Insured should Consider Proposal for Settlement / Offer of Judgment from Insurer

When an insured sues its insurer, the insured seeks its attorney’s fees pursuant to Florida Statute s. 627.428(1).  The statute provides for one-way attorney’s fees in favor of an insured if it obtains a judgment in its favor against its insurer.   If the insurer prevails, on the other hand, the insurer is not entitled to its attorney’s fees pursuant to this statute. As a result, an insurer will typically serve an offer of judgment / proposal for settlement to create an argument to recover its attorney’s fees if it prevails.

In the case of Tower Hill Signature Insurance Company v. Javellana, 42 Fla. L. Weekly D2597a (Fla. 3d DCA 2017), this is exactly what happened. The insured, in a property insurance dispute, sued its property insurer claiming the insurer breached the terms of the insurance contract by failing to pay the actual cash value of covered damage. (Actual cash value is a method used to value an insured’s property by deducting the depreciation value from the replacement cost.) The insured, as is often the case, also included claims for declaratory relief asking the court to render certain declarations relating to the policy. The thrust of the lawsuit, however, was the insured’s claim for monetary damages under its breach of contract claim. During the litigation, the insurer served a proposal for settlement / offer of judgment on the insured to create an argument to recover attorney’s fees. The insured did not accept the proposal.

The jury disagreed with the insured and rendered a verdict in favor of the insurer. The insurer then moved for its attorney’s fees pursuant to the proposal for settlement / offer of judgment it served on the insured. The trial court denied this motion. On appeal, the Third District reversed the trial court on this issue ruling that the insurer was entitled to attorney’s fees pursuant to its proposal. Because the primary relief sought by the insured was monetary damages per its breach of contract count, the insurer’s proposal for settlement / offer of judgment was valid and the insurer’s motion for attorney’s fees should have been granted.

As an insured, consider the risks associated with an insurer’s proposal for settlement.  The risk is simple:  you can potentially be liable for your insurer’s attorney’s fees based on a decision not to accept a proposal for settlement / offer of judgment.  Make sure to consult with your counsel regarding this risk.


Please contact David Adelstein at or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.


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