Paul J. Stann v. The First Liberty Insurance Corporation

• Court: Court of Appeals for the Eleventh Circuit
• Decided: February 3, 2021
• Docket: 20-12076
• Status: Unpublished

Opinion

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[DO NOT PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT ________________________

No. 20-12076 Non-Argument Calendar ________________________

D.C. Docket No. 6:18-cv-01499-WWB-LRH

PAUL J. STANN,

Plaintiff-Appellant,

versus

THE FIRST LIBERTY INSURANCE CORPORATION,

Defendant-Appellee. ________________________

Appeal from the United States District Court for the Middle District of Florida ________________________

(February 3, 2021)

Before NEWSOM, GRANT, and BRASHER, Circuit Judges.

PER CURIAM:

Paul Stann argues that he is entitled to attorney’s fees under section 627.428

of the Florida Statutes because his insurer, Liberty, settled his claim after he filed a USCA11 Case: 20-12076 Date Filed: 02/03/2021 Page: 2 of 12

lawsuit. But because Liberty was attempting to resolve the dispute through

mediation when Stann sued, that section does not apply. And though he claims

that the district court made various errors when ruling on his motions, we find no

abuse of discretion here. Accordingly, we affirm.

I.

After Stann’s property was damaged by a hurricane, he reported his losses to

Liberty. Liberty sent an adjuster to inspect the property pursuant to their policy.

The adjuster estimated that the cost to repair the damage was $4,295.19. Stann

disagreed; he thought the cost was $110,711.64. This disagreement prompted

Liberty to reinspect the property; this time, it estimated damages of $14,318.35.

Based on the new estimate, Liberty issued a payment of $4,014.68 to Stann to

cover the undisputed portion of the loss, less the applicable deductible and

recoverable depreciation. Liberty asked Stann to show its estimate to his

contractor; if his contractor’s estimate was higher, he should contact Liberty before

beginning work. Liberty also said it would consider paying any difference once

repairs were completed.

Stann still thought he was owed more, so he invoked his right to mediation

under the policy. He submitted a service request with the Florida Department of

Financial Services. The Department informed Liberty of the demand and

appointed a mediator. Under the Florida Administrative Code, the mediation

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conference would be held at a reasonable location within 15 miles of the insured

property, unless both parties agreed otherwise. Because Stann did not live in the

same state as the property, he requested permission to participate by phone.

Liberty preferred to mediate in person—as the Code allowed—and asked when

Stann was available to do so. The Department requested a status update from

Stann about three weeks later. Instead of providing possible dates to mediate,

Stann said that he had hired a lawyer to file a lawsuit against Liberty.

Six days later, Stann sued Liberty in state court for breach of contract.

Liberty removed the case to federal court, and then moved to dismiss the complaint

or, in the alternative, stay proceedings pending mediation. The district court stayed

the case for sixty days so the parties could participate in mediation. In an effort to

resolve the disagreement, Liberty hired a company to review the various estimates;

that company estimated a total loss of $23,915.23. Liberty sent that estimate to

Stann before the date of mediation.

Mediation occurred, but ended in an impasse. Liberty still paid Stann

$13,151.71, which reflected the amount of its latest estimate plus interest, less

prior payments and the deductible. Stann then filed a motion in district court—the

August 12, 2019 motion—arguing that this $13,151.71 payment entitled him to an

award of attorney’s fees under section 627.428 of the Florida Statutes. That

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section provides that an insured can recover attorney’s fees if the court issues a

judgment or decree in the insured’s favor. Fla. Stat. § 627.428.

A magistrate judge recommended denying Stann’s motion. The magistrate

judge noted that Liberty stood ready to mediate the dispute before Stann sued.

Because Stann was not forced to litigate in order to recover from Liberty, there was

no “confession of judgment” to trigger section 627.428.

Later, Liberty paid Stann $57,500 to settle all issues except for attorney’s

fees and taxable costs. It’s not completely clear why. But Stann then filed a

motion—the January 9, 2020 motion—asking for partial summary judgment and

attorney’s fees and costs or, in the alternative, an evidentiary hearing. The district

court denied that motion for attempting to relitigate motions already pending

before the court and for being filed after the deadline for dispositive motions had

passed. It then dismissed the case with prejudice in light of the settlement,

retaining jurisdiction to resolve the pending motions for attorney’s fees. Stann

again filed a motion for attorney’s fees on April 16, 2020.

The district court issued an order adopting after de novo review the

magistrate judge’s report and recommendation that had been filed before the final

settlement payment. The court also denied Stann’s August 12, 2019 motion

arguing that the first settlement payment entitled him to attorney’s fees. It then

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denied as moot his April 16, 2020 motion for attorney’s fees and costs. Once each

motion had been addressed, the district court dismissed the case.

This appeal followed.

II.

This Court reviews the denial of attorney’s fees and costs for abuse of

discretion. Villano v. City of Boynton Beach, 254 F.3d 1302, 1304 (11th Cir.

