Maloy v. Scottsdale Insurance Company
Filing
30
OPINION AND ORDER granting 29 stipulation for dismissal and the case is dismissed with prejudice; granting in part and denying in part 26 Motion for Attorney Fees. Attorney fees are awarded in the amount of $9,747.00 and costs are awarded in the amount of $439.35 to plaintiff. The Clerk shall enter judgment accordingly and close the file. Signed by Judge John E. Steele on 3/26/2019. (RKR)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
PENNEY MALOY,
Plaintiff,
v.
Case No:
SCOTTSDALE
COMPANY,
2:17-cv-470-FtM-29MRM
INSURANCE
Defendant.
OPINION AND ORDER
This matter comes before the Court on plaintiff's Motion for
Determination of Entitlement to Reasonable Attorney[’]s Fees and
Courts Costs (Doc. #26) filed on January 30, 2019.
Defendant
filed a Response in Opposition (Doc. #27) and an Affidavit of David
Gee in Support (Doc. #28) on February 13, 2019.
Also before the
court
Dismissal
is
the
Joint
Stipulation
For
Order
of
With
Prejudice (Doc. #29.)
Plaintiff seeks costs and attorney fees pursuant to Fed. R.
Civ. P. 54(d), Fla. Stat. § 57.041, and Fla. Stat. § 626.9373.
While
defendant
Scottsdale)
Scottsdale
obtained
Insurance
jurisdiction
in
Company
this
Court
(defendant
by
or
asserting
plaintiff would be entitled to reasonable attorney fees if she
prevailed (Doc. #1, ¶7), it now asserts that plaintiff is entitled
to no attorney fees or costs.
Alternatively, Scottsdale asserts
plaintiff is entitled only to fees for a portion of the litigation.
For the reasons set forth below, the motion for attorney fees and
costs is granted as to entitlement, and granted in part and denied
in part as to the amount of attorney fees and costs.
I.
Procedural History
The record in this case establishes the following chronology:
On October 9, 2016, plaintiff’s residence suffered damage to its
roof and interior due to heavy wind and/or rain in a storm.
Plaintiff filed a claim under her insurance policy with Nationwide
Insurance Company, which was underwritten by Scottsdale, a surplus
lines insurer.
Scottsdale first received notice of plaintiff’s claim on
November 2, 2016.
(Doc. #28, ¶ 5.)
By letter dated November 28,
2016, Scottsdale notified plaintiff that a portion of the claimed
damage was not covered by its policy, and that an independent
adjuster had inspected the damages and determined that the “roof
leaked
due
to
wear
and
tear,
deterioration,
maintenance, which are excluded causes of loss.”
and
inadequate
After deducting
the $1,000 deductible and non-recoverable depreciation, Scottsdale
issued a $7,218.69 check to plaintiff under separate cover.
(Doc.
#28-3, p. 3.)
Plaintiff disputed Scottsdale’s determination of the claim,
and
therefore
Scottsdale
continued
- 2 -
to
investigate
the
claim,
including
hiring
an
engineering
firm.
On
March
28,
2017
Scottsdale made an additional payment to plaintiff in the amount
of
$6,564.01.
On
May
10,
2017,
Scottsdale
made
another
supplemental payment to plaintiff in the amount of $1,407.24 (Doc.
#28-5.)
Plaintiff continued to dispute the sufficiency of these
amounts.
On May 17, 2017, an attorney faxed a letter to Scottsdale
notifying it of his representation of plaintiff.
(Doc. #28-6.)
On May 19, 2017, plaintiff’s attorney sent a letter to Scottsdale
noting, among other things, that “there is obviously a disagreement
between the parties” as to three specifically identified matters.
Plaintiff’s attorney requested that Scottsdale “reevaluate its
inadequate initial payment” and “make payment within the next 14
days”.
(Doc. #28-7.)
Counsel included an estimate of damages in
the amount of $60,161.49 from CNI Concepts Enterprises Inc.
By a reply letter dated June 6, 2017, Scottsdale rejected
counsel’s estimate, but noted that another $5,115.20 supplemental
payment was issued.
On
June
9,
(Doc. #28-9.)
2017,
plaintiff’s
attorney
sent
a
letter
to
Scottsdale noting plaintiff’s continued disagreement and again
requesting reevaluation and payment of more money within fourteen
days.
