Tower Hill Signature Ins. Co. v. Javellana , 238 So. 3d 372 ( 2017 )

Third District Court of Appeal
State of Florida
Opinion filed December 13, 2017.
Not final until disposition of timely filed motion for rehearing.
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Nos. 3D16-2526 & 3D16-2492
Lower Tribunal No. 14-31467
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Tower Hill Signature Insurance Company,
Appellant/Cross-Appellee,
vs.
Cesar Javellana and Sandra Javellana,
Appellees/Cross-Appellants.
Appeals from the Circuit Court for Miami-Dade County, Michael A.
Hanzman, Judge.
Traub Lieberman Straus and Shrewsberry and Ashley R. Kellgren and Scot
E. Samis (St. Petersburg), for appellant/cross-appellee.
Barnard Law Offices and Maxwell S. Barnard and Andrew C. Barnard, for
appellees/cross-appellants.
Before SALTER, EMAS and LOGUE, JJ.
EMAS, J.
In these consolidated appeals, each party seeks review of an order denying
their respective motions for attorney’s fees. Cesar and Sandra Javellana (“the
Javellanas”), plaintiffs below, appeal the denial of their motion for attorney’s fees
and costs pursuant to section 627.428, Florida Statutes (2016). Tower Hill
Signature Insurance Company (“Tower Hill”), defendant below, appeals the denial
of its motion for attorney’s fees under the offer of judgment statute, section 768.79,
Florida Statutes (2016).1
We affirm the trial court’s denial of the Javellanas’ motion for attorney’s
fees and costs because there was no “rendition of a judgment” in favor of the
Javellanas on their claims. However, we reverse the trial court’s denial of Tower
Hill’s motion for attorney’s fees, because this was a “civil action for damages”
under section 768.79, and the “true relief” sought by the Javellanas was an award
of monetary damages.
PROCEDURAL HISTORY
The Javellanas sustained damage to their home from water intrusion, and
initiated a claim with their homeowner’s insurer, Tower Hill. Tower Hill
investigated the claim, which included an inspection by its independent claims
adjuster, and determined the claim was covered under the policy. Based on the
adjuster’s evaluation and estimate, Tower Hill made an initial payment to the
1 Tower Hill was awarded its costs by the court as the prevailing party. There is no
issue raised about the cost award in this appeal.
2
Javellanas in an amount that Tower Hill characterized as the “actual cash value” of
the loss,2 and invited the Javellanas to submit supplemental claims should they
discover additional damage. Although Tower Hill later made some additional
payments, which the Javellanas accepted, they nevertheless contended that Tower
Hill grossly underpaid the claim,3 and therefore, breached the terms of the
insurance policy.
The Javellanas sued Tower Hill, and the operative complaint contained three
counts: breach of contract (Count I); declaratory judgment related to the wear and
tear/marring exclusion in the policy (Count II); and declaratory judgment, seeking
to have the court declare that Tower Hill may not unilaterally determine actual
cash value but that actual cash value must be determined either as an issue of fact
or by agreement of the insured and insurer (Count III).
While the litigation was pending, Tower Hill served an offer of judgment on
each of the plaintiffs, pursuant to section 768.79, Florida Statutes (2016). These
offers of judgment were not accepted by the Javellanas, and the case proceeded to
a jury trial.4
2 The policy provided in pertinent part: “We [Tower Hill] will initially pay at least
the actual cash value of the insured loss, less any applicable deductible. We shall
pay any remaining amounts necessary to perform such repairs as work is
performed and expenses are incurred.”
3 The record establishes that additional sums were paid, following the initial
payment, for water and mold remediation. The total paid by Tower Hill to the
Javellanas was $45,149, including the deductible, and the Javellanas allege an
additional $66,800 is needed to repair the damage.
3
After the Javellanas rested their case, Tower Hill moved for directed
verdict. Tower Hill argued that the Javellanas failed, as a matter of law, to prove a
breach by Tower Hill, because the evidence showed that Tower Hill performed its
duties under the policy by paying the amount of the independent adjuster’s repair
estimate at actual cash value and advising the Javellanas to submit supplemental
claims for any additional damage. The court denied the motion, concluding that it
was for the jury to determine, as an issue of fact related to the breach of contract,
whether or not Tower Hill failed to pay the actual cash value of the loss.
