*1 MOHNKERN, E. Plaintiff- Janet

Appellant,

The PROFESSIONAL INSURANCE

COMPANY, f.k.a. Insur Professional Corporation, Defendant-Appel

lee.

No. 07-3486. Appeals, Court of

United States

Sixth Circuit.

Argued: June Sept.

Decided and Filed: Boles, Edgar Moriarty H. &

ARGUED: Jaros, Pike, Ohio, Pepper Appellant. *2 Bachraeh, Henderson, 2063622M, Rawle & Joshua to Broderick J. Blacknell (“Blacknell”), resident, Pennsylvania, Appellee. for a Philadelphia, Florida in the Boles, $100,000. However, Edgar Moriarty BRIEF: H. & amount of ON Blaek- Jaros, Pike, Ohio, Appellant. problems nell’s health Pepper attendant Bachraeh, Henderson, & medical bills led to him selling policy Joshua Rawle his Pennsylvania, Appellee. return for a sum than the Philadelphia, policy less limits. BATCHELDER, MARTIN and Before: E. November Janet Mohn- JORDAN, Judges; Circuit Senior District (“Mohnkern”) $100,000 invested Judge.* Alpha Capital (“Alpha”), with Group which solicited for placements investors MARTIN, J., opinion delivered in viatical settlements. Mohnkern’s court, JORDAN, D.J., joined. in which placed funds were in escrow with Viati- BATCHELDER, 163-69), (pp. J. delivered (“VES”) Services, cal Escrow LLC until separate dissenting opinion. a placed policy. she was [ ] Blacknell 9, 1999, On March Mohnkern was as- OPINION signed policy the Blacknell in exchange MARTIN, JR., F. Circuit BOYCE $49,995.00 of her initial in- Judge. vestment. The remainder of Mohn- brought Plaintiff Janet Mohnkern suit placed kern’s investment was in another claiming attorneys’ she was owed un- policy and is not at litiga- issue der Florida law defendant The Profes- assignment tion. The of the Blacknell Company. sional Insurance The district policy to Mohnkern was recorded granted court the defendant’s motion for in April noting the “Approval summary judgment, and Mohnkern now Assignment of Absolute with Janet E. appeals that decision. We now AFFIRM. (Amended B.) Mohnkern.” Compl., Ex. In April Alpha and company I. called Liberte Capital Group, another viat adequately court The district recited the firm, ical settlement commenced an action facts of this case: convoluted in federal district court against their es This is one of number of satellite agent, Capwill, crow James A. alleging spawned cases in Li that Capwill misappropriated it funds held Capital Group Capwill, berte et al v. Alpha escrow for and Liberte. The (N.D.Ohio) Case No. 5:99 CV 818 Receiver, district court appointed a involving the viatical insurance indust instructed the Receiver “to satisfy the ry.1 creditors, claims of including investors and undisputed