Because of an address error, Scottsdale asserts it did not
receive this letter until June 17, 2017.
- 3 -
On June 27, 2017, plaintiff filed a lawsuit against Scottsdale
in state court for breach of the insurance policy.
(Doc. #1-1,
p. 4.)
By letter dated July 11, 2017, Scottsdale advised plaintiff
that “no additional payment is due.”
Scottsdale also invoked the
appraisal clause of the insurance Policy and appointed Brian
Wasserman of Worley as its appraiser.
(Doc. #28-1, Exh. A.)
On July 17, 2017, plaintiff’s attorney sent the Complaint and
Summons to the Chief Financial Officer of the State of Florida,
who then electronically delivered a copy to defendant on July 21,
2017.
(Doc. #1-1, p. 3.)
On August 18, 2017, defendant removed the case to federal
court based upon diversity of citizenship (Doc. #1) and filed a
Motion to Compel Appraisal and Abate All Proceedings Pending
Completion of Appraisal, or, in the Alternative, to Dismiss or
Require a More Definite Statement (Doc. #3.)
On August 30, 2017,
the parties filed a Joint Motion to Abate All Proceedings Pending
Completion of Appraisal (Doc. #7), which was granted and the case
was stayed (Doc. #8.)
The appraisal process did not go smoothly,
and required court intervention.
(Docs. ## 9, 10, 11, 12, 14, 18,
19, 20, 21, 22, 23, 24.)
On December 4, 2018, a $94,083.58 appraisal award was drafted
and signed by defendant’s appraiser and a neutral umpire.
- 4 -
(Doc.
#26-3.)
On December 26, 2018, Scottsdale sent checks for the full
amount of the appraisal award, offset by the prior payments, to
plaintiff’s counsel.
(Doc. #24, ¶4.)
The parties notified the
Court on January 7, 2019, that the appraisal process was complete
and they were exploring the possibility of settling remaining
issues, including attorney fees.
(Doc. #24, ¶5.)
The Court
directed the parties to file a stipulation for dismissal and agreed
that unresolved issues regarding attorney fees would be addressed
after dismissal.
(Doc. #25.)
On February 18, 2019, the parties
filed a Joint Stipulation for Order of Dismissal With Prejudice
(Doc. #29).
II.
When
federal
Entitlement to Attorney Fees
jurisdiction
is
based
upon
diversity
of
citizenship, a party’s right to attorney’s fees is determined by
state law.
Inc.,
270
Prime Ins. Syndicate, Inc. v Soil Tech Distribs.,
F.
Underwriters
App'x
v.
962,
Weisberg,
963
222
(11th
F.3d
Cir.
1309,
2008)
1312
(citing
(11th
All
Cir.
2000)(“[W]e hold that Fla. Stat. § 627.428 is substantive law for
Erie 1 purposes.”)).
The only basis for an award of attorney fees
in this case is Fla. Stat. § 626.9373(1), which provides:
(1) Upon the rendition of a judgment or decree
by any court of this state against a surplus
lines insurer in favor of any named or omnibus
1
Erie R. Co. v. Tompkins, 304 U.S. 64 (1938).
- 5 -
insured or the named beneficiary under a
policy or contract executed by the insurer on
or after the effective date of this act, the
trial court or, if the insured or beneficiary
prevails on appeal, the appellate court, shall
adjudge or decree against the insurer in favor
of the insured or beneficiary a reasonable sum
as fees or compensation for the insured's or
beneficiary's
attorney
prosecuting
the
lawsuit for which recovery is awarded.
Fla. Stat. § 626.9373(1).
The Court finds cases interpreting the
very similar Fla. Stat. § 627.428 to be persuasive as to §
626.9373(1).
The purpose behind both statutes is “. . .to place
the insured . . . in the place she would have been if the carrier
had seasonably paid the claim or benefits without causing the payee
to engage counsel and incur obligations for attorney's fees.”
Lewis v. Universal Prop. & Cas. Ins. Co., 13 So. 3d 1079, 1081
(Fla. 4th DCA 2009)(citation omitted).
“It is the incorrect
denial of benefits, not the presence of some sinister concept of
‘wrongfulness,’ that generates the basic entitlement to the fees
if such denial is incorrect.”
Ivey v. Allstate Ins. Co., 774 So.
2d 679, 684 (Fla. 2000).
