Clifton v. UNITED CAS. INS. CO. OF AMERICA

• Decision Date: 16 April 2010
• Docket Number: No. 2D09-971.,2D09-971.
• Citation: 31 So.3d 826
• Parties: Herman CLIFTON, Appellant, v. UNITED CASUALTY INSURANCE COMPANY OF AMERICA, Appellee.
• Court: Florida District Court of Appeals

31 So.3d 826

Herman CLIFTON, Appellant, v. UNITED CASUALTY INSURANCE COMPANY OF AMERICA, Appellee.

No. 2D09-971.

District Court of Appeal of Florida, Second District.

February 12, 2010.

Rehearing Denied April 16, 2010.

Raymond T. Elligett, Jr., of Buell & Elligett, P.A., Tampa; and David J. Pettinato of Merlin Law Group, P.A., Tampa, for Appellant.

William R. Lewis, Scott J. Frank, and Thomas A. Keller of Butler Pappas Weihmuller Katz Craig LLP, Tampa, for Appellee.

VILLANTI, Judge.

Herman Clifton appeals the final summary judgment entered in favor of his homeowner's insurance company, United Casualty Insurance Co., in this breach of contract action arising out of damage that Clifton's home suffered during Hurricane Charley. Because there were disputed issues of material fact as to whether Clifton was forced to file suit to resolve his dispute with United Casualty, United Casualty was not entitled to summary judgment in its favor. Accordingly, we reverse and remand for further proceedings.

Clifton's residence was damaged by Hurricane Charley on August 13, 2004, and Clifton promptly filed a claim with United Casualty for the damage. United Casualty sent an adjuster, who inspected the damage and adjusted the claim. After applying the deductible and possibly some depreciation, United Casualty paid Clifton $3054.22 for the damage it determined was the result of Hurricane Charley.

According to Clifton, after receiving this payment, he notified United Casualty that the payment was insufficient to pay for the necessary repairs to his residence. He asserted that he had repeatedly disputed the amount of the loss with both United Casualty and its local agent and had requested that someone from United Casualty reinspect his residence and consider paying additional policy proceeds. According to Clifton, United Casualty ignored his requests, and only after he received no response to his requests for over three years did he file suit on November 15, 2007. The complaint alleged that United Casualty had breached the insurance contract by failing to pay the full amount necessary to repair the damage to Clifton's residence caused by Hurricane Charley.

United Casualty answered Clifton's complaint and raised affirmative defenses, including that Clifton had failed to comply with the conditions precedent to bringing the suit and that his claim was barred by accord and satisfaction. United Casualty also alleged that it had paid Clifton all of the proceeds to which he was entitled under the policy. Along with its answer and affirmative defenses, United Casualty filed a motion seeking to invoke the appraisal clause of its policy with Clifton. The court granted the motion seeking appraisal, and Clifton and United Casualty engaged in the appraisal process provided for by the policy. The appraisal process resulted in an award in favor of Clifton of $18,744.24.

Clifton subsequently filed a motion to confirm the appraisal award and for entry of judgment, and he sought an award of attorney's fees. After paying the appraisal award, United Casualty filed a motion to dismiss Clifton's complaint, contending that the dispute between the parties had been resolved by the appraisal process and that no triable issues remained to be litigated. In support of that motion, United Casualty filed the affidavit of its assistant vice president of property claims, Greg Warnock, in which he asserted that United Casualty had no notice whatsoever that Clifton was dissatisfied with his claim payment until United Casualty was served with the complaint.

Shortly thereafter, and before the trial court had ruled on either pending motion, United Casualty withdrew its motion to dismiss and the accompanying affidavit. In their place, United Casualty filed a motion for summary judgment and a separate response to Clifton's motion for attorney's fees. Concerning the motion for attorney's fees, United Casualty argued that it was not responsible for those fees because it had not wrongfully withheld any insurance benefits. It reiterated its assertions that it had no knowledge that Clifton was dissatisfied with the initial claim payment until suit was filed, although it no longer supported those assertions with any record evidence.

In the motion for summary judgment, United Casualty alleged that it was entitled to judgment in its favor because it had paid the amounts due in accordance with the terms of the policy and thus Clifton could not prove that it breached the policy. United Casualty also alleged that Clifton could not prove that he had suffered any damages because United Casualty had now paid Clifton all of the amounts due under the policy.

In response to United Casualty's motion for summary judgment, Clifton filed an affidavit asserting that he had repeatedly notified both United Casualty and its local agent that the original claim payment was insufficient to cover all of his damages. Clifton asserted that United Casualty "refused to respond" to his pleas for additional policy proceeds until after Clifton filed suit.

