Timing is Everything!
In Synergy Contracting v. Fednat Insurance, Case Number 2D21-144 (Fla. 2d DCA December 10, 2021) the insured’s home suffered a covered loss. The insured contracted for repairs with, and assigned its policy benefits to, Synergy Contracting. A dispute arose, and Synergy sued Fednat for breach of contract. Fednat invoked the policy’s appraisal clause, timely paid the $3,795.62 appraisal award and asked the court to dismiss. Synergy argued that dismissal was improper because it was entitled to a statutory attorney’s fee award. The court agreed and did not dismiss.
Believing that payment ended the breach of contract claim, and that Synergy was wasting everyone’s time by dragging out the litigation; Fednat served a $100.00 proposal for settlement on Synergy. Fednat then moved for, and was granted, summary judgment finding that nothing was owed under the policy. Upon receiving summary judgment, Fednat moved for and was granted final judgment. With a final judgment in hand, Fednat sought, but was denied, a prevailing party fee award under its proposal for settlement.
Synergy appealed the final judgment, and Fednat appealed the denial of its motion for fees. Florida’s Second District Court of Appeal found that the timing of events was critical to its decision and that Fednat, in invoking the appraisal clause and paying the appraisal award after suit was filed, had, in effect, confessed judgment in favor of Synergy on the breach of contract action. The court also found that in insurance policy disputes, the insured’s right to a statutory fee award was part and partial of the insured’s damages and that the insurer’s post-suit payment did not moot the case. Finally, the court noted that while Fednat may ultimately have a “race to the courthouse” defense to Synergy’s fee claim, that defense did not warrant entry of final judgment for Fednat. Applying these findings to the case at hand, the court reversed the judgment in favor of Fednat and affirmed the denial of Fednat’s motion for fees.
Had Fednat invoked the policy’s appraisal clause pre-suit, Synergy’s lawsuit would have been stayed during the appraisal process, upon timely payment of the appraisal award, Synergy’s claim would have become moot, and Fednat would have been in a good position to argue that Synergy was not entitled to a statutory fee award. Unfortunately, that did not happen, and a $3,795.62 claim cost Fednat tens-of-thousands of dollars to litigate.
Timing really is everything!
Thanks to Charles “Chip” George for his contribution to this post. Please contact Chip with any questions.