It is that the parties, Professional other in the order legal priori (“PIC”) ... Company ty....” Insurance issued Capital See Liberte Group, LLC v. (6th policy, Policy life insurance No. Capwill, Fed.Appx. 628-29 * Jordan, policy Honorable R. Leon Senior United amount of the but in excess of the Judge States District Eastern District premiums paid or current cash surrender val- Tennessee, sitting by designation. ue, provides the seller an immediate cash Generally, a viatical settlement is the sale of buyer settlement. And the is entitled to the policy by policy a life insurance owner upon original death benefit the death of the sale, before the Such a matures. usu- policy owner. ally price at a discounted from the face Cir.2004). expanded By court early January The district PIC stood 9, 1999, ready Receiver’s duties on November “to proceeds to January all Mohnkern. On cover all interests insurance *3 emailed Mohnkern that it was policies by waiting funded investors which Liberte to hear from NES the status of Capital, Alpha Capital, or LLC con- LLC premium payments tacted, and wanted clarifi- are or were in the name which cation from Mohnkern as to A. whom Capwill, Capwill James CWN & premium payment name, refunds were to be Group any or other either as nomi- 4, January 2002, returned. On PIC nee owner or as trustee ... for the pur- received an email from NES and re- pose of managing administering insur- sponded to NES as follows: policies foregoing which one of the owner, Hi beneficiary Lynn, either is named as Trustee, including, but is not limited you your Thank e-mail. I au- undisputed death claims....” It is that the payment thorized of the policy pro- name, Policy Blacknell was listed ceeds to Janet Mohnkern this morn- included, in the district court’s order es- ing. you If believe this decision is tablishing a Receivership. please incorrect let me know as soon possible. I have not received con- The district court summarized the re- yet firmation toas when the check will maining facts as follows: go assuming out but I’m days. few away passed Blacknell on November I will let Janet Mohnkern know as 2000. Due to difficulties ascer- soon as I My receive confirmation. taining information about the location of decision was based on the collateral death, it Blacknell’s was not until Octo- assignment. only remaining in- 1, 2001, Alpha’s agent, ber that escrow formation I you needed from was on Services, NorthEast Escrow LLC the premium refund. I believe that (“NES”), forwarded the certified death premiums were for a few months certificate a copy as- following the date of death. Janet signment to Mohnkern. Approximately Mohnkern believes that premium later, days ten Mohnkern submitted her her, go refund should but I wanted claim policy. to PIC on the Blacknell to get your agreement on that issue The claim form indicates it was received returning premiums to Janet. on October Retirement Ac- you agree Do that premi- excess counts, Inc., and forwarded to PIC and payments go um should to Janet received them on November Mohnkern and not to NorthEast Es- claim, In investigating the PIC deter- you very crow Services? Thank much mined that Mohnkern was not your help with this matter. named Scott Holman required, part, that Blacknell’s estate GE Financial Assurance. sign By off on the claim. letter dated day, Later that same NES advised PIC November PIC advised Mohn- of the following: kern that it needed certain documenta- Dear Scott: proceed tion order to with the pro- states, cessing of her claim. Have been directed the Federal dispute, Receiver, Mohnkern does not Court-appointed Mr. Wil- requested received the Wuliger express documentation liam our concern from her on November over the of this death bene- regarding rights. this death her contractual fit. I understand Sub- sequent hearing to a fairness process claim has been Al- regarding method of distribution months, Wuliger’s it is Mr. many but investors, pha motion Mohnkern’s okay court must that the position release and distribution of the Blacknell Wuliger benefit. Mr. payment of this Appeal, was dismissed. On motion before the court putting a the Sixth Circuit reversed and remand- today for direction. hearing ownership ed “for a as to the mail, a you, by forward to let- Will Policy proceeds, Blacknell consistent along explaining the situation with ter process rights.” with Mohnkern’s due *4 Mr. appointing the motion from court Capital Group, Capwill, Liberte LLC v. and NorthEast Wuliger the Receiver (6th Cir.2005). 377, 421 F.3d 385 court-appoint- as the Escrow Services remand, 2005, After in December Alpha Capital agent ed escrow over and Receiver resolved the your pa- ask for Group. We then contractual re- you to the mo- tience. Will forward ceived in return for settlement paid, tion is to be as soon as as who Upon of her contractual claim. notifica- receive it. settlement, tion of that lifted Court Unfortunately, stay in present lawsuit. Mohn- (of wrapped up receivership in the four sets forth causes of action in Group) Alpha Capital and Mrs. Mohn- (1) complaint her amended as follows: kern does not know the decision delay that Defendant’s failure or in pay- Wuliger Mr. to allow the court to de- ment was a violation of Florida statute cide (2) 627.421; §§ 624.155 and that Defen- you. Thank unreasonably dant acted and in violation Day Lynn (3) statutory rights; Plaintiffs Operations. statutory Defendant has an absolute ob- of these devel- PIC advised Mohnkern ligation [attorneys’] to her fees and 6, January opments on 2002. The Re- law; interest accordance with Florida (4) ceiver filed his motion on the Blacknell declaratory in regards relief death benefit the Liberte action on [attorneys’] Plaintiffs entitlement 7, it January approved by 2002 and was fees and interest under Florida law. 10, January In the Court on ac- The district court went on to hold that the directive in the cordance with Court principal inquiry was whether Mohn- order, from payed attorneys’ kern was due fees under Florida NES, Blacknell the escrow statute 627.421. The court lower held by the company utilized Receiver “taking into consideration PIC’s ac- direction, placed the Court’s NES responses tion and to the Receiver and segregated monies in a account. order, ..., attorneys’ Court to award Mohnkern filed this instance, penalize in this would be to 8, 2002, March District of Middle power insurer when it was without to re- subsequently Florida and it was trans- contrary solve the conflict would be ferred to Northern District of the intent of the statute.” [the Ohio] 19, Following on April unsuccess- II. discussions, ful settlement this Court judice, stayed the case sub until Mohn- This Court reviews de novo a grant summary iudg- kern intervened the Liberte action district court’s Hardesty Hamburg Twp., 461 sonable sum as fees or compensation ment. (6th Cir.2006). Summary Beneficiary’s attorney....” the ... F.3d Fla. genuine where no issue judgment proper 627.428. Florida courts have held Stat. moving par- fact exists and the of material that a equiva- settlement “is the functional ty is entitled to as a matter of lent of ... a verdict favor in- of. considering 56(c). law. Fed.R.Civ.P. Lloyd’s sured.” Wollard v. & Cos. Of summary judgment, (Fla.1983). motion for the district Lloyds, 439 So.2d 218-19 court must construe all reasonable infer- And, as the Eleventh recog- Circuit has nonmoving party. ences in favor of the nized, an may attorneys’ insured recover Matsushita Elec. Indus. Co. v. Zenith Ra- 627.428when reaching a set- Corp., dio 475 U.S. 106 S.Ct. tlement. See Pepper’s United States v. (1986). L.Ed.2d The central Inc., Alloys, & Steel 289 F.3d presents is “whether the evidence issue (11th Cir.2002). disagreement require sufficient submis- The issue we simple: must decide is jury it sion to or whether is so one-sided does the Florida statute automatically party prevail