Plaintiff satisfies the requirements of the Fla. Stat. §
626.9373(1).
Florida courts have allowed recovery of attorney
fees even in the absence of a literal judgment when an insured
obtains the “functional equivalent of a confession of judgment or
a verdict,” such as by the insurer’s payment of a claim based upon
settlement.
Wollard v. Lloyd’s & Cos. of Lloyd’s, 439 So. 2d 217,
- 6 -
218 (Fla. 1983).
See also Ivey v. Allstate Co., 774 So. 2d 679,
684 (Fla. 2000); Pepper’s Steel & Alloys, Inc. v. United States,
850 So. 2d 462, 465 (Fla. 2003).
Here, plaintiff has obtained the
functional equivalent of a judgment by virtue of the appraisal
award, and will have an order pursuant to the Joint Stipulation
(Doc. #29), which effectively approves the appraisal award in favor
of plaintiff and against Scottsdale.
The amount of the appraisal
is greatly in excess of the amount otherwise paid by Scottsdale.
Scottsdale argues, however, that plaintiff is not entitled to
any attorney fees under Fla. Stat. § 627.9373(1) because she did
not serve her Complaint, which was filed before Scottsdale invoked
the
appraisal
procedure,
appraisal process.
until
after
the
invocation
of
the
The service of the complaint after invocation
of the appraisal process, Scottsdale argues, establishes that
plaintiff unnecessarily filed the suit, and therefore is not
entitled to any attorney fees.
The Court disagrees.
Florida case law establishes that service of process is not
the proper focal point, rather it is the filing of a complaint.
In any event, under Florida law attorney fees may be appropriate
even when appraisal is invoked prior to the filing of a complaint.
Florida's cases have uniformly held that a
section 627.428 attorney's fee award may be
appropriate where, following some dispute as
to the amount owed by the insurer, the insured
files suit and, thereafter, the insurer
invokes its right to an appraisal and, as a
- 7 -
consequence of the appraisal, the insured
recovers substantial additional sums. See,
e.g., Goff v. State Farm Fla. Ins. Co., 999
So. 2d 684 (Fla. 2d DCA 2008); Jerkins v. USF&G
Specialty Ins. Co., 982 So. 2d 15 (Fla. 5th
DCA 2008); First Floridian Auto & Home Ins.
Co. v. Myrick, 969 So. 2d 1121 (Fla. 2d DCA
2007),
review
denied,
980
So.
2d
489
(Fla.2008); Ajmechet v. United Auto. Ins. Co.,
790 So. 2d 575 (Fla. 3d DCA 2001). Underlying
these decisions is the notion that the
insureds were entitled to fees as the insureds
“did not ‘race to the courthouse,’” see
Jerkins, 982 So. 2d at 18, the suit was not
filed simply for the purpose of the attorney's
fee award, but rather to resolve a legitimate
dispute, see id., and 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, see
State Farm Fla. Ins. Co. v. Lorenzo, 969 So.
2d 393, 398–99 (Fla. 5th DCA 2007).
There are far fewer cases addressing an
insured's
entitlement
to
fees
in
the
circumstance where suit is filed after the
insurer invokes the appraisal process. This
was, however, the circumstance in both
Travelers Indemnity Ins. Co. v. Meadows MRI,
LLP, 900 So. 2d 676 (Fla. 4th DCA 2005), and
Federated Nat’l Ins. Co. v. Esposito, 937 So.
2d 199 (Fla. 4th DCA 2006). The decisions in
these cases plainly indicate that whether suit
is filed before or after the invocation of the
appraisal process is not determinative of the
insured's right to fees; rather, the right to
fees turns upon whether the filing of the suit
served a legitimate purpose.
Lewis v. Universal Prop. & Cas. Ins. Co., 13 So. 3d 1079, 1081–82
(Fla. 4th DCA 2009).
The Court finds that plaintiff’s lawsuit was
necessarily filed for the valid purpose of resolving a legitimate
dispute, and not for the purpose of generating and seeking attorney
- 8 -
fees.
While Scottsdale argues that plaintiff should have not served
the Complaint after its invocation of the policy appraisal right,
the Court is not persuaded.
None of the state cases mentioned in
Lewis focus on service of process, but upon filing of a complaint.
Additionally, a party has no right to file a case and simply sit
on it without serving process.
