Opinion
2D22-1505
08-04-2023
NAOMI MARIE STIWICH, as the personal representative of the Estate of Mary Schiro, Appellant, v. PROGRESSIVE AMERICAN INSURANCE COMPANY and GARY PARSONS, Appellees.
Bailey Howard of Bishop & Mills, PLLC, Tallahassee (withdrew after briefing); and John S. Mills of Bishop & Mills, PLLC, Jacksonville, for Appellant. Stuart J. Freeman of Freeman, Goldis & Cash, P.A., St. Petersburg, for Appellee Progressive American Insurance Company.
Appeal from the Circuit Court for Sarasota County; Hunter W. Carroll, Judge.
Bailey Howard of Bishop & Mills, PLLC, Tallahassee (withdrew after briefing); and John S. Mills of Bishop & Mills, PLLC, Jacksonville, for Appellant.
Stuart J. Freeman of Freeman, Goldis & Cash, P.A., St. Petersburg, for Appellee Progressive American Insurance Company.
No appearance for remaining Appellee.
SLEET, CHIEF JUDGE .
Naomi Stiwich, as personal representative for the Estate of Mary Schiro, appeals the trial court's final order denying her motion for attorney fees and costs in her action for uninsured motorist (UM) benefits against Progressive American Insurance Company. Because Progressive's actions amounted to a confession of judgment on which the trial court should have entered final judgment for Stiwich, we reverse the court's order and remand for entry of a final judgment and a determination of whether Stiwich has satisfied all of the remaining statutory requirements for entitlement to fees.
In November 2019, Schiro was in an automobile accident and suffered injuries. She subsequently passed away due to causes unrelated to the accident. In December 2020, Stiwich, as the personal representative of Schiro's estate, brought suit against Progressive seeking to recover the $10,000 policy limits under Schiro's UM policy with Progressive. Stiwich later filed an amended complaint, which alleged that Progressive had issued a UM policy "to cover . . . Schiro" for the injuries she suffered in the accident and that Progressive "failed and refused to pay." Progressive filed an answer and affirmative defenses in which it denied all allegations in the amended complaint. The parties conducted discovery, and on July 14, 2021, pursuant to section 768.79, Florida Statutes (2021), Stiwich served on Progressive a demand for judgment in the amount of $7,999.99. Progressive never responded to the proposal, and it expired.
On November 12, 2021, Stiwich filed a civil remedy notice with the Florida Department of Financial Services against Progressive pursuant to section 624.155(3), Florida Statutes (2021), as a prerequisite to filing a separate bad faith action against Progressive for failing to adjust Stiwich's claim for UM damages. See § 624.155(3)(a) ("As a condition precedent to bringing an action under this section, the department and the authorized insurer must have been given [sixty] days' written notice of the violation."). Pursuant to section 624.155(3)(c), "[n]o action [under the civil remedy statute] shall lie" if, within sixty days of receiving such notice, an insurer pays the damages or otherwise corrects the circumstances on which the violation is based.
Here, thirty-one days after Stiwich filed her civil remedy notice, Progressive paid the $10,000 limit on Schiro's UM policy. Thereafter, Stiwich filed her motion seeking entry of "an order of Confession of Judgment/Final Judgment" and requesting attorney fees and costs. In the motion, Stiwich argued that Progressive's payment of Schiro's UM policy limits was "the functional equivalent of a confession of judgment or a verdict in favor of the insured." Stiwich therefore requested that the court "enter an Order of Confession of Judgment/Final Judgment . . . in favor of Plaintiff . . . in the amount of $10,000.00" and, noting her rejected settlement offer, asked the court to award her attorney fees and costs.
Progressive opposed the motion, arguing that because it never denied coverage, its payment of the UM policy limits in response to Stiwich's civil remedy notice could not be a confession of judgment but rather was a settlement. Progressive maintained that because no judgment had ever been entered in the underlying action, Stiwich could not recover fees and costs pursuant to section 768.79(1), which provides that a plaintiff can only be entitled to fees based on a rejected demand for judgment if he or she "recovers a judgment in an amount at least [twenty-five] percent greater than the offer." (Emphasis added.)
The trial court denied the motion, stating that "[a]t the time Progressive paid policy limits, the lawsuit remained pending with no judgment having been entered." The court agreed with Progressive that in order to award attorney fees under section 768.79(1), Stiwich was required to recover a judgment and that Progressive's payment of UM policy limits in response to Stiwich's civil remedy notice did not satisfy that statutory requirement. The court did not address whether Progressive's tender amounted to a "settlement" but concluded that it was not a "judgment" and did not satisfy the "plain and ordinary language" of the statute.
In making its oral pronouncement, the trial court was singularly focused on the issue of whether a confession of judgment satisfies the statutory language of section 768.79(1). It is unclear from the record whether the court made a determination that Progressive's tender under the civil remedy notice did indeed amount to a confession of judgment or whether the court concluded that such a determination was unnecessary because it believed a confession of judgment could never entitle a plaintiff to attorney fees under section 768.79(1). Either way, our disposition would be the same.
