Florida Statute § 627.70152: Part 3 – A Rough Calculation

In Florida Statute § 627.70152: Part 1 – A Rushed Mess, we explored the significant error in Florida Statute § 627.70152 dictating the requirements for a “Presuit settlement demand.” Then in Florida Statute § 627.70152: Part 2 – What’s In Your Notice?, we took a dive into the murky waters of the Notice of Intent to Initiate Litigation required by Florida Statute § 627.70152. Now we will talk about the near-impossible task of calculating attorney’s fees and costs pursuant to Florida Statute § 627.70152.

First, we look at the simplest scenario:

A claim “other than a denial of coverage” is at issue. The policyholder can discern the requirements for the Notice of Intent, which presumably include all aspects of (3)(a), notably a “presuit settlement demand.” The carrier responds with a “presuit settlement offer” pursuant to (4)(b). Litigation ensues with judgment to the benefit of the policyholder. Now the parties, and the court, are tasked with calculating the applicable attorney’s fees and costs.

Under Florida Statute § 627.70152(8)(a), the attorney’s fees and costs are calculated based on the amount obtained through litigation at a percentage of the “disputed amount,” which is defined at (2)(c) as “the difference between the claimant’s presuit settlement demand, not including attorney fees and costs listed in the demand, and the insurer’s presuit settlement offer, not including attorney fees and costs, if part of the offer.”

In a perfect world, this is fairly straightforward. However, the world is not perfect, so we must now look at other practical applications.

Suppose the claim is denied. The policyholder provides a Notice of Intent without a presuit settlement demand, which is permissible under Florida Statute § 627.70152. The carrier decides to maintain their denial of the claim, thus no presuit settlement offer exists. Litigation ensues with judgment to the benefit of the policyholder. How are fees and costs calculated?

No “Presuit settlement demand” exists, nor does a “Presuit settlement offer.” Without either of those, there can be no “Disputed amount” under Florida Statute § 627.70152 as a disputed amount is premised on the difference between a presuit demand and presuit offer. And without a “Disputed amount,” how are the calculations to be made regarding the applicable attorney fees and costs pursuant to Florida Statute § 627.70152(8)(a)?

Scenario 2:

A claim resulted in coverage to the interior, but the roof was excluded. A notice is provided pursuant to a denial of coverage; thus, no presuit settlement demand is made. The carrier, believing partial coverage for a claim triggers (4)(b) instead of (4)(a), issues a presuit offer. Litigation ensues with judgment to the benefit of the policyholder. How are fees and costs calculated?

Scenario 3:

A presuit demand is made after a policyholder is forced to retain an attorney to sift through the jumbled mess of Florida Statute § 627.70152. This demand includes the amount of damages, attorney fees, and costs. The responsive offer only covers the indemnity for damages. Is there an obligation for the insurance carrier to pay a policyholder’s attorney fees and costs pre-litigation?

Scenario 4:

A presuit demand is made after a policyholder is forced to retain an attorney to sift through the jumbled mess of Florida Statute § 627.70152. The response pursuant to (4)(b) is an election of appraisal. Since the election of appraisal was not made pursuant to the insurance policy, do those terms apply? Who ultimately pays for the costly appraisal process? Again, is there an obligation for the insurance carrier to pay a policyholder’s attorney fees and costs pre-litigation/following appraisal?

The scenarios can go on and on through tangents and always come out with different outcomes. It cannot be that the legislature would leave the policyholders of Florida with a diminished ability to seek justice for wrongly adjusted claims. If that is not the case, then why are there so many problems with Florida Statute § 627.70152 that appear to fall in favor of the insurance carrier?