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... By Allowing Recovery of Attorney's Fees for WRONGFULLY Causing Its Insured to Resort to Litigation, says the Court, following established Florida Insurance Case Law, in Download Clifton v. United Casualty Insurance Co. (Fla. 2d DCA Opinion Filed February 12, 2010), attached Official Slipsheet Opinion at 6-7; also published as Clifton v. United Casualty Insurance Co., 2010 WL 476660 *3 (Fla. 2d DCA February 12, 2010)(subscription required to access Westlaw).
At the heart of these Cases is the idea that the Confession of Judgment Rule allows Policyholders-Insureds to recover Attorney's Fees in their action against their Insurance Company because as a matter of Law they prevailed. However, the Confession of Judgment Rule is not absolute; rather, it can involve Questions of Fact which preclude Summary Judgment, as in the Clifton Case:
What can be gleaned from these cases is that an insurer that is aware of a dispute with its insured cannot simply ignore that dispute, wait until the insured files suit to demand appraisal, pay any subsequent appraisal award, and then maintain that the payment does not constitute a confession of judgment as a matter of law. On the other hand, if an insurer is not on notice that the claim or payment is disputed, the insured generally will be unable to show that he or she was "forced" to file suit, and a subsequent post-suit payment by the insurer may not constitute a confession of judgment. While this does not mean that the insured is required to invoke the appraisal clause prior to suit, it does mean that the insured must, at a minimum, clearly notify his or her insurer in a timely fashion of his or her dissatisfaction with the amounts paid.
In light of this controlling case law, it is clear that summary judgment in favor of United Casualty was inappropriate.
Download Clifton v. United Casualty Insurance Co. (Fla. 2d DCA Opinion Filed February 12, 2010), at 9; Clifton v. United Casualty Insurance Co., 2010 WL 476660 *5 (Fla. 2d DCA February 12, 2010). [Emphasis by the Court.]
The assessment and recovery of Attorney's Fees in Insurance Cases is discussed by Dennis J. Wall, "Litigation and Prevention of Insurer Bad Faith" in ยงยง 13:12-13:14 (Second Edition, Shepard's/McGraw-Hill; 2009 Supplement, West Publishing Company).
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