The courts continue to award attorneys fees as the result of appraisal, even upon timely payment of the appraisal award by the insurer.
On November 19, 2008, the Third District Court of Appeal issued its opinion in Holder v. State Farm Insurance Company. After the insured suffered hurricane damage, the State Farm adjuster offered (and non-binding mediation confirmed) the insured had $9,065.00 in covered losses. The insured had a $9,000.00 deductible, leaving a net of $65.00 in insurance proceeds for the hurricane loss.
A year later, the insured filed suit, and State Farm invoked the binding arbitration clause of the policy. The loss was appraised, and resulted in an appraisal award of $50,178.60. State Farm promply paid the loss. However, even though the filing of the lawsuit directly resulted in the payment of over 500 times the amount previously offered, the trial judge denied a claim for attorney’s fees.
The Third DCA reversed the trial court’s denial of attorney’s fees, citing Ajmechet v. United Automobile Ins. Co., 790 So. 2d 575 (Fla. 3d DCA 2001). Ajmechet states:
When the carrier did not pay Ms. Ajmechet’s claim for her stolen, insured car, she sued the company in the circuit court, where the insurer demanded appraisal. After the appraisers determined the amount of the loss, the carrier paid the award without further ado. Because the payment was obviously effected by the law suit, we hold the insured was entitled to fees under section 627.428, Florida Statutes (2001).
(citation omitted) It should be clear that when an insurer forces its insured into litigation to recover proceeds that are owed under the policy, the insurer is responsible for attorney’s fees.