In Citizens v. Arias, No. 3D23-0895 (Fla. 3d DCA 2024), the Third District Court of Appeal reversed four decisions from trial court Judge David C. Miller as well as the final judgment entered in favor of the insureds. The case returns to the trial court for further proceedings.
The underlying insurance claim involved a water loss. Citizens argued the alleged loss was the result of wear and tear and deterioration of the plumbing line, which resulted in constant or repeated seepage or leakage from different sources on the line.
One of the reversed four decisions involved the underwriting file’s inspection report. This document is a plaintiff favorite. The inspector conducts a cursory inspection with a checklist, which indicates different components of the structure are in “poor”, “fair”, or “good” condition. The plaintiff lawyer holds up the inspection report, arguing to the jury that the insurance company inspected the roof at the start of the policy and it was in “good” condition. The plaintiff lawyers asks, “So how can the insurance company argue there is pre-existing damage?” Or they argue that we knew the condition was “poor” but decided to still insure it.
If insurance companies did not insure properties with existing damage, there would be widespread economic damage. Without insurance, mortgage companies would not lend money to buyers. More and more people would be unable to acquire a house. Sellers could only sell to cash buyers. Or homebuyers obtaining a loan could only buy perfect houses. This is why insurance companies do insure properties with existing damage. But it is also why insurance companies include an “existing damage” exclusion. The damage that exists at the inception of the policy is excluded. The homeowner can insure their house with existing damage but the insurance company does not take on that risk.
In Arias, the trial court ruled, as a matter of law, that because Citizens inspected the dwelling before the insureds renewed the policy, Citizens could only rely on wear and tear occurring only after the home inspection. The Third District rejected this ruling finding no authority in Florida law or the policy that would place such limitations.
RECENT CHANGES TO FLORIDA RULES OF CIVIL PROCEDURE WILL HAVE A
SIGNIFICANT IMPACT ON CIVIL LITIGATION
Joseph A. Matera, Esq., Partner
In 2024, the Supreme Court of Florida (“Supreme Court”) entered various Orders amending the Florida Rules of Civil Procedure. In addition to amending certain rules, the Supreme Court also created a new rule regarding conferral between the parties prior to the filing of most motions. Florida Rule of Civil Procedure 1.202 now requires parties to confer prior to filing motions with the exception of dispositive motions and certain other motions such as a motion to dismiss for failure to state a claim on which relief can be granted. Additionally, the movant must certify in the motion, using specific language, that conferral was completed or that the opposing party did not respond to efforts made to confer. If there is no conferral, the movant must state the with particularity the efforts made to confer. Although some jurisdictions locally required conferral, the Florida Rules of Civil Procedure did not.
As the readers of this article likely know, certain jurisdictions require litigants to participate in non-binding arbitration, which is governed by 1.820 of the Florida Rules of Civil Procedure. Non-binding arbitration is commonly described as a “mini-trial”. Evidence is presented to the arbitrator and he/she renders an opinion with an accompanied award. Prior to recent changes to the Florida Rules of Civil Procedure, if a party did not wish to accept the arbitrator’s award, the party would file a “Motion for Trial De Novo”. Now, if a party does not wish to accept the award, the party must file a “Notice of Rejection of the Arbitration Decision”. The Notice of Rejection must be filed within twenty (20) days from the service of the arbitrator’s award. The Notice of Rejection must specifically request a trial within the Notice of Rejection. Failure to comply with this strict rule will result in the arbitrator’s award becoming final.
Another substantial change was made to 1.510 of the Florida Rules of Civil Procedure which relates to motions for summary judgment. Prior to this recent change, litigants could wait until twenty (20) prior to the scheduled hearing on a motion for summary judgment to file a response. This is no longer the case. Now, the responding party must respond no later than forty (40) days from the date the motion for summary judgment is served. The motion for summary judgment cannot be set for a hearing until ten (10) days after the deadline for service of a response to the motion for summary judgment unless the parties stipulate or the court orders otherwise.
The rules of discovery have also been changed by the Supreme Court. The Supreme Court has implemented an initial discovery disclosure requirement within 1.280 of the Florida Rules of Civil Procedure. Parties now are required to disclose certain information and documentation without ever receiving any sort of discovery request from the other party. This is an effort to ensure cases move along and are not filed without the requisite investigation. If a party does not comply with their initial discovery disclosure requirement, that party may not seek discovery by other means. The discovery rules were also amended to provide a duty to supplement discovery responses “in a timely manner” after learning the disclosure or response is “incomplete or inaccurate”.
All of the aforementioned rules will be impacted by changes made to the expected duration of cases per the rules governing case management and pre-trial procedure encompassed within 1.200 of the Florida Rules of Civil Procedure. No later than 120 days after the commencement of an action, the trial court now must assign a civil case a certain track and enter a case management order (“CMO”). The case track will either be (1) complex; (2) general; (3) or streamlined. A party may move the trial court to change the track designation by promptly filing a motion “after the appearance of good cause to support the motion”. The CMO must provide that the deadlines will be “strictly enforced unless changed by court order”. Trial judges must enter a CMO by April 4, 2025 if a current pending case does not contain a CMO. CMO’s in effect on January 1, 2025 remain the effective CMO.
