When you open a claim, the first decision made by your insurance company will indicate how the rest of your claim will be handled.
If your insurance company accepts your claim and opens coverage, then you’ve already bypassed some of the larger hurdles to restore your property back to its condition before the loss. However, there can still be a disagreement between you and your insurance company as to how great ($$$) the loss was and what amount can be agreed upon. When this happens, you can:
- Attempt to resolve the issue with your insurer by yourself.
- Enter into appraisal (more on that here).
- Hire an attorney to handle the claim on your behalf (contact us here!).[1]
Now, while the first two options can lead to the inclusion of several third parties, only the third introduces a lawyer who can initiate a lawsuit if needed to recover for the loss. When it comes to bringing forth such actions, the Florida Legislature has created a statute where attorney’s fees can be awarded when an insured recovers.[2] So, if attorneys can obtain their fees independent from an insured’s recovery, the big question is: when is the right time to start litigating?
Litigation can be an expensive process by which an individual may potentially recover from a loss they suffered as a result of someone else’s actions (or inactions). Instead of resolving it between yourselves, you are now seeking a determination from an arbiter of the law. But how necessary was the need to include such other third parties when you and your insurance company could have resolved it between yourselves? Recently, the 3rd DCA addressed the reasonableness of initiating suit when an insured’s attorney sought to recover attorney’s fees.
A Miami-Dade County property belonging to insured, Osvaldo Delgado (“Delgado”), suffered a loss. The property was insured by Citizens Property Insurance Corporation (“Citizens”), and notice of the loss was provided to Citizens. Citizens opened coverage and issued partial payment, but Delgado contested the amount. While Citizens demanded appraisal, Delgado initiated suit instead. In response, Citizens entered a motion before the Court to compel appraisal pursuant to the insurance policy. Appraisal was allowed to occur, which ended in favor of Delgado, and an appraisal award was issued for the remaining amounts of loss. Procedurally then, Delgado was awarded attorney’s fees pursuant to Fla. Stat. §627.428. Citizens contested such an award, arguing that 1) the appraisal award was not a judgment for the purposes of Fla. Stat. §627.428, and 2) initiation of the lawsuit was not necessary to resolve the claim. The lower court disagreed and found in favor of Delgado, leading to Citizens appealing.
The 3rd DCA, relying on precedents of the Florida Supreme Court and its sister district courts, affirmed the lower court’s decision in assessing an award of attorney’s fees.
Regarding Citizens’ first argument, that the appraisal award was not a judgment for the purposes of satisfying the Florida Statute, the 3rd DCA cited to the Florida Supreme Court. In Johnson and Ivey, the Florida Supreme Court held that where an insurer pays policy proceeds following the initiation of a lawsuit, but before judgment has been rendered by the court, this payment constitutes the functional equivalent of a confession of judgment, thereby entitling an insured to attorney’s fees.[3] Therefore, Delgado was entitled to seek attorney’s fees when the appraisal award was issued in Delgado’s favor, becoming a confession of judgment by Citizens. Citizens’ second argument, that the insured did not need to initiate the lawsuit to resolve the claim, also failed upon the 3rd DCA’s review. Relying on Lime Bay, Lewis and Myrick, and pursuant to the circumstances present in the record, Delgado’s filing of suit was determined to have been “a necessary catalyst to effectuate payment of the claim.”[4] Accordingly, the 3rd DCA affirmed the lower court’s decision.
So, what is the takeaway from such a case? Well, sometimes litigation is necessary. Sometimes, the threat of litigation is just enough to motivate your insurance company to start taking your claim seriously. At other times, the threat is just not enough. Regardless, you shouldn’t feel nervous about having to involve an attorney when it comes to your rights to recover under a loss. As the Court held in Delgado, the attorney’s presence and initiation of the lawsuit was NEEDED to make the insurance company finally pay the insured what they were due for their loss. If you find yourself in this situation, feel free to reach out to us. Your Loss is Our Concern.
If you have a question regarding this article, or your claim in general, follow the link here, email us at info@schirmerlaw.com, call us at 754-260-5410, or stop by our Fort Lauderdale office for a free consultation. Your Loss is Our Concern.
DISCLAIMER: This blog/article, and its representations, do not equate to legal advice. All representations, characterizations, and impressions made directly or inadvertently are solely those of the Author/Law Firm and cannot be taken as legal advice. Such material is being made available to the public for educational purposes only as well as to give a general understanding of the laws upon which it speaks. By using this article, You, the reader, understand that there is no attorney-client relationship formed between you and the Author/Firm which publishes this blog/article. This Blog/Article should not be used as a substitute for competent legal advice from a licensed practitioner of law in your State.
[1] This is not an exhaustive list, as it depends on the presence of others involved in the claim, such as third-party contractors. Feel free to contact us to see how the presence of third parties can affect your overall recovery.
[2] Fla. Stat. §627.428
[3] Johnson v. Omega Ins. Co., 200 So.3d 1207 (Fla. 2016); Ivey v. Allstate Ins. Co., 774 So.2d 679 (Fla. 2000)
[4] State Farm Fla. Ins. Co. v. Lime Bay Condo., Inc., 187 So.3d 932 (Fla. 4th DCA 2016); Lewis v. Universal Prop. & Cas. Ins. Co., 13 So.3d 1079 (Fla. 4th DCA 2009); First Floridian Auto & Home Ins. Co. v. Myrick, 969 So.2d 1121 (Fla. 2nd DCA 2007)
