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Attorneys Fees Award Upheld in the Fourth DCA

The appellate attorneys of the Powell Law Firm’s Miami office recently won an appeal in the Fourth District Court of Appeals, establishing that an award of attorneys fees in a dispute between an insured and his insurer is appropriate under certain circumstances even when the insured receives his compensation though the appraisal process rather than through court action.

In State Farm Insurance v. Ulrich,  case no. 4D10-2180, the Miami appellate attorneys of the Powell Law firm, in conjunction with attorney P. Brandon Perkins of the firm’sFort Myers office, successfully represented the insureds in a dispute over the extent of coverage provided by the insureds’ windstorm insurance policy.  The insureds had sought coverage for repairs to their roof, which the insureds claimed were needed as the result of hurricane damage. The insurer argued that the homeowners’ policy in question provided coverage for only a portion of the insureds’ roof, taking the position that the reminder of the damage was caused by another source.  Thus, the insurer invoked the appraisal process afforded by the policy.

Rather than voluntarily submitting to the appraisal process, the insureds filed suit against the insurer.  The trial court abated the suit, and allowed the appraisal to continue.   Ultimately, the appraisal resulted in an award to the insureds which included compensation for repairs to the portions of the roof that the insurer claimed were not covered.  The insurer opted not to challenge the appraisal award and paid the full scope of damages awarded through the appraisal process; including those damages which the insured initially argued were not covered.

The insureds then moved the court to affirm the appraisal award and award costs and attorney’s fees.  The trial court denied the insureds’ motion to confirm the award, but nevertheless awarded the insureds’ counsel his fees.

The insurer appealed, arguing that because the appraisal process resolved the dispute and the trial court denied the insureds’ motion to affirm the appraisal award, no judicial action was necessary in order for the plaintiff to recover.  The Powell Law Firm represented the insureds, arguing that, under Travelers Indem. Ins. Co. of Illinois v. Meadows MRI, LLP, 900 So. 2d 676, 679 (Fla. 4th DCA 2005), et. al., the litigation was necessary to force the insurer to reconsider the insureds’ damages, and therefore the attorney’s fees award was proper.  The Powell Law Firm argued that, because filing suit caused the insurer to reverse its position that a portion of the claimed damages were not covered, filing suit served a legitimate purpose even though they recovery was ultimately obtained through the appraisal process. In addition, the attorneys at the Powell Law Firm contended that, because the dispute was over coverage of the claim rather than its valuation, appraisal was not appropriate under the policy and was therefore the subject of judicial determination, again justifying the insureds’ decision the file suit. 

Ultimately, the Fourth District Court of Appeal affirmed the trial court’s ruling, and awarded not only the trial court’s award of attorney’s fees, but awarded appellate fees as well.

The Powell Law Firm, P.A. has offices in Miami, Fort Myers and Key West and is experienced in handling first party coverage disputes at both the trial and appellate level.

Offer of Judgment directed to a foreclosure deficiency

The Fort Myers lawyers of the Powell Law Firm, in conjunction with appellate support from Brett C. Powell in our Miami office, would like to share a strategy that worked well in a recent foreclosure case.

The Powell Law firm represented a Fort Myers landowner in a foreclosure proceeding. The Fort Myers landowner wanted to consent to the foreclosure judgment, but was concerned about the potential of a deficiency judgment being entered against him personally.  The bank’s lawyer would not “waive the deficiency” even if the Fort Myers landowner consented to the foreclosure judgment. After careful deliberation (and client consent), the Fort Myers lawyers of the Powell Law Firm took the calculated risk of serving the bank with an offer of judgment directed to the deficiency.

An offer of judgment is a written settlement proposal drafted pursuant to Rule 1.442 and section 768.79, that alerts your adversary (the bank in this case) that you are willing to settle the damages portion of the lawsuit by agreeing to a judgment at a stated amount.

