INFINITY AUTO INSURANCE COMPANY

v.

GABLES INSURANCE RECOVERY, INC., A/A/O RAFAEL PERE

GABLES INSURANCE RECOVERY, INC.. a_/a/0 Rafael Perez Martinez ht to this Court by appeal, and after due consideration the court having This cause having been broug cordance issued its opinion; h further proceedings be had in said cause in ac YOU ARE HEREBY COMMANDED that suc h eto and incorporated as part of this order, and with the rules of with the opinion of this COURT attached er procedure and laws of the STATE OF FLORIDA. Lower Tribunal Case Number(s): 11-016662—SP 25 WITNESS the Honorable Abby Cynamon, Administrative Judge oftheAppellate Division ofthe Circuit Court ofthe Eleventh Judicial Circuit of Florida and the seal ofthe said Circuit Court at Miami, this 19th day of March, 2015. _ A True Copy \ " nonfatv r-\ k er]; ‘ 545$ " “(N '= B . ‘la ‘ .' E‘ 4§b*\Q. ~. ‘ “J1 \v- ' ,\-... ' emeac Nassar ‘ \_ _ -"'~‘ _-'1, , ~~ a2 H \__-5,. . _ I % /'45,‘;-‘LX Mandate rev. 10/22/2008 [*2] O “’/I/\/\-A/\/,\___

NOT FINAL UNTIL TIME EXPIRES

I /Z/4%

TO FILE RE-HEARING MOTION AND

/ L/

IF FILED DISPOSED OF. IN THE CIRCUIT COURT OF THE

ELEVENTH JUDICIAL CIRCUIT, IN

AND FOR MIAMI-DADE COUNTY,

FLORIDA

APPELLATE DIVISION

CASE NUMBER: 13-169 AP

LOWER COURT

CASE NUMBER: 1 1-016662 SP INFINITY AUTO INSURANCE COMPANY, Appellant, ‘ vs. I

GABLES INSURANCE RECOVERY, INC.

a/a/0 Rafael Perez Martinez, Appellee. / OPINION FILED: \’L- \E~ \‘-'\ Z58 IA WODEGVGQ.Ifl 2'-: ~<: y-I. We 4.. 2‘! 1 ('7 .4 BELSKY, ESQ., and BELAYNE D, GUERRERO, ESQ., for Appellant.

