42
Fla. L. Weekly D2597aTop of Form

Attorney’s
fees — Insurance — Offer of judgment — Trial court properly denied insureds’
motion for attorney’s fees pursuant to section 627.428, Florida Statutes, where
insureds did not recover a judgment in their favor in their action against
insurer for breach of contract and declaratory judgment — Trial court erred in
denying insurer’s motion for attorney’s fees pursuant to offer of judgment
statute on basis that insureds’ action sought both equitable relief and money
damages where true relief sought by insureds was money damages for breach of
contract, and not equitable relief

TOWER HILL SIGNATURE INSURANCE
COMPANY, Appellant/Cross-Appellee, v. CESAR JAVELLANA and SANDRA JAVELLANA,
Appellees/Cross-Appellants. 3rd District. Case Nos. 3D16-2526 & 3D16-2492.
L.T. Case No. 14-31467. December 13, 2017. Appeals from the Circuit Court for
Miami-Dade County, Michael A. Hanzman, Judge. Counsel: Traub Lieberman Straus
and Shrewsberry and Ashley R. Kellgren and Scot E. Samis (St. Petersburg), for
appellant/cross-appellee. Barnard Law Offices and Maxwell S. Barnard and Andrew
C. Barnard, for appellees/cross-appellants.

(Before SALTER, EMAS and LOGUE, JJ.)

(EMAS, J.) In these consolidated
appeals, each party seeks review of an order denying their respective motions for
attorney’s fees. Cesar and Sandra Javellana (“the Javellanas”), plaintiffs
below, appeal the denial of their motion for attorney’s fees and costs pursuant
to section 627.428, Florida Statutes (2016). Tower Hill Signature Insurance
Company (“Tower Hill”), defendant below, appeals the denial of its motion for
attorney’s fees under the offer of judgment statute, section 768.79, Florida
Statutes (2016).1

We affirm the trial court’s denial
of the Javellanas’ motion for attorney’s fees and costs because there was no
“rendition of a judgment” in favor of the Javellanas on their claims. However,
we reverse the trial court’s denial of Tower Hill’s motion for attorney’s fees,
because this was a “civil action for damages” under section 768.79, and the
“true relief” sought by the Javellanas was an award of monetary damages.

PROCEDURAL HISTORY

The Javellanas sustained damage to
their home from water intrusion, and initiated a claim with their homeowner’s
insurer, Tower Hill. Tower Hill investigated the claim, which included an
inspection by its independent claims adjuster, and determined the claim was
covered under the policy. Based on the adjuster’s evaluation and estimate,
Tower Hill made an initial payment to the Javellanas in an amount that Tower
Hill characterized as the “actual cash value” of the loss,2 and invited the Javellanas to submit
supplemental claims should they discover additional damage. Although Tower Hill
later made some additional payments, which the Javellanas accepted, they
nevertheless contended that Tower Hill grossly underpaid the claim,3 and therefore, breached the terms of
the insurance policy.

The Javellanas sued Tower Hill, and
the operative complaint contained three counts: breach of contract (Count I);
declaratory judgment related to the wear and tear/marring exclusion in the
policy (Count II); and declaratory judgment, seeking to have the court declare
that Tower Hill may not unilaterally determine actual cash value but that
actual cash value must be determined either as an issue of fact or by agreement
of the insured and insurer (Count III).

While the litigation was pending,
Tower Hill served an offer of judgment on each of the plaintiffs, pursuant to
section 768.79, Florida Statutes (2016). These offers of judgment were not
accepted by the Javellanas, and the case proceeded to a jury trial.4

After the Javellanas rested their
case, Tower Hill moved for directed verdict. Tower Hill argued that the
Javellanas failed, as a matter of law, to prove a breach by Tower Hill, because
the evidence showed that Tower Hill performed its duties under the policy by
paying the amount of the independent adjuster’s repair estimate at actual cash
value and advising the Javellanas to submit supplemental claims for any
additional damage. The court denied the motion, concluding that it was for the
jury to determine, as an issue of fact related to the breach of contract,
whether or not Tower Hill failed to pay the actual cash value of the loss.

At the conclusion of the trial, the
jury received the verdict form which asked the following two questions:

1. Did
Plaintiffs prove by the greater weight of the evidence that Tower Hill
Signature Insurance Company failed to initially pay at least the actual cash
value, less any applicable deductible, to Cesar & Sandra Javellana for
damage(s) caused by a drain line failure pursuant to the terms of the policy?

