In the case of Travelers of Florida v. Stormont, Download Travelers of Florida v. Stormont (Fla. 3d DCA Case Nos. 3D09.1100, 3D08.2835, Opinion Filed September 15, 2010) (STATED NOT FINAL; PUBLIC ACCESS) also published as 2010 WL 3564708 *1 (Fla. 3d DCA September 15, 2010)(Westlaw subscription required to access Westlaw), the principal issue stated by the Appellate Court "is whether, and to what extent, an insured is entitled to attorney's fees for legal services rendered in connection with an appraisal under an insurance policy." Stated differently, the principal questions presented in that appeal concern (1) Whether and When an Insured is entitled to Attorney's Fees in connection with an Appraisal under a First-Party Policy, (2) If so, in what amount, and (3) Prejudgment Interest.
1. Whether and When an Insured is entitled to Attorney's Fees in connection with an Appraisal under a First-Party Policy. The Court in this case expressly held that not all Attorney's Fees can be recovered in such a case. "In order to be entitled to attorney's fees, it must have been reasonably necessary for the insured to file a court action." The available remedy, if any, is provided by Fla. Stat. § 627.428. Travelers of Florida v. Stormont, 2010 WL 3564708 at *2. "Where suit is filed without any necessity to do so, attorney's fees under section 627.428 will be denied." Id.
Where suit is filed prematurely, the Insured is not entitled to recover Section 627.428 Attorney's Fees. In that case, the Insured filed suit contending that the Insurance Company's selection of a supposedly incompetent Appraiser was a violation of the Insurance Company's Policy obligation to select a competent Appraiser and was "Bad Faith." The Florida Appellate Court held that filing a lawsuit at this juncture was premature. "The insured was not entitled to attorney's fees for this phase of the trial court proceedings." Id. at *3.
In contrast, the same Insurance Company's refusal to pay an ultimate Appraisal Award and its half of the neutral Umpire's fee to boot, entitled the Insured in the same case to Attorney's Fees under the Florida Statute: "It was entirely reasonable for the insured to file this motion [to enter judgment in accordance with the award] after the insurer not only failed to pay the award, but also failed to pay its half of the umpire's fee." Id.
2. If so, in what amount. In Florida as in other jurisdictions, a "multiplier" is judicially sanctioned for awarding Attorney's Fees. In this case, the Trial Court awarded a 2.5 multiplier, which the Appellate Court held "must be eliminated." The Third District in this case followed the lead of previous First District case law holding that under circumstances where there is no question that there would be a recovery of damages, the correct multiplier is only 1.0. Id. at *4.
3. Prejudgment Interest. This case involved a Theft Loss. the Insured claimed Interest from the date of the Theft, which was January 28, 2006. The Appellate Court disagreed. "The prejudgment interest award must be reduced, so as to cover the period from the date of the [Appraisal] award until the date of the insurer's payment of the $95,000 principal amount of the award." Id. at *4.
The Appellate Court panel unanimously signed off on the Opinion in this case, which was written by Judge Gerald B. Cope. He has been a respected Appellate Judge in Florida for over 20 years. He resigned effective October 31, 2010 to enter private practice. He and his demonstrated expertise in Insurance Law will be greatly missed. Best wishes to Judge Cope as he enters another phase of his honorable career.
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