Payment of disputed insurance claim, “without more,” after insured files suit is sufficient to support fee award under section 627.428.  [Added 3/2/14]

    Insured sued his insurer, Geico, after Geico denied a claim for a loss to his auto.  Geico apparently had suspected that Insured was complicit in the theft of his own auto.  About a year after suit was filed, Geico paid the vehicle lienholder named in Insured’s policy.  Insured then filed a motion for attorney’s fees under Fla.Stat. sec. 627.428 (2008), arguing that Geico’s payment to the lienholder “was the functional equivalent of a confession of judgment.”  The trial court ultimately denied the motion for fees.  Insured appealed.

    The Third DCA reversed.  The court cited Wollard v. Lloyd’s & Cos. of Lloyd’s, 439 So.2d 217 (Fla. 1983), for the proposition that the payment of the disputed claim after suit is filed but before judgment is rendered is the functional equivalent of a confession of judgment.  “As a result, when an insurer voluntarily pays the disputed loss after suit is filed, ‘[section 627.428] must be construed to authorize the award of an attorney’s fee to an insured . . . even though technically no judgment for the loss claimed is thereafter entered favorable to the insured.’  Wollard, 439 So.2d at 218 (quoting Cincinnati Ins. Co. v. Palmer, 297 So.2d 96, 99 (Fla. 4th DCA 1974)).”

    The court rejected Geico’s argument that the payment was not a confession of judgment, but rather “represented the “purchase price” it paid to the lienholder in order to preserve the [auto] for evidence in its counterclaims.”  The court emphasized that “the sole fact that the claim was paid, without more, constitutes a settlement or judgment within the meaning of section 627.428.”  Do v. GEICO General Ins. Co., __ So.3d __ (Fla. 3d DCA, No. 3D12-1655, 2/26/2014).


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