: CLIFTON v. UNITED CASUALTY INSURANCE COMPANY OF AMERICA, SECOND DISTRICT COURT OF APPEAL, FEBRUARY 12, 2010
 
ISSUE: CONFESSION TO WHAT!

Clifton appealed the entry of final summary judgment in favor of his insurer, United Casualty Insurance Company of America (hereafter "United Casualty"), arising out of a breach of contract action for damages sustained to his residence after Hurricane Charley.    After making a claim for property damage, United Casualty issued payment to Clifton.  Clifton contended that the amount of the payment was insufficient.  He allegedly repeatedly disputed the payment amount and after three years brought a breach of contract action against United Casualty who invoked the appraisal process.  That process resulted in an award in favor of Clifton, who filed a motion to confirm the award and sought attorney's fees.  United Casualty paid the award and filed a motion to dismiss the complaint along with an affidavit stating that it had no notice of Clifton's dissatisfaction with the original pre-suit claim payment.  United Casualty then withdrew its motion to dismiss and filed a motion for summary judgment arguing that it was entitled to summary judgment since it had paid the amounts due in accordance with the policy of insurance and that Clifton could not prove that it breached the policy or had suffered any damages.  In addition, United Casualty filed a response to Clifton's motion for attorney's fees arguing that it did not wrongfully withhold insurance benefits.   The trial court granted summary judgment in favor of United Casualty and this Appeal followed.  

Clifton argued that pursuant to the confession of judgment rule, United Casualty confessed judgment by paying additional policy proceeds after suit was filed and therefore, summary judgment was improper.  The Second District noted that although this is a general rule, it is not absolute.  It operates only "to penalize an insurance company for wrongfully causing its insured to resort to litigation in order to resolve a conflict with its insurer when it was within the company's power to resolve it."  In other words, the court noted, the question of whether a post suit insurance payment of additional policy proceeds acts as a confession of judgment is determined based on whether "the filing of the suit acted as a necessary catalyst to resolve the dispute and force the insurer to satisfy its obligations under the insurance contract." 

Citing Florida case law, the court noted that if an insurer is aware of a dispute with its insured, the insurer cannot ignore the dispute, wait until a lawsuit is filed to demand appraisal, pay the appraisal award, and then maintain that there is no confession of judgment.  However, if the insurer is not on notice that a claim or payment is disputed the insured will generally be unable to show that he was forced to file a lawsuit and a post-suit payment may not constitute a confession of judgment.  The court held that summary judgment in favor of United Casualty was inappropriate in light of a disputed issue of material fact.  Namely, Clifton filed an affidavit contending that he repeatedly informed United Casualty that he was dissatisfied with the claim payment made and United Casualty contended that it was unaware of any dispute until after the lawsuit was filed.  Accordingly, the lower court decision was reversed and remanded.