The ink is not even dry on your appraisal award and the insurer has been served with a Motion for Entitlement to Attorneys Fees in Costs in a case where the insurer did not even know there was a disputed price and scope of the estimate until suit was filed.

Should you pay the attorneys fees and costs or fight the entitlement?

What if a Plaintiff offers to dismiss a lawsuit in exchange for participation in appraisal if you agree to pay his, or her, nominal attorney’s fees and costs to date?

Should you pay the attorneys fees and costs, or fight the entitlement?

In a post-Cammarata world our instinct is to immediately settle the attorneys fees and obtain a full and final Release, in order to avoid even the whisper of a bad faith claim. However, a bad faith suit is also predicated upon a tolled civil remedy notice and actual bad faith handling of the claim.

If after review of the claim, the handling reveals that the handling was good, meaning notices were sent at the right time, correspondence was followed up on, telephone calls were returned, etc., consideration should be given to fighting the entitlement to attorneys fees and costs. This is especially true when the policy has an appraisal provision that states each party shall bear its own costs, that no attorneys fees will be awarded, or that the appraisal award is not subject to entry by a court.

Even if the policy does not include language precluding attorneys fees, the argument can be made that payment of an appraisal award while in suit, is not the functional equivalent of a confession of judgment that triggers Plaintiff’s entitlement to fees and costs under F.S. 627.428. The confession of judgment doctrine applies only to penalize an insurance company that wrongfully causes an insured to resort to litigation in order to resolve a conflict, when it was within the insurer’s power to resolve the matter without litigation. State Farm Florida Ins. Co. v. Lorenzo, 969 So. 2d 393, 397 (Fla. 5th DCA 2007). “It is only when the claims adjusting process breaks down and the parties are no longer working to resolve the claim within the contract, but are actually taking steps that breach the contract, that the insured may be entitled to an award of fees under section 627.428, Florida Statutes.” Goldman v. United Services Auto. Ass’n, 244 So. 3d 310, 311 (Fla. 4th DCA 2018).

If the insurer is unaware of the disagreement of the damage evaluation until the filing of the Complaint, and the insurer demands appraisal once in suit, Goldman stands for the proposition that there was “never a breakdown in the claims adjusting or communication process, nor was there a refusal to pay the claim,” that triggered the lawsuit and the attorneys fees that follows. Id.

There is certainly negative case law that stands for the proposition that attorneys fees should be awarded when an appraisal award is paid mid-suit; however, a close reading of these cases reveals that most negative case law is easily distinguishable based on the insurer’s actions, or inactions, pre-suit. Therefore, if review of the claims handling in your file shows that correspondence and telephone calls were responded to, and there was no reason to suggest disagreement of price and scope pre-suit – you may just have a case worth fighting Plaintiff’s entitlement to fees.