that one must a matter of *5 attorneys’ upon award fees a successful Inc., Liberty Lobby, law.” Anderson v. beneficiary/insured? outcome Or 251-52, 2505, 477 U.S. 106 S.Ct. 91 require does the statute the insurer to (1986). L.Ed.2d 202 wrongfully have caused the insured/benefi- ciary to resort to before attor- 1. Attorneys’ Fees neys’ fees can be awarded? argues Mohnkern that because she purpose The behind place 627.428 to litigate was forced to in order to receive beneficiary the insured or in place she policy, under the Blacknell would if have been the carrier had season statute is automatically triggered, and PIC ably paid the claim or benefits without attorneys’ must her fees under the causing payee engage counsel and in argues statute. PIC order for incur attorneys’ fees. As the Florida Su attorneys’ be awarded under preme Court said Ins. Co. N. Am. v. of 627.428, wrongly deny the insurer must Lexow, (Fla.1992): 602 So.2d 531 benefit, paying causing a insured consistently Florida courts have held Here, litigation. resort to it was the Re purpose that the of section 627.428 and resulting ceiver’s action and the court or predecessor discourage its is to the con- der that paying pro halted PIC from testing against of valid claims insurance ceeds the Blacknell to Mohnkern. companies and to reimburse successful PIC, According to it never denied the ben [attorneys’] insureds for their fees when efit and was without power to resolve they compelled are to defend or sue to claim. Mohnkern’s Clay enforce their insurance contracts. The Florida statute at issue reads America, v. Prudential Ins. Co. part relevant that “[u]pon rendition of a (Fla.App.Ct.1993). So.2d ... against an insurer and in favor of ... named correctly under The district court relied on (GEICO) a policy, adjudge the trial court ... shall Employees Government Ins. Co. (Fla.1987).2 ... in favor the ... beneficiary Battaglia, a rea- So.2d out, accurately pointed ciary ultimately litigating As the district court successful attorneys' Florida have courts denied fees in company: an insurance numerous situations where insured/benefi- If court held that GEICO court’s order. PIC had refused to fol- Battaglia penalized for trial court’s the district could not be low court’s order and that had the ef- staying receiver, arbitration order it would instead payment Battaglia’s delaying fect of held in being contempt have risked claim, causing Battaglia to resort It district court. was the Receiver and the Florida court stated litigation. The court compelled district pe- 627.428 is to purpose of section “[t]he to intervene the Liberte action to assert wrongfully causing its nalize a carrier rights her contractual under the Blacknell litigation to resolve a to resort to insured policy. Battaglia, And under because PIC reasonably conflict it was within the when power was without to resolve Mohnkern’s claim to do so. When the power carrier’s claim in the face of the district court’s reasonably can one that the carrier ex- order, does not Id. Ac- apply. 627.428 court, than resolved rather pect to be cordingly, we AFFIRM the district court’s itself, then 627.428 does not section summary motion for grant judg- PIC’s punitive fee.” 503 So.2d at 360 generate ment. omitted). (internal citations com- The facts show that Mohnkern was 2. Statutory Interest pelled rights to enforce her under sue argues Mohnkern also the district thereby policy, fitting within the Blacknell denying court erred in her claim for inter However, of the statute. language est Florida Statute 627.4615. claim, her valid nor did not contest though Even it in Mohnkern raised her deny her claim. truly it ever did *6 summary judgment, motion for the district to a court order when it pursuant acted court did not address her claim for interest Re- paid proceeds the Blacknell into the granting summary judg in its order account instead of to ceiver’s escrow ment. wrongfully PIC never caused Mohnkern. litigation, argues rather Mohnkern to resort under by 627.4615,3 forced to abide the district where a ulti- PIC was [Attorneys’] have ... been denied in fees have been denied where the insurer reasonably expected where the initial denial of claim not instances was could to resolve upon provided legal information factual and based erroneous issues the conflict was by Liberty Ship insured. National Ins. Co. forced into court. Crotts v. Bankers and Life York, 1357, (Fla.2006) pers Bailey, Ins. Co. New 476 v. 944 So.2d 1030 So.2d of (Fla.1985) (factual (rejecting imposition liability 1359 issue involved con of strict submitted). flicting proceeds claims to insurance where a valid claim is not le 627.428 gal questions applicability paid $1 had over revolved around Where the insurer million claims, exempted disability process adjust pay Florida statute which was in the dollars delays legal process). ments ing remaining payments from See also Time Ins. claims Arnold, (Fla. 1975); provide timely Co. v. 319 So.2d 639 were due to insured's failure to documentation, Equitable Soc.’y supporting Assurance U.S. v. information with Life Nichols, (Fla. 1956) (under [attorneys’] 84 So.2d 502 the insured was not entitled to showing predecessor [attorneys'] incorrectly statute no fees absent fees absent of denied insurer). wrongful by Lodging conduct Speciality benefits. Tristar Arch F.Supp.2d Insurance (2005) provides 3. Section 627.4615 Fla. Stat. (M.D.Fla.2006) (noting difference between ex follows: dispute possi istence of a bona fide and mere bility determining payments: payable of a as crucial in Interest on death claim payments by policy provides payment whether insured are treated as When a of its judgment), aff'd, Fed.Appx. lump upon proceeds confessions of in a sum the death of insured, (11th Cir.2007). Additionally, [attorneys’] must include in- mately determined to be entitled to insur- interest to the Receiver. All of the cases the insurance carrier relied on policy proceeds, Mohnkern involve the denial from the statutorily non-payment liable for interest of a death benefit. Here, proof just date the insurer receives written due the benefit paid, not to Here, persons. of the death of the insured Mohnkern. The fact that Mohnkern was argues entitled to in- recoup she was then unable to all of the interest 2, 2001, through from paid terest November PIC was not wrongful due to date she received her settlement on De- denial of benefit Accordingly, PIC. years a period cember of four and district court’s denial of Mohnkern’s claim statute, According one month. to the she interest under AF- 627.4615 is was entitled to an annual interest rate of FIRMED. 8 percent. least III. argues paid that it Based on foregoing, we AFFIRM policy, along appli-