G. BART BILLBROUGH, ESQ., for Appellee.

Before MILTON CH, MIGUE O, and MARIA EL%Ifl E, JJ. . (/ ~ (VERDE, J.) / \

ABU-NAIISAR

I [*3] This is an appeal of a lower court’s ruling denying Appellant’s motion for attorney’s fees A...-1 4...-.4... T7,... 41... ..._...._.....__ JALAZI -1 LA! ._--. _-... a,-_.._.,.__- [*4] J AQI\<ii .___ _I 1)-‘, L‘__4,A.L -_, 4Q4%@ - - A J34- __, auu L/Ublb. FUI UIC IUGDUIID UUIZIIICU UCIUW, WU IUVCIDC ZIIIU ICIIRUIU IUI IUI UICI plUUCCUlIIgb. This action commenced in small claims court in October 2011 when the Appellee, Gables Insurance Recovery (“GIR”), filed a statement of claim seeking PIP benefits under an insurance policy issued by the Appellant, Infinity Auto (“Infinity”). The crux of the dispute whether Infinity paid the correct measure of benefits tmder the policy. In December 2011, the county court judge invoked the Florida Rules of Civil Procedure. Infinity then timely filed an answer and affirmative defenses denying the material allegations of the complaint, and alleging that it paid the subject claim in full pursuant to the terms of the policy and in accordance with the fee schedule provisions of Section 627.736(5)(a)(2), Florida Statutes. Soon after filing its answer, Infinity responded to a document request by stating that a PIP endorsement to the subject policy was ordered, and would be provided upon receipt.l Roughly two weeks later, on January 27, 2012, Infinity sewed GIR with a proposal for settlement in the amount of $100. On February 17, 2012 — six days prior to the expiration of the proposal for settlement - Infinity provided GIR with an unauthenticated copy of the PIP endorsement it previously promised. GIR rejected the proposal for settlement. On March 12, 2012, Infinity moved for summary judgment and filed a supporting affidavit authenticating its PIP endorsement. The trial court granted Infinity’s motion for 1 The subject insurance policy contained a “Florida Amendatoiy Endorsement” dated December 2, 2009 — generally referred to as a “PIP endorsement.” In relevant part, the endorsement specifically adopted Florida Statute section 627.736(5)(a)(2), and limited reimbursement of medical bills to 200 percent of the Medicare Part B participating physicians fee schedule. Page 2 of 7 [*4] summary judgment on the basis of the endorsement, and entered a final judgment in Infinity’s favor. Infinity timely moved for attorney fees and costs pursuant to its proposal for settlement. GIR made two arguments in opposition to Infinity’s motion for fees and costs. First, it maintained that the proposal for settlement failed to compoit with the time requirements of Florida Rule of Civil Procedure 1.442(b), which prohibits a defendant from serving a proposal for settlement until 90 days after an action commences. GIR argued that while the instant proposal was served over 90 days after the small claims lawsuit commenced, the Florida Rules of Civil Procedure, which govern service of proposals, did not take effect until the lower court invoked them on December 1, 2011. GIR contended that for the purposes of the proposal for settlement, the “clock” began rtmning in December, and as such, the January 27 proposal, served only 57 days later, was premature. GIR next argued that Infinity’s proposal for settlement was not made in good faith since Infinity failed to produce an authenticated PIP endorsement, which governed the case’s outcome, until March — well after the proposal for settlement had expired. The standard of review for this appeal is two-fold. With regard to whether the proposal for settlement properly comported with the time requirements of the applicable rule, the question is one of statutory construction, and the review is de novo. DiamondAircraft Indus., Inc. v. Horowitch, 107 So. 3d 362, 367 (Fla. 2013). With regard to whether Infinity’s proposal for settlement was made in good faith, this Court reviews the lower court’s statutory interpretation de novo, but uses an abuse of discretion standard to review the trial court’s factual determination as to whether Infinity’s proposal was made in good faith. Downs v. Coastal Sys. Int ’l., Inc. , 972 U) .°l\)Q. l\) Ui “O0l\)Ox id /“\"I1 ,_..P‘ U) Q. C7F)>> l\) C>C> O0 \._/ Page 3 of 7 [*5] Florida Statute section 768.79 governs proposals for settlement and states in pertinent “CE. “In any civil action for damages filed in the courts of this state, if a defendant files an offer ofjudgment which is not accepted by the plaintiff within 30 days, the defendant shall be entitled to recover reasonable costs and attorney's fees incurred by her or him or on the defendant's behalfpursuant to a policy of liability insurance.” The timing ofproposals for settlement is addressed by Florida Rule of Civil Procedure l.442(b), which states that “a proposal to a plaintiff shall be served no earlier than 90 days after the action has been commenced.” The key detennination balances on the definition of the term “commenced.” Florida Rule of Civil Procedure 1.050 addresses the issue stating that “[e]very action of a civil nature shall be deemed commenced when the complaint or petition is filed.” A parallel provision in Florida Small Claims Rule 7.050 states that “[a]ctions are commenced by the filing of a statement of claim.” Applying the plain language of the above-stated rules to the instant facts, it follows that GIR’s underlying action “commenced” with the filing of its statement of claim in small claims court on October 19, 2011. Infinity’s proposal for settlement, served 100 days later was thus timely served Imder Florida Rule of Civil Procedure 1.442(b). There is no legal support for the proposition that in the context of a proposal for settlement, the “commencement” date of a small claims action is the date upon which the Rules of Procedure were invoked. We turn next to GIR’s good faith argument. Florida Statute section 768.79 govems proposals for settlement and states in pertinent part: Page⁴ of 7 [*6] (1) In any civil action for damages filed in the courts of this state, if a defendant files an offer ofjudgment which is not accepted by the plaintiffwithin 30 days, the defendant shall be entitled to recover reasonable costs and attorney's fees incurred by her or him or on the defendant's behalfpursuant to a policy of liability insurance... (6)(a) If a defendant serves an offer which 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 shall be awarded reasonable costs, including investigative expenses, and attorney's fees... (7)(a) If a party is entitled to costs and fees pursuant to the provisions ofthis section, the court may, in its discretion, determine that an offer was not made in good faith. In such case, the court may disallow an award of costs and attorney's fees. (b) When determining the reasonableness of an award of attorney's fees pursuant to this section, the court shall consider, along with all other relevant criteria, the following additional factors:

