Appraisal: When Are You Entitled To Fees And What Are You Entitled To Recover?

In Hill v. State Farm Florida Ins. Co. (2D07-2311), the Second District reversed the trial court's order denying the insured attorneys fees and stated "Although the trial court may very well have reached the correct outcome in this case, we conclude that its legal analysis is inconsistent with our more recent cases."  The court stated:

Accordingly, we reverse the final summary judgment and remand the case for a renewed determination of whether Ms. Hill filed her lawsuit in good faith in order to force State Farm to adjust the claim or whether she filed suit merely as an effort to seek attorneys' fees for the normal process of adjusting the claim. If she filed her lawsuit in good faith in order to force State Farm to adjust the claim, then she is entitled to attorney's fees. If not, then State Farm is not liable for the attorney's fees she incurred as a result of filing suit.

Discussing its recent decision in Goff v. State Farm Florida Insurance Co., 999 So. 2d 684 (Fla. 2d DCA 2008) [discussed HERE]; the Court stated:

It is apparent that some lawyers have read more into Goff than this court intended. Adjusting and settling property claims under insurance policies is never an easy process. It requires a level of good faith and cooperation from all parties. The law does not provide any general mechanism to impose attorneys' fees against one party or the other merely because the negotiation process is difficult. It is only when the claims adjusting process breaks down and the parties are no longer working to resolve the claim within the contract, but are actually taking steps that breach the contract, that the insured may be entitled to an award fees under section 627.428, Florida Statutes (2004). See, e.g., Lewis v. Universal Prop. & Cas. Ins. Co., 13 So. 3d 1079, 1081 (Fla. 4th DCA 2009) (stating that the underlying rationale of awarding attorneys' fees under section 627.428 is the notion that the insureds filed suit "to resolve a legitimate dispute" and not simply to collect attorneys' fees).

Lewis was discussed HERE.  The court continued:

The line between rigorous negotiations and breach of contract is undoubtedly difficult to describe and it is a determination that is fact intensive. This court recently expanded on this issue in reversing a summary judgment in Clifton. 35 Fla. L. Weekly at D365-D366 (holding that summary judgment in favor of the insurer is improper when there was a "bona fide" dispute between the parties that prompted the insured to sue). From the record in this appeal, we question whether this lawsuit was filed to force State Farm to conduct an appraisal or whether it was merely a preemptive lawsuit intended to obtain attorneys' fees for the usual efforts in negotiating an insurance claim. The trial court, however, did not decide this case based on our recent decisions and, thus, none of the parties addressed the issue of whether Ms. Hill needed to file this lawsuit to force State Farm to comply with its contract. Because this issue was not considered at the hearing on the motion for summary judgment, it is not appropriate for this court to base its decision on those cases. Instead, we reverse and remand the case to the trial court to determine whether Ms. Hill may be entitled to fees under the reasoning in Goff and Clifton. In all other respects, we affirm the judgment on appeal.

Clifton was discussed HERE.  Finally, the Court discussed what fees are recoverable:

On remand, if the trial court determines that Ms. Hill is entitled to an award of attorneys' fees, we observe that the scope of the remedy we envisioned in Goff has clearly been misconstrued by Ms. Hill's attorneys in this case. The fees we envisioned in Goff were the fees necessary to force State Farm back to the negotiations table to resolve the dispute within the terms of the insurance contract. The appraisal process, for example, is not legal work arising from an insurance company's denial of coverage or breach of contract; it is simply work done within the terms of the contract to resolve the claim. Thus, except under the most extraordinary of circumstances, we do not envision fees for such work to be recoverable under the rule announced in Goff. Instead, the fees should normally be limited to the work associated with filing the lawsuit after the insurance carrier has ceased to negotiate or has breached the contract and the additional legal work necessary and reasonable to resolve the breach of contract.