by Caryn L. Bellus and Jeff Wank, Esqs.
Caryn L. Bellus, Esq. Courtesy, Kubicki Draper
Jeff Wank, Esq. Courtesy, Kelley Kronenberg
The Fourth District Court of Appeal recently addressed the issue of whether a release attached to a Proposal for Settlement (PFS) rendered an insurer’s motion for attorney’s fees unenforceable. In this case, the insured sued the insurer due to water loss seeking $58,601.35 in damages. The insured was served with a proposal for settlement and attached release, which the insured rejected. Final summary judgment was entered for the insurer based on the insured’s failure to comply with the policy’s requirement that the insured attend an examination under oath. Following entry of judgment, the insurer sought to recover costs and attorney’s fees. The trial court denied recovery basing its denial on the insured’s argument that including the term “assigns” in describing who would be bound by the release, incorporated any claims or assignments of benefits (“AOB”) to third parties and made the PFS ambiguous and invalid.
In American Integrity Ins. Co. of Florida v. Branford, 4D19-3950 (Fla. 4th DCA Feb. 24, 2021), the court reversed and remanded the trial court’s decision denying the insurer’s attorney’s fees. The court recognized that when read as a whole, the insurer’s PFS and accompanying release did not contain an ambiguity that could “reasonably affect the [plaintiff] offeree’s decision” on whether to accept the proposal. Rather, in reasonably interpreting the PFS the insurer was offering Plaintiff $1,000.00 to settle her case, and the release would prevent her from seeking further damages for the same water loss. Therefore, contrary to the insured’s argument, an exception for an AOB does not need to be carved out.
On appeal, the Fourth DCA determined that using the word “assigns” to define the insured in the release does not create an ambiguity due to the insured’s preexisting assignment of benefits to a third party. Rather, when read together as a whole, the PFS and release resolved only the claims the plaintiff asserted or could have asserted in the lawsuit. The court also found that “nit-picking” the use of the word “assigns” in the PFS and release could not have reasonably affected the insured plaintiff’s decision to accept the proposal. What’s more, “after making the assignment of benefits to the third party, nothing remained for the plaintiff to release or accept on the third party’s behalf.”
Caryn L. Bellus is an Equity Partner and Board Certified Appellate Lawyer with Kubicki Draper. Caryn maintains a statewide appellate practice which includes all aspects of the firm’s legal work, from auto accidents and bad faith to nursing home, toxic torts and worker’s compensation. She specializes in the areas of civil appeals, complex litigation support and insurance coverage disputes. In addition to being a frequent lecturer on insurance industry and legal topics, Caryn is a Past Chair of The Appellate Practice Section of The Florida Bar and a Past Chair of FDLA’s Amicus Curiae Committee.
Jeff Wank is a Partner with Kelley Kronenberg in its Fort Lauderdale office with a practice focused on defending insurance companies in first-party property claims, including insurance coverage disputes and bad faith litigation. As a past-president of the Young Lawyers Section of the Broward County Bar Association, past-chair of Legal Aid of Broward County and Coast to Coast of South Florida Legal Aid, and current Secretary for Florida’s Children First, Jeff’s community involvement has been a central part of his practice. Jeff also serves on the Board of Directors of FAIR (Federal Association for Insurance Reform), where he works with the legal and insurance community statewide to legislate and effectuate positive change for policyholders and the insurance industry.
LMA Newsletter of 3-15-21