Gone are the days of endless extensions and continuances. It will be difficult to obtain extensions of time relating to deadlines contained within the CMO’s. An agreed Order may be submitted to extend a deadline within a CMO only if the extension “does not affect the ability to comply with the remaining dates in the CMO”. If a deadline extension may affect another deadline, parties must seek an amendment to the CMO. The CMO’s are required to contain a projected trial date. If the trial date is still projected, a party or parties may move to alter the projected trial period by filing a motion with specific information contained therein as outlined in 1.200(e)(3) of the Florida Rules of Civil Procedure.
Once there is an actual trial date, 1.460 of the Florida Rules of Civil Procedure applies. The rule explicitly provides that continuances are “disfavored” and should only be granted upon “good cause shown”. Litigants are required to have their cases ready for trial on the actual trial date. If a continuance is sought, the rule requires the motion to have specific information therein, including the proposed date by which the case will be ready for trial, and whether that date is agreed by all parties. The rule advises trial courts that it should use all efforts to avoid continuances, such as allowing remote appearances. Litigants should be aware that if the trial court grants a continuance based on the “dilatory conduct” of an attorney or named party, the court may impose sanctions.
The Supreme Court appears to have grown tired of clogged dockets due to delays with discovery, a lack of communication by some counsels, and continuances. Parties and litigants should pay attention to these changes. They have great impact. Failing to timely respond to a motion for summary judgment or failing to file a notice of rejection of an arbitration award can have great financial impacts on litigants. Failing to comply with the rules of discovery can delay efforts to move a client’s case forward or alternatively delay the meritorious defense of a claim. It is important parties comply to ensure an efficient judicial system.
COURTS DISAGREE – SIXTH DISTRICT RULES, “NO DECREE? NO FEES”
Annie S. Antos, Esq., Associate and David J. Salmon, Esq., Partner
In Universal v. True Builders, et al., No. 6D2023-2498 (Fla. 6th DCA 2024), the Sixth District Court of Appeal reversed the county court’s judgment granting post-suit attorney’s fees and costs to True Builders’ attorney. The case returns to the county court to enter an amended judgment omitting the attorney’s fees and costs incurred by True Builders in litigation of its first of two cases.
True Builders’ two lawsuits arise from an assignment of benefits received in a water loss homeowners insurance claim. The Insureds, David and Melaney Joiner (the “Joiners”), hired True Builders to perform emergency dry-out services and restoration work. In exchange for the work performed, the Joiners assigned their right to obtain insurance proceeds from Universal for proceeds related to the work performed by True Builders.
True Builders sued Universal in Circuit Court (“First Case”) and the Joiners sued for breach of contract in a separate lawsuit. These two cases were consolidated, but Universal challenged the circuit court’s jurisdiction over the claims, alleging that the damages did not meet the jurisdictional threshold. True Builders moved to transfer their lawsuit to county court, which was twice denied by the circuit court and ultimately their second amended complaint was dismissed by the circuit court without prejudice.
Without filing a third amended complaint or seeking appellate relief, True Builders instead filed an entirely separate lawsuit in county court (“Second Case”). Universal moved to consolidate the Second Case into the First Case and ultimately settled the Second Case, stipulating in the settlement agreement that True Builders was entitled to recover attorney’s fees and costs related to the Second Case. The county court awarded True Builders its attorney’s fees and costs for both cases.
Universal disputed the award of attorney’s fees and costs on the First Case, which was rejected by the county court. The county court (1) analogized the decision to award fees and costs to cases in which appellate courts awarded relief under Section 627.428(1) for fees incurred before a suit was filed or during an arbitration proceeding; and (2) concluded that Universal acted unreasonably in not only failing to provide coverage for the assigned loss, but also by raising the jurisdictional issues and then objecting to a jurisdictional transfer.
In reversing the county court’s decision, the Sixth District concluded that the plain language of Section 627.428(1) limits recovery of attorney’s fees and costs to “the suit in which recovery is had.” The Sixth District plainly declined the county court’s expansion of the confession of judgment as expressly ignoring the plain language of 627.428(1), concluding that the First Case was not the case in which recovery was had.
The Sixth District additionally rejected True Builders’ assertion that the county court entered judgment for fees and costs based on Universal’s “unreasonably [withheld] payment under the policy.” The county court cited Wollard v. Lloyds, et al.in its contention that courts have broadened the statutory language to include a case where it is settled before a judgment entry occurred. Wollard v. Lloyd’s & Cos. of Lloyd’s, 439 So.2d 217, 218 (Fla. 1983). In finding that this language only occurred in obiter dictum and was therefore not precedential nor binding, the Sixth District rejected the inclination to elevate Wollard’s dictum to being applicable to the work performed by True Builders in the First Case.
While Section 627.428(1) allows an assignee to recover attorney’s fees for litigating a matter to judgment against an insurer, its plain language limits this recovery to a suit in which recovery is had and does not apply to fees and costs incurred in a case that is dismissed or otherwise disposed of without entry of judgment. The Sixth District expressly rejected the application of 627.428(1) to fees incurred during the course of litigation of a case in which no recovery was obtained and remanded the case to the county court to amend their judgment entry. While the two courts may disagree, the Sixth District holds that you must have a judgment decree to obtain your fee.
This result reduced the fee award by about $100,000.00.