At the conclusion of the trial, the jury received the verdict form which asked
the following two questions:
1. Did Plaintiffs prove by the greater weight of the
evidence that Tower Hill Signature Insurance Company
failed to initially pay at least the actual cash value, less
any applicable deductible, to Cesar & Sandra Javellana
for damage(s) caused by a drain line failure pursuant to
the terms of the policy?
If your answer to Question 1 is “Yes”, please proceed with answering
question 2. If on the other hand, your answer to Question 1 is “No”, your
verdict is for the Defendant and you should sign and date the verdict form.
2. What is the total additional amount owed to Cesar &
Sandra Javellana for damage caused by Tower Hill
Signature Insurance Company’s failure to pay ACV?
4 On the first day of trial, the trial court determined that, as to Count II (seeking
declaratory relief related to the wear and tear/marring exclusion), there was no case
or controversy, and thus ruled in favor of Tower Hill.
4
The jury answered “No” to Question 1, finding that the Javellanas did not
prove that Tower Hill failed to initially pay the Javellanas at least the actual cash
value for damage caused by the drain line failure. The trial court thereafter
entered final judgment in favor of Tower Hill.
Tower Hill later moved for attorney’s fees, pursuant to section 768.79 and
its unaccepted offers of judgment.
The Javellanas also moved for fees and costs, asserting, inter alia, that
because the trial court “effectively” ruled in their favor in denying Tower Hill’s
directed verdict motion on the declaratory judgment count, they were entitled to
recover fees and costs under section 627.428(1).
The court held a hearing on both motions. As to Tower Hill’s motion, the
court determined that Tower Hill was not entitled to attorney’s fees under section
768.79, pursuant to Diamond Aircraft Industries, Inc. v. Horowitch, 107 So. 3d
362 (Fla. 2013), because the Javellanas’ complaint sought both equitable relief and
money damages. The court also denied the Javellanas’ motion for attorney’s fees
and costs, finding there was no judgment in their favor, and therefore, no
entitlement to fees and costs under section 627.428(1). Both parties appealed the
court’s orders.
ANALYSIS
1. Javellanas’ Motion for Attorney’s Fees and Costs
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As for the Javellanas’ appeal of the order denying their motion for fees
pursuant to section 627.428(1), upon our de novo review, Do v. Geico General
Insurance Co., 137 So. 3d 1039, 1042 (Fla. 3d DCA 2014), we affirm the court’s
order without further discussion, because the Javellanas did not obtain a judgment
in their favor. See § 627.428(1), Fla. Stat. (2016) (providing for award of
attorney’s fees “[u]pon the rendition of a judgment or decree” against an insurer
and in favor of the insured); Magdalena v. Toyota Motor Corp., 3D16-2322 (Fla.
3d DCA November 29, 2017); Do, 137 So. 2d at 1044-45.
2. Tower Hill’s Motion for Attorney’s Fees
We likewise review de novo the trial court’s order denying Tower Hill’s
motion for attorney’s fees, which determined that the offers of judgment were not
valid. Campbell v. Goldman, 959 So. 2d 223 (Fla. 2007). We hold that this case
was a civil action for damages, and therefore, Tower Hill’s offers of judgment
were valid under section 768.79(1), the offer of judgment statute, which provides:
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 or on the
defendant's behalf pursuant to a policy of liability
insurance or other contract 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.
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(Emphasis added.)
We begin with the well-settled proposition that a party is not entitled to fees
under section 768.79 where the plaintiff seeks only nonmonetary relief. MYD
Marine Distrib., Inc. v. Int’l Paint Ltd., 187 So. 3d 1285 (Fla. 4th DCA 2016);
National Indem. Co. v. Consol. Ins. Servs., 778 So. 2d 404 (Fla. 4th DCA 2001).
