Steven G. Miles v. Provident Life and Accident

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________ FILED
U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
No. 09-15726
AUGUST 17, 2010
Non-Argument Calendar
JOHN LEY
________________________ CLERK
D.C. Docket No. 08-00069-CV-ORL-18-KRS
STEVEN G. MILES, M.D.,
Plaintiff-Appellant,
versus
PROVIDENT LIFE AND ACCIDENT INSURANCE COMPANY,
Defendant-Appellee.
________________________
Appeal from the United States District Court
for the Middle District of Florida
________________________
(August 17, 2010)
Before BLACK, PRYOR and COX, Circuit Judges.
PER CURIAM:
I. BACKGROUND
Steven G. Miles, M.D., was a practicing interventional radiologist. In early
2006, Miles was diagnosed with a disease that affected his ability to work. In June
2006, he submitted a claim for total disability benefits to his occupational disability
insurer, Provident Life and Accident Insurance Company (“Provident”). Provident
acknowledged Miles’s claim and undertook an investigation of the claim that lasted
about six months. During the investigation, Miles responded to Provident’s requests
for information and provided claim documentation. On December 1, 2006, Provident
denied Miles’s claim for total disability benefits. When Miles disputed the denial of
his claim, Provident undertook a review of the decision. Despite communications
from Provident to Miles in both May 2007 and July 2007 saying that the company
would conclude the review process within thirty days, Provident made no decision
on its review of Miles’s claim in 2007.
At the end of November 2007, one year after his claim was denied, Miles filed
suit against Provident in a Florida state court, seeking total disability benefits under
the policy and attorney’s fees pursuant to section 627.428, Florida Statutes.
Provident removed the case to federal court. Provident’s answer to the complaint
denied (among other things) that Miles was totally disabled and denied that he was
entitled to attorney’s fees. On February 8, 2008, while the lawsuit was still pending,
Provident sent Miles a letter reversing its earlier denial of his claim and
acknowledging that Miles was totally disabled under the policy. Thereafter,
Provident paid Miles total disability benefits under the policy.
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Miles moved for summary judgment on his attorney’s fees claim. Provident
opposed Miles’s motion and filed a cross-motion for summary judgment. The district
court denied Miles’s motion and granted Provident’s motion, finding that Miles was
not entitled to attorney’s fees because Provident’s initial denial of his claim was not
wrongful. Miles appeals.
II. ISSUES ON APPEAL AND CONTENTIONS OF THE PARTIES
We review the district court’s decision that Miles is not entitled to attorney’s
fees. Miles argues that the district court erred because, where an insured brings suit
to challenge an insurer’s denial of his claim and then the insurance company pays the
claim, the insured is entitled to attorney’s fees under section 627.428(1), Florida
Statutes. Miles also argues that the district court erred in relying on inadmissible
documents submitted by Provident in support of its motion.
Provident defends the district court’s ruling and argues, as it did in the district
court, that an insurer is not liable for an insured’s attorney’s fees unless it denied the
insured’s claim unreasonably or in bad faith. Provident argues that the documents
attached to its motion were admissible and that, in any event, the district court did not
rely on those documents.
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III. STANDARD OF REVIEW
This court reviews a district court’s grant of summary judgment by applying
the same legal standards used by the district court. See, e.g., Hilburn v. Murata Elecs.
N. Am., Inc., 181 F.3d 1220, 1225 (11th Cir. 1999). Summary judgment is
appropriate where “‘there is no genuine issue as to any material fact and the moving
party is entitled to a judgment as a matter of law.’” Wooden v. Bd. of Regents of the
Univ. Sys. of Ga., 247 F.3d 1262, 1271 (11th Cir. 2001) (quoting Fed. R. Civ. P.
56(c)).
IV. DISCUSSION
The Florida statute at issue in this appeal states:
Upon the rendition of a judgment or decree by any of the courts of this
state against an insurer and in favor of any named or omnibus insured
or the named beneficiary under a policy or contract executed by the
insurer, the trial court or, in the event of an appeal in which the insured
or beneficiary prevails, the appellate court shall adjudge or decree
against the insurer and in favor of the insured or beneficiary a
reasonable sum as fees or compensation for the insured’s or
beneficiary’s attorney prosecuting the suit in which the recovery is had.
