Tendering policy limits to an insured in response to a Notice of Intent to Litigate, under section 627.70152, Florida Statutes (2021), precludes insureds from recovering pre-suit attorney’s fees from their property insurers in a subsequently filed litigation for the same claim.

The Fourth District Court of Appeal recently held that plaintiffs are not entitled to attorney’s fees if an insurer tenders the policy limit in response to a Notice of Intent to Litigate. Citizens Property Insurance Corporation, V. Vazquez, No. 4D22-1611, 2023 WL 4917156 (Fla. 4th DCA Aug. 2, 2023).

Citizens Property Insurance Corporation issued a homeowners’ insurance policy covering the plaintiffs’ property from December 30, 2019, through December 30, 2020. Within the policy, a $10,000 coverage limit was in place for covered losses due to accidental water discharge from a plumbing system.

In June 2020, the plaintiffs suffered a loss from water damage due to an accidental water discharge. Citizens acknowledged coverage for the loss, paid $3,517.70, and provided an estimate reflecting the basis for the payment.

Over a year later, on August 6, 2021, counsel for the plaintiffs filed a Notice of Intent to Initiate Litigation under section 627.70152, Florida Statutes (2021). For the damages in the dispute section, the plaintiffs listed $3,982.30 and $3,500 for attorney’s fees, for a total demand of $7,482.30.

Three days later, Citizens acknowledged receipt of the Notice of Intent and, on the following day, tendered the remainder of the $10,000 policy limit for accidental water discharge, totaling $6,482.30. The amount Citizens paid was more than the plaintiffs sought in damages.

Despite receiving the policy limits, which exceeded the plaintiffs’ demand, the plaintiffs sued Citizens for one count of breach of contract. The complaint demanded full payment of damages incurred to the plaintiffs’ property and reasonable attorney’s fees. The plaintiffs alleged Citizens breached the contract when it initially underpaid the claim and breached again when it failed to pay the plaintiff’s attorney’s fees with the settlement demand in the Notice of Intent.

Before serving the complaint on Citizens, the plaintiffs moved for attorney’s fees under section 627.70152, Florida Statutes, noting that despite issuing payment, Citizens completely ignored the attorney’s fees and costs request.

The plaintiffs claimed they were entitled to fees because, in their view, the clear intent of section 627.70152, Florida Statutes, was to require payment of attorney’s fees and costs when the claimant has to file a Notice of Intent. The trial court agreed, awarding the plaintiffs $13,500 in attorney’s fees. Citizens then appealed.

On appeal, the Fourth District Court of Appeal reversed the award of attorney’s fees. First, the court noted that the policy was issued prior to 2021, but even if the 2021 amendment to chapter 627, which created section 627.70152(8), Florida Statutes, retroactively applied to the case, the plaintiffs were not entitled to attorney’s fees because the trial court not render a judgment against Citizens on the contract claim nor did Citizens confess judgment. Notably, the court commented that Citizens abandoned any argument that section 627.70152(8), Florida Statutes (2021), could not be retroactively applied to a policy issued before the amendment.

The court assumed that section 627.70152(8), Florida Statutes (2021) applied to this case. The court noted that under the previous version of the statute, the plaintiffs would not have been entitled to attorney’s fees. The court determined that section 627.70152(8) does not create an independent right to attorney’s fees, even if it applied retroactively to this case. That section merely creates a process for calculating the amount of attorney’s fees otherwise awardable under section 627.428. The court read section 627.70152(2)(d), Florida Statutes (2021) to require that a pre-suit demand include a notice to alert an insurer of potential exposure to pre-suit attorney’s fees if the insurer rejects a pre-suit settlement and later settles the case. The court then found that the pursuit payment made by Citizens in response to the Notice of Intent did not amount to a confession of judgment.

The court explained that although settlement of a lawsuit is, under certain circumstances, seen as a confession of judgment akin to a verdict in favor of the insured, the confession-of-judgment doctrine applies only when an insured must sue for benefits. The court found that the plaintiffs did not have to sue to recover benefits and resolve the dispute. Instead, Citizens’ pre-suit payment in response to the plaintiffs’ Notice of Intent exceeded the plaintiffs’ demand. Additionally, Citizens’ pre-suit settlement was not a confession of judgment—that is, the pre-suit settlement did not render the plaintiffs the prevailing parties—and did not trigger entitlement to attorney’s fees.

This case, indicating potential exposure to pre-suit fees after an insurer refuses pre-suit settlement but later concedes, appears to apply only to those cases operating under a rendition of section 627.428, Florida Statutes, which permits recovery of fees. That statute provided that:

Upon the rendition of a judgment or decree by any of the courts of this state against an insurer and in favor of any named or omnibus insured or the named beneficiary under a policy or contract executed by the insurer, the trial court or, in the event of an appeal in which the insured or beneficiary prevails, the appellate court shall adjudge or decree against the insurer and in favor of the insured or beneficiary a reasonable sum as fees or compensation for the insured’s or beneficiary’s attorney prosecuting the suit in which the recovery is had. In a suit arising under a residential or commercial property insurance policy not brought by an assignee, the amount of reasonable attorney fees shall be awarded only as provided in s. 57.105 or s. 627.70152, as applicable.

The 2023 amendments to Chapter 627 eliminated the availability of fees for insureds in first-party property insurance cases. However, in pre-amendment cases, the court affirms that section 627.70152, Florida Statutes (2021) is merely a process through which attorneys’ fees may be awarded under section 627.428(1), Florida Statutes and may apply retroactively to cases involving policies before the 2023 Amendments.