DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA

FOURTH DISTRICT

INFINITY AUTO INSURANCE COMPANY,

Appellant,

v.

METRIC DIAGNOSTIC TESTING, INC. a/a/o JUNIOR CELESTIN,

Appellee.

No. 4D21-3431

[July 13, 2022]

Appeal from the County Court for the Seventeenth Judicial Circuit, 

Broward County; Natasha DePrimo, Judge; L.T. Case No. COWE21-

000884.

Gladys Perez Villanueva, Miami Springs, and Leslie M. Goodman of Law 

Offices of Leslie M. Goodman & Associates, Miami, for appellant.

John C. Daly and Christina M. Kalin of Daly & Barber, P.A., Plantation, 

for appellee.

GERBER, J.

In this personal injury protection (PIP) case, the defendant insurer 

appeals from the county court’s final order requiring the insurer, as a 

sanction for having pled a mistaken affirmative defense, to pay the plaintiff 

provider’s attorney’s fees incurred from the date when the insurer filed the

mistaken affirmative defense until the date when the insurer notified the 

provider about the mistaken affirmative defense.

 

The insurer primarily argues the county court erred in entering the 

sanctions order because the county court did not find the insurer had pled 

the affirmative defense in bad faith, but instead accepted the insurer’s 

admission that the insurer had pled the affirmative defense by mistake. 

We agree with the insurer’s argument and therefore reverse.

Procedural History

The insured was working as an Uber driver when he was injured in a 

motor vehicle accident. As consideration for treatment from the provider, 
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the insured assigned to the provider the right to seek PIP benefits under 

the insured’s automobile insurance policy with the insurer. Pursuant to 

the assignment, the provider requested payment from the insurer.

The insurer sent a denial letter to the provider. The letter stated that 

the insurer was denying the claim due to a policy exclusion—specifically, 

the policy’s “transportation network company driver amendatory exclusion 

endorsement.” That endorsement provided: “No coverage of any kind 

applies under this policy for any accident, loss, bodily injury, property 

damage, or other damage that occurs while any insured ... is logged on to 

a transportation network company’s digital network or while any insured 

... is engaged in a prearranged ride.” The insurer’s denial later further 

stated: “We have confirmed that [the insured] was logged on to a 

transportation network company’s digital network as a driver or who [sic] 

is engaged in a prearranged ride at the time of loss.”

The provider filed a breach of contract action against the insurer. The 

insurer’s original counsel filed an answer containing only one affirmative 

defense. That affirmative defense referenced a different insured’s name

and alleged the insurer had denied the claim due to a “material 

misrepresentation”—specifically, the insured’s failure to disclose on his 

insurance application that he was using his vehicle for business purposes. 

The affirmative defense did not refer to the “transportation network 

company driver amendatory exclusion endorsement” upon which the 

insurer had relied in denying the provider’s claim.

The provider filed a reply to the insurer’s material misrepresentation 

affirmative defense. The provider also propounded discovery on the 

insurer pertaining to the material misrepresentation defense, and sent the 

insurer a proposed joint pretrial stipulation, identifying material 

misrepresentation as the issue for trial.

Eight days before a case management conference, the provider’s 

counsel informed the insurer’s successor counsel that the insurer had not 

produced any documents supporting its material misrepresentation 

defense. Later that day, the insurer’s successor counsel filed a motion for 

leave to amend the insured’s answer. The motion asserted the insurer’s 

answer had mistakenly referenced the name of a different insured, and 

had mistakenly alleged the material misrepresentation affirmative defense. 

“In reality,” the insurer’s successor counsel argued:

[T]he claim was denied subject to an exclusionary 

endorsement in the policy which requires an insured to report 

if he is driving for [a] transportation network company ....
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The [provider] was aware of the basis of the denial ... 

pursuant to the [insurer’s] [denial letter], which ... cit[ed] the 

specific exclusion and overall basis for the denial.

The [insurer’s successor counsel] ... responded to [the 

provider’s] outstanding discovery requests. The discovery 

responses ... expressly state[d] the actual reason for the denial 

of the claim.

Additionally, a multitude of documents produced in 

response to discovery reference same.

Thus, [the provider] and [its] counsel were unquestionably 

aware of the issues in this litigation.

The [insurer’s successor counsel] was contacted by [the 

provider’s] counsel [eight days before the case management

conference] regarding documents supporting a[] [material 

misrepresentation] defense.

The [insurer’s successor counsel] immediately took action

on this matter, looking into the issues, attempting to get 

documentation which would appease [the provider’s] counsel 

regarding the denial and identifying the issue with the 

affirmative defense. 

In order to conform its pleading to the facts, [the insurer]

seeks to amend its Answer and Affirmative Defenses to reflect 

the real reason for claim denial. 

