Forthuber v. First Liberty Insurance Corporation
Filing
23
ORDER granting 9 Motion to Dismiss for Failure to State a Claim; denying as moot 9 Motion to Strike. COUNT I of the complaint is dismissed with prejudice. Signed by Judge Gregory A. Presnell on 9/27/2018. (TKW)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION
DAVID FORTHUBER,
Plaintiff,
v.
Case No: 6:18-cv-00880-GAP-GJK
THE FIRST LIBERTY INSURANCE
CORPORATION,
Defendant.
ORDER
This matter comes before the Court without a hearing on the Motion to Dismiss Count I with
Prejudice, or, Alternatively, to Strike Claims for Damages (Doc. 9) filed by the Defendant, The First
Liberty Insurance Corporation (“First Liberty”), the Response in Opposition (Doc. 13) filed by the
Plaintiff, David Forthuber (“Forthuber”), and the Reply to Plaintiff’s Response (Doc. 16.) filed by
First Liberty.
PROCEDURAL BACKGROUND
Forthuber brought the instant suit in the Eighteenth Judicial Circuit on April 4, 2018
(“Forthuber II”). (Doc. 2, p. 1.) Count I of Forthuber’s complaint asserted bad faith pursuant to
Fla. Stat. §624.155 and sought damages including punitive damages. Count II of the complaint
alleged breach of contract for First Liberty’s failure to pay a separate claim, unrelated to Count I.
(Doc. 1, p. 8.) Forthuber II was removed to Federal Court on June 6, 2018. (Id.) By its motion, First
Liberty seeks dismissal of Count I or, in the alternative, to strike Forthuber’s claim for punitive
damages. (Doc. 9, p. 1.)
BACKGROUND
After Forthuber’s residence was damaged in May 2009, Forthuber filed a claim with his
home insurer, First Liberty (“2009 Claim.”) (Doc. 2, p. 1.) First Liberty disputed the amount claimed
and Forthuber brought suit for breach of contract in the Eighteenth Judicial Circuit for Seminole
County in Forthuber v. First Liberty Ins. Corp. 2011-CA-001210 (“Forthuber I”). The parties signed
a settlement agreement on July 15, 2015 (“Settlement Agreement”). (Doc. 9-1.) Pursuant to the
Settlement Agreement First Liberty paid $30,000 to Forthuber (“2015 Payment”), and Forthuber
released First Liberty from all claims arising from the 2009 Claim, except Forthuber’s claim for
attorneys’ fees. (Id.)
I.
Attorneys’ Fees: Appeal to the Fifth District Court of Appeal
First Liberty paid the 2015 Payment on August 10, 2015. (Doc. 2, p. 2.) In Forthuber I, a fee
hearing was held on April 27, 2016. (Id. at 3.) Forthuber claimed attorneys’ fees pursuant to
Fla. Stat. § 627.428 for the hours his attorney worked on Forthuber I, including an amount that
Forthuber’s attorney accrued at a prior law firm (“Prior Firm Fees”), which was disputed by First
Liberty. Id. On June 14, 2016, the Court issued a Final Judgment Awarding Fees to Forthuber which
excluded the Prior Firm Fees. (Id.) The amount stipulated in the Final Judgment Awarding Fees was
timely paid to Forthuber by First Liberty (“2016 Fee Payment”). (Doc. 2-1, p. 18.) Forthuber
appealed, and on November 17, 2017 the Fifth DCA reversed and remanded the case back to the
trial court to consider the Prior Firm Fees. Forthuber v. First Liberty Ins. Corp., 229 So. 3d 896
(Fla. 5th DCA 2017).1
1
This matter is still pending in the Circuit Court.
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II.
Civil Remedy Notice
On January 19, 2018, Forthuber filed and served on First Liberty a Civil Remedy Notice of
Insurer Violations (“2018 CRN”) which included claims that First Liberty breached the Settlement
Agreement, misrepresented its obligations to Forthuber, and acted unreasonably in contesting and
failing to pay the entire amount of attorneys’ fees claimed by Forthuber. (Doc. 2-1, pp. 12-13.) The
2018 CRN claimed damages totaling $318,000, the exact composition of which was not
specified. (Doc. 2-1 p. 17.) However, it is clear that the lion’s share of the fees Forthuber claims
include those expended by Forthuber’s attorney at his prior firm and those expended pursuing the
appeal in the Fifth DCA. (Doc. 2-1 pp. 16-17.)
LEGAL STANDARD
Dismissal of a complaint under Federal Rule of Civil Procedure 12(b)(6) will be granted
where the allegations in a complaint, however true, do not raise a claim of entitlement to relief.
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 558, 127 S. Ct. 1955, 1966 (2007). In ruling on a motion
to dismiss, the Court must accept the factual allegations as true and construe the complaint in the
light most favorable to the plaintiff. SEC v. ESM Group, Inc., 835 F.2d 270, 272 (11th Cir.1988).
The court must limit its consideration to the pleadings and any attached exhibits.
Fed. R. Civ. P. 10(c); see also GSW, Inc. v. Long County, Ga., 999 F.2d 1508, 1510 (11th Cir. 1993).
ANALYSIS
I.
