Insurance Company Ordered to Pay Legal Fees and Costs After Denying Benefits to Insured Florida Driver Following Collision

In Explorer Insurance Co. v. Cajusma, a Florida man obtained liability coverage from an insurance company. Later, the man and his passengers were involved in a traffic wreck with another vehicle that was carrying two individuals. Following the accident, the man and his passengers each sought chiropractic care from a local clinic. Each of the man’s passengers also sought personal injury protection (“PIP”) benefits.

Next, the driver of the other vehicle and his own passenger filed a negligence claim against the man. After the man’s insurer denied each individual’s claim, they filed separate lawsuits against the man in a Florida court. In addition, the chiropractic clinic filed a lawsuit against the man and one of his passengers, seeking payment for the services it performed following the collision.

Although the terms of the liability insurance policy required the man’s insurer to defend and indemnify him in any legal actions that resulted from a covered accident, the insurance company sought a declaratory judgment against each person involved in the traffic wreck. According to the insurer, the company was not obligated to pay for anything related to the crash because material misrepresentations were made in connection with the incident. In response, the man sued his insurer for breach of contract due to the company’s failure to provide him with a defense and its refusal to pay his property damage claims. The man and his insurer ultimately settled the case for about $10,000, including legal expenses.

Despite this, both the man and his passenger filed a motion for summary judgment in the insurer’s declaratory judgment action. They also requested legal expenses and costs under Section 627.428 of the Florida Statutes. In general, a motion for summary judgment asks a court to find there are no material facts in dispute, and one party to a lawsuit is entitled to judgment in his or her favor as a matter of law. The insurer then filed a motion to voluntarily dismiss its own case. Although the court granted the insurance company’s motion, it also granted the man’s and his passenger’s request for legal expenses and costs pursuant to the statute.

On appeal, Florida’s Fifth District Court of Appeal stated the purpose of Section 627.428 was to provide attorney’s fees and costs to an insured who was forced to sue in order to collect reimbursement for valid claims that were contested by the individual’s insurer. According to the court, the insured man was entitled to recover attorney’s fees because his insurance company simultaneously provided him with a benefit and asserted it was not required to do so, prior to voluntarily dismissing its request for a declaratory judgment. In contrast, the appellate court ruled that the man’s passenger was not entitled to recover costs or legal expenses because the insurer did not defend him or pay damages on his behalf.

Finally, Florida’s Fifth District Court of Appeal affirmed the lower court’s order with regard to the man, reversed its decision awarding attorney’s fees and costs to his passenger, and remanded the case.

If you were involved in a South Florida injury accident, you should discuss your rights with a caring personal injury attorney. To speak with a dedicated Miami car accident lawyer, call the experienced advocates at Friedman, Rodman & Frank, P.A. at (305) 448-8585 or contact us through our website.

Additional Resources:

Explorer Insurance Co. v. Cajusma, Fla: Dist. Court of Appeals, 5th Dist. 2015

More Blog Posts:

Florida Appeals Court Examines Apportionment Due to Preexisting Injuries in Workers’ Compensation Case, November 13, 2015, South Florida Personal Injury Lawyers Blog

Appeals Court Orders New Trial in Florida Car Accident Case, November 10, 2015, South Florida Personal Injury Lawyers Blog


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