Further, the Florida Supreme Court has made it clear that “section 768.79 does not
apply to cases that seek both equitable relief and damages.” Diamond Aircraft,
107 So. 3d at 372.
The Javellanas argued below, and the trial court agreed, that, pursuant to
Diamond Aircraft, because their complaint sought both equitable relief and money
damages, Tower Hill’s offers of judgment were not valid, and therefore, Tower
Hill was not entitled to an award of attorney’s fees under section 768.79.
Tower Hill contends that there is an exception to Diamond Aircraft’s general
holding in cases where, as here, the “true relief” sought is monetary damages. The
trial court rejected this argument, noting Diamond Aircraft’s pronouncement that
“there is no basis to establish an exception for instances in which the equitable
claim lacks serious merit.” Id. at 374. We agree with the trial court that Diamond
Aircraft so held, but what Diamond Aircraft did not hold is that a plaintiff can
avoid an otherwise valid offer of judgment by merely adding a declaratory
judgment count to a cause of action in which the true relief sought is money
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damages. Indeed, the Court in Diamond Aircraft focused its discussion and
analysis on the opening phrase of the offer of judgment statute, which provides that
“[i]n any action for damages . . . 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 . . . .” (Emphasis added). In
construing the nature and scope of this language, the court discussed and cited
approvingly to two decisions from the Fourth District Court of Appeal, both of
which are relevant to the instant case: DiPompeo Construction Corp. v. Kimmel &
Associates, Inc., 916 So. 2d 17 (Fla. 4th DCA 2005) and Nelson v. Marine Group
of Palm Beach, Inc., 677 So. 2d 998 (Fla. 4th DCA 1996).
In DiPompeo, Kimmel, a professional recruiting firm, invoiced DiPompeo
$20,000 for commission earned in providing executive search services to
DiPompeo, following DiPompeo’s hiring of an employee. DiPompeo, disputing
that it owed Kimmel a commission, filed a complaint seeking a declaratory
judgment that, because it had no contract with Kimmel, DiPompeo did not owe
Kimmel any money. Kimmel then filed a counterclaim, seeking to recover its
commission on theories of breach of contract and unjust enrichment.
The trial court determined that a contract did exist between DiPompeo and
Kimmel, but that DiPompeo’s hiring of the employee was independent of the
contract, since it was not a result of Kimmel’s efforts. Thus, DiPompeo lost on its
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declaratory judgment claim, and Kimmel lost on its counterclaim for breach of
contract and quantum meruit.
DiPompeo filed a motion for attorney’s fees based upon an offer of
judgment served upon, and not accepted by, Kimmel. The trial court denied the
motion, ruling that DiPompeo’s declaratory judgment action was not a “civil action
for damages” and therefore, the offer of judgment was not valid under section
768.79.
The Fourth District reversed, holding that “[i]n construing the term ‘action
for damages,’ this court has looked behind the procedural vehicle used to bring a
lawsuit and focused on whether the ‘real issue’ in the case is one for damages.”
DiPompeo, 916 So. 2d at 18 (quoting National Indem. Co., 778 So. 2d at 408).
Our sister court found that the offer of judgment was valid, because the “real
issue” in the case was the entitlement to money damages, and the Florida Supreme
Court, in Diamond Aircraft, approved DiPompeo’s conclusion that “the plaintiff’s
claim was in actuality an action for damages because the real issue before the court
was whether the plaintiff owed money to the defendant.” Diamond Aircraft, 107
So. 3d at 373.
Nelson, 677 So. 2d at 998, involved the unsuccessful sale of a yacht, and the
seller’s retention of the buyer’s escrowed deposit. The would-be buyer (Nelson)
filed an action seeking a declaratory judgment that the seller (Marine Group) was
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not entitled to retain the deposit as liquidated damages, and that the buyer was
entitled to the return of the deposit. The seller counterclaimed with an action for
damages (i.e., seeking to retain the buyer’s escrowed deposit as liquidated
damages). Ultimately, the trial court found that the buyer breached the contract
and seller was entitled to retain the deposit. Seller sought attorney’s fees based
upon an offer of judgment. Buyer contended the offer was invalid because the
case involved an action seeking both monetary and nonmonetary damages. The
trial court found the offer of judgment valid, and the Fourth District affirmed this
determination: “As evidenced both by the real issues in dispute and the
counterclaim which clearly framed this case as an action for damages, the offer of
judgment statute properly applied.” Id. at 999.