On appeal, Stiwich argues that this was error. She maintains that although section 768.79(1) does indeed require her to recover a judgment to trigger her entitlement to attorney fees under that statute, Progressive executed a confession of judgment by tendering policy limits. She further argues that although the confessed judgment is not the judgment required by the statute, it was equivalent to a verdict upon which final judgment in her favor should have been entered, triggering her entitlement to fees under the statute. We agree.
At common law, where the defendant, "at any time before trial[,] confessed the action and withdrew his plea and other allegations," a judgment by confession was entered for the plaintiff. Allstate Fire &Cas. Ins. Co. v. Castro, 351 So.3d 127, 131 (Fla. 1st DCA 2022) (quoting Info. Buying Co. v. Miller, 161 S.E. 617, 619 (Ga. 1931)). In the insurance context, "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." Ivey v. Allstate Ins. Co., 774 So.2d 679, 684-85 (Fla. 2000) (emphasis added) (citing Wollard v. Lloyd's &Cos. of Lloyd's, 439 So.2d 217, 218 (Fla. 1983)). This is true even where, as here, the payment was tendered to cure a civil remedy notice; "the motivation of an insurer in making the payment on the claim is immaterial in assessing whether a confession of judgment has occurred." Castro, 351 So.3d at 134 (rejecting "Allstate['s] argu[ment] that the payment of policy limits was only made in response to Castro's [civil remedy notice]"); see also § 624.155(8) ("The civil remedy specified in this section does not preempt any other remedy . . . provided for pursuant to any other statute or pursuant to the common law of this state."); Do v. GEICO Gen. Ins. Co., 137 So.3d 1039, 1043-44 (Fla. 3d DCA 2014) ("[T]here is no requirement that an insurer must intend to confess judgment in order for it to occur.").
By tendering the amount of the disputed claim to cure the civil remedy notice, Progressive acknowledged that Schiro's estate was entitled to the UM benefits Stiwich sought in the instant action, and thus it "confessed" judgment in this action. See Castro, 351 So.3d at 131 ("[A] confession of judgment is substantially an acknowledgment that the debt is justly due." (alteration in original) (quoting Bank of Chatham v. Arendall, 16 S.E.2d 352, 355 (Va. 1941))); see also Fortune v. First Protective Ins. Co., 302 So.3d 485, 489-90 (Fla. 2d DCA 2020) ("The statutory claim for bad faith 'is founded upon the obligation of the insurer to pay when all conditions under the policy would require an insurer exercising good faith and fair dealing towards its insured to pay.' "(quoting Vest v. Travelers Ins. Co., 753 So.2d 1270, 1275 (Fla. 2000))). Consequently, the trial court should have treated Progressive's tender of policy limits as a confession of judgment or verdict in Stiwich's favor. See Castro, 351 So.3d at 131 ("A confession of judgment is the substitute for verdict." (quoting Whitley v. S. Wholesale Corp., 164 S.E. 903, 903 (Ga.Ct.App. 1932))).
And because Stiwich established that Progressive's tender of UM policy limits was a confession of judgment that could be substituted for a verdict in her favor, the trial court erred in denying her motion in which she asked the court to "enter an order for Confession of Judgment/Final Judgment." (Emphasis added.) The trial court should have entered final judgment for Stiwich in the amount of Progressive's $10,000 payment. See id. ("A judgment must be regularly entered upon a confession of judgment. The confession itself is not the judgment of the court." (quoting Whitley, 164 S.E. at 903)); see also All. Spine &Joint, III, LLC v. GEICO Gen. Ins. Co., 321 So.3d 242, 244-45 (Fla. 4th DCA 2021) ("[W]hen a party confesses judgment up to the maximum amount of damages alleged in the complaint, the confessing party has, in fact, agreed to the precise relief sought in the complaint. In such a situation, the issue between the parties, as framed by the pleadings, becomes moot as the court can provide no further substantive relief other than entering the confessed judgment." (citation omitted)).
That final judgment would then satisfy the requirement in section 768.79(1) that a plaintiff must first recover a judgment to be entitled to fees under that statute. See Castro, 351 So.3d at 134. Accordingly, the trial court erred in denying Stiwich's request for attorney fees on that basis and instead should have proceeded to a determination of whether Progressive's rejection of her demand for judgment entitled her to fees under the remaining requirements of the statute.
