Florida Appellate Court Upholds Ruling Making an Insurer Jointly and Severally Liable for its Insured’s Litigation Costs

3367543094_470e356692_bIn the recent case of New Hampshire Indemnity Co. v. Gray, the plaintiff suffered injuries in a catastrophic motor vehicle collision and filed suit against the other driver. The other driver’s insurance company defended him in the lawsuit, according to the terms of his insurance policy. After a jury trial on the matter, the plaintiff was awarded over $2 million in damages.

Shortly thereafter, the plaintiff filed a motion seeking tax costs against the insurance company and seeking to join the insurance company in the final judgment. The defendant objected to the request for joinder in the judgment, claiming that nothing in the insurance policy held the company responsible for the damages.

The insurer also claimed that the plaintiff failed to follow the requirements of Section 627.4136(4), preventing the plaintiff from seeking damages directly from the company. The plaintiff complied with the statute’s requirements, but the insurance company did not receive notice of the compliance until after the court held that the insurer was jointly and severally liable with the defendant for over $135,000 in costs.

The insurer appealed to the First District Court of Appeals in Florida, claiming that the joinder was improper and that the trial court failed to articulate any basis for the joinder. The company also claimed that the court failed to establish any evidence supporting an interpretation of the policy that would require the insurer to cover costs.

The appellate court first concluded that the insurance company failed to appropriately preserve its claim regarding the lower court’s alleged lack of a basis for joining the insurer in the judgment award. Assuming the insurance company had properly preserved this argument, the court concluded that the judgment would not be defective because the record indicated that the lower court had contemplated the parties’ positions and adopted the plaintiff’s view on the issue.

Second, the appellate court rejected the insurer’s argument that the plaintiff failed to comply with the requisite procedural requirements. Most notably, the insurance company had admitted that it received a copy of the motion seeking joinder in advance of the hearing and failed to ask for a continuance of the hearing or additional time to investigate the plaintiff’s arguments. As a result, the insurance company was not prejudiced, and the lower court did not commit an abuse of discretion in ruling on the motion.

Addressing the merits of the claim, the court first advised that under Florida law, an insurance company cannot be named as a defendant unless a judgment has already been secured against the company. The court engaged in a substantive discussion of case law interpreting this rule, finally concluding that it would be absurd to allow an insurer to opt for litigation over a settlement without consulting their policyholder, but still enable the company to disclaim any liability for the costs of litigation incurred. The court of appeal affirmed the trial court’s ruling that the insurance company should be held jointly and severally liable for its insured’s litigation expenses.

If you or someone you love has been injured in a car accident, the dedicated personal injury lawyers at Lusk, Drasites & Tolisano can help. We have provided aggressive and compassionate representation to victims throughout Southwest Florida, including Fort Myers, Cape Coral, and Naples. Call us now at 1-800-283-7442 or contact us online to set up your free consultation today.

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