Section 768.79 states:

In any civil action for damages filed in the courts of this state, if a defendant files an offer of judgment which is not accepted by the plaintiff within 30 days, the defendant shall be entitled to recover reasonable costs and attorney’s fees incurred by her or him . . . from the date of filing of the offer if the judgment is one of no liability or the judgment obtained by the plaintiff is at least 25 percent less than such offer, and the court shall set off such costs and attorney’s fees against the award.

In this case, we offered $10,000 to settle the deficiency aspect of the case. The bank did not accept our offer, and the property was sold at auction to the bank for the entire judgment amount. The Fort Myers lawyers of the Powell Law Firm then filed a motion for summary judgment on the issue of deficiency arguing that there is no deficiency as a matter of law because the bank bid the entire judgment amount at the foreclosure auction. The trial court agreed, and entered a Final Judgment in favor of the defendant. Then, the Fort Myers lawyers of the Powell Law Firm, filed a motion for attorney fees and costs alleging that such fees and costs were recoverable pursuant to the Offer of Judgment statute. Ultimately, the trial court found that the defendant was entitled to recover his attorney fees and costs for litigating the deficiency aspect of the case.

The strategy used in this case can be employed in a variety of situations. Obviously there are risks associated with serving an offer of judgment, and if you are not a Florida lawyer, you should consult with a Florida Lawyer regarding those potential risks. In addition, it should be noted that this strategy worked well because we had ample evidence that the property’s value was at or above the judgment amount (thus even if the bank didn’t bid the judgment amount, we would still have been prepared to bring a motion alleging “no deficiency.”). We write about this strategy because it is definately a tool to consider in negotiating and/or defending against a deficiency judgment in an appropriate case.

The Powell Law Firm has offices in Fort Myers, Miami, and Key West. We have experience representing lenders and borrowers in mortgage foreclosure proceedings.

Paragraph 22 is alive and well

Any Fort Myers Lawyer who practices in the area of foreclosure law has heard of, and can probably recite, “paragraph 22.” The paragraph, which is contained in the vast majority of residential mortgages in Florida, requires the lender to send the borrower a pre-acceleration notice prior to commencing with a foreclosure complaint. Failure to send such notice constitutes an affirmative defense for the borrower. Once the affirmative defense is raised, the lender then has to file an affidavit refuting the defense by alleging that the paragraph 22 notice was sent to the borrower and file the paragraph 22 notice.

Today, the Second District once again re-affirmed the paragraph 22 defense in the case of Taylor v. Bayview Loan Servicing, LLC. (2D10-1493, November 9, 2011). In Taylor, the Second District stated: “With respect to the affirmative defense of lack of notice, Bayview failed to refute this affirmative defense; it therefore prevents summary judgment in this case.”

The Taylor opinion cited to Konsulian v. Busey Bank, N.A., 61 So. 3d 1283, 1285 (Fla. 2d DCA 2011), Goncharuk v. HSBC Mort. Servs., Inc., 62 So.3d 680 682 (Fla. 2d DCA 2011); Lazuran v. Citimortgage, Inc., 35 So. 3d 189, 189-90 (Fla. 4th DCA 2010). Each of these cases reversed summary judgment because the lender failed to refute the defense of lack of notice when it moved for summary judgment.

The bottom line for lenders, and their attorneys: paragraph 22 is alive and well; if raised as a defense you must refute it in your motion for summary judgment and provide the court with summary judgment evidence that shows compliance with paragraph 22, i.e., an affidavit.

The Fort Myers lawyers of the Powell Law Firm are experienced at representing both lenders and borrowers in mortgage foreclosure cases. Our firm handles litigation and appeals.


Attorney Fees as an Element of Damages?

The Powell Law Firm, and its lawyers in Fort Myers, love creativity. Unfortunately, we cannot take credit for the creative argument advanced by an opposing Fort Myers Lawyer. In the case, the opposing Fort Myers lawyer argued that our client should pay “attorney fees as an element of damages” in a Breach of Warranty of Deed case. The case involved an encumbrance to a piece of real property located in Fort Myers. The encumbrance, (a sewer assessment lien) was not disclosed to the purchaser at the time the property was conveyed. In fact, the sewer assessment lien had encumbered the property for many years before our clients ever took title to the Fort Myers property and was unknown to our clients. After our clients sold the property, the purchaser discovered the encumbrance and sued her title company and our clients.