1. The then apparent merit or lack of merit in the claim.

2. The number and nature of offers made by the parties.

3. The closeness of questions of fact and law at issue.

4. Whether the person making the offer had unreasonably

refused to fumish infonnation necessary to evaluate the reasonableness of such offer. 5. Whether the suit was in the nature of a test case presenting questions of far-reaching importance affecting nonparties. § 768.79, Fla. Stat. (2012). The Florida Supreme Court has written extensively on section 768.79, summarizing its Interpretation by stating: “[T]he legislature has created a mandatory right to attorney's fees if the statutory prerequisites have been met. The statute begins by creating an ‘entitlement’ to fees. That entitlement may then lead to Page 5 of 7 [*7] an ‘award’ of fees. That award may then be lost by a finding that Ca. =52?jitlAI\ ,\..434l,\.~.,\..4- I\*7r\n I\OII'\ A ‘ Inc Ul1l.ll.lUll1Cl1L vvaa uicfilfiu IIOI. lfigOO GI” TITO l':‘If“uGl.ll'lI Of the award may be adjusted upward or downward by a consideration of statutory factors.” TGI Friday's, Inc. v. Dvorak, 663 So. 2d 606, 611 (Fla.1995), citing Schmidt v. Fortner, 629 So. 2d 1036 (Fla. 4th DCA 1993). The Court went on to explain that the words “shall be entitled” in 768.79(1) “camiot possibly have any meaning other than to create a right to attorney's fees when the two preceding prerequisites have been fulfilled: i.e., (1) when a party has served a [proposal for settlement], and (2) that party has recovered ajudgment at least 25 percent more or less than the [proposal].” Id. Under this interpretation, there is no argtunent that Infinity met the definition of a party “entitled to fees” once it served a valid proposal for settlement, and prevailed by way of ajudgment that was at least 25% less than the proposal. GIR’s confusion arises with the next portion of the statute - subsection 7(a) ~ which permits a trial court to disallow an award of attorney's fees if it determines that a qualifying offer “was not made in good faith.” The trial court erred in construing this “good faith” provision by focusing its analysis on whether GIR reasonably rejected Infinity’s proposal for settlement, rather than on whether Infinity had a reasonable basis upon which to make the proposal. The trial court’s interpretation does not comport with Florida law. “[W]hether [an offeree] acted reasonably in rejecting [a proposal for settlement] is irrelevant to a determination ofwhether [the offeror] acted in good faith in serving his proposal.” Wagner v. Brandeberry, 761 So. 2d 443, 445-46 (Fla. 2d DCA 2000). “The question of whether a proposal was served in good faith turns entirely on whether the offeror had a reasonable Page 6 of 7 [*8] foundation upon which to make his offer, and made it with the intent to settle the claim against c:__.ct. E?G ‘*5;:22Q CoégsQ Qe M ‘>1ETS ZSE? ('5 ' “Q(I O the offeree sho " offer be accepted.” Id.; Department of "" v. Weinstein, 747 So. 2d 1019, 1020 (Fla. 3d DCA 1999). Further, Florida courts “do not understand the good faith requirement of section 768.79(7)(a). . .to demand that an offeror necessarily possess, at the time he makes an offer or demand under the statute, the kind or quanttun of evidence needed to support ajudgment. The obligation of good faith merely insists that the offeror have some reasonable foundation on which to base an offer.” Schmidt, 629 So. 2d at 1039; Donohoe v. Starmed Staffing, Inc., 743 So. 2d 623 (Fla. 2d DCA 1999). Infinity had a “reasonable foundation” on which to base its proposal for settlement as it maintained at all times that the subject claim had been paid in full pursuant to the terms of the contract, the fee schedule provisions of section 627.736(5)(a)(2), and the PIP endorsement, notwithstanding its unauthenticated status. 2 \.¢ The lower court erred in ruling that Infinity’s proposal for settlement was untimely; and not made in good faith. Therefore, its decision is REVERSED and REMANDED for proceedings consistent with this opinion. HIRSCH and DE LA O, JJ., concur. 2 GIR’s claim that Infinity unreasonably withheld the authenticated PIP endorsement is relevant only to the amount of Infinity’s eventual fee award. Section 768.79(7)(b) provides trial courts with a non-exhaustive list of five factors to use in determining the reasonableness of a fee award. Among the factors listed in subsection 7(b) is an examination of“[w]hether the person making the offer had unreasonably refused to furnish information necessary to evaluate the reasonableness of such offer.” These factors are inapplicable to the trial court’s determination as to entitlement to fees. See DiamondAircraft Industries, Inc. v. Horowitch, 107 So. 3d 362 (Fla. 2013). Page 7 of 7 4* , Wmaer ea ' .;».'..’~.“.-.¢i“';.5-;»:»' if ‘ 1.; ¥: .1 ’

I Z.

ii? REPRESENTED BY CGUNSE-L» [*9] INFINITY AUTO INSURANCE COMPANY, vs .

GABL

A

IN THE CIRCUIT COURT OF THE ELEVENTH

JUDICIAL CIRCUIT, IN AND FOR MIAMI-DADE

COUNTY, FLORIDA. APPELLATE DIVISION

CASE NUMBER: 13-169 AP LOWER COURT CASE NUMBER: 11-o16662—SP 25 ppellant(s). ES INSURANCE RECOVERY, INC., a/a/0 Rafael Perez Martinez, Appellee(s). an!" U3“ SW1 __.; WI‘ .5 ‘gag Appellant [ L]/Gr ‘s Motion to anted. The it; .in .,1't$“fi€é QI Zr ~ivs%i“'“““m’m for Attorney’s Fees and Costs is hereby: g;1i!I\Inl case is remanded to the lower court to determine the I ] D ' amount of a r enled.

MILTON HIRSCH, MIGUEL DE LA O

easonable fee. , and MARIA ELENA VERDE, JJ CONC . . :3-I“ It IS so ordered this UR. dayof l ‘Q1’ Iii I24r,2OJi MT}/fbniflfi

GUEL D

,’ . . /iii? /'1 - ./7//7 / 4%ft /Lanai!/.

ELENA VERDE

CC:

ERIC G. BELSKY, ESQ

Order 7 SOUTHEASTTHIRD AVENUE

THIRD FLOOR

FT. LAUDERDALE, FL

Mtn For Atty Fees rev. 10/23/2008 33316

G. BART BILLBROUGH, ESQ.

100 ALMERIA AVENUE, SUITE 320 CORAL GABLES, FL 33134 OTTO i\I ESPINO, ESQ. 2151 South Le Jeune Road, Ste 300 CORALGABLESFL3p34