Without the revision to its defenses, this case cannot be 

fairly tried upon its merits and [the insurer] will essentially be 

forced to pay out on a claim which was expressly excluded 

from the policy because [the insurer’s prior counsel] made a 

mistake.

(paragraph numbering and exhibit references deleted).

Attached to the insurer’s motion was a proposed amended answer. The 

proposed amended answer replaced the original answer’s material 

misrepresentation affirmative defense with a policy exclusion affirmative

defense based on the “transportation network company driver amendatory 
4

exclusion endorsement” which the insurer had referenced in its denial 

letter.

In response, the provider filed a motion to strike the insurer’s pleadings. 

The provider argued the parties had completed discovery and the insurer 

was trying to change its defense to a new defense which the insurer had 

not timely pled. The provider’s motion to strike also requested the county 

court to award sanctions, including payment of the provider’s attorney’s 

fees and costs.

At the case management conference, the county court granted the 

insurer’s motion to amend, and denied the provider’s motion to strike the 

insurer’s pleadings. However, the county court ordered the insurer to pay

the provider’s attorney’s fees incurred from the date when the insurer filed 

the mistaken affirmative defense until the date when the insurer notified 

the provider about the mistaken affirmative defense. In rendering that 

sanction, the county court stated:

I understand people make mistakes ... [and] ... the [denial]

letter [cited the policy exclusion.] [However,] for the last six 

months [the provider’s counsel has] been litigating this case 

under material misrepresentation, doing all of her discovery

...[.] [T]hat mistake probably cost [the provider’s counsel] 

quite a bit of time and money that went into this. ... Had [the 

provider’s counsel] known, ... maybe she could have ...

addressed it differently, [but] we don’t know because she 

wasn’t given the right information.

....

I ... think that ... the state of this case warrants sanctions 

with regards to how the case ha[s] proceeded.

So I’m going to grant the motion for leave to amend, but 

I[’m] going to issue sanctions and ... have a full [evidentiary] 

hearing on [the amount] because quite frankly, ... I think that 

[the provider’s counsel] may be entitled to everything worked 

on ... from the time that answer was filed until the time that 

[the provider’s counsel] was made aware that the answer was 

wrong ...[.] I’m going to be looking at ... all of those hours of 

work with regards to her discovery ... [and] her motion 

practice ...[.] [The provider’s counsel] had put a great deal of 

work ... and I need to have a full [evidentiary] hearing on [the 

amount] after she gives me her hours for the entire time 
5

period, so I am going to grant sanctions ... to try to alleviate 

that prejudice ...[.] [T]here isn’t a motion before me, but I find 

based upon the prejudice ... to the [provider] in this particular 

situation, that I am going to issue sanctions ....

After the case management conference, the county court entered a 

written order which, consistent with the oral rulings, granted the insurer’s 

motion for leave to amend its answer, denied the provider’s motion to strike 

the insurer’s pleadings, and found that the provider was “entitled to 

sanctions for all work on the file relating to [the] [insurer’s] [m]aterial 

[m]isrepresentation defense from the time that the [a]nswer was filed 

[nearly six months earlier] ... [with the amount] to be determined by the 

[c]ourt at [a later] evidentiary hearing.”

Before the later evidentiary hearing, the insurer attempted to challenge 

the county court’s earlier entitlement finding by submitting affidavits 

attesting to the fact that the provider had been aware of the insurer’s policy 

exclusion defense, both before the litigation based on the insurer’s denial 

letter, and during the litigation based on the insurer’s discovery responses. 

Then, at the evidentiary hearing, the insurer’s counsel sought to raise this 

affidavit-based challenge. However, the county court summarily rejected 

that challenge, stating: “We’re past that part already. The Court has 

already issued sanctions with regards to this, so today’s hearing is solely 

about time and amount[.]” The county court then awarded the provider’s 

requested time at a stipulated hourly rate. Defense counsel asked the 

court to clarify whether the basis for the monetary sanctions had been the 

court’s “inherent authority.” The county court responded: “Yes, the Court 

has the discretion to issue sanctions in this particular case, rather than 

enter a default or do any other type of sanction.”

Later, the county court entered a written order recounting the case’s 

procedural history and, ultimately, summarizing the basis for ordering the 

insurer to pay monetary sanctions to the provider:

This Court[,] ... based on the [provider’s] argument of 

prejudice[,] issued monetary sanctions as remedy to alleviate 

the prejudice. The Court[] ... found that the [provider] had not 

been aware of the exclusion defense until a few days before 

the Case Management hearing and had been litigating the 

case for several months on the basis of the [d]efense originally 

presented[,] [t]hereby causing [the] [provider] to unnecessarily 

incur fees and costs related to the original affirmative defense.
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The insurer timely filed a notice of appeal of the county court’s 

sanctions order. Two months after the insurer filed its notice of appeal, 

the provider filed in the county court a voluntary dismissal of its breach of 

contract action, reserving only “the right to collect ... monetary sanctions 

previously ordered.”

