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February 23, 2018 by admin

Insurance — Attorney’s fees — Proposal for settlement — Where trial court had entered summary judgment for insurer in insured’s action alleging breach of insurance contract on basis that claimed loss was not covered under policy, it was an abuse of discretion to deny insurer’s motion for attorney’s fees pursuant to offer of judgment statute on ground that insurer’s nominal proposal for settlement was not made in good faith

43 Fla. L. Weekly
D395a

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Insurance
— Attorney’s fees — Proposal for settlement — Where trial court had entered
summary judgment for insurer in insured’s action alleging breach of insurance
contract on basis that claimed loss was not covered under policy, it was an
abuse of discretion to deny insurer’s motion for attorney’s fees pursuant to
offer of judgment statute on ground that insurer’s nominal proposal for
settlement was not made in good faith — Insurer had a reasonable basis at the
time of the proposal to conclude that its exposure was nominal

MOUNT VERNON FIRE INSURANCE COMPANY, Appellant, v. NEW MOON
MANAGEMENT, INC., a/k/a NEW MOON MANAGEMENT COMPANY, Appellee. 3rd District.
Case No. 3D16-2243. L.T. Case No. 13-886-K. Opinion filed February 14, 2018. An
Appeal from the Circuit Court for Monroe County, Mark H. Jones, Judge. Counsel:
Fowler White Burnett, P.A., and Esther E. Galicia, for appellant. Garcia Law
Firm, Trial Attorneys, and Nathalia A. Mellies, for appellee.
(Before ROTHENBERG, C.J., and EMAS and LUCK, JJ.)
(ROTHENBERG, C.J.) The defendant below, Mount Vernon Fire
Insurance Company (“Mount Vernon”), appeals the denial of its amended motion
for entitlement to attorney’s fees and costs (“amended motion for entitlement”)
filed pursuant to section 768.79, Florida Statutes (2015), and Florida Rule of
Civil Procedure 1.442, which was based on the trial court’s finding that Mount
Vernon’s nominal proposal for settlement to its insured, New Moon Management,
Inc., etc. (“New Moon”), was not made in good faith. Because we conclude that
the trial court abused its discretion by finding that Mount Vernon’s proposal
for settlement was not made in good faith, see State Farm Fla. Ins.
Co. v. Laughlin-Alfonso
, 118 So. 3d 314, 315 (Fla. 3d DCA 2013) (“The abuse
of discretion standard of review governs this Court’s review of a trial court’s
determination that a proposal for settlement was not made in good faith.”), we
reverse the order under review and remand for the entry of an order granting
Mount Vernon’s amended motion for entitlement.
Mount Vernon issued a commercial property and general
liability policy to New Moon. Following heavy rains in August 2008, New Moon
filed a claim under the policy for water damage. Later that year, after
obtaining a roof damage report from a structural engineer, Mount Vernon denied
the claim based on exclusions and limitations in the insurance policy.
In August 2013, New Moon filed a complaint against Mount
Vernon, asserting claims for breach of the insurance contract and bad faith.
After nearly two years of extensive discovery, on July 2, 2015, Mount Vernon
served a nominal proposal for settlement ($1,000) on New Moon pursuant to rule
1.442 and section 768.79.
Within a week of serving its proposal for settlement, Mount
Vernon filed a motion for final summary judgment, asserting that the damage was
not covered under the terms of the policy. Following a hearing, the trial court
granted Mount Vernon’s motion for summary judgment. Thereafter, the trial court
entered final summary judgment in favor of Mount Vernon and denied New Moon’s
motion for rehearing and motion for relief from judgment.1

Pursuant to rule 1.442 and section 768.79, Mount Vernon
filed its amended motion for entitlement based on New Moon’s failure to accept
Mount Vernon’s proposal for settlement. In response, New Moon argued that the
nominal proposal for settlement was not made in good faith because Mount Vernon
did not have a reasonable basis to offer the nominal amount.
At the hearing on the amended motion for entitlement, Mount
Vernon argued that it submitted its proposal for settlement following extensive
discovery and the taking of several depositions and, at the time it submitted
its proposal for settlement, the record reflected that there were no issues of
material fact and that Mount Vernon had a reasonable basis to conclude that it
had “no exposure, let alone nominal exposure.” The trial court reserved ruling.
Thereafter, the trial court entered an order denying Mount Vernon’s amended
motion for entitlement, finding that Mount Vernon’s nominal proposal for
settlement was not made in good faith. See § 768.79(7)(a), Fla. Stat.
(2015) (“If a party is entitled to costs and fees pursuant to the provisions of
this section, the court may, in its discretion, determine that an offer was not
made in good faith. In such case, the court may disallow an award of costs and
attorney’s fees.”). Mount Vernon’s appeal followed.
Mount Vernon contends that the trial court abused its
discretion by determining that the nominal proposal for settlement was not made
in good faith. We agree.
In addressing whether the trial court abused its discretion
by finding that Mount Vernon’s nominal proposal for settlement was not was made
in good faith, we must consider whether Mount Vernon “had a reasonable basis at
the time of the offer to conclude that [its] exposure was nominal.” Fox v.
McCaw Cellular Commc’ns of Fla., Inc.
, 745 So. 2d 330, 333 (Fla. 4th DCA
1998); see also Dep’t of Highway Safety & Motor Vehicles, Fla.
Highway Patrol v. Weinstein
, 747 So. 2d 1019, 1021 (Fla. 3d DCA 1999)
(reversing the trial court’s denial of attorney’s fees, which were sought under
section 768.79, where the record conclusively demonstrates that, at the time
the nominal proposal for settlement was made, the offeror had a reasonable
basis to conclude that its exposure was nominal). Further, we recognize that
good faith is “determined by the subjective motivations and beliefs of the
pertinent actor.” Weinstein, 747 So. 2d at 1021.
In the instant case, the record reflects that Mount Vernon
made its proposal for settlement following almost two years of litigation and
extensive discovery. Further, less than a week after making its proposal for
settlement, Mount Vernon moved for summary judgment, and in doing so, relied
heavily on the investigation report issued by its claim administrator in
October 2008, the roof damage report issued by structural engineers in November
2008, and the exclusions and limitations contained in the policy. Thus, the
record conclusively demonstrates that Mount Vernon “had a reasonable basis at
the time of the offer to conclude that [its] exposure was nominal.” Fox,
745 So. 2d at 333. Accordingly, we conclude that the trial court abused its
discretion by denying Mount Vernon’s amended motion for entitlement based on
the determination that the nominal proposal for settlement was not made in good
faith. We, therefore, reverse the order under review and remand for the entry
of an order granting Mount Vernon’s amended motion for entitlement.2

Reversed and remanded.
__________________
1New Moon appealed these
orders, and this Court affirmed. See New Moon Mgmt., Inc. v. Mount
Vernon Fire Ins. Co.
, 3D16-2242 (Fla. 3d DCA Dec. 27, 2017).
2In its answer brief, New
Moon also argued that the trial court’s order denying Mount Vernon’s amended
motion for entitlement should be affirmed because there was an ambiguity in the
proposal for settlement, thereby defeating its enforcement. As New Moon did not
raise this argument in the lower tribunal, the argument was not properly
preserved for appellate review. We have, therefore, not addressed this argument
on appeal.
* * *
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