the Blacknell with the the district court’s denial of Mohnkern’s 627.4615, cable interest under to the motion partial summary judgment and kept Receiver. Those funds were in a seg- grant of PIC’s motion summary judg- regated interest-bearing account ment. Yet, out, agent. points escrow as PIC $105,000 Mohnkern received in her settle- BATCHELDER, ALICE M. Circuit receiver,

ment with the apparently Judge, dissenting. $5,000 only represents interest. PIC paid states that it over in interest I respectfully majori- dissent from the Receiver, not including the interest ty’s deny decision to Janet Mohnkern at- garnered interest-bearing account. torney’s fees under Fla. Stat. 627.428. PIC, According to because it ap- the majority recognizes, (Maj. As Op. at statute, plicable interest under the it is 162-63), Mohnkern only satisfies the re- simply liable for additional interest be- quirements recovery for such as set forth *7 627.428(1): cause Mohnkern was not able to recover plain § the of text She was money more from the Receiver. assignee beneficiary the of a life insur- — policy, compelled she was to sue to argument find that We PIC’s has the rights, enforce her and the re- paid policy proceeds most merit. It the sulted a determination that she was plus statutory pur- interest to the Receiver entitled to policy proceeds. the Because suant to a valid court It order. is not clear case, § applicable 627.428 is to this what else PIC could have done. To com- because the district court that ordered pel pay them to again interest would be to pay PIC NES instead of Mohnkern was penalizing following them for a court or- issue, authority without to resolve the der, making pay them double interest attorney’s Mohnkern is entitled to fees. on the death benefit. Mohnkern cites no cases, any, and we do not find that would As Supreme Court of Florida has require PIC to interest after it abided recognized, dispute is within the “[i]f loses, paid plus court order and the benefit scope of 627.428 and the insurer [§ ]