Fla. Stat. § 624.155(3)(d)
Florida Statutes § 624.155 provides a cause of action which an insured may bring against
their insurer when the insurer has not attempted “in good faith to settle when, under all the
circumstances, it could and should have done so.” Fla. Stat. § 624.155(1)(b)(1). As a prerequisite to
a claim under Fla. Stat. § 624.155, the insured must first file and serve a CRN detailing the insured’s
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claim and damages, which starts a 60-day cure period. Fla. Stat. § 624.155(3). After expiration of
the cure period, a bad faith action may be brought, however “[n]o action shall lie if, within 60 days
after filing notice, the damages are paid or the circumstances giving rise to the violation are
corrected.” Fla. Stat. § 624.155(3)(d).
In Talat Enters. v. Aetna Cas. & Sur. Co., the Florida Supreme Court held that a CRN is
cured under Fla. Stat. § 624.155(3)(d) when an insurer pays “the contractual amount due the
insured,” which is “the amount owed pursuant to the express terms and conditions of the
policy.” 753 So. 2d 1278, 1283 (Fla. 2000). This contractual amount due does not include extra
contractual damages such as punitive damages and attorneys’ fees. Id. at 1282.
II.
The Amounts Claimed in the 2018 CRN are Extra Contractual Damages
First Liberty argues that Count I should be dismissed because the damages arising from the
2009 Claim have been paid, meeting the requirements of Fla. Stat. § 624.155(3)(d).
2
(Doc. 9, p. 4- 9.) Forthuber does not contest that the 2015 Payment satisfied a contractual amount
owing under the policy. Rather he argues that the costs and fees sought by the 2018 CRN are also
contractual damage under the insurance policy. (Doc. 13, p. 5.) First Liberty, however, contends
that the costs, fees, and interest claimed in the 2018 CRN are extra contractual damages and, under
Talat, cannot be used as the foundation for a bad faith claim. (Doc. 9, pp. 4, 8.)
In support of his claim, Forthuber relies on Pepper's Steel & Alloys, Inc. v. United States,
850 So. 2d 462 (Fla. 2003) which held that under Fla. Stat. § 627.428 an insured may recover
attorneys’ fees incurred in reaching a settlement or contesting whether a settlement had in fact been
2
The 2015 Payment was made before the 2018 CRN was filed, and therefore occurred
prior to the 60-day cure period beginning. In Talat the insured filed a CRN after the insurer had
paid the contractual damages and the court found that payment before the filing of a CRN meets
the requirements of Fla. Stat. § 624.155(3)(d). See Talat 753 So. 2d at 1283.
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reached, and Bankers Sec. Ins. Co. v. Brady, 765 So. 2d 870 (Fla. 5th DCA 2000) which held that
an insured may recover attorneys’ fees incurred when bringing suit to enforce a settlement
agreement. (Doc. 13, p. 5.). The cases cited by Forthuber only address when an entitlement to fees
may arise under Fla. Stat. § 627.428, they do not support Forthuber’s argument that attorneys’ fees
and costs are contractual damages supporting a bad faith claim under Fla. Stat. § 624.155.
Forthuber contends that a bad faith action can arise from a failure to pay an agreed upon
settlement,
citing
Higgs v. Indus. Fire & Cas. Ins. Co., 501 So. 2d 644 (Fla. 3d DCA 1986).
(Doc. 13, p. 5.) However, there was no agreement in this case as to the amount of fees to be paid.
Rather, the Settlement Agreement provides that the 2015 Payment is “exclusive of a settlement of
Forthuber’s attorneys’ fees and costs,” and that Forthuber’s release of claims “does not, however,
resolve Forthuber’s claim for attorneys’ fees and costs, the amount of which remains to be
determined by the Court.” (Doc. 9-1.)
III.
First Liberty Has Already Paid the Required Contractual Damages
Even if the amounts claimed in the 2018 CRN are contractual, Forthuber’s claim fails.
Forthuber contends that Fla. Stat. § 624.155(3)(d) requires payment of all contractual amounts
owing before a bad faith action can be avoided. (Doc. 13, p. 5.) However, Forthuber’s position has
been foreclosed by Talat. In Talat the court endorsed the finding of Magistrate Judge Glazebrook
that “an insurer need not immediately pay 100% of the damages claimed to flow from bad faith
conduct”
to
avoid
a
bad
faith
cause
of
action.
Talat
753
So.
(citing Talat Enterprises, Inc. v. Aetna Cas. & Sur. Co., 952 F. Supp. 773, 777-78
2d
at
1282
(M.D.
Fla.
1996)). First Liberty’s 2015 Payment satisfied the underlying contractual obligation and in 2016
First Liberty also paid the fees initially awarded by the Circuit Court in Forthuber I.
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(Doc. 2- 1, p. 18.) 3 Allowing an insured to file a CRN after an insurer has made significant
payments of contractual and extra contractual costs, and then claim that nothing has been paid such
that a bad faith action arises under § 624.155(3)(d), would ignore the central holding in Talat: That
Fla. Stat. § 624.155(3)(d) cannot be used to force an insurer to pay all contractual and extra
contractual damages in dispute. Talat 753 So. 2d at 1282.
Accordingly, it is ORDERED AND ADJUDGED that Defendant’s Motion to Dismiss
(Doc. 9) is GRANTED. COUNT I of the complaint is dismissed with prejudice.
DONE AND ORDERED in Chambers in Orlando, Florida, on September 27, 2018.
Copies furnished to:
Counsel of Record
3
A provision of the Settlement Agreement required Forthuber to release all claims relating
to two CRN’s filed prior to the 2015 Payment: one filed on September 20, 2010 and one filed on
July 18, 2014. (Doc. 9-1.)
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