After the trial court pronounced its ruling at the hearing below, counsel for Stiwich stated that the trial court would still have to render a final judgment "for purposes of appeal." The trial court invited the parties to "draft . . . a very simple final order disposing of the case and you can submit it along with the written typed-up ruling, but I want my typed up ruling the way I just said it. So, send up a very short . . . final order adopting . . . the reasons stated in open court." (Emphasis added.) Although the court was careful to refer to the disposition as a final order rather than a final judgment, we are confused as to how the court could maintain the position that no judgment had been entered in the underlying case while at the same time signing off on an order which stated that "[t]he [c]ourt considers this a final order: all judicial labor in this case has been completed" and that "[t]he [court] directs the Clerk to close this case." No matter how the trial court titled the order, it appears that the court entered a final judgment based upon a settlement between the parties. But nothing in section 624.155 expressly states or impliedly suggests that curing a civil remedy notice is a settlement of any kind. At best, Progressive's tender here could be considered a settlement of any potential bad faith claim. But as written, section 624.155 does nothing to alter the operation of the common law doctrine of confession of judgment. See Castro, 351 So.3d at 133 ("Unless a statute unequivocally states that it changes the common law, or is so repugnant to the common law that the two cannot coexist, the statute will not be held to have changed the common law." (quoting Wyche v. State, 232 So.3d 1117, 1119 (Fla. 1st DCA 2017))).
Florida Rule of Civil Procedure 1.442 provides that "[a] proposal to a defendant shall be served no earlier than [ninety] days after service of process on that defendant." Best practices would dictate that defense counsel use that ninety-day period to investigate and evaluate the merits of the action and to communicate and exchange information with plaintiff's counsel through informal and formal discovery before a settlement proposal that triggers entitlement to fee sanctions is served. That way, the reasonableness of the proposal and whether to accept or reject it can be fairly evaluated. See generally Coates v. R.J. Reynolds Tobacco Co., No. SC2021-0175, 2023 WL 4004339, at *3 (Fla. June 15, 2023) ("[T]he offer-of-judgment statute operates to penalize a party who refuses to accept a good-faith, reasonable proposal for settlement as reflected in the ensuing final judgment.").
Finally, we address Progressive's position below and on appeal that its tender of policy limits cannot be deemed a confession of judgment in the underlying suit because it never denied Schiro's UM "coverage" and that therefore the underlying suit was not necessary to resolve any dispute between the parties. Progressive relies on this court's opinion in Clifton v. United Casual Insurance Co. of America, 31 So.3d 826 (Fla. 2d DCA 2010), in which we stated that "the confession of judgment rule is not absolute" and that "a confession of judgment will be determined based on whether 'the filing of the suit acted as a necessary catalyst to resolve the dispute and force the insurer to satisfy its obligations under the insurance contract.' "Id. at 829 (underlined emphasis added) (quoting Lewis v. Universal Prop. &Cas. Ins. Co., 13 So.3d 1079, 1081 (Fla. 4th DCA 2009)).
We note, however, that in Clifton this court also stated that "the existence of a bona fide dispute . . . is a crucial condition precedent" to treating a postsuit payment as a confession of judgment. Id. (quoting Tristar Lodging, Inc. v. Arch Specialty Ins. Co., 434 F.Supp.2d 1286, 1298 (M.D. Fla. 2006)). The record before us in the instant matter demonstrates a bona fide dispute between the parties and that Stiwich's suit was a necessary catalyst to resolve that dispute. In her amended complaint, Stiwich alleged that Schiro was due UM "coverage" pursuant to the policy issued to her by Progressive and that Progressive "failed and refused to pay." In its answer, Progressive denied "[e]ach and every allegation not specifically admitted." This created a genuine dispute between the parties as to whether Schiro was due UM benefits under the policy and whether Progressive failed or refused to pay such benefits. Stiwich filed suit in order to resolve this dispute between the parties and to force Progressive to pay the benefits that she alleged were due under the policy.
Furthermore, to the extent that this argument attempts to differentiate between a carrier's denial of coverage and its denial of liability, the case law does not support such a distinction; rather, a genuine dispute arises where an insured filed a claim and the insurer failed to pay benefits on that claim. See Johnson v. Omega Ins. Co., 200 So.3d 1207, 1215 (Fla. 2016) ("[I]t is well settled that the payment of a previously denied claim following the initiation of an action for recovery, but prior to the issuance of a final judgment, constitutes the functional equivalent of a confession of judgment." (emphasis added)).
It makes no difference whether Progressive refused to pay the UM claim because it concluded that Schiro did not have coverage or because it concluded that it was not liable to pay for some reason expressed in its affirmative defenses. The fact that it did not pay on the claim is what created the dispute between the parties that made Stiwich's filing suit necessary. Nothing in the record before us indicates that Stiwich filed this suit for any improper purpose.
For the reasons discussed, we reverse and remand for the trial court to enter a final judgment in Stiwich's favor in the amount of $10,000 based on the confession of judgment, which acts like a verdict, and to determine whether Stiwich has satisfied all of the remaining requirements of section 768.79(1) and is thus entitled to fees and costs under that statute.
Reversed and remanded.
SMITH and LABRIT, JJ., Concur.
Opinion subject to revision prior to official publication.