June 16th, 2017

Be Our Guest or “At Our Request”? : Interpreting the Additional Payment/Supplementary Payment Provisions in Requesting Attorney’s Fees and Costs

By, Molly Chafe Brockmeyer, Esq.

The Florida Supreme Court is currently reviewing the issue of whether the policy language “all investigative and legal costs incurred by us” and “all reasonable costs incurred by an insured at our request” allows for an insurer to be added to a cost judgment pursuant to section 768.79, Florida Statutes, the offer of judgment statute. See Order Accepting Jurisdiction, Government Employees Ins. Co. v. Macedo, No. SC16-935 (Fla. Oct. 19, 2016)(certifying as direct conflict and express and direct conflict).

In Government Employees Insurance Company v. Macedo, GEICO challenged a final judgment in an automobile insurance case holding it liable for a plaintiff’s attorney fees and costs after GEICO had rejected, on behalf its insured defendant, a $50,000 settlement proposal made by the plaintiff pursuant to section 768.79, Florida Statutes.  190 So. 3d 1155, 1156 (Fla. 1st DCA 2016), review granted (Oct. 19, 2016).  Plaintiff succeeded in obtaining a jury verdict in her favor, receiving more than four times the amount of the proposal. Id. The plaintiff then added GEICO to the judgment pursuant to section 627.4136(4), Florida Statutes, and sought taxable fees and costs pursuant to the offer of judgment statute. Id. The trial court added GEICO to the judgment, making GEICO jointly and severally liable with its insured. Id.

The First District Court of Appeal, upholding its decision in New Hampshire Indemnity Company v. Gray, 177 So. 3d 56 (Fla. 1st DCA 2015), stated that GEICO’s policy with the insured gave it the sole right to litigate and settle claims, and thus contractually obligated it to pay for “all investigative and legal costs incurred by us” and “all reasonable costs incurred by an insured at our request.” Id. at 1156. The court further stated that the policy did not provide a definition of legal or other costs, nor exclude, for example, costs and fees awarded to a plaintiff driver pursuant to the offer of judgment statute. Id. Further the court restated its holding in Gray:

[U]nder insurance policies such as the one here, insurers enjoy the sole right to settle or litigate claims against their insureds; therefore, choosing to litigate is no different than a request … to do so. Any such expression, or request, necessarily encompasses incurring litigation costs, which may mean not only the insurer’s litigation costs, but also those incurred by the opposing party should that party prevail. It is the insurer’s choice to litigate—a decision only it can make—that results in these costs being incurred; thus, “those expenses [are] incurred at the insurer’s request.”

Id. at 1156-57, (quoting Gray, 177 So. 3d at 63 (internal citation omitted)).

However, the court, in certifying conflict to the Florida Supreme Court, recognized the conflict with the Second District’s opinion in Steele v. Kinsey, which held that the same language was unambiguous and that the words at issue here, “reasonable expenses incurred at our request,” can only mean that the insurer must request the product or service that incurs the expense. 801 So. 2d 297, 300 (Fla. 2d DCA 2001).

On October 19, 2016, the Florida Supreme Court accepted jurisdiction. The appeal is perfected as of January 24, 2017, and the Court has dispensed with Oral Argument.

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