terest, equal greater at an annual rate to or death of the insured. If the method of Moody's Corporate calculating substantially than the Bond Yield Av- such index is erage-Monthly Average Corporate changed as of the from the method of calculation in received, day January the claim was from the date use on the rate must not proof percent. the insurer receives written due less than 8 let me know as soon as obligated please for attor- incorrect always is the insurer Lexow, N. Am. v. of advice was possible.” Ins. Co. This solicitation ney’s fees.” (Fla.1992) (emphasis Day made entirely unprompted, as had 602 So.2d added). determining dispute whether asking update clear that she was 627.428, Flori- scope of wrapping up comes within only purpose for the Mohn- purpose of the stat- look file, courts weigh da in on the issue. kern’s not to contesting ute, discourage “to which is later, Nonetheless, Day a few hours re- compa- claims insurance of valid court-appoint- plied that it was the federal successful insureds to reimburse nies and that “the court must position ed Receiver’s attorney’s they fees when are for their benefit,” okay payment of this and that to enforce their to defend or sue compelled “putting the Receiver was a motion before Thus, at 531. contracts.” Id. insurance today the court for direction.” PIC general purposes: two serves the statute to await action the Receiver and agreed taking actions that from to deter insurers This led to the court the district court. litigation (by punish- insureds into compel order, paying the which then led to PIC’s do), compensate and to ing those that NES, not Mohnkern. policy proceeds compelled. they when are so insureds punitive I think it clear that the or is case under this Examining the current purpose of 627.428 is well deterrent rubric, compensatory it is clear Despite having on these facts. de- served As the applicable. of 627.428 is purpose that Mohnkern was entitled to termined acknowledges, “Mohnkern was majority proceeds, PIC chose involve NES rights to enforce her compelled to sue process instead of and the Receiver Maj. policy.” Op. at the Blacknell paying required Mohnkern the result, of settlement at the time 162. As contract, under the insurance with the re- $56,147 attorney’s had that Mohnkern was forced to initiate sult recover the litigation costs to fees and litigation. Accordingly, this case is she had 627.428, and, scope within the because $49,995. initially paid obligated is prevailed, punitive purpose, As to the deterrent Lexow, fees. See 602 So.2d helpful. is review of PIC’s actions a brief (“If scope within the January informed Mohnkern loses, and the insurer [§ ] 627.428 ready her the it was always obligated insurer Policy and that such proceeds, Blacknell fees.”). place upon would take resolution *8 majority The cases relied on do collateral matter.1 The of an unrelated They undermine this conclusion. not Lynn Day from NES following day, § merely prove that 627.428 does not PIC; Day at was emailed Holman Scott attorney’s every to award fees insured- file “wrap up,” trying [Mohnkern’s] to ultimately prevails in liti- who pay if had decided to wanted to know PIC willing that I am gation, point to con- policy proceeds. Within ten Mohnkern the cede. But that is not determinative of minutes, replied Holman that based on the attorney’s to whether Mohnkern is entitled had authorized assignment, collateral based on the facts Holman went on fees under 627.428 payment to Mohnkern. My of this case. read- you believe this decision is and circumstances say, to “[i]f premium payments made question that had been 1. The matter was the collateral death. NES or Mohn- after Blacknell’s whether PIC should refund to law, withheld, ing including of the Florida case all of denied or attorney’s majority opinion, cases cited were appropriate. F.Supp.2d not at indicates 627.428 does award 1294-1301. fees to victorious insured-ben- Clearly, helped by PIC is not this line of eficiary only where the insurer did not cases, majority and the is mistaken to benefits,

