Case Law Update – Appellate Court Case Addresses Attorney’s Fees

August 16, 2017 by on News

In GEICO v. Macedo, the Florida Supreme Court held that the trial court was correct in ruling that GEICO was required to pay taxable fees and costs awarded against its insured pursuant to an offer of judgment. The Court first noted that the GEICO policy gave GEICO the “sole right to litigate and settle claims” and that its policy stated that it would pay “other reasonable expenses incurred at our request.” As an initial matter, the Court reiterated controlling Florida law which holds that if there is any ambiguity in the language of an insurance policy, that ambiguity must be construed in favor of coverage and strictly against the insurer. A policy provision is ambiguous if it is “susceptible to two reasonable interpretations, one providing coverage and the other excluding coverage.

The GEICO policy at issue stated that that GEICO would not only pay court costs, but that it would also pay “legal expenses.” The Court held that “the use of the terms ‘costs’ along with ‘legal expenses’ creates an ambiguity regarding whether attorneys’ fees are included or excluded.” The Court also reasoned that attorneys’ fees and costs awarded under an offer of judgment were likewise owed because GEICO had control over settling or not settling the case and therefore they were incurred “as a result of the insurance company’s choice not to settle” and consequently were incurred at the insurance company’s request

In view of this case, which resolved a conflict with Steel v. Kinsey from the Second District Court of Appeal, insurers who wish to exclude liability for payment of attorneys’ fees awarded under the offer of judgment statute should carefully examine their policy language and consider drafting express provisions addressing this issue.

If you have any questions about this case or would like to refer an appellate matter, please contact our appellate attorneys.

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