Sands on the Ocean Condo. Ass'n, Inc. v. QBE Ins. Corp.

• Decision Date: 13 December 2012
• Docket Number: CASE NO. 05-14362-CIV-MARRA
• Parties: SANDS ON THE OCEAN CONDOMINIUM ASSOCIATION, INC., Plaintiff, v. QBE INSURANCE CORPORATION, Defendant.
• Court: U.S. District Court — Southern District of Florida

SANDS ON THE OCEAN CONDOMINIUM ASSOCIATION, INC., Plaintiff,

v.QBE INSURANCE CORPORATION, Defendant.

CASE NO. 05-14362-CIV-MARRA

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA

Dated: December 13, 2012

OPINION AND ORDER¹

This cause is before the Court upon Plaintiff's Brief on Issues Remaining to be Adjudicated by the Court, Renewed Motion for Confirmation of Appraisal Award, Motion for Entry of Final Judgment, Motion to Determine Entitlement to an Award of Attorney's Fees, Costs and Prejudgment Interest (DE 84). Defendant has filed a response to the motion (DE 86). No reply memorandum was filed. The Court has carefully considered the motion and response and is otherwise fully advised in the premises.

I. Background

Plaintiff, a condominium association, sustained damage due to Hurricane Frances on September 4, 2004. (Compl. ¶ ¶ 3, 7, DE 1.) After the hurricane, Defendant inspected the property and advanced approximately $650,000.00, although Plaintiff sought 2.7 million dollars. (Compl. ¶ 8; June 14, 2006 Order granting motion to compel appraisal, DE 32 at 1 n.1.) In July of 2005, Defendant's independent adjuster concluded that Plaintiff's claim was excessive. (Id. at2.) Plaintiff submitted a revised claim package in September of 2005, after Hurricane Katrina and prior to Hurricane Wilma. (Id.) Defendant's independent adjuster advised Plaintiff that it was difficult to review and evaluate the revised claim in light of the 2005 hurricanes. (Id.) On December 8, 2005, Plaintiff filed a Complaint for declaratory judgment, breach of contract and breach of implied warranty of good faith and fair dealing. (Compl. ¶ ¶ 11-36.)

On April 13, 2006, Defendant filed a motion to compel appraisal of loss and motion to dismiss or abate action. (DE 15.) In response, Plaintiff submitted evidence that Defendant made no efforts to investigate or adjust its insurance claim since September of 2005. (DE 32 at 2.) The Court entered an Order granting the motion to compel appraisal, granting the motion to abate, and staying the case pending the conclusion of the appraisal process. (DE 32.) The appraisal resulted in an award for Plaintiff in the total amount of $1,937,989.53. However, the amount of the appraisal award did reflect the amount of the deductible that needed to be paid by Plaintiff, prior payments made by Defendant under the policy and the terms of the policy that might otherwise reduce the amount of the damages to which Plaintiff was entitled. Plaintiff subsequently moved to lift the stay and confirm the appraisal award. (DE 43.) Thereafter, Defendant paid Plaintiff $931,596.53. This amount stemmed from a reduction of the appraisal award by: 1) $253,543.00 for the hurricane deductible; 2) advance payments previously made to Plaintiff under the policy and 3) the additional costs for the fire alarm system beyond the ordinance and code provision of the policy. (DE 51.) The Court held that confirmation of the appraisal was appropriate and that Defendant was entitled to reduce the award for the "Fire Alarm System (Simplex)" to $10,000.00. In addition, the Court noted it could not rule on whether the hurricane deductible failed to comply with Florida Statutes § 627.701 until theFlorida Supreme Court issued a ruling in Chalfonte Condominium Apartment Assoc., Inc. v. QBE Ins. Corp..² As a result, the Court denied, without prejudice, Plaintiff's motion for confirmation until the Florida Supreme Court issued its ruling. (DE 63.)

Plaintiff now seeks to confirm the appraisal award, enter final judgment, obtain an award of attorney's fees pursuant to Florida Statute § 627.428, costs pursuant to 28 U.S.C. § 1920, and prejudgment interest from the date of the loss. In response, Defendant claims that it timely paid the award and therefore confirmation of the appraisal award and entry of final judgment should not be used for the purpose of awarding attorney's fees. In addition, Defendant claims that the chronology of the events and the insurer's pre-suit conduct does not entitle Plaintiff to attorney's fees. Moreover, Defendant contends that because the policy allowed Defendant to pay the appraisal award within 30 days and Defendant did so, Plaintiff is not entitled to prejudgment interest. Lastly, Defendant claims that Plaintiff has no entitlement to costs under the policy.

II. Discussion

First, the Court rejects Defendant's request that it not confirm the appraisal award. Defendant is essentially seeking reconsideration of the Court's March 24, 2009 Order (DE 63), which held that confirmation of the appraisal award is appropriate. Significantly, Defendant waited over three years to challenge the Court's Order and it has failed to set forth any grounds for doing so. See Lussier v. Dugger, 904 F.2d 661, 667 (11th Cir. 1990) (denial of a motion for reconsideration is "especially soundly exercised when the party has failed to articulate any reason for the failure to raise an issue at an earlier stage in the litigation").

