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Measure modifies offers of judgment in insurance claims

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Sen. Jeff Brandes

Sen. Jeff Brandes

A bill that would allow offers of judgment in property insurance claims without settling attorney’s fees and which requires the recipients to notify the offer or of any defects in the offer has cleared the Senate Judiciary Committee.

SB 686 received a vigorous debate on February 15 with attorneys representing property owners saying the proposed bill could violate Florida Bar rules because they would be required to give advice to insurance companies to the possible detriment of their clients. It would amend F.S. §768.79.

Sen. Jeff Brandes, R-St. Petersburg, the bill sponsor, said the bill’s goal is to speed settlements to consumers by resolving the underlying claim while allowing other issues such as attorney’s fees, costs, and interest to be worked out later.

“It tries to say, ‘Let’s address the consumer’s needs, let’s address the insurer’s needs, then let’s fight until the cows come home about the attorney’s fees,’” Brandes said. “What we’re trying to do is trying to streamline the process. Too often what we’re doing is arguing over attorney’s fees when what we’re trying to do is get someone paid.”

But attorneys testifying at the meeting objected to a section of the bill, as amended, that reads: “Within 30 days after an offer is served, the offeree must notify the offeror of any grounds for challenging the validity of the offer. The grounds for challenging the validity of the offer must be in writing and stated with specificity to enable the offeror to reevaluate the offer and make corrections, if warranted. If the offeree fails to timely notify the offeror in writing of the grounds for challenging the validity of the offer, the offeree waives the right to object to the validity of the offer.”

Tiffany Faddis, president-elect of the Florida Justice Association, said the current offer of judgment statute, F.S. §768.79, and the related Rule of Civil Procedure 1.442 are detailed on how offers are to be made and the section requires her to “babysit” insurance lawyers who are making offers.

Wyndham Geyer, an attorney who represents homeowners, said the language raises ethical problems.

He said he would have to explain to his clients that “this offer of judgment is going to be used against you and I have to go out and do the research to make sure it is enforceable against you. That is an ethical burden I cannot overcome…. I think this is an untenable conflict of interest.”

Another problem is if a property has two owners, the bill would require both owners to agree to accept an offer. Geyer said that means if a couple owned a property but disagreed over an offer, they each would have to retain separate attorneys.

“I don’t think The Florida Bar would allow us to do something that would harm our clients…and would come back and put them on the hook for fees and costs,” said Steven Silverberg, also an attorney representing homeowners.

Sen. Tina Polsky, D-Boca Raton, said as an attorney and mediator she hasn’t seen problems with the current offer of judgment law and rules and questioned the need to delay the payment of attorney’s fees.

“When we settle cases, we always settle them with attorney’s fees because that ends the case right then and there,” she said. “I don’t understand why we would be seeking a situation where we’re not resolving a case in full…. That’s what these offers of judgment are for, to end the case.”

But Brandes said disputes over attorney’s fees can delay payment to homeowners who need the money to fix their properties after a storm or other event.

“Commingling these ideas of attorney’s fees and payment to the insured and these offer of judgment standards sometimes delays these payments,” he said. “I believe we should be able to make a direct payment to that individual and then debate and argue and settle the attorney’s fees at a later date.”

The bill passed 6-4. SB 686  next goes to the Banking and Insurance Committee and then the Rules Committee. It has no counterpart in the House. If passed, the law would become effective July 1.

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