This court has followed the Nelson/DiPompeo analysis approved in
Diamond Aircraft. See Faith Freight Forwarding Corp. v. Anias, 206 So. 3d 753,
755 (Fla. 3d DCA 2016) (reversing trial court’s order invalidating offer of
judgment and, citing DiPompeo, holding that such an offer is permitted “where the
plaintiff’s claim was an action for damages because the ‘real issue’ before the
court was whether the plaintiff was owed the compensation.”). Other courts have
followed this reasoning as well. See, e.g., Polk Cty. v. Highlands-in-the-Woods,
LLC, 227 So. 3d 161 (Fla. 2d DCA 2017) (recognizing that “[w]hen determining
whether a complaint alleges an action for damages or one for equitable relief,
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Florida courts ‘look to whether the ‘real issue’ is one for damages’ or equitable
relief”); Yacht Club on the Intracoastal Condo. Ass’n, Inc., 599 Fed. Appx. 875,
883 (11th Cir. 2015) (noting that “[i]t is clear that under Diamond Aircraft, we
must reject The Yacht Club’s argument that attorney’s fees under § 768.79 are not
available in any case in which a declaratory judgment accompanies a claim for
damages. While the Florida Supreme Court found that cases seeking both
monetary and non-monetary relief are not eligible for attorney’s fees under §
768.79, by citation to Nelson and DiPompeo Construction, it reiterated that a court
should look behind the procedural vehicle used in a complaint to discern what true
relief is sought”).
Therefore, reading Diamond Aircraft in tandem with Nelson and DiPompeo,
we conclude that this case is an “action for damages,” within the meaning of
section 768.79(1), because it is plain that the true relief sought by the Javellanas
was money damages for a breach of contract, rather than equitable relief.
Accordingly, Tower Hill’s offer of judgment was not invalidated by the Javellanas’
inclusion of declaratory judgment counts in a cause of action that, in actuality,
sought money damages.
This is not to say that the count for declaratory relief—i.e., seeking a
declaration that Tower Hill did not, as a matter of law, comply with the terms of
the policy merely by unilaterally determining actual cash value and paying that
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amount—lacked serious merit, or was not at issue in this case. Nonetheless, that
question, raised in a count for declaratory relief, was subsumed within the true
relief sought, in this case: whether Tower Hill breached the policy by failing to
pay actual cash value and if so, the amount of damages for the breach. If Tower
Hill could unilaterally determine the actual cash value of the claim, and, as a
matter of law, comply with the policy terms by paying that unilaterally-determined
amount, then the Javellanas could not prove a breach, and could not, therefore,
obtain damages.
On the other hand, by obtaining a favorable “outcome” on its declaratory
count— that is, a determination that Tower Hill did not, as a matter of law, comply
with the terms of the policy merely by unilaterally determining actual cash value
and paying that amount— the Javellanas did not and could not obtain the “true
relief” they sought in this action. Instead, a favorable outcome on that declaratory
count simply established that the question of whether Tower Hill paid actual cash
value in compliance with the terms of the policy was a question of fact for the jury,
but nevertheless remained an inextricable component of the breach of contract
claim. The Javellanas’ decision to extract that discrete question from its breach of
contract claim, and present it as a standalone count for declaratory relief, does not
alter the fact that the true relief sought in the case was money damages for an
alleged breach of contract.
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Thus, the trial court erred in its conclusion that, because the Javellanas’
action sought both equitable relief and money damages, Tower Hill’s offers of
judgment were invalid under section 768.79(1).5
We therefore affirm the trial court’s order denying the Javellanas’ motion
for attorney’s fees; reverse the trial court’s order denying Tower Hill’s motion for
attorney’s fees; and remand this cause for proceedings consistent herewith.
Affirmed in part, reversed in part and remanded with directions.
5 The Javellanas have raised a number of additional bases for invalidating Tower
Hill’s offers of judgment. However, the trial court did not reach these, instead
basing its order of denial on the issue addressed in this opinion. We decline to
reach the merits of these additional bases, leaving it to the trial court, on remand
and if appropriate, to address them in the first instance.
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