2001); Mathews v. Crosby, 480 F.3d 1265, 1276 (11th Cir. 2007). We review a

district court’s interpretation of state law de novo. Jones v. United Space All.,

L.L.C., 494 F.3d 1306, 1309 (11th Cir. 2007).

III.

Under section 627.428 of the Florida Statutes, an insured is entitled to an

award of attorney’s fees if the court enters a judgment in favor of the insured. This

section is triggered when there is “an incorrect denial of benefits, followed by a

judgment or its equivalent of payment in favor of the insured.” Johnson v. Omega

Ins. Co., 200 So. 3d 1207, 1219 (Fla. 2016). It 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” for this section. Id. at 1215. On the other hand, where an

insurer is complying with the policy when the insured decides to sue, an award of

attorney’s fees under section 627.428 is unwarranted. See State Farm Florida Ins.

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Co. v. Lorenzo, 969 So. 2d 393, 398 (Fla. Dist. Ct. App. 2007). This means that

“not all post-suit payments by an insurer will constitute a confession of judgment.”

Bryant v. GeoVera Specialty Ins. Co., 271 So. 3d 1013, 1019 (Fla. Dist. Ct. App.

2019).

The doctrine applies only where the insured was “forced to litigate” to

receive benefits. State Farm Florida Ins. Co. v. Lime Bay Condo., Inc., 187 So. 3d

932, 934 (Fla. Dist. Ct. App. 2016). Courts do not apply the doctrine where the

insurer was complying with the policy and the insured might have recovered

benefits without suing; that would reward a race to the courthouse for attorney’s

fees. See Lorenzo, 969 So. 2d at 398; see also Goldman v. United Servs. Auto.

Ass’n, 244 So. 3d 310, 311 (Fla. Dist. Ct. App. 2018). Instead, the insurer must

have previously—and incorrectly—denied benefits. Johnson, 200 So. 3d at 1219.

Only when “the claims adjusting process breaks down and the parties are no longer

working to resolve the claim within the contract” can the insured be entitled to fees

under this section. See Hill v. State Farm Florida Ins. Co., 35 So. 3d 956, 960

(Fla. Dist. Ct. App. 2010).

Stann argues that by making two additional payments after he filed the

lawsuit, Liberty confessed judgment pursuant to section 627.428. Liberty, for its

part, says that there is no evidence that Stann was forced to litigate in order to

receive those payments; Liberty was actively engaged in the mediation process

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when Stann sued. In fact, Stann’s own scheduling issues were the reason

mediation had not yet taken place. If Stann had allowed the process to proceed, he

would have obtained these payments all the same.

In a similar case, a Florida court held that attorney’s fees were not

warranted. There, the insured filed a motion to compel appraisal even though the

insurer was complying with the appraisal process that the insured had invoked.

Federated Nat’l Ins. Co. v. Esposito, 937 So. 2d 199, 202 (Fla. Dist. Ct. App.

2006). The parties corresponded regarding appraisal for two months before the

insured petitioned the court to compel appraisal. Id. at 200. Allowing attorney’s

fees in that situation, the court said, would “encourage an insured to run to the

courthouse rather than to participate in the alternative dispute resolution outlined

by the agreement between the parties.” Id. at 202.

Like the insurer in Esposito, Liberty complied with the policy and

participated in the alternative dispute resolution outlined in their agreement. Under

the loss payment provision of the policy, Liberty was not required to pay any

amount Stann requested. Instead, its obligation was conditioned upon agreeing to

a loss amount or a party obtaining a mediation award or final judgment. Before

Stann invoked mediation, Liberty tried to reach such an agreement; it adjusted the

loss amount whenever Stann expressed disagreement with its estimates. And after

Stann invoked mediation, Liberty continued to cooperate by attempting to schedule

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a date to meet. Under a normal reading of the contract, both parties were required

to attempt to resolve their dispute through mediation once Stann invoked that

process. Though Liberty attempted to, Stan did not. Penalizing Liberty in this

situation would dissuade insurers from complying with the terms of their own

agreements. Esposito, 937 So. 2d at 202; see also Hill, 35 So. 3d at 960.

Because Stann sued before mediation even took place, he cannot argue that

he was “forced to sue.” Lorenzo, 969 So. 2d at 398. Stann sued even though he

had invoked mediation and even though Liberty was complying with the

alternative dispute resolution laid out in their policy. Liberty had not denied Stann

benefits under the policy; to the contrary, it was attempting to negotiate a

resolution of their dispute. Because he could have complied with the alternative

dispute resolution he himself invoked to receive these benefits, section 627.428

does not apply to his case.

Stann says that the touchstone for section 627.428 liability is whether the

insurer pays additional benefits after the insured files a lawsuit, but the cases he

cites say no such thing. They instead show that section 627.428 only applies when

an insured sues after the insurer incorrectly denied benefits or the claims adjusting

process broke down. See, e.g., Johnson, 200 So. 3d at 1219; Ivey v. Allstate Ins.

