Recently the Fifth District Court of Appeal, sitting in Daytona Beach, Florida, affirmed the trial court’s ruling that GEICO Insurance Company was required to pay the injured parties’ attorneys’ fees against the defendant driver in the amount of $113,175.00. After the Court awarded the attorneys’ fees (because the insurance company rejected a proposal for settlement) it moved to add GEICO as a defendant to the attorney fee judgment and eventually obtain a Writ of Garnishment against GEICO. GEICO appealed the alleging that it was not responsible to pay the attorneys’ fee judgment under the language of its policy.
GEICO took the position that a “bright-line” rule prohibited a plaintiff from ever recovering attorneys’ fees against a defendant from the defendant’s insurers if the fees were awarded based upon a proposal for settlement. On the other hand, the claims as they were presented to the Appellate Court, were on the issue of contractual interpretation and insurance coverage.
In agreeing with the Trial Court the Fifth District Court of Appeal recognized that several courts have ruled that a party may not recover Section 768.79 attorneys’ fees assessed against an opposing party, from the opposing parties’ insurance company, when the insurance company was not a party to the litigation and was not served with a Proposal for Settlement. The Fifth District Court of Appeal distinguished each of these cases and in fact pointed out in one of those cases, the sister court stated that “the only conceivable source of liability for attorneys’ fee…..could only derive from the offer of judgment statute.” 75 So.2d 718 (Fla. 2nd DCA 1999).
In the case before the Fifth District Court of Appeal, the Trial Court did not tax the attorneys’ fees against GEICO based solely on the Offer of Judgment Statute; rather, as the Court pointed out, the Trial Court found that the attorneys’ fees judgment was explicitly covered under the terms and language of the policy issued by GEICO Insurance Company.
That language, in the GEICO Insurance Company policy, stated that not only would GEICO pay “in addition to the applicable limited of liability: [A]ll costs taxed against the insured, in any suit defended by the insurer.” The insurer was GEICO. Simply put, the GEICO Insurance Company policy indicated that GEICO would pay all court costs. Given that the award of attorneys’ fees in the attorney fee judgment was a cost charged against the insured, GEICO was obligated to pay the attorneys’ fee judgment.
Practice point: When faced with the opportunity to recover attorneys’ fees under Florida Rule of Civil Procedure, Rule 1.442 and Section 768.79, Florida Statutes, “The Offer of Judgment Statute” are successful you should immediately move to add the insurance carrier to the judgment as a party defendant to the attorney fee judgment and begin writ of garnishment proceedings against that insurance company. In doing so, and in preparation for doing so, you should always look back to the language in the policy for sections which may provide for “additional payments.” Look for language wherein the insurance carrier indicates that it will pay “all court costs charged to an insured in a covered lawsuit.”
This is one more example in which it appears GEICO had the opportunity to resolve a case in the policy limits. The Proposal for Settlement was $9,999.99. Most likely this was a $10,000.00 policy which GEICO refused to tender pre-suit resulting in litigation. Although the opinion does not set out the facts of the case, but it is well known that GEICO will steadfastly refuse to tender policy limits, especially, minimal policy limits such as these “throw away” policies valued at $10,000.00. In this case, GEICO most likely had an opportunity to settle a case for $10,000.00 and found itself having to pay an excess of $25,000.00 for the final judgment, and final attorney fee judgment in addition to the costs of conducting the appeal.
At some point, in our state, the insurance companies will begin to take a rational approach to evaluating claims, and compensating injured parties for the reasonable value of their damages … or they will go broke.
See GEICO v. Hollingsworth, opinion filed January 30, 2015. Although this opinion was filed today, it is not vial until time expires for a Motion for Rehearing. Let’s hope there is no Motion for Rehearing and GEICO simply pays what it owes.