is ... the functional equivalent of a confession of judgment.”
Establishes that settlement of an insurance claim does not eliminate the insurer's obligation to pay attorney's fees under section 627.428
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Join FLexlaw to unlock all legal intelligenceFollowing an automobile accident, Angel Brito filed a PIP insurance claim with Fortune Insurance Company. Fortune denied coverage, prompting Brito to …
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PER CURIAM.
Fortune Insurance Company appeals from an order awarding attorney’s fees to the insured, Angel Brito. Following an automobile accident Brito filed a claim under his PIP policy with Fortune. When coverage was denied Brito initiated a lawsuit against Fortune. Before trial Fortune paid Brito $2,000 on the $10,000 policy after applying the $8,000 deductible provision. Brito filed a motion for attorney’s fees pursuant to section 627.428, Florida Statutes (1983). After a hearing the court awarded $8,000 in fees to Brito’s attorney.
In disputing the attorney’s fee award Fortune makes two arguments. Fortune first contends that because no judgment was ever entered against the insurer, the trial court lacked the authority to enter an award for attorney’s fees. Fortune’s second point is that even if there was authority to award attorney’s fees, the court’s failure to make specific findings justifying an $8,000 fee award on a $2,000 recovery, requires a reversal. We agree with Fortune’s second point.
Whether a court may award attorney’s fees to an insured who has settled his claim against his insurance company is a question that was decided by the Florida Supreme Court in Wollard v. Lloyd’s and Companies of Lloyd’s, 439 So. 2d 217 (Fla. 1983). In interpreting section 627.428, Florida Statutes (1983),1 the court held that in order to discourage litigation and encourage prompt settlement “the payment of a claim is ... the functional equivalent of a confession of judgment.” Wollard, 439 So. 2d at 218. Fortune could not escape liability for attorney’s fees under the statute simply by settling the suit before a judgment was entered.
In granting the insured’s motion for attorney’s fees, however, the trial judge failed to make findings on the record or in the final order in support of the $8,000 fee award. The absence of specific findings in support of the award requires a remand for an evidentiary hearing. Florida Patient’s Compensation Fund v. Rowe, 472 So. 2d 1145 (Fla.1985); Travelers Indem. Co. v. Sotolongo, 513 So. 2d 1384 (Fla. 3d DCA 1987); Lake Tippecanoe Owners Ass’n v. Hanauer, 494 So. 2d 226 (Fla. 2d DCA 1986).
Affirmed in part, reversed in part, and remanded for further proceedings.
. Section 627.428(1) provides:
(1) Upon the rendition of a judgment or decree by any of the courts of this state against an insurer and in favor of any named or omnibus insured or the named beneficiary under a policy or contract executed by the insurer, the trial court or, in the event of an appeal in which the insured or beneficiary prevails, the appellate court shall adjudge or decree against the insurer and in favor of the insured or beneficiary a reasonable sum as fees or compensation for the insured’s or beneficiary’s attorney prosecuting the suit in which the recovery is had.
Cases With Similar Vibessemantic neighbors from the corpus
Citator
Authorities Cited
- Fla. Patient's Comp. Fund v. Rowe, 472 So. 2d 1145 (Fla. 1985)
- Wollard v. Lloyd's & Cos. OF Lloyd's, 439 So. 2d 217 (Fla. 1983)
- Travelers Indem. Co. v. Sotolongo, 513 So. 2d 1384 (Fla. 3d DCA 1987)
- Lake Tippecanoe Owners Ass'n, Inc. v. Hanauer, 494 So. 2d 226 (Fla. 2d DCA 1986)