If
your answer to Question 1 is “Yes”, please proceed with answering question 2.
If on the other hand, your answer to Question 1 is “No”, your verdict is for
the Defendant and you should sign and date the verdict form.

2. What is
the total additional amount owed to Cesar & Sandra Javellana for damage
caused by Tower Hill Signature Insurance Company’s failure to pay ACV?

The jury answered “No” to Question
1, finding that the Javellanas did not prove that Tower Hill failed to
initially pay the Javellanas at least the actual cash value for damage caused
by the drain line failure. The trial court thereafter entered final judgment in
favor of Tower Hill.

Tower Hill later moved for
attorney’s fees, pursuant to section 768.79 and its unaccepted offers of
judgment.

The Javellanas also moved for fees
and costs, asserting, inter alia, that because the trial court
“effectively” ruled in their favor in denying Tower Hill’s directed verdict
motion on the declaratory judgment count, they were entitled to recover fees
and costs under section 627.428(1).

The court held a hearing on both
motions. As to Tower Hill’s motion, the court determined that Tower Hill was
not entitled to attorney’s fees under section 768.79, pursuant to Diamond
Aircraft Industries, Inc. v. Horowitch, 107 So. 3d 362 (Fla. 2013), because
the Javellanas’ complaint sought both equitable relief and money damages. The
court also denied the Javellanas’ motion for attorney’s fees and costs, finding
there was no judgment in their favor, and therefore, no entitlement to fees and
costs under section 627.428(1). Both parties appealed the court’s orders.

ANALYSIS

1. Javellanas’ Motion for Attorney’s
Fees and Costs

As for the Javellanas’ appeal of the
order denying their motion for fees pursuant to section 627.428(1), upon our de
novo review, Do v. Geico General Insurance Co., 137 So. 3d 1039, 1042
(Fla. 3d DCA 2014), we affirm the court’s order without further discussion,
because the Javellanas did not obtain a judgment in their favor. See §
627.428(1), Fla. Stat. (2016) (providing for award of attorney’s fees “[u]pon
the rendition of a judgment or decree” against an insurer and in favor of the
insured); Magdalena v. Toyota Motor Corp., 3D16-2322 (Fla. 3d DCA
November 29, 2017); Do, 137 So. 2d at 1044-45.

2. Tower Hill’s Motion for
Attorney’s Fees

We likewise review de novo the trial
court’s order denying Tower Hill’s motion for attorney’s fees, which determined
that the offers of judgment were not valid. Campbell v. Goldman, 959 So.
2d 223 (Fla. 2007). We hold that this case was a civil action for damages, and
therefore, Tower Hill’s offers of judgment were valid under section 768.79(1),
the offer of judgment statute, which provides:

In
any civil action for damages
filed in the courts of this state, if a defendant files an offer of judgment
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 behalf pursuant to a policy of liability insurance or
other contract from the date of filing of the offer if the judgment is one of
no liability or the judgment obtained by the plaintiff is at least 25 percent
less than such offer, and the court shall set off such costs and attorney’s
fees against the award.

(Emphasis added.)

We begin with the well-settled
proposition that a party is not entitled to fees under section 768.79 where the
plaintiff seeks only nonmonetary relief. MYD Marine Distrib., Inc. v.
Int’l Paint Ltd., 187 So. 3d 1285 (Fla. 4th DCA 2016); National Indem.
Co. v. Consol. Ins. Servs., 778 So. 2d 404 (Fla. 4th DCA 2001). Further,
the Florida Supreme Court has made it clear that “section 768.79 does not apply
to cases that seek both equitable relief and damages.” Diamond Aircraft,
107 So. 3d at 372.

The Javellanas argued below, and the
trial court agreed, that, pursuant to Diamond Aircraft, because their
complaint sought both equitable relief and money damages, Tower Hill’s offers
of judgment were not valid, and therefore, Tower Hill was not entitled to an
award of attorney’s fees under section 768.79.