wrongfully deny and that conclude otherwise. There is no applied exception Florida courts have that, at the time PIC NES the Black- awarding only to 627.428’s of fees in two Policy nell proceeds, PIC was under a distinct factual settings, neither one of obligation contractual to applies to this case. proceeds. those Mohnkern submitted all First, the Florida courts have found that necessary paperwork to claim her wrongfully deny the insurer did not bene benefits, and PIC informed Mohnkern that where, fits at the time the insurer was it had approved receipt her of the benefits. benefits, alleged to have denied it was Furthermore, below, I explain as will obligation pay. example, no to For was obligation not relieved of this by the in Liberty Bailey, National Ins. Co. v. Life district court’s order instructing it to 944 So.2d 1028 (Fla.Dist.Ct.App.2006), NES. majority Maj. Op. which the cites at at majority similarly errs its reli 161-62 n. the insured submitted a claim ance on Government Employees Ins. Co. treating form and physician’s statement (GEICO) (Fla. v. Battaglia, 503 So.2d 358 that erroneously reflected her illness as Dist.Ct.App.1987), which squarely falls predating policy, her in which caused the no-duty-to-pay within the line of cases. deny surer her claim. When the in insured, Battaglia, who had uninsured brought attempting sured suit before coverage through GEICO, motorist explain correct or the errors in her sub injured in tortfeasor, a collision with the missions, she was not entitled to liability coverage who had through Florida 627.428, “upon because re (“FFB”). Farm Bureau The insured filed insuredj’s claim, ceipt of initial [the [the an action the tortfeasor and FFB. obligation pay.” had no insurer] year litigation, After one the tortfeasor 1030; So.2d at see also Time Ins. v.Co. disappeared cooperate, and refused to Arnold, 319 So.2d 638 (Fla.Dist.Ct.App. FFB causing deny coverage on the ba 1975) (same general pattern fact Bailey prejudiced by sis that its defense been had majority Maj. Op. cited at at denial, the tortfeasor’s actions. After this 2). Additionally, 161-62 n. in Tristar sought the insured unin arbitration on its Lodging, Speciality Inc. v. Arch Ins. policy. opposition sured motorist With no (M.D.Fla.2006), F.Supp.2d cited GEICO, from granted. arbitration was Maj. majority Op. at 161-62 n. date, hearing But final GEICO suit, at the time the insured filed the insur tortfeasor, located the who was then de er already paid had a number of claims posed by all par counsel for interested process adjusting and was in the *9 GEICO, FFB, and the insured. remaining claims. The court declined to ties— accident, coverage FFB reinstated for attorney’s award fees because there was and, result, stay as a moved for a remaining no indication of when the GEICO claims therefore, declaratory were due and initiated a payable, and and it arbitration impossible say was action a seeking that the insurer had determination timely. failed to pay With no breach of a it was not liable for the uninsured duty pay, wrongfully coverage availability benefits were not motorist due to the granted stay stay The court a to that effect and a of arbitration on coverage.