Ultimately, the title company paid the amount of the lien, but refused to pay for the purchaser’s attorney fees. The purchaser’s Fort Myers lawyer then filed a Motion for Summary Judgment on the issue of attorney fees and successfully argued to the Magistrate that his client should recover “attorney fees as an element of damages.” In support of the argument, the Fort Myers lawyer cited to Gore v. Gen. Prop. Corp., 6 So. 2d 837 (Fla. 1942). If read broadly, Gore lends credence to the argument.

In opposition, the Fort Myers Lawyers of The Powell Law Firm, with appellate support from our Miami office, filed an “objection” to the Magistrate’s Report and Recommendation arguing that attorney fees can only be awarded as “damages” if the attorney fees were incurred in a third-party suit to gain title to, or possession of, real property from that third-party.

In support of our argument we cited to J & L Enterprises v. Jones, 614 So. 2d 1151 (Fla. 4th DCA 1993), a case directly on point.  Notwithstanding our argument, the trial court denied our objection and proceeded to adopt the Report and Recommendation of the Magistrate which awarded attorney fees as an element of damages. To stay execution on the judgment, a bond was posted pending appellate review.

The case is currently pending in the the Second District Court of Appeal (oral arguments were held on September 27, 2011). We will write an updated blog post when the Second District renders a decision. For now, we write about this case to applaud the creativity of a fellow Fort Myers lawyer and to point out that no lawyer (yours truly included) wins every time.

The Fort Myers Lawyers of the Powell Law Firm are experienced in representing sellers and purchasers in disputes with their title companies.

Breach of Quiet Enjoyment

The Fort Myers Lawyers of the Powell Law Firm, in conjunction with Brett C. Powell in our Miami office, recently won an appeal in the Second District Court of Appeal that concerned whether a tenant could raise Breach of Quiet Enjoyment as an affirmative defense if the Breach did not rise to the level of “Constructive Eviction.” Coral Wood Page, Inc. v. GRE Coral Wood LP

The facts of the case were straightforward. A lawyer for a Cape Coral landlord, brought an action for Eviction and Damages against a Cape Coral tenant. The tenant raised Breach of Quiet Enjoyment as a defense. Because the tenant did not deposit rent into the court registry during the pendancy of the case, the landlord’s lawyer successfully moved for summary judgment on the Eviction count. The landlord’s lawyer then moved for summary judgment on the damages count and sought “accelerated rent” as damages pursuant to the lease.

The trial court entered judgment in favor of the landlord on the damages count, and we appealed on behalf of the tenant.  On appeal, our firm argued that there was a genuine issue of material fact regarding the amount of damages based on the affirmative defense of Breach of Quiet Enjoyment. The landlord’s lawyer argued that the affirmative defense fails as a matter of law because the tenant did not voluntarily vacate the premises or otherwise allege Constructive Eviction.

The Second District reversed the judgment of the trial court and held that Breach of Quiet Enjoyment may be alleged as an affirmative defense even if Constructive Eviction is not alleged.

This opinion is a great benefit to tenants in Fort Myers, Cape Coral, and throughout the Second District, because it demonstrates that a lawyer for a tenant may defend the damages component of an eviction lawsuit on the theory of Breach of Quiet Enjoyment even if Constructive Eviction is not alleged.

Our firm has offices in Fort Myers, Miami, and Key West and our lawyers are experienced in representing both landlords and tenants in eviction proceedings.

P. Brandon Perkins and Kristen Perkins Honored for their contributions to the Guardian Ad Litem Program

The Florida Guardian Ad Litem Program for the Lee County Bar Association recently honored The Powell Law Firm’s Fort Myers attorneys Kristen Perkins and P. Brandon Perkins, presenting them with awards  “In Grateful Recognition of Pro Bono services to Dependency Court in 2010.”  Congratulations to  both Brandon and Kristen!