At the hearing on United Casualty's motion for summary judgment, the trial court was faced with Clifton's unrebutted affidavit asserting that he had expressed dissatisfaction with the settlement of his claim in a timely manner and that United Casualty had ignored his requests for further action on his claim until after he filed suit. United Casualty disputed these facts, but the only evidence supporting its position had been withdrawn. Further, the record clearly showed that United Casualty had paid significant sums to Clifton in settlement of his claim after suit was filed. Despite this record evidence, the trial court granted summary judgment in favor of United Casualty, finding that because United Casualty had complied with the payment terms in the policy, it had not breached the policy and was entitled to judgment in its favor. This appeal is the result of that ruling.

As a general proposition, "a movant is entitled to summary judgment `if the pleadings, depositions, answers to interrogatories, admissions, affidavits, and other materials as would be admissible in evidence on file show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.'" Estate of Githens ex rel. Seaman v. Bon Secours-Maria Manor Nursing Care Ctr., Inc., 928 So.2d 1272, 1274 (Fla.2d DCA 2006) (quoting Fla. R. Civ. P. 1.510(c)). The moving party bears the burden of proving the nonexistence of issues of material fact, and every possible inference must be viewed in favor of the party opposing summary judgment. Id. Even the slightest possibility of the existence of a genuine issue of material fact precludes the entry of final summary judgment. Nard, Inc. v. DeVito Contracting & Supply, Inc., 769 So.2d 1138, 1140 (Fla. 2d DCA 2000).

Here, the record reflects that there are genuine issues of material fact that preclude the entry of summary judgment in favor of United Casualty. Florida courts have repeatedly held that when an insurer pays additional policy proceeds after suit is filed, "it has, in effect, declined to defend its position in the pending suit. Thus, the payment of the claim is, indeed, the functional equivalent of a confession of judgment or a verdict in favor of the insured." Wollard v. Lloyd's & Cos. of Lloyd's, 439 So.2d 217, 218 (Fla.1983); see also Ivey v. Allstate Ins. Co., 774 So.2d 679, 684-85 (Fla.2000) ("Where an insurer pays policy proceeds after suit has been filed but before judgment has been rendered, the payment of the claim constitutes the functional equivalent of a confession of judgment or verdict in favor of the insured. ..."); Stewart v. Midland Life Ins. Co., 899 So.2d 331, 333 (Fla. 2d DCA 2005); Scott v. Progressive Express Ins. Co., 932 So.2d 475, 479 (Fla. 4th DCA 2006). Under this general rule, summary judgment in favor of United Casualty was improper because its post-suit payment of additional policy proceeds to Clifton operated as a confession of judgment against it and as a verdict in favor of Clifton. Simple logic dictates that a party who confesses to judgment against it by virtue of the post-suit payment of additional damages cannot use that same payment to argue that it is then entitled to judgment in its favor.

However, the confession of judgment rule is not absolute. Instead, "while Florida law does hold that payments are treated as confessions of judgment where an insurer first disputes the claim and then settles, the existence of a bona fide dispute and not the mere possibility of a dispute, is a crucial condition precedent to such a holding." Tristar Lodging, Inc. v. Arch Speciality Ins. Co., 434 F.Supp.2d 1286, 1298 (M.D.Fla.2006), aff'd, 215 Fed.Appx. 879 (11th Cir.2007); see also Wollard, 439 So.2d at 219 n. 2 (noting that the requirement that the insurance company "unreasonably withhold payment under the policy" is a condition precedent to an award of attorney's fees under the confession of judgment rule and requiring that the trial court consider the "necessity of the legal services rendered as well as their reasonable value" (first emphasis added)); State Farm Fla. Ins. Co. v. Lorenzo, 969 So.2d 393 (Fla. 5th DCA 2007) (holding that the confession of judgment doctrine did not support an award of attorney's fees to an insured who first filed suit after State Farm had fully paid all the amounts due pursuant to a pre-suit appraisal). Thus, the confession of judgment rule will operate only "`to penalize an insurance company for wrongfully causing its insured to resort to litigation in order to resolve a conflict with its insurer when it was within the company's power to resolve it.'" First Floridian Auto & Home Ins. Co. v. Myrick, 969 So.2d 1121, 1124 (Fla. 2d DCA 2007) (quoting Bassette v. Standard Fire Ins. Co., 803 So.2d 744, 746 (Fla. 2d DCA 2001)) (emphasis added). Accordingly, the question of whether an insurer's post-suit payment of...