Tower Hill contends that there is an
exception to Diamond Aircraft‘s general holding in cases where, as here,
the “true relief” sought is monetary damages. The trial court rejected this
argument, noting Diamond Aircraft‘s pronouncement that “there is no
basis to establish an exception for instances in which the equitable claim
lacks serious merit.” Id. at 374. We agree with the trial court that Diamond
Aircraft so held, but what Diamond Aircraft did not hold is
that a plaintiff can avoid an otherwise valid offer of judgment by merely
adding a declaratory judgment count to a cause of action in which the true
relief sought is money damages. Indeed, the Court in Diamond Aircraft
focused its discussion and analysis on the opening phrase of the offer of
judgment statute, which provides that “[i]n any action for damages .
. . if a defendant files an offer of judgment which is not accepted by the
plaintiff within 30 days, the defendant shall be entitled to recover reasonable
costs and attorney’s fees . . . .” (Emphasis added). In construing the nature
and scope of this language, the court discussed and cited approvingly to two
decisions from the Fourth District Court of Appeal, both of which are relevant
to the instant case: DiPompeo Construction Corp. v. Kimmel & Associates,
Inc., 916 So. 2d 17 (Fla. 4th DCA 2005) and Nelson v. Marine Group of
Palm Beach, Inc., 677 So. 2d 998 (Fla. 4th DCA 1996).

In DiPompeo, Kimmel, a
professional recruiting firm, invoiced DiPompeo $20,000 for commission earned
in providing executive search services to DiPompeo, following DiPompeo’s hiring
of an employee. DiPompeo, disputing that it owed Kimmel a commission, filed a
complaint seeking a declaratory judgment that, because it had no contract with
Kimmel, DiPompeo did not owe Kimmel any money. Kimmel then filed a
counterclaim, seeking to recover its commission on theories of breach of
contract and unjust enrichment.

The trial court determined that a
contract did exist between DiPompeo and Kimmel, but that DiPompeo’s hiring of
the employee was independent of the contract, since it was not a result of
Kimmel’s efforts. Thus, DiPompeo lost on its declaratory judgment claim, and
Kimmel lost on its counterclaim for breach of contract and quantum meruit.

DiPompeo filed a motion for
attorney’s fees based upon an offer of judgment served upon, and not accepted
by, Kimmel. The trial court denied the motion, ruling that DiPompeo’s
declaratory judgment action was not a “civil action for damages” and therefore,
the offer of judgment was not valid under section 768.79.

The Fourth District reversed,
holding that “[i]n construing the term ‘action for damages,’ this court has
looked behind the procedural vehicle used to bring a lawsuit and focused on
whether the ‘real issue’ in the case is one for damages.” DiPompeo, 916
So. 2d at 18 (quoting National Indem. Co., 778 So. 2d at 408). Our
sister court found that the offer of judgment was valid, because the “real
issue” in the case was the entitlement to money damages, and the Florida
Supreme Court, in Diamond Aircraft, approved DiPompeo‘s
conclusion that “the plaintiff’s claim was in actuality an action for damages
because the real issue before the court was whether the plaintiff owed money to
the defendant.” Diamond Aircraft, 107 So. 3d at 373.

Nelson, 677 So. 2d at 998, involved the unsuccessful sale of a
yacht, and the seller’s retention of the buyer’s escrowed deposit. The would-be
buyer (Nelson) filed an action seeking a declaratory judgment that the seller
(Marine Group) was not entitled to retain the deposit as liquidated damages,
and that the buyer was entitled to the return of the deposit. The seller
counterclaimed with an action for damages (i.e., seeking to retain the buyer’s
escrowed deposit as liquidated damages). Ultimately, the trial court found that
the buyer breached the contract and seller was entitled to retain the deposit.
Seller sought attorney’s fees based upon an offer of judgment. Buyer contended
the offer was invalid because the case involved an action seeking both monetary
and nonmonetary damages. The trial court found the offer of judgment valid, and
the Fourth District affirmed this determination: “As evidenced both by the real
issues in dispute and the counterclaim which clearly framed this case as an
action for damages, the offer of judgment statute properly applied.” Id.
at 999.

