sunEthics

Although insurer admitted coverage prior to being served with complaint, its delay in paying claim results in award of fees to insured.  [Added 1/26/12]

    Insured was in an auto accident in which he allegedly was hurt and his vehicle damaged.  Insurer initially contended that Insured was not covered due to non-payment of premium.  Insured hired counsel and filed suit.  The complaint referenced only bodily injuries.  Prior to being served, Insurer informed Insured that his policy that been reinstated.  Insured then amended his complaint to allege Insurer's refusal to pay the property damage claim.  Insurer paid the claim approximately 9 months after the accident.

    Insured sought an award of attorney's fees and costs under Fla.Stat. sec. 627.428(1) (2009).  Insurer defended by asserting that Insured was not "forced" to file suit to obtain coverage.  The trial court awarded fees, but only for work performed up until the date on which Insurer admitted coverage.  The court "refused to award [Insured] fees through the date on which payment was made for his property damage claim, ostensibly finding that [Insured] had not been forced to file suit to obtain coverage for his property damage claim."  Insured appealed.

    The Fifth DCA reversed and remanded for an award of additional fees.  Although Insurer apparently thought the accident was staged, there was no evidence in the record supporting its suspicion.  "A delay of nine months from the date of the accident until the tender of payment is not reasonable under the facts and circumstances presented.  [Insurer]'s belated recognition of coverage does not effectuate repair of the vehicle and is little solace to the policy holder who is without transportation.  [Insured] was forced to secure counsel to both respond to the initial denial of coverage and to subsequently litigate over the delay in payment.  The trial court erred in not awarding attorney's fees for the reasonable and necessary hours spent in pursuing those claims.  His counsel may also recover reasonable fees incurred in establishing entitlement to fees.  See State Farm Fire & Cas. Co. v. Palma, 629 So.2d 830, 832-33 (Fla. 1993)."  (Footnote omitted.)  Barreau v. Peachtree Casualty Ins. Co., ___ So.3d ___ (Fla. 5th DCA, No. 5D10-3637, 1/20/2012).

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