Indiana Lumbermens Mutual Insurance Co. v. Pennsylvania Lumbermens Mutual Insurance Co.
125 So. 3d 263
Fla. Dist. Ct. App.2013Background
- Two insurance carriers (ILM and PLM) insured the subcontractor; ILM coverage ended 4/30/2001 and PLM coverage ran from 6/1/2001 to at least 9/2004.
- Subcontractor faced a coverage dispute in a prior water-damage lawsuit; ILM defended under a reservation of rights, PLM refused defense.
- ILM paid $40,000 to settle on the subcontractor’s assignment of PLM coverage rights in exchange for ILM’s release of the subcontractor.
- ILM sued PLM for breach of contract, declaratory relief, and subrogation, claiming PLM breached its duty to defend and indemnify.
- Trial court granted ILM summary judgment on coverage issues but reserved attorney’s-fees determination; court denied ILM’s request for fees in the declaratory judgment action.
- On appeal, the court reversed the denial of attorney’s fees, holding ILM as an assignee stands in the insured’s shoes and is entitled to fees under section 627.428.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether an assignee may recover attorney’s fees under 627.428. | ILM, as assignee, is within 627.428’s class. | PLM argues assignment type, lack of prevailing issues, and fee inaccuracy limitability. | Yes; assignee may recover fees under 627.428. |
| Whether the assignment permitted recovery of defense costs and attorney’s fees. | ILM argued the assignment supports recovery of defense costs and fees. | PLM contends the assignment did not authorize such fees. | Assignment supports recovery of attorney’s fees under 627.428. |
| Whether the “significant issues” test applied to 627.428 fee awards. | ILM asserts that the test does not apply to 627.428. | PLM argues the test should limit fees to significant issues on appeal. | The significant-issues test does not apply to 627.428. |
Key Cases Cited
- Barreto v. United Servs. Auto. Ass'n, 82 So.3d 159 (Fla.4th DCA 2012) (fee award when insurer defeats loss amount with judicial intervention)
- Jerkins v. USF & G Specialty Ins. Co., 982 So.2d 15 (Fla.5th DCA 2008) (standard for fee awards under 627.428)
- Continental Cas. Co. v. Ryan Inc. E., 974 So.2d 368 (Fla.2008) (assignee rights and fee entitlements under 627.428)
- All Ways Reliable Bldg. Maint., Inc. v. Moore, 261 So.2d 131 (Fla.1972) (assignee stands in insured’s shoes for attorney’s fees)
- United Educators Ins. v. Everest Indem. Ins. Co., 372 F.Appx 928 (11th Cir.2010) (insurers may recover under 627.428 as assignees)
- Danis Indus. Corp. v. Ground Improvement Techniques, Inc., 645 So.2d 420 (Fla.1994) (significant-issues test does not apply to 627.428)
- Pa. Lumbermens Mut. Ins. Co. v. Ind. Lumbermens Mut. Ins. Co., 43 So.3d 182 (Fla.4th DCA 2010) (contractual coverage disputes and assignment context)