This court has followed the Nelson/DiPompeo
analysis approved in Diamond Aircraft. See Faith Freight
Forwarding Corp. v. Anias, 206 So. 3d 753, 755 (Fla. 3d DCA 2016)
(reversing trial court’s order invalidating offer of judgment and, citing DiPompeo,
holding that such an offer is permitted “where the plaintiff’s claim was an
action for damages because the ‘real issue’ before the court was whether the
plaintiff was owed the compensation.”). Other courts have followed this
reasoning as well. See, e.g., Polk Cty. v. Highlands-in-the-Woods,
LLC, 227 So. 3d 161 (Fla. 2d DCA 2017) (recognizing that “[w]hen
determining whether a complaint alleges an action for damages or one for
equitable relief, Florida courts ‘look to whether the ‘real issue’ is one for
damages’ or equitable relief”); Yacht Club on the Intracoastal Condo. Ass’n,
Inc., 599 Fed. Appx. 875, 883 (11th Cir. 2015) (noting that “[i]t is clear
that under Diamond Aircraft, we must reject The Yacht Club’s argument
that attorney’s fees under § 768.79 are not available in any case in which a
declaratory judgment accompanies a claim for damages. While the Florida Supreme
Court found that cases seeking both monetary and non-monetary relief are not
eligible for attorney’s fees under § 768.79, by citation to Nelson and DiPompeo
Construction, it reiterated that a court should look behind the procedural
vehicle used in a complaint to discern what true relief is sought”).

Therefore, reading Diamond
Aircraft in tandem with Nelson and DiPompeo, we conclude that
this case is an “action for damages,” within the meaning of section 768.79(1),
because it is plain that the true relief sought by the Javellanas was money
damages for a breach of contract, rather than equitable relief. Accordingly,
Tower Hill’s offer of judgment was not invalidated by the Javellanas’ inclusion
of declaratory judgment counts in a cause of action that, in actuality, sought
money damages.

This is not to say that the count
for declaratory relief — i.e., seeking a declaration that Tower Hill did not,
as a matter of law, comply with the terms of the policy merely by unilaterally
determining actual cash value and paying that amount — lacked serious merit,
or was not at issue in this case. Nonetheless, that question, raised in a count
for declaratory relief, was subsumed within the true relief sought, in this
case: whether Tower Hill breached the policy by failing to pay actual cash
value and if so, the amount of damages for the breach. If Tower Hill could
unilaterally determine the actual cash value of the claim, and, as a matter of
law, comply with the policy terms by paying that unilaterally-determined
amount, then the Javellanas could not prove a breach, and could not, therefore,
obtain damages.

On the other hand, by obtaining a
favorable “outcome” on its declaratory count — that is, a determination that
Tower Hill did not, as a matter of law, comply with the terms of the policy
merely by unilaterally determining actual cash value and paying that amount —
the Javellanas did not and could not obtain the “true relief” they sought in
this action. Instead, a favorable outcome on that declaratory count simply
established that the question of whether Tower Hill paid actual cash value in
compliance with the terms of the policy was a question of fact for the jury,
but nevertheless remained an inextricable component of the breach of contract
claim. The Javellanas’ decision to extract that discrete question from its
breach of contract claim, and present it as a standalone count for declaratory
relief, does not alter the fact that the true relief sought in the case was
money damages for an alleged breach of contract.

Thus, the trial court erred in its
conclusion that, because the Javellanas’ action sought both equitable relief
and money damages, Tower Hill’s offers of judgment were invalid under section
768.79(1).5

We therefore affirm the trial
court’s order denying the Javellanas’ motion for attorney’s fees; reverse the
trial court’s order denying Tower Hill’s motion for attorney’s fees; and remand
this cause for proceedings consistent herewith.

Affirmed in part, reversed in part
and remanded with directions.

__________________

1Tower Hill
was awarded its costs by the court as the prevailing party. There is no issue raised
about the cost award in this appeal.

2The policy
provided in pertinent part: “We [Tower Hill] will initially pay at least the
actual cash value of the insured loss, less any applicable deductible. We shall
pay any remaining amounts necessary to perform such repairs as work is
performed and expenses are incurred.”

3The record
establishes that additional sums were paid, following the initial payment, for
water and mold remediation. The total paid by Tower Hill to the Javellanas was
$45,149, including the deductible, and the Javellanas allege an additional
$66,800 is needed to repair the damage.

4On the
first day of trial, the trial court determined that, as to Count II (seeking
declaratory relief related to the wear and tear/marring exclusion), there was
no case or controversy, and thus ruled in favor of Tower Hill.

5The
Javellanas have raised a number of additional bases for invalidating Tower
Hill’s offers of judgment. However, the trial court did not reach these,
instead basing its order of denial on the issue addressed in this opinion. We
decline to reach the merits of these additional bases, leaving it to the trial
court, on remand and if appropriate, to address them in the first instance.

* * *