FFB’s Clearly, Bailey that basis. as with but dismissed both sides’ of arbitration Tristar, Battaglia deny- the rationale of summary judgment in the de- for motions attorney’s ing fees was the insurer did Thereafter, claratory judgment action. deny the in- wrongfully benefits to again disappeared, the tortfeasor once because, during question, sured the time deny coverage FFB based again causing duty the insurer was under no cooperation. lack of on the tortfeasor’s Thus, insured. for the same reasons Bai- FFB, coverage After this denial of ley inapplicable and Tristar are to the summary judg- filed a insured motion case, Battaglia. current so is declaratory judgment ment in the action seeking setting a determination that he enti- The second factual in which the was wrongful Florida have coverage courts found no de tled to the uninsured motorist coverage nial of is where the insurer does from GEICO. The court entered sum- deny liability simply “not but effect, bec[o]me[s] mary judgment to that and also involved over which of two granted insured claimants entitled to the benefits of the [i]s § 627.428. policy,” conclusively and a court decides appeals The Florida court of re- district Lexow, (citing the issue. 602 So.2d at 531 determination, versed the fees Cave, Insurance v.Co. Manufacturers Life finding wrongfully that GEICO never de- (Fla.1974); Equitable So.2d 103 Life coverage. nied The court reasoned: Nichols, Society Assurance v. 84 So.2d 500 affording At the times FFB was cover- (Fla.1956)); see also Manufacturers Life age, obligated was not to do so. GEICO (Fla. Cave, Insurance Co. v. 295 So.2d 103 stayed From time the trial court [the 1974); Shippers Crotts Bankers & Ins. the arbitration after FFB’s reinstate- Co., 476 (Fla.Dist.Ct.App.1985). So.2d 1357 coverage], again ment until FFB de- cases, these Among majority relies on disap- nied coverage tortfeasor [after Maj. Op. Nichols Crotts. at 5-6 n. 2. time], peared the final there no was Nichols, insured, death, to his coverage obligation part of GEI- changed of his life insur eminently CO. It was reasonable surviving spouse, ance from his GEICO to seek resolution of that fact Walsh, to Nichols. After the insured’s declaratory judgment and to obtain a death, change Walsh contested ben stay during of arbitration that period. eficiary arguing that the decedent had coverage Given the last denial FFB unduly been influenced Nichols. The deny ... coverage GEICO did not attempted insurer to reach a settlement reject It im- arbitration. did resist the failed, parties, between the but when this it, position attorney both Walsh Nichols filed suits law every it had right to do. policy proceeds. to recover the The insur words, 503 So.2d at 360-361. In other company filed cross-bill of inter- only because the insured had uninsured pleader, which was dismissed because the GEICO, coverage motorist through GEI- consolidating court determined that obligated CO was on that policy brought by cases Walsh and Nichols would only if coverage. FFB denied After FFB Supreme suffice. The Court of Florida coverage, reinstated GEICO was not obli- upheld lower court’s determination gated benefits, coverage insured that Nichols entitled to was it wrongful therefore not denial of but reversed its determination that Nich *10 coverage declaratory judgment to seek a ols was entitled to (and identical) nearly version of a counterclaim against unpaid insured for The Court 627.428.2 reasoned: hospital bills. The trial granted court summary judgment to the insured on his company The insurance admitted liabili- claim for the policy proceeds and to the ty under the policy pay but declined to hospital on its claim for unpaid either bills. claimant until be- The settled, tween court them had been denied the either insured attorney’s fees. negotiation judicial The facts The Florida district court appeals af- fiat. supported would have a bill for inter- fees, firmed the denial of reasoning that pleader, filed, had one timely been and because the insurer was faced with com- thus there “wrongful” was no refusal to peting claims to the policy proceeds that proceeds of the policy to the involved “factual legal issues which the appellee Nichols. company insurance could reasonably added). expected be (emphasis own, So.2d at 502 to resolve on its insurance company wrongful was not Likewise, in Crotts v. Ship Bankers & withholding payment and forcing the con- pers Ins. injured insured was in a flict into court.” 476 So.2d at 1359. motorcycle accident transported to a where, hospital, arrival, upon his signed he To determine whether Nichols and its assignment to the hospital of “the in progeny apply case, to the instant the na- ” surance hospital benefits due me.... He ture of the district court’s involvement in second, signed a identical form when he this case must be examined. The record was later, readmitted. Two months reflects that right Mohnkern’s pro- insured, counsel, through requested that ceeds of the insurance had entirely his entire no-fault insurance benefits be vested her virtue of an absolute paid him benefits, as disability rather assignment before any there was receiver- benefits, than medical and the insurer estate, ship and neither PIC nor Mohn- biweekly commenced disability payments a party to the action in which the to him. Approximately eight later, months district court issued its order instructing requested the insured that he result, PIC to NES. As a the district entire remaining poli balance of the court was without authority adjudicate cy because he was then perma considered entitlement policy proceeds, or to nently disabled. lump Before this sum order PIC to make such payment to NES. made, payment was the hospital informed Indeed, an examination of receivership law insurer of its claim to based point. confirms this It is “well settled” assignments signed by the insured. that a court “cannot by its order take The eventually insured sued the insurer to property from the actual possession receive of a proceeds, at which time the stranger insurer filed a to the action in third-party which a receiver complaint against hospital interpleader appointed who claims title to it or right declaratory relief. hospital then filed to possession.” its 2 Clark on Receivers 625.08, Fla.Stat.1953, 2. Section pro- insurer, F.S.A. creed such and in favor of the vided that: beneficiary named in said or contract Upon insurance, the rendition aof or decree a reasonable sum as fees or by any of the against any courts of this state compensation attorneys for his or solicitors insurer favor of the prosecuting the recovery suit in which the policy or contract of insurance executed had. insurer, such there adjudged shall be or de- *11 168 ed.1959).3 (3d stands in stark contrast to Nichols and Such order violates Crotts, where fees were denied Capital Group, Liberte LLC process,