Because confirmation of the award is appropriate, it is equally appropriate to enter final judgment for Plaintiff. See Wilson v. Federated Nat. Ins. Co., 969 So. 2d 1133, 1134 (Fla. Dist. Ct. App. 2007); Muckenfuss v. Hanover Ins. Co., No. 5:05-cv-261-Oc-10GRJ, 2007 WL 1174098, at * 4 (M.D. Fla. Apr. 18, 2007). Upon entry of final judgment, Florida Statute § 627.428 provides for attorney's fees "to place the insured . . . in the place she would have been if the carrier had seasonably paid the claim or benefits without causing the payee to engage counsel and incur obligations for attorney's fees." Lewis v. Universal Prop. and Cas. Ins. Co., 13 So. 3d 1079, 1081 (Fla. Dist. Ct. App. 2009) (quoting Travelers Indem. Ins. Co. of Ill. v. Meadows MRI, LLP, 900 So.2d 676, 679 (Fla. Dist. Ct. App. 2005)).³ "[A] trial court has no discretion to deny reasonable attorney's fee to the prevailing plaintiff where the insurance company first disputes the claim and then settles the case after a lawsuit is filed." Amador v. Latin American Property and Casualty Insurance Company, 552 So. 2d 1132, 1133 (Fla. Dist. Ct. App. 1989); Losicco v. Aetna Casualty & Surety Company, 588 So. 2d 681, 682 (Fla. Dist. Ct. App. 1991). Courts, however, have refused to award attorney's fees when the insured immediately files a lawsuit, instead of permitting the appraisal process to determine the outcome of the dispute. See Travelers of Fl. v. Stormont, 43 So. 3d 941 (Fla. Dist. Ct. App. 2010) (denying attorney's fees when the insurer demanded appraisal and insured refused to respond toinsurer's written correspondence and instead filed suit). Based on the foregoing, the Court finds that Plaintiff, as the prevailing party, is entitled to attorney's fees.

Defendant, however, contends that Plaintiff is not entitled to recover attorney's fees. In support, Defendant points to its own pre-suit conduct as well as Plaintiff's pursuit of claims for which it was not a prevailing party. These arguments, however, are best raised when the Court examines the underlying attorney's fee record to determine a reasonable fee to award Plaintiff. See Davis v. Fletcher, 598 F.2d 469, 470 (5th Cir.1979)⁴ (the determination of what constitutes a reasonable fee is left to the sound discretion of the district court and will not be reversed absent abuse of discretion.)

Next, the Court will address whether Plaintiff is entitled to recover prejudgment interest. Under Florida law, courts must look to the contract of insurance to "determine the date from which coverage payment is due, as well as when interest is due on the amounts payable." Ellie's 50'S Diner, Inc. v. Citizens Prop. Ins. Corp., 54 So. 3d 1081 (Fla. Dist. Ct. App. 2011); see also Golden Door Jewelry Creations, Inc. v. Lloyds Underwriters Non-Marine Assoc., 117 F.3d 1328, 1341-42 (11th Cir.1997) (holding that prejudgment interest should accrue from date payment became due under policy, not from the date of loss). According to Defendant, and not disputed by Plaintiff, the policy at issue here required Defendant to pay the covered loss or damages, within 30 days after receiving the sworn proof of loss and the filing of the appraisal award.⁵ Plaintiff, however, claims that Defendant did not pay the entire amount of the appraisal award within those thirty days and therefore Plaintiff is entitled to prejudgment interest from the date of loss. It appears that Plaintiff is claiming that because Defendant deducted the hurricane deductible, prior payments and the fire alarm code upgrades from the appraisal award, Defendant failed to pay the entire amount of the appraisal award. The Court disagrees. Indeed, the appraisal award explicitly stated that it was made "without any consideration of any deductible amount or prior payments issued to the insured or any terms, conditions, provisions or exclusions of the . . . policy." (Appraisal Award, Ex. A, DE 43-1.) Therefore, Defendant paid the entire amount minus the appropriate deductions.

Plaintiff, however, relies upon a line of cases stemming from Independent Fire Ins. Co. v. Lugassy, 593 So. 2d 570 (Fla. Dist. Ct. App. 1992), which found an exception to the general rule that the terms of the policy govern with respect to an award of prejudgment interest. Specifically, this line of cases has held that prejudgment interest should be calculated from the date of the loss when the insurer denied liability for loss under the policy. Id. at 572; see also Underwriters Ins. Co. v. Kirkland, 490 So. 2d 149, 153-54 (Fla. Dist. Ct. App. 1986) (holding that prejudgment interest should be calculated from date of loss because no sworn proof of loss needed to be submitted due to the fact that the insured property was completely destroyed by fire). In other words, this exception permits the insurance company to be liable for prejudgment interest either from the date the loss occurred or the date the insurance company was put on notice of the loss. Chalfonte Condominium Apartment Ass'n, Inc. v....