On appeal, the insurer primarily argues the county court erred in 

entering the sanctions order because the county court did not find the 

insurer had pled the material misrepresentation affirmative defense in bad 

faith, but instead accepted the insurer’s admission that the insurer had 

pled the material misrepresentation affirmative defense by mistake. The 

insurer also argues the error was fundamental because the county court’s 

decision to impose sanctions occurred without having provided the insurer 

with an opportunity to present its affidavit-based evidentiary challenge to 

the sanctions determination.

Our Review

Applying an abuse of discretion standard of review, we agree with the 

insurer’s fundamental error argument and therefore reverse. See Rivero 

v. Meister, 46 So. 3d 1161, 1163 (Fla. 4th DCA 2010) (“The standard of 

review of an order granting sanctions for attorney misconduct is abuse of 

discretion.”); Moakley, 826 So. 2d at 226-27 (“The inherent authority of 

the trial court, like the power of contempt, carries with it the obligation of 

restrained use and due process.”) (footnote omitted).

A trial court’s decision to impose attorney’s fees as a sanction for 

attorney misconduct “must be based upon an express finding of bad faith 

conduct and must be supported by detailed factual findings describing the 

specific acts of bad faith conduct that resulted in the unnecessary 

incurrence of attorneys’ fees.” Moakley v. Smallwood, 826 So. 2d 221, 227 

(Fla. 2002). Here, the county court failed to make an express finding of 

bad faith conduct when imposing sanctions against the insurer. Instead, 

the record reflects the county court recognized the insurer’s admission—

which the provider has never disputed—that the insurer’s original counsel 

filed the material misrepresentation affirmative defense by mistake.

In this respect, Rivero—which discusses Moakley’s requirements for the 

imposition of sanctions upon a trial court’s exercise of its inherent 

authority—is instructive. In Rivero, the provider filed a motion for 

sanctions, alleging that insurers and their attorneys failed to appear at a 

scheduled trial date. 46 So. 3d at 1162. The circuit court held a hearing 

on the provider’s motion, and without making an express finding of bad 
7

faith conduct, granted the provider’s motion. Id. On appeal, we reversed 

the circuit court’s decision, reasoning:

[T]he [circuit] court did not make an express finding of bad 

faith conduct. The [circuit] court also did not make any 

detailed factual findings describing specific acts of bad faith 

conduct that resulted in the [provider’s] unnecessary 

incurrence of attorneys’ fees. Instead, the [circuit] court found 

that the [insurers’] attorneys were merely negligent. Because 

the [circuit] court did not make an express finding of bad faith 

conduct, we are required to reverse.

Id. at 1163; see also id. at 1164 (Damoorgian, J., concurring) (“Moakley

simply does not allow for the imposition of sanctions for negligent 

conduct.”); N. Cnty. Co. v. Bologna, 816 So. 2d 842, 844 (Fla. 4th DCA 

2002) (“Here, the [circuit] court did not make an express finding of bad 

faith conduct on the part of appellant, nor were the [circuit] court’s factual 

findings of misconduct detailed with the high degree of specificity required 

by Moakley. Such findings are a necessary precedent to any sanction of 

attorney’s fees awarded under the trial court’s inherent power.”).

The provider’s answer brief argues the county court properly exercised 

its authority to impose monetary sanctions pursuant to Florida Rule of 

Civil Procedure 1.190(e) which, according to the provider, “the Third 

District [has] acknowledged ... gives a trial court the inherent authority to 

allow amendments under ‘terms as may be just’ which includes awarding 

monetary sanctions,” citing Chatmon v. Woodard, 492 So. 2d 1115 (Fla. 

3d DCA 1986). 

However, the provider’s reliance on Chatmon and rule 1.190 is 

misplaced for three reasons.

First, the principle for which the provider cites Chatmon is dicta. In 

Chatmon, an automobile negligence case which pre-dated Moakley, the 

defendant did not initially raise a dispositive affirmative defense, but after 

some discovery and pre-trial preparation had occurred, the defendant 

moved to amend the answer in order to assert a dispositive affirmative 

defense. Id. at 1116. The circuit court granted the motion and thereupon 

dismissed the case. Id. On appeal, the Third District affirmed, finding no 

abuse of discretion in circuit court having granted, “even at the relatively 

late stage to which the case had progressed, leave to amend the pleadings 

so as to assert an absolute, unanswerable defense to the action.” Id. In 

support, the Third District cited rule 1.190(a) (“Leave of court shall be 

given freely when justice so requires.”) and a portion of rule 1.190(e) (“At 
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every stage of the action the court must disregard any error or defect in 

the proceedings which does not affect the substantial rights of the 

parties.”). Id.

