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TMH Medical Services, LLC v. National Union Fire Insurance Company of Pittsburg, Pa

United States District Court, M.D. Florida, Orlando Division

July 17, 2019

TMH MEDICAL SERVICES, LLC, Plaintiff,
v.
NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURG, PA, Defendant.

          ORDER

          ROY B. DALTON JR. UNITED STATES DISTRICT JUGDE.

         Before the Court is Defendant's Motion for Attorneys' Fees and Costs. (Doc. 155 (“Motion”).) On referral, U.S. Magistrate Judge Daniel C. Irick recommends denying the Motion. (Doc. 168 (“R&R”).) Defendant objected to the R&R (Doc. 169 (“Objection”)), and Plaintiff responded (Doc. 170). On de novo review, the Objection is sustained, the R&R adopted in part and rejected in part, and the Motion granted in part.

         I. Background

         This insurance coverage dispute concerns Defendant National Union Fire Insurance Company of Pittsburg, PA's (“NUFIC”) purported failure to indemnify and defend Plaintiff TMH Medical Services, LLC (“TMH”) for claims TMH asserted were covered under one of NUFIC's insurance policies. (See Doc. 16.) So TMH sued NUFIC for breach of contract related to the insurance policy and declaratory judgment that TMH is entitled to defense and indemnity. (Id.) NUFIC disputed these claims, and the lawsuit proceeded. (See, e.g., Doc. 39.)

         During the discovery phase of this case, NUFIC served a proposal for settlement on TMH under Florida Statute § 768.79 on April 20, 2018. (Doc. 155-1 (“Proposal for Settlement”).) The Proposal for Settlement attempted to “fully and finally resolve all damages that would otherwise be awarded in a final judgment in this action” for $250, 000.00. (Id. a t ¶¶ 2 -3 .) Relevant here, it also included the following conditions:

5. As a condition of acceptance of this Proposal, Plaintiff must agree to dismiss with prejudice all claims in the lawsuit against National Union Fire Insurance Company of Pittsburgh, Pa.
7. No. portion of the amount in Paragraph 3 is being offered to resolve any claim for punitive damages, as there currently is no pending claim for punitive damages. In the event that Plaintiff is permitted to assert a claim for punitive damages, the dismissal of this action would also include a dismissal with prejudice of all punitive damages claims against National Union Fire Insurance Company of Pittsburgh, Pa.

(Id. ¶¶ 5, 7.) TMH didn't accept the Proposal for Settlement within 30 days, so it was deemed rejected under Florida law. (Doc. 155, p. 2); Fla. R. Civ. P. 1.442(f)(1). Both parties moved for summary judgment (Docs. 121, 122), and the Court granted summary judgment in favor of NUFIC (Doc. 151). Judgement was entered in favor of NUFIC (Doc. 152), which TMH ha s appealed (Doc. 156).

         Now NUFIC moves for attorneys' fees and costs under Florida Statute § 768.79 based on TMH's rejection of the Proposal for Settlement. (Doc. 155.) TMH counters that NUFIC is not entitled to fees and costs under § 768.79 because: (1) TMH seeks both monetary and nonmonetary relief; and (2) the Proposal of Settlement is ambiguous and unenforceable. (Doc. 158.) Magistrate Judge Irick then bifurcated the attorneys' fees proceedings to determine NUFIC's entitlement to fees now and the amount following the appeal if NUFIC prevails. (Docs. 166, 167.)

         On referral, Magistrate Judge Irick recommends denying the Motion. (Doc. 168.) Specifically, Magistrate Judge Irick found: (1) TMH's request for monetary and nonmonetary relief in this action did not invalidate the Proposal for Settlement; (2) Paragraph 3 of the Proposal for Settlement is not ambiguous; but (3) the second sentence of Paragraph 7 is ambiguous and renders the Proposal for Settlement invalid (“Paragraph 7 Finding”). (Id. at 3-8.) Thus, he concluded that NUFIC is not entitled to attorneys' fees and costs under § 768.79.[1] (Id. at 8.)

         NUFIC objected to Magistrate Judge Irick's Paragraph 7 Finding, contending that Paragraph 7 is not ambiguous under Florida law. (Doc. 169.) With TMH's response (Doc. 170), the matter is ripe.

         II. Legal Standards

         When a party objects to a magistrate judge's findings on a dispositive matter, the district court must “make a de novo determination of those portions of the report . . . to which objection is made.” 28 U.S.C. § 636(b)(1); see also Fed. R. Civ. P. 72(b)(3).[2] “ Parties filing objections to a magistrate's report and recommendation must specifically identify those findings objected to. Frivolous, conclusive, or general objections need not be considered by the district court.” Marsden v. Moore, 847 F.2d 1536, 1548 (11th Cir. 1 9 88). The district court “may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge.” 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72(b)(3). The district court must consider the record and factual issues based on the record independent of the magistrate judge's report. Jeffrey S. by Ernest S. v. State Bd. of Educ. of State of Ga., 896 F.2d 507, 513 (11th Cir. 1990).

         III. Analysis

         Defendant objects to the R&R's conclusion that Paragraph 7 is ambiguous and thus that NU FIC is not entitled to attorneys' fees and costs under § 768.79. (Doc. 169, pp. 3, 13- 19.) NUFIC maintains that the Proposal for Settlement, when viewed in its entirety, does not contain any reasonable ambiguities that would make it unenforceable under Florida law. (Id.) Magistrate Judge Irick rejected NU FIC 's position and agreed with TMH's claim of ambiguity as it relates to the second sentence of Paragraph 7. (Doc. 168, pp. 6-8.) Specifically, Magistrate Judge Irick raised potential questions based on the language, the history of the case, and the context in which the Proposal for Settlement ...


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