Most residential property policies provide for an “appraisal” as an alternative dispute resolution mechanism when the insurer concedes coverage for a loss in whole or part, but the amount of the loss is disputed. The resulting appraisal award is binding on the parties absent certain limited grounds for challenging the award or the insurer’s obligation to pay it in full. Once issued, absent any cognizable challenge, an insurer must timely pay the award—often within 30 days by contract—subject to any applicable sub-limits, deductibles, or other policy limitations. Florida law has long held that where an insured is forced to file suit to compel appraisal or recover policy benefits and an appraisal later ensues, an insurer’s payment of the resulting appraisal award operates as a “confession of judgment”—the functional equivalent of a judgment in the insured’s favor sufficient to trigger the insured’s entitlement to attorneys’ fees and costs as the prevailing party under Sections 627.428 (for admitted insurers) or 626.9373 (for surplus lines insurers) of the Florida Statutes. Bryant v. GeoVera Specialty Ins. Co., 271 So. 3d 1013, 1019-20 (Fla. 4th DCA 2019); Jerkins v. USF & G Specialty Ins. Co., 982 So. 2d 15, 17-18 (Fla. 5th DCA 2008); Goff v. State Farm Florida Ins. Co., 999 So. 2d 684, 688 (Fla. 2d DCA 2008); Velez v. Scottsdale Ins. Co., No. 9:17-CV-81310, 2019 WL 7837204, at *2 (S.D. Fla. Aug. 2, 2019).
Historical lack of clarity and the source of confusion
Until recently, however, insureds had little guidance from Florida courts as to whether an insurer’s payment of an appraisal award also triggered Florida Rule of Civil Procedure 1.525’s thirty-day deadline to file a motion for fees and costs, or whether the insured was first required to move for and await the entry of an actual final judgment. The lack of clarity stems from Rule 1.525’s triggering mechanism: resembling Section 627.428 in requiring the “filing of [a] judgment, including a judgment of dismissal, or the service of a notice of voluntary dismissal” but with the additional requirement that such judgment or notice “conclude the action as to that party.”
Garrido confirms the procedural trigger for fee motions
The Third District’s recent decision in Garrido v. Safepoint Insurance Co., No. 3D21-151, 2022 WL 107606 (Fla. 3d DCA Jan. 12, 2022) appears to provide the answer. There, the insured sued her insurer for breach of contract. Fifteen months after filing its answer and affirmative defenses, the insurer filed what it styled a “Confession of Judgment and Confession of Coverage,” whereby it conceded coverage for the loss and consented to the entry of judgment against it. Seven months later, the insured moved for entry of final judgment and to recover its attorney’s fees under Section 627.428. The insurer attempted to strike the fee motion as untimely under Rule 1.525 because it was filed more than thirty days after the insurer filed its “Confession of Judgment and Confession of Coverage,” which the insurer argued triggered the thirty-day deadline under Rule 1.525. The trial court granted the insurer’s motion to strike and denied the insured’s motion for fees and costs as untimely. On appeal, the Third District disagreed with the trial court, holding instead that a “confession of judgment” does not immediately trigger the insured’s deadline to move for fees and costs under Rule 1.525. The Third District distinguished Section 627.428’s substantive fee-shifting provision setting forth the parameters of an insured’s entitlement to fees from Rule 1.525’s procedural requirement that motions for fees and costs be filed within thirty days of the filing of an actual judgment concluding the action:
[A] “confession of judgment” in the context of section 627.428 is not the functional equivalent of the “judgment” that opens the thirty-day filing window prescribed in rule 1.525. Rule 1.525’s thirty-day time period commences upon the trial court’s rendition of a judgment, or service of a notice of voluntary dismissal, that concludes the action as to the party seeking fees. While [the insurer’s] voluntary payment of [the insured’s] claim may have triggered [the insured’s] entitlement to statutory attorney’s fees, [the insurer’s] subsequent unilateral action of filing its [“Confession of Judgment and Confession of Coverage”] did not “conclude the action” so as to trigger rule 1.525’s thirty-day time period.
Garrido’s impact on the timing of post-appraisal fee motions
Although the Garrido decision did not explicitly consider the issue in the context of an insurer’s payment of an appraisal award, because the in-suit payment of an appraisal award may constitute a “confession of judgment” under Florida law as described above, Garrido should be read as equally applicable in that context. Thus, while a prudent insured considering whether to move for attorney’s fees and costs following an insurer’s payment of an appraisal award may avoid the issue by, if appropriate, immediately seeking the entry of a final judgment or filing a precautionary motion for fees and costs within thirty days of the insurer’s payment, insureds who fail to do so can point to Garrido in opposition to an insurer’s argument that a motion for fees and costs filed more than thirty days post-payment, but prior to the entry of a final judgment, is untimely under Rule 1.525.