In a footnote, the Third District stated: “It may have been appropriate 

to have conditioned permitting the amendment upon the defendant’s 

payment of the additional costs and expenses incurred by the plaintiff as 

a result of the apparently inexcusable tardiness in asserting the defense.” 

Id. at 1116 n.2. In support of that statement, the Third District cited 

another portion of rule 1.190(e): “At any time in furtherance of justice, 

upon such terms as may be just, the court may permit any process, 

proceeding, pleading or record to be amended or material supplemental 

matter to be set forth in an amended or supplemental pleading.” Id.

(emphasis supplied in Chatmon). However, the Third District noted that 

the plaintiff had not sought that relief in the circuit court. Id. Thus, the 

Third District’s statement that “[i]t may have been appropriate to have 

conditioned permitting the amendment upon the defendant’s payment of 

the additional costs and expenses incurred by the plaintiff” based upon 

rule 1.190(e) was dicta.

Second, even if we considered the Third District’s footnoted statement 

as having been decided on the merits, the Third District decided Chatmon

before the Florida Supreme Court decided Moakley. After Moakley, a trial 

court imposing monetary sanctions pursuant to its “inherent authority”—

as opposed to express authorization in a rule of civil procedure—must base 

such action “upon an express finding of bad faith conduct ... supported by 

detailed factual findings describing the specific acts of bad faith conduct 

that resulted in the unnecessary incurrence of attorneys’ fees.” Moakley, 

826 So. 2d at 227; cf. Fla. R. Civ. P. 1.380(a)(4) (permitting a trial court to 

award expenses—“that may include attorneys’ fees”—incurred in pursuing 

or opposing a motion to compel); Fla. R. Civ. P. 1.720(f) (permitting a trial 

court to impose sanctions—including “mediation fees, attorneys’ fees, and 

costs”—against a party failing to appear for mediation). Unlike rules 

1.380(a)(4) and 1.720(f), rule 1.190(e) does not expressly authorize a trial 

court to impose attorney’s fees based upon a party’s motion to amend or 

supplement its pleadings. We will not “interpret” such authority onto rule 

1.190(e)’s plain language.

Third, as the insurer’s reply brief argues, the county court did not cite 

rule 1.190(e) or the rule’s “upon such terms as may be just” phrase to 

impose sanctions against the insurer. Instead, as the insurer clarified with 

the county court at the evidentiary hearing’s conclusion, the county court 

relied upon its “inherent authority” to impose monetary sanctions against 

the insurer.
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Conclusion

 

In sum, we must reverse the county court’s order imposing attorney’s 

fees as a sanction for attorney misconduct, because the county court failed 

to comply with Moakley’s requirement that such imposition “must be 

based upon an express finding of bad faith conduct and must be supported 

by detailed factual findings describing the specific acts of bad faith 

conduct that resulted in the unnecessary incurrence of attorneys’ fees.” 

826 So. 2d at 227. While we recognize the county court imposed the 

sanction because the provider’s counsel’s work in addressing the insurer’s 

mistaken affirmative defense “probably cost [the provider’s counsel] quite 

a bit of time and money,” the inability to characterize the insurer’s 

mistaken affirmative defense as “bad faith conduct” prohibited the 

imposition of any such sanction. We direct the county court, on remand, 

to vacate the sanctions order.1

Reversed and remanded with directions.

DAMOORGIAN and LEVINE, JJ., concur.

* * *

Not final until disposition of timely filed motion for rehearing.

1 In Rivero, we recognized the apparent unfairness of situations like this case 

in which one party’s conduct does not necessarily rise to the level of “bad faith 

conduct,” but nevertheless causes another party to unnecessarily incur 

attorney’s fees. 46 So. 3d at 1163-64. We suggested that our supreme court 

consider clarifying Moakley’s undefined “bad faith” requirement to include both 

intentional and reckless misconduct. Id. at 1164. Judge Damoorgian, in a 

concurring opinion, suggested a trial court should have the discretion to impose 

sanctions even when the conduct rises only to a negligence standard. Id.

(Damoorgian, J., concurring). As Judge Damoorgian aptly asked, “Who should 

bear this cost, the victim or the perpetrator?” Id. Although the facts here do not 

rise to the level of Rivero’s facts, we continue to suggest that Moakley’s undefined 

“bad faith” requirement may require clarification as to its scope.