due acknowledged duty (6th Cir.2005) because the insurer its 421 F.3d 377 v. Capwill, policy payment under the but withheld process rights due (holding Mohnkern’s competing parties from the until their void, violated), on and is therefore Clark conclusively by claims were resolved the Indeed, a receiver to Receivers Crotts, court. Nichols and the insurer a property of from non- possession obtain court, allowing forced the claims into all proceeds from as the party, such opportunity present parties the to their PIC, the receiver: proceeds enabling claim to the the by suit in the ordi- proceed either must all court’s on the matter to bind it, try right his to or the nary way to Here, parties. PIC did not force the dis- in main petitioner the complainant court, pute simply paid into but instead third a person should make such suit NES and washed of matter. its hands the to apply to the main suit and have party Because neither Mohnkern nor was a receivership proper- extended to the the case, party receivership to the neither had ty in hands so that an order for the his opportunity present any arguments the to property may be made delivery court, to the district and the court’s order binding, may and which which will be party. on the issue did not bind either if by process contempt enforced majority rely The also incorrect to obeyed. language by the from decisions intermedi- (3d ed.1959). on Receivers Clark appellate ate Florida courts that find the Quite clearly, single the motion filed the punitive purpose inapplicable 627.428 resulting court order Receiver and the when “the claim is one that the [insurer] wholly to divest Mohn- were insufficient reasonably expect can to be a resolved in property pro- kern of her interest court, Maj. Op. rather than itself.” PIC, compel nonparty, ceeds and to a to 360). (citing Battaglia, 503 So.2d at to NES. Supreme reject- Court of Florida has court was without Because district argument, stating: ed this issue, authority pay- PIC’s to resolve reject argument We ment to to NES—and denial fees should not be assessed [the to conclu- Mohnkern —occurred because this involved a insurer] party type reasonably sive resolution of the issue which of claim which could be proceeds. to expected was entitled to the This be resolved court. Daily example, property Tel. to the hands.” For in Wheaton their 124 Fed. at Cir.1903), (2d corpo- might mistakenly 124 Fed. 61 an insolvent 62. Some read this as incon- receivership Marquette was indebted sistent with Horn v. Pere R. et ration involved in Co. al., (Circ.Ct.E.D.Mich.1907), party not a 151 Fed. 626 to a bank. Where the bank was to action, receivership receivership it was error to order where a court's order to hand company the receiver the bank to the amount over all assets of railroad bank, deposits pending apply party corporate with the found to to a bank that was not a However, right key the bank's at the time of the determination of set off order. deposits against corporate such debt. As Horn was that the defendant bank “came described, in[to action] the Wheaton court the bank was answered to the merits.” court, Thus, day nothing their and the receiv- 151 Fed. at 629. there is in- “entitled to proceed by ordinary way er suit in the consistent about Horn and the rule that a must try right property, plaintiff nonparty by summary pro- his or the cannot be forced action, bring parties ceeding property hand the receiver- must them as over apply ship receivership to have the extended estate. *12 insurerj’s good faith in bringing [The HUGHES, Denise If Plaintiff

this is irrelevant. suit -Appellant/Cross scope within the of section 627.428 and loses, Appellee, always the insurer the insurer is obligated attorney’s fees. Lexow, PIC, therefore, 602 So.2d at 531. REGION AREA VII AGENCY ON escape liability attorney’s cannot al., et Defendants-Ap AGING by arguing that it was reasonable to allow pellees/Cross-Appellants. a court to determine whether the Receivership was affected estate. 07-1570, Nos. 07-1647. event, rely And PIC could not United Appeals, States Court of because, that ground here as I detailed Sixth Circuit. above, PIC did not—nor it attempt did to—have the issue properly resolved Argued: July court. Decided Sept. and Filed: Accordingly, there is no basis for denial fees under § 627.428. She meets all statutory

requirements recovery of those fees. compensatory purpose of the statute

is well served in this case because Mohn- $56,147

kern spend was forced to in attor-

ney’s fees and costs to recover for which she initially $49,995.

had The punitive

purpose of the statute is well served be- PIC, despite

cause having determined that proceeds, was entitled to the

voluntarily virtually and with no advance Mohnkern,

notice to breached its obli-

gation policy by under the remitting the

proceeds to a third-party legal that had no

right Furthermore, to them. PIC should permitted escape liability

based on the involvement of the district

court, because the matter prop- was never

erly before the Finally, court. because

there is no other basis under Florida law

by which PIC can I escape liability, would

reverse the district court and award Mohn- 627.428.