Fla. R. Civ. P. 1.070(j)(if no
service within 120 days court must take action to dismiss case or
effect service); Fed. R. Civ. P. 4(m)(generally, court “must”
dismiss
complaint
which
is
not
served
within
90
days).
Accordingly, the Court finds that plaintiff is entitled to attorney
fees.
Scottsdale argues in the alternative that plaintiff is not
entitled to attorney fees for pre-litigation work by plaintiff’s
attorney, nor for attorney fees incurred after September 6, 2017,
when the appraisal was invoked.
Scottsdale argues that the Policy
requires each party to bear their own expenses for the appraisal
and umpire.
As to the pre-litigation hours, the Court finds that the hours
should not be excluded, and that plaintiff is entitled to the fees.
As
of
November
plaintiff’s
claim
28,
and
2016,
paid
Scottsdale
plaintiff
rejected
only
a
portions
nominal
of
amount.
Plaintiff disputed the payment, and had an initial meeting with
- 9 -
counsel on December 14, 2016.
After reviewing the claim file,
counsel initiated contact with an expert around February 16, 2017,
to conduct an inspection, which initial report was not received
and
reviewed
until
May
9,
2017.
(Doc.
#26-6,
pp.
8-9.)
Scottsdale did not make a second payment until March 28, 2017,
which was another small payment, and a third small payment on May
10, 2017.
It was after this payment that counsel sent a letter
of demand to Scottsdale.
The Court finds that the pre-litigation
actions were necessary and part of the process to get to a stage
for appraisal and the final award.
As to the post-appraisal hours, the Court finds that these
hours should also be allowed.
Although the Court stayed the case
pending appraisal on September 6, 2017, immediately thereafter
Scottsdale sought to reopen the case to establish certain deadlines
to complete the appraisal process, and the parties disputed the
issue
of
attorney’s
fees.
As
the
Court’s
intervention
was
required after September 6, 2017, the request to exclude these
hours is denied.
The
Policy
does
provide
for
each
party
to
pay
its
own
appraiser and to bear the “other expenses” equally, Doc. #28-2, p.
35, but the term “expenses” does not encompass attorney fees.
Plaintiff is entitled to “attorney's fees associated with an
expensive and drawn out appraisal,” Travelers Indem. Ins. Co. v.
- 10 -
Meadows MRI, LLP, 900 So. 2d 676, 679 (Fla. 4th DCA 2005), and for
litigating entitlement to attorney’s fees, Nationwide Prop. & Cas.
Ins. v. Bobinski, 776 So. 2d 1047, 1048 (Fla. 5th DCA 2001).
Scottsdale’s
request,
the
Court
had
more
involvement
in
At
the
appraisal process than is usual, and therefore attorney fees
incurred during the appraisal process will not be excluded.
III. Amount of Attorney Fees
A reasonable attorney fee is calculated by multiplying the
number of hours reasonably expended by the reasonable hourly rate.
Hensley v. Eckerhart, 461 U.S. 424, 433 (1983).
The party seeking
an award of fees should submit adequate documentation of hours and
rates in support, or the award may be reduced.
Id.
A “reasonable
hourly rate” is “the prevailing market rate in the relevant legal
community for similar services by lawyers of reasonably comparable
skills, experience, and reputation.”
Norman v. Housing Auth. of
Montgomery, 836 F.2d 1292, 1299 (11th Cir. 1988).
The burden is
on the fee applicant “to produce satisfactory evidence” that the
rate is in line with those prevailing in the community.
Stenson,
465
U.S.
886,
896
n.11
(1984).
Blum v.
Plaintiff
seeks
$14,439.00 in attorney fees based on the Affidavit of Plaintiff’s
- 11 -
Counsel, Kenneth R. Duboff, Esq. Regarding Amount of Attorney[’]s
Fees and Costs.
(Doc. #26-6, Exh. F.)
1. Hourly Rate
Plaintiff seeks a rate of $600 per hour for Kenneth R. Duboff,
who was admitted to the Florida Bar in 1976; $500 per hour for
Joshua A. Blacksten, who was admitted to the Florida Bar in 1999;
$500 per hour for Nicole S. Duboff, who was admitted to the Florida
Bar in 2003; $300 an hour for Gabriela Perez-Dumois, who was
admitted to the Florida Bar in 2015; $300 an hour for Gabriel
Perez, who was admitted to the Florida Bar in 2016; $250 an hour
for Marian Rivera, who was admitted to the Florida Bar in 2017,
and $400 an hour for Alexander M. Navarro, who was admitted to the
Florida Bar in 2014.
