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A court should not confirm an award, and thereby open the door for an award of attorney’s fees, when the insurer did not contest coverage, followed the dispute resolution procedures outlined in the parties’ agreement, and paid the appraisal award promptly, a Florida state court held.
In Federated National Insurance Co. v. Esposito, No. 4D05-4480, 2006 WL 2419114 (Fla. App. Aug. 23, 2006), Esposito motioned the court to confirm an appraisal award and enter a judgment, even though Federated had already paid the award in full. Federated claimed that Esposito only sought confirmation to seek an award of attorney’s fees.
The Court held that there is no need to confirm an award when the insurer has promptly paid. The parties had agreed the resolve their disputes through the appraisal process and had successfully done so.
The underlying issue in this case, according to the Court, was whether the insurer should be subject to statutory attorney’s fees if the insured initiates litigation despite the fact that the insurer fully participated in the contractual appraisal process.
The Court’s answer was clear: “Because of the laudable goal of the appraisal process-to resolve disputes without litigation-and the potential to evade that goal by resort to the court system, we hold that there is no need to confirm an appraisal award in circumstances such as those presented here.”
Federated did not contest coverage and participated in the appraisal process as outlined in the parties’ contract, and the Court refused to fault Federated for complying with the terms of its agreement because doing so would encourage non-compliance.
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