Gov't Emps. Ins. Co. v. Macedo

• Decision Date: 13 July 2017
• Docket Number: No. SC16–935,SC16–935
• Parties: GOVERNMENT EMPLOYEES INSURANCE COMPANY, Petitioner, v. Alysia M. MACEDO, et al., Respondent.
• Court: Florida Supreme Court

228 So.3d 1111

GOVERNMENT EMPLOYEES INSURANCE COMPANY, Petitioner,
v.
Alysia M. MACEDO, et al., Respondent.

No. SC16–935

Supreme Court of Florida.

[July 13, 2017]

B. Richard Young and Joshua J. Hartley of Young, Bill, Boles, Palmer & Duke, P.A., Pensacola, Florida, for Petitioner

David A. Simpson and Jonathan D. Simpson of Simpson Law Firm, Fort Walton Beach, Florida, for Respondent Alysia M. Macedo

Dale Swope, Darrell Hinson, and Stephanie Miles of Swope, Rodante P.A., Tampa, Florida; and Elizabeth Munro of Florida Vanguard Attorneys, LLC, Tampa, Florida, for Respondent Zackery R. Lombardo

Jack R. Reiter, Jordan S. Kosches, and Veronica A. Meza of GrayRobinson, P.A., Miami, Florida, for Amicus Curiae Property Casualty Insurers Association of America

POLSTON, J.

Government Employees Insurance Company (GEICO) seeks review of the decision of the First District Court of Appeal in Government Employees Insurance Co. v. Macedo, 190 So.3d 1155 (Fla. 1st DCA 2016).¹ As explained below, we approve the First District's decision and hold that the ambiguous Additional Payments section of the insurance policy must be construed in favor of coverage for the costs and attorneys' fees awarded against the insured pursuant to section 768.79, Florida Statutes, the offer of judgment statute.

I. BACKGROUND

Zackery R. Lombardo's automobile insurance with GEICO provided bodily injury liability coverage for up to $100,000 per person and $300,000 per incident. The policy also gave GEICO the sole authority to settle any claim or suit.

Alysia M. Macedo sued Lombardo for damages resulting from bodily injuries she sustained in an April 2012 automobile collision with Lombardo. On May 1, 2014, Macedo served Lombardo with a proposal for settlement for $50,000, which was not accepted. The case proceeded to trial, and the jury returned a verdict in favor of Macedo in the amount of $243,954.55.² "Macedo then joined GEICO to the judgment, see § 627.4136(4), Fla. Stat., and sought taxable fees and costs pursuant to section 768.79, which the trial court awarded against GEICO jointly and severally with its insured." Macedo, 190 So.3d at 1156.

On appeal, the First District affirmed the trial court's judgment based upon its prior decision in New Hampshire Indemnity Co. v. Gray, 177 So.3d 56 (Fla. 1st DCA 2015), which had held "that the insurer's policy provision stating that it would cover ‘other reasonable expenses incurred at our

228 So.3d 1113

request’ included costs associated with choosing to litigate a case instead of settling it." Macedo, 190 So.3d at 1156 (explaining its decision in Gray and quoting the policy at issue in Gray ). The First District explained that "GEICO's policy with Mr. Lombardo gave it the sole right to litigate and settle claims, and contractually obligated it to pay for ‘all investigative and legal costs incurred by us' and ‘all reasonable costs incurred by an insured at our request.’ " Id. (quoting the Additional Payments section of the policy). The First District reasoned that "[a]ny such expression, or request [to litigate rather than settle], necessarily encompasses incurring litigation costs, which may mean not only the insurer's litigation costs, but also those incurred by the opposing party should that party prevail." Id. at 1157 (quoting Gray, 177 So.3d at 63 ). Finally, the First District certified that its decision in Macedo conflicts with the Second District's decision in Steele v. Kinsey, 801 So.2d 297 (Fla. 2d DCA 2001). Id.

II. ANALYSIS

Insurance policy construction is a question of law subject to de novo review. Wash. Nat'l Ins. Corp. v. Ruderman, 117 So.3d 943, 948 (Fla. 2013). Courts construe insurance contracts according to their plain language. Fayad v. Clarendon Nat'l Ins. Co., 899 So.2d 1082, 1086 (Fla. 2005). However, "any ambiguity which remains after reading each policy as a whole and endeavoring to give every provision its full meaning and operative effect must be liberally construed in favor of coverage and strictly against the insurer." Ruderman, 117 So.3d at 949–50. A provision is ambiguous if it is "susceptible to two reasonable interpretations, one providing coverage and the other excluding coverage." Fayad, 899 So.2d at 1086. The ambiguity must be genuine, and the lack of a definition for an operative term "does not, by itself, create an ambiguity." Botee v. S. Fid. Ins. Co., 162 So.3d 183, 186 (Fla. 5th DCA 2015). "When a term in an insurance policy is undefined, it should be given its plain and ordinary meaning, and courts may look to legal and non-legal dictionary definitions to determine such a meaning." Id.

Here, the relevant portion of the Additional Payments section of Lombardo's policy with GEICO states:

...