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Florida Supreme Court rules that insurer's liability policy covered defendant's liability for attorney's fee and costs awarded under offer of judgment statute, Fla. Stat. Section 768.79

On July 13, 2017, in Geico Gen. Ins. Co. v. Macedo, No. SC16-935, the Florida Supreme Court affirmed a Florida First DCA ruling that GEICO was liable under its automobile liability insurance policy for attorney’s fees and costs awarded to a prevailing plaintiff who obtained a $243,000 jury award after a previous $50,000 proposal for settlement had been rejected by the defense. GEICO had disclaimed any responsibility for the fees and costs, arguing unsuccessfully that the policy did not cover attorney’s fees because the Additional Payments section of the policy only referred to costs, and that the policy did not cover these particular fees and costs because the policy only covered costs “incurred by an insured at our request.” The Supreme Court ruled that the costs provisions of the policy were at the very least ambiguous with regard to whether attorney’s fees were covered, and that any ambiguity had to be interpreted against the insurer. See Geico Gen. Ins. Co. v. Hollingsworth, 157 So. 3d 365, 368 (Fla. 5th DCA 2015) (stating that “[i]n light of the case law . . . combined with the principle that an ambiguous policy must be interpreted against the insurer and in favor of coverage, we are compelled to” hold that the attorneys’ fees granted pursuant to the offer of judgement statute must be considered a “court cost” under the additional payments provision); see also Geico Gen. Ins. Co. v. Rodriguez, 155 So. 3d 1163, 1171-72 (Fla. 3d DCA 2014) (holding that attorneys’ fee sanction was covered as a “court cost” under the additional payments provision of the insurance policy); Tri-State Ins. Co. of Minn. v. Fitzgerald, 593 So. 2d 1118, 1119 (Fla. 3d DCA 1992) (holding that attorneys’ fees sanction fell within the coverage provided by the policy’s language of “all costs taxed against the Insured, in any suit defended by the Insurer(s)”). With regard to GEICO’s second argument, that the costs had not been incurred at its request, the Supreme Court noted that the insurer was given discretion to settle the case and the insured were required under the policy to cooperate with the insurer, effectively leaving the insurer in the position of being able to unilaterally settle the case within policy limits. The Court noted that its decision was in direct conflict with the previous decision of the Florida Second DCA in Steele v. Kinsey, 801 So. 2d 297 (Fla. 2d DCA 2001) and disapproved of the Steele decision to the extent that it was inconsistent with the instant decision.