Fla. Stat. § 627.428(1). It is well settled in Florida law that no actual judgment or
decree is necessary if, when an insured must sue an insurance company on a disputed
claim, the insurance company subsequently agrees to pay the claim. Wollard v.
Lloyd’s & Cos. of Lloyd’s, 439 So.2d 217, 218 (Fla. 1983). “[T]he payment of the
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claim is, indeed, the functional equivalent of a confession of judgment or a verdict in
favor of the insured.” Id. Under those circumstances, the insured is entitled to
attorney’s fees pursuant to the statute. Id. at 218-19.
Provident argues that the district court did not err in entering judgment for
Provident because, in order for an insured to be entitled to attorney’s fees, he must
show that the insurance company’s denial of the claim was unreasonable or in bad
faith. Provident bases this argument on language in Florida appellate court opinions
saying that attorney’s fees are recoverable only when the insurer has “wrongfully”
withheld payment on the claim. See Appellee’s Br. at 28-29. The plain language of
the statute, however, imposes no requirement that an insured demonstrate that the
insurer’s denial of the claim was unreasonable or in bad faith. And, Provident cites
no case law that clearly states these things must be proven. We also disagree with
Provident’s interpretation of the word “wrongful” in the state court opinions. As we
understand the cases, an insurance company “wrongfully” denies the claim if it does
so incorrectly, meaning in spite of its duty to do otherwise under the insurance
contract. See Cincinnati Ins. Co. v. Palmer, 297 So.2d 96, 98 (Fla. App. 1974) (“The
fact that the insurer’s refusal to pay the amount owed by it under the terms of the
policy was in good faith and on reasonable grounds does not relieve the insurer from
liability for payment of attorney’s fees where it is subsequently found liable on the
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policy.” (citation omitted)); see also Wollard, 439 So.2d at 219 and n.2 (stating that,
even if it were the case that the insured had been dilatory in its prosecution of the
claim and the insurance company had been the impetus for settlement, the insured
would be entitled to reasonable attorney’s fees if the legal services were necessary).
An award of attorney’s fees to an insured may be warranted under Florida law
even if an insurer did not act in an unreasonable manner in denying a claim. But, an
insured must show that he or she needed to resort to litigation to receive benefits.
Gov’t Employees Ins. Co. v. Battaglia, 503 So.2d 358, 360 (Fla. 5th DCA 1987)
(“The purpose of section 627.428 is to penalize a carrier for wrongfully causing its
insured to resort to litigation to resolve a conflict when it was reasonably within the
carrier’s power to do so.”) (citing Crotts v. Bankers & Shippers Ins. Co. of New York,
476 So.2d 1357, 1358 (Fla. 2d DCA 1985); Vermont Mutual Ins. Co. v. Bolding, 381
So.2d 320 (Fla. 5th DCA 1980)). In their summary judgment papers, the parties
presented arguments and evidence relevant to the issue of whether litigation was
necessary for Miles to receive benefits. The district court made no findings on that
issue. Instead, the court based its decisions on the lack of evidence showing a
genuine issue of material fact that Provident acted in an unreasonable manner.
Because there is no requirement for such a showing, we vacate the district court’s
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decision and judgment.1 We remand the case for further proceedings , during which
the district court should decide whether the legal services were necessary to the
favorable resolution of Miles’s previously-denied claim. See Wollard, 439 So. 2d at
219, n.2.
V. CONCLUSION
For the foregoing reasons, we vacate the judgment for fees and remand the case
to the district court.2
VACATED AND REMANDED.
1
In light of our decision, we do not consider whether the district court improperly relied on
the evidence submitted by Provident.
2
Miles’s motion for this court to grant him attorney’s fees is denied. However, if the district
court determines that Miles’s lawsuit was necessary, it should award fees and expenses for the
handling of his appeal and determine the amount to be awarded.
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