Second DCA Finds Insurer’s Payment Following Receipt of Civil Remedy Notice While Disputed Claim is in Suit is a Confession of Judgment

By Darrell A. Limia

In Stiwich v. Progressive American Insurance Company & Gary Parsons, Florida’s Second District Court of Appeal held that, even in an instance where the insurer never denied coverage, an insurer’s payment following receipt of a Civil Remedy Notice (“CRN”) constitutes a confession of judgment.

Stiwich involved a lawsuit brought by the personal representative of an estate for the insured who suffered injuries in an automobile accident. In December 2020, the representative brought suit against Progressive seeking to recover the policy limits under the insured’s Uninsured Motorist (“UM”) policy with Progressive. Plaintiff subsequently issued an Offer of Judgment pursuant to Fla. Stat. §768.79 for $7,999, which Progressive never responded to and expired. Plaintiff then filed a CRN pursuant to Fla. Stat. §624.155(3), as a condition precedent to bringing a bad faith action against Progressive. Pursuant to Fla. Stat. §624.155(3)(c), “[n]o action shall lie” if, within sixty days of receiving the CRN, an insurer pays the damages on which the violation is based. Thirty-one days after receiving the CRN, progressive paid the $10,000 limit of the policy. Plaintiff then filed a motion seeking entry of “an order of Confession of Judgment/Final Judgment” and requested attorney fees and costs.

Progressive opposed the motion and argued that because it never denied coverage, its payment of the UM policy limits in response to the CRN was a settlement, not a confession of judgment. Progressive further argued that because no judgment had been entered, Plaintiff could not recover fees and costs because Fla. Stat. §768.79(1) provides that a plaintiff can only be entitled to fees based on a rejected demand for judgment if plaintiff recovers a judgment that is at least 25% greater than the offer. The trial court agreed with Progressive that Plaintiff was not entitled to attorney fees because Progressive’s payment in response to the CRN was not a judgment.

On appeal, the Second DCA reversed, holding that Progressive’s tendering policy limits was a confession of judgment, and the equivalent to a verdict upon which final judgment should have been entered in Plaintiff’s favor, triggering Plaintiff’s entitlement to fees. In so holding, the Court noted that there is no differentiation between an insurer’s denial of coverage and its denial of liability, ruling that it did not matter whether Progressive refused to pay the UM claim because it concluded the insured did not have coverage or because Progressive concluded that it was not liable to pay for some reason expressed in its affirmative defense. The fact that an insurer does not pay a claim is what creates a dispute between the parties and makes filing suit necessary. The Second DCA further held that the trial court erred in denying Plaintiff’s request for attorney fees and should have proceeded to a determination of whether Progressive’s rejection of the Offer of Judgment entitled Plaintiff to fees under the remaining requirements of Fla. Stat. §768.79.