February 26, 2013
A home in Miami suffered damage in 2005 from Hurricane Katrina. The Homeowner’s Carrier went to appraisal with the homeowner. Although the homeowner was not represented by legal counsel, the homeowner won.
The Homeowner’s Carrier did not issue a check immediately, however. Under the Homeowner’s Policy, it had 60 days to pay the Appraisal Award. During that time, the Carrier’s representatives tried to ask the neutral Umpire on the Appraisal Panel whether the award included a deduction for depreciation. The Carrier did not get a reply from the Umpire.
The Carrier did not ask its own chosen Appraiser whether the Appraisal Award included a deduction for depreciation.
The Homeowner’s Carrier did not file for declaratory or other relief from a Court to resolve the depreciation deduction issue.
Rather, the Carrier “unilaterally” sent the homeowner a check for the amount of the Appraisal Award, less the Carrier’s deduction for what it calculated should be the amount of depreciation on the damaged home. This amount was $49,000.00.
The homeowner then retained a lawyer and filed suit against the Carrier. The homeowner asked the Court for leave to Amend the Complaint to add a Punitive Damages Claim, attaching a letter sent by the neutral Umpire to the homeowner’s attorney. In the letter, the Umpire stated “that depreciation had already been deducted from the final appraisal award.”
A little over one month later, or after more than 150 days passed since the Appraisal Award was rendered, the Carrier paid the homeowner “the depreciation amount [of $49,000.00 which] it had previously withheld from the appraisal award.”
The homeowner requested an award of an enhanced amount of the Attorney’s Fees incurred by the homeowner in dislodging the $49,000.00 in ‘withheld depreciation’. The Trial Court entered a final judgment of attorney’s fees and costs in the amount of $138,000.00. The Trial Court scrupulously followed an established Florida procedure concerning the assessment of a “lodestar” approach to setting attorney’s fees which is essentially an enhanced attorney’s fees amount. It is more an assessment of an exemplary amount against a defendant than an award of money to a plaintiff.
The Homeowner’s Carrier appealed.
The Appellate Court affirmed, even though as it stated it is well aware that this amount is “close to three times the amount of the recovered depreciation amount.”
This amount is of course on top of whatever Attorney’s Fees the Carrier incurred itself, along with Costs, Expert Witness Fees, and other expenses as well. Sometimes disasters are the result of human decisions and not always the result of natural catastrophes like Hurricane Katrina.