(Doc. #26-6, Exh. F, ¶¶ 4b.)
Counsel refers
to Miami-Dade County, Florida as to the customary hourly rates
charged, however the prevailing market is the Fort Myers Division
of the Middle District of Florida.
Olesen-Frayne v. Olesen, 2:09-
CV-49-FTM-29DNF, 2009 WL 3048451, *2 (M.D. Fla. Sept. 21, 2009).
The
rates
in
Fort
Myers
are
significantly
lower
than
Miami.
Therefore the hourly rates will be reduced as follows:
Requested Rate
Kenneth R. Duboff (KRD)
Joshua A. Blacksten (JAB)
Nicole S. Duboff (NSD)
Gabriela
Perez-Dumois
(GPD)
Reduced Rate
$600
$500
$500
$300
$400
$350
$300
$250
- 12 -
Gabriel Perez (GP)
$300
Marian Rivera (MR)
$250
Alexander M. Navarro (AMN) $300
$200
$200
$250
2. Number of Hours
The Court has reviewed the number of hours expended by each
attorney and finds that the hours are reasonable with a few
exceptions.
As a preliminary matter, all requested hours for AF
will be eliminated as the individual was not identified by name or
experience and AF is not listed in the billing records as one of
the of the attorneys of record.
On those occasions that Mr. Duboff
charged $500 instead of the customary $600, the rate was still
reduced to $400 an hour.
The entry on October 23, 2018, at 4:27
PM (0.3 hours) fails to identify an attorney with the task and
time and therefore will be eliminated.
The 0.3 hours for e-filing
the lawsuit and 0.5 hours for opening a new file and importing
documents will be eliminated as clerical or administrative tasks.
The Court will otherwise allow the requested hours at the reduced
hourly rates for a total of $9,747.00.
IV.
Costs
Plaintiffs, as the prevailing parties, are usually entitled
to an award of costs under Rule 54 of the Federal Rules of Civil
Procedure. “[Title 28 U.S.C.] Section 1920 enumerates expenses
that a federal court may tax as a cost under the discretionary
- 13 -
authority found in Rule 54(d).” Crawford Fitting Co. v. J. T.
Gibbons, Inc., 482 U.S. 437, 441 (1987).
Section 1920 provides:
A judge or clerk of any court of the United
States may tax as costs the following:
(1) Fees of the clerk and marshal;
(2) Fees for printed or electronically
recorded transcripts necessarily obtained for
use in the case;
(3) Fees and disbursements for printing and
witnesses;
(4) Fees for exemplification and the costs of
making copies of any materials where the
copies are necessarily obtained for use in the
case;
(5) Docket fees under section 1923 of this
title [28 U.S.C. § 1923]; [and]
(6) Compensation of court appointed experts,
compensation of interpreters, and salaries,
fees,
expenses,
and
costs
of
special
interpretation services under section 1828 of
this title [28 U.S.C. § 1828].
28 U.S.C. § 1920.
Plaintiff
seeks
$689.35
in
taxable
costs.
This
amount
includes $250.00 to obtain an estimate from CNI Concepts, the
$424.35 filing fee in Lee County Circuit Court, and the $15.00 for
service of process fee.
The Court finds that the $250.00 is not
a taxable cost, but the other two costs are taxable.
Accordingly, it is hereby
ORDERED:
- 14 -
1. The Joint Stipulation for Order of Dismissal With Prejudice
(Doc. #29) is GRANTED, and the case is dismissed with
prejudice.
including
The Clerk shall enter judgment accordingly,
attorney
fees
and
costs
set
forth
below,
terminate all remaining deadlines and motions, and close
the file.
2. Plaintiff's Motion for Determination of Entitlement to
Reasonable Attorney[’]s Fees and Courts Costs (Doc. #26)
is GRANTED as to entitlement and GRANTED IN PART AND DENIED
IN PART as to the amount of attorney fees and costs.
Attorney fees are awarded in the amount of $9,747.00 and
costs are awarded in the amount of $439.35.
DONE and ORDERED at Fort Myers, Florida, this
of March, 2019.
Copies:
Counsel of Record
- 15 -
26th
day
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