Within a week of serving its proposal for settlement, Mount Vernon filed a motion for final summary judgment, asserting that the damage was not covered under the terms of the policy. Following a hearing, the trial court granted Mount Vernon's motion for summary judgment. Thereafter, the trial court entered final summary judgment in favor of Mount Vernon and denied New Moon's motion for rehearing and motion for relief from judgment.

Pursuant to Rule 1.442 and Section 768.79, Mount Vernon moved for its attorneys' fees and costs based on New Moon's failure to accept Mount Vernon's proposal for settlement.

In response, New Moon argued that the nominal proposal for settlement had not been made in good faith because Mount Vernon did not have a reasonable basis to offer the nominal amount.

At the hearing on Mount Vernon's motion, the insurer argued that it had submitted its proposal for settlement following extensive discovery and the taking of several depositions and, at the time it submitted its proposal for settlement, the record reflected that there were no issues of material fact and that Mount Vernon had a reasonable basis to conclude that it had "no exposure, let alone nominal exposure."

The trial court denied Mount Vernon's motion, finding that its nominal proposal for settlement had not been made in good faith.

Mount Vernon appealed.

The Appellate Court's Decision

The appellate court reversed.

In its decision, the appellate court explained that, when considering whether the trial court had abused its discretion by finding that Mount Vernon's nominal proposal for settlement had not been made in good faith, it had to consider whether Mount Vernon "had a reasonable basis at the time of the offer to conclude that [its] exposure was nominal." Moreover, the appellate court added, "good faith" was "determined by the subjective motivations and beliefs of the pertinent actor."

The appellate court observed that Mount Vernon had made its proposal for settlement "following almost two years of litigation and extensive discovery." The appellate court added that, less than a week after making its proposal for settlement, Mount Vernon moved for summary judgment and, in doing so, relied heavily on an investigation report issued by its claim administrator in October 2008, the roof damage report issued by structural engineers in November 2008, and the exclusions and limitations contained in the policy.

Thus, the appellate court ruled, the record "conclusively" demonstrated that Mount Vernon "had a reasonable basis at the time of the offer to conclude that [its] exposure was nominal."

Accordingly, the appellate court concluded that the trial court had abused its discretion by denying Mount Vernon's amended motion for entitlement based on its determination that the nominal proposal for settlement had not been made in good faith. Therefore, it ordered the trial court to grant Mount Vernon's motion for attorneys' fees and costs.

The case is Mount Vernon Fire Ins. Co. v. New Moon Management, Inc., No. 3D16-2243 (Fla. Ct.App. Feb. 14, 2018). Attorneys involved include: Fowler White Burnett, P.A., and Esther E. Galicia, for appellant. Garcia Law Firm, Trial Attorneys, and Nathalia A. Mellies, for appellee.