April 21st, 2017
By, Meagan R. Cyrus
It is well established in Florida that ambiguities in policy language are to be strictly construed against the insurer, and in favor of broader coverage for the insured. Auto-Owners Ins. Co. v. Anderson, 756 So. 2d 29, 34 (Fla. 2000). The Florida Supreme Court further expanded on this notion in Washington Nat’l Ins. Corp. v. Ruderman, 117 So. 3d 943 (Fla. 2013), again ruling in favor of policyholders, finding that insurers could not clarify an ambiguity through the use of extrinsic evidence. However, prior to the court’s determination as to the ambiguity of the language at issue, can extrinsic evidence be used to the advantage of the insured? The answer is possibly, and depending on the jurisdiction.
Interpretive and drafting history materials in the hands of the insurer can show that an insured’s interpretation is a reasonable one, creating ambiguity. It is difficult for an insurer to argue against an alternative interpretation that it itself considered in the writing of the policy. This battle is won at the discovery stage. The Middle District ruled in favor of the insurer on this issue, finding that an insured’s request for documents used to interpret the meaning of the policy were irrelevant to coverage issues, relying on Ruderman. Evanston Ins. Co. v. Frank’s Lab., Inc., No. 5:12–cv–603–Oc–UAMHPRL, 2013 WL 5556225, at *1 (M.D. Fla. Oct. 8, 2013). The Southern District, however, decided conversely, granting an insured’s discovery request for such materials: “[c]ontrary to [insurer’s] position, drafting history and extrinsic evidence of interpretive materials is discoverable at this early stage of the litigation when questions concerning ambiguity have not been resolved.” Viking Yacht Co. v. Affiliated FM Ins. Co., 07-80341-CIV-Marra/Johnson, 2008 WL 8715540, at *2 (S.D. Fla. Feb. 7, 2008).
The relevant inquiry at issue as to the discoverability and consideration of interpretative and drafting materials is whether or not the court has determined the policy to be ambiguous. If not, such materials are often crucial for an insured to prove an argument for reasonableness of interpretation. This is distinguishable from Ruderman, in which the court had made a determination of ambiguity, and the insurer sought to refute that finding.
April 20th, 2017
By, Ellen G. Smith, Esq.
We have all heard of the elephant in the room, but what about the invisible man in the courtroom? That invisible man is also known as the Fabre defendant. See Fabre v. Marin, 623 So. 2d 1182 (Fla. 1993). The Fabre defendant is a very important player at trial when dealing with multi-party and/or multi-defendant litigation.
The Fabre defendant usually arises when one or more parties settle in a case before trial, leaving other defendants remaining in the litigation and at trial. These remaining parties at trial then get to point their finger at the settled parties saying “they did it” either wholly or partially. The burden is on the remaining defendant(s) to prove, by a preponderance of the evidence, the Fabre defendant(s) are at fault. However, the decision of including or not including Fabre defendants can have a big impact on findings or economic and noneconomic damages.
The Wells v. Tallahassee Memorial Regional Medical Center, Inc., 659 So. 2d 249, 253-53 (Fla. 1995) opinion, after the enactment of the three setoff statutes and section 768.81, clarifies that “the setoff statutes do not apply to noneconomic damages for which defendants are only severally liable pursuant to section 768.81(3), but held that the setoff statutes continue to apply to economic damages for which parties continue to be subject to joint and several liability. D’Angelo v. Fitzmaurice, 863 So. 2d 311, 314 (Fla. 2003), citing Wells, 659 So. 2d at 253.
Two cases since the Fabre case should cause remaining defendants to take pause and consider whether or not to include a settled out or nonparty defendant(s) on a verdict form. In particular, the Supreme Court decision in Gouty v. Schnepel, 795 So. 2d 959 (Fla. 2001) provides an important distinction for a Fabre defendant who is found not liable (on the verdict form with a 0% liability verdict) versus a Fabre defendant not found liable (not included on the verdict form, so no liability verdict is determined). In Gouty, the plaintiff sued a gun owner and a gun manufacturer after being injured. Id. at 960. Prior to trial, the plaintiff settled with the gun manufacturer. Id. At trial, the jury found the gun owner 100% at fault, and attributed 0% of the fault to the gun manufacturer. Id. After trial, the gun owner sought to reduce the jury verdict of economic damages by the amount of settlement paid by the gun manufacturer. Id. The Court explained “that the setoff provisions, which were enacted before section 768.81, presuppose the existence of multiple defendants jointly liable for the same damages.” Id. at 963, quoting Wells, 659 So. 2d at 252-53 (Fla. 1995). Thus, the Court held that a defendant who is found solely liable does not receive a setoff because the parties are not joint tortfeasors. Gouty, 795 So. 2d at 965. The setoff statutes only apply where multiple defendants are liable for the same injury, thus if one defendant is found not liable, the two defendants are not liable for the same injury. See id. Here, the catch is if the gun owner had not listed the gun manufacturer as a Fabre defendant then the gun owner would have received a setoff of the settlement amount for economic damages to prevent the plaintiff from receiving a double recovery.
Furthermore, this point is emphasized in the D’Angelo holding. The plaintiffs, the Fitzmaurices, sued the doctor who allegedly left a laparotomy pad inside the plaintiff, Mr. Fitzmaurice, during an appendectomy. D’Angelo, 863 So. 2d at 312. Prior to trial, the plaintiffs settled with the medical center where the surgery took place. Id. At trial, only the doctor was listed on the verdict form, and the jury did not make a determination as to the medical center’s liability or apportion fault. Id. at 313. The jury awarded damages to the plaintiffs. Id. The doctor then sought a setoff of the economic damages for the settlement reached between the plaintiffs and the hospital. Id. The trial court granted the doctors motion and reduced the economic damages but refused to reduce the noneconomic damages. Id. On appeal, the court explained that “[u]nlike noneconomic damages, or which section 768.81 eliminated joint and several liability, the setoff statues continue to apply to economic damages for which parties continue to be subject to joint and several liability.” Id. at 316.
Thus the important take home from Wells, Gouty and D’Angelo is that if a defendant wants a reduction for non-economic damages then that defendant must list the settled out defendant(s) as Fabre defendants on the verdict form and prove their fault. However, the economic damages, based on the setoff statues, does allow a set-off of economic damages even if a nonparty defendant is not found liable.
Based on these rulings, a defendant who faces trial leaving behind settled out parties need to carefully consider whether or not to include these settled out defendants and have them be the invisible men in the court room. On one hand, the noneconomic damages award might be reduced if the Fabre defendants are apportioned fault. On the other hand, if the jury finds the Fabre defendants not liable, then the defendant not only receives 100% of the noneconomic damages but also will not receive a set-off of the economic damages.