Co., 774 So. 2d 679, 684–85 (Fla. 2000). In Johnson, the insurer “totally denied

Johnson’s claim for insurance coverage” before switching its position during

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litigation—warranting attorney’s fees. 200 So. 3d at 1210, 1219. In Goff, the

insured’s lawsuit “forced” the insurer to request an appraisal and eventually pay

significant additional amounts. Goff v. State Farm Florida Ins. Co., 999 So. 2d

684, 688 (Fla. Dist. Ct. App. 2008). And in Barreto, the insurer had “abated the

appraisal process,” requiring judicial intervention for the insured’s claim to be

paid. Barreto v. United Servs. Auto. Ass’n, 82 So. 3d 159, 162 (Fla. Dist. Ct. App.

2012).

It simply is not the case that the confession of judgment doctrine applies

whenever a plaintiff sues an insurer and money is later paid. Lorenzo, 969 So. 2d

at 398. Here, Liberty did not incorrectly deny Stann benefits before he decided to

sue; instead, it was attempting to reach an agreement on the amount of Stann’s

covered loss. And the mediation process had not yet broken down; Liberty was

trying to schedule a date to meet to resolve the dispute. Because Stann was not

forced to litigate in order to recover these benefits, and instead could have

complied with the alternative dispute resolution he invoked, section 627.428 does

not apply.

IV.

Stann raises a few other arguments concerning the district court’s rulings on

his motions for attorney’s fees. But because the district court did not err in any of

these rulings, we affirm its decisions.

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First, Stann says that the district court violated his due process rights by

“refusing to consider his [January 9, 2020] motion on its merits.” The district

court denied this motion for two reasons: it improperly relitigated motions pending

before the court and was filed outside the deadline for dispositive motions. Stann

disagrees with both grounds.

As for the first ground, he thinks there were two independent bases for

attorney’s fees—Liberty’s $13,151.71 payment and its later $57,500 payment to

settle the claim. With that in mind, he thinks his August 12, 2019 and January 9,

2020 motions for attorney’s fees litigated two different issues. Though we agree

that each motion concerned a different payment, we disagree that each payment

raised a different entitlement for attorney’s fees. To determine whether

section 627.428 applies, we need not look to when or how the insurer paid the

insured’s claims; we look to whether the insured was forced to litigate to get his

claim paid. Lime Bay, 187 So. 3d at 934. If Liberty had incorrectly denied

benefits before Stann filed his lawsuit, then Stann would have been entitled to

attorney’s fees once Liberty changed its position during his suit. That dispositive

question—whether Liberty incorrectly denied benefits before Stann decided to

sue—was the same in both of his motions. And if Liberty had incorrectly denied

benefits before the suit, then Stann would be allowed to recover fees only once.

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For that reason, the district court did not abuse its discretion in preventing Stann

from relitigating this issue.

Stann also challenges the district court’s determination that his motion fell

outside the deadline for dispositive motions. We need not reach that question—we

can affirm on any ground supported by the record. Kernel Records Oy v. Mosley,

694 F.3d 1294, 1309 (11th Cir. 2012). Because we agree with the district court

that the January 9, 2020 motion impermissibly relitigated issues raised in an earlier

motion, we need not consider whether the motion also fell outside applicable

deadlines.

Second, Stann says that the district court failed to determine whether he was

a prevailing party for the purpose of taxing costs under 28 U.S.C. § 1920. But the

district court plainly denied Stann’s motion for costs in the same order that it

denied his outstanding motions for attorney’s fees. Because the court dismissed

the case and denied Stann’s remaining motions, it was not an abuse of discretion to

determine that Stann was not the prevailing party for purposes of section 1920.

See Mathews, 480 F.3d at 1276.

Third, Stann says that the court erred in finding that his April 16, 2020

motion was moot. That motion, again, hinged on whether Stann was forced to

litigate in order to get Liberty to pay his claim. Lime Bay, 187 So. 3d at 934; see

also Johnson, 200 So. 3d at 1219. Because the district court determined that he

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was not forced to litigate when dismissing his January 9, 2020 motion, there was

no issue left to decide regarding his April 16, 2020 motion. Without a confession

of judgment, attorney’s fees were not recoverable—no matter which payment the

district court looked to. So the district court did not abuse its discretion in denying

his later motion as moot after it had considered—and rejected—his earlier one.

Fourth, Stann claims that the district court abused its discretion by not

holding an evidentiary hearing regarding his motions for attorney’s fees. Stann

mentions this issue in only one sentence of his initial brief without citing any

authority. Because this is a conclusory argument devoid of any reasoning, we

deem it abandoned. Fed R. App. P. 28(a)(8); Access Now, Inc. v. Sw. Airlines Co.,

385 F.3d 1324, 1330 (11th Cir. 2004).

* * *

Stann was not forced to litigate in order to recover from Liberty, so he is not

entitled to attorney’s fees under section 627.428. And though he claims otherwise,

the district court did not abuse its discretion in any of the rulings Stann challenges.

AFFIRMED.