Trisura Specialty Ins. Co. v. Blue Horse Trucking Corp.
| Decision Date | 22 August 2022 |
| Docket Number | 20-cv-24134-WILLIAMS/McALILEY |
| Parties | TRISURA SPECIALTY INSURANCE COMPANY, Plaintiff, v. BLUE HORSE TRUCKING CORPORATION, NELSON BETANCOURT and JUAN GABRIEL REYES SANCHEZ, Defendants. |
| Court | U.S. District Court — Southern District of Florida |
REPORT AND RECOMMENDATION ON JOINT MOTION TO DETERMINE ENTITLEMENT TO ATTORNEY'S FEES
Defendants Nelson Betancourt (“Betancourt”) and Blue Horse Tucking Corp. (“Blue Horse”), filed a Joint Motion to Determine Entitlement to Attorney's Fees (the “Motion”), (ECF No. 84). Plaintiff, Trisura Specialty Insurance Company (“Trisura”), filed a response memorandum, (ECF No. 85), and Betancourt and Blue Horse each filed a reply memorandum. (ECF Nos. 86, 88). For the reasons that follow, I recommend that the Court grant the Motion.
After nearly two years of litigation before this Court, and in a related action filed in State Court, the State Court action has concluded, and two issues remain for this Court to decide: are Defendants entitled to recover their reasonable attorneys' fees from Plaintiff (and if they are, what amount) and should this Court enter a final judgment for Defendants or simply dismiss the action as moot. See (ECF No. 106 at 2). Defendants' Motion raises the first question, and the Honorable Kathleen M. Williams has referred that Motion to me. (ECF No. 105). In the course of reviewing the merits of that Motion, I encountered information that may assist the Court in deciding whether to enter a final judgment for Defendants, and I include that here.
On July 22, 2020, a tractor-trailer driven by Defendant Betancourt had a singlevehicle accident, that caused Defendant Juan Gabriel Reyes Sanchez (“Sanchez”), who was a passenger in the truck, to be seriously injured. Defendant Blue Horse owned the tractortrailer and authorized Betancourt and Sanchez to operate it together. Sanchez sued Blue Horse and Betancourt in State Court. Blue Horse's automobile liability insurer, Trisura, provided a defense to the defendants in the State Court action, under a reservation of rights. Trisura also filed this declaratory judgment action against all Defendants, asking this Court to declare that the policy Trisura issued to Blue Horse did not obligate it to defend Betancourt and Blue Horse, or indemnify them for any claims in the State Court action. See (ECF No. 1).
The State Court lawsuit was dismissed in March 2022 when the parties settled the dispute. Trisura paid the full amount of the $1,000,000 liability insurance policy in settlement of that action. (ECF No. 107 at 2 ¶ 3).
Sanchez's State Court Complaint had four claims: three against Blue Horse, for (i) vicarious liability, (ii) failure to inspect and maintain the vehicle and (iii) failure to train and evaluate Betancourt, and one against Betancourt for negligence. (ECF No. 1-2). The vicarious liability count alleged that Blue Horse is responsible for Sanchez's injuries because Blue Horse owned the vehicle and gave consent to Betancourt to operate it. (Id.). Sanchez did not claim that Blue Horse is liable because Betancourt was Blue Horse's employee, and he did not assert any factual allegations to describe the employment relationship between him, Betancourt, and Blue Horse. (Id.).
The commercial auto liability policy that Trisura issued to Blue Horse has numerous exclusions. (ECF No. 1-1). As relevant here, the policy excludes coverage for an employee's bodily injury claims against an employer and fellow employee. (Id.). This action turned on the applicability of that exclusion.
On November 4, 2021, Sanchez amended his State Court Complaint to allege that Sanchez and Betancourt were independent contractors, not employees of Blue Horse. (ECF No. 53-1 at 5-9).
Shortly before the amendment, the parties in this case filed motions for summary judgment. (ECF Nos. 53, 55, 59). The day after amendment, with the consent of Betancourt and Blue Horse, Sanchez asked this Court to deny the motions for summary judgment without prejudice and to order the parties to file revised summary judgment motions. (ECF No. 62). Sanchez claimed that the newly alleged facts in the Amended Complaint could bear upon Trisura's duty to defend, and he cited caselaw for the proposition that the most recent (amended) pleading in the underlying action determines the duty to defend. (Id. at 2-3) (citing Addison Ins. Co. v. 4000 Island Blvd. Condo Ass'n, 263 F.Supp.3d 1266, 1269 (S.D. Fla. 2016)).
Trisura opposed that motion. (ECF No. 64). It argued that the parties need not amend their motions for summary judgment because Trisura “does not believe the [new] allegations materially change the analysis of Trisura's duty to defend (or lack thereof).” (Id. at 3 ¶ 10). Trisura also told the Court that “the allegations contained in the amended complaint are not materially different from those contained in the previous complaint for purposes of the Court's analysis regarding the duty to defend”. (Id. at 4 ¶ 11). Trisura also noted that the Amended Complaint was filed with this Court and thus was available for the Court's review. (Id. at 4 ¶ 10).
The Court did not immediately rule on the motion. In its briefing on summary judgment, Trisura maintained that under the original and amended Complaints, it has no duty to defend Betancourt and Blue Horse, because at the time of the incident, Sanchez and Betancourt were employees of Blue Horse. (ECF Nos. 65, 78).
On January 7, 2022, while the summary judgment motions were pending, the parties to the State Court lawsuit settled that action, (ECF No. 83), and Trisura paid Sanchez the limits of the insurance policy. (ECF No. 107 at 2 ¶ 3). The parties agree that the settlement moots this action, (id.), and they filed a joint stipulation of dismissal that asks the Court to retain jurisdiction to determine Defendants Betancourt's and Blue Horse's requests for attorneys' fees, and whether this Court should enter a final judgment. (Id. at 2 ¶ 4).
The Motion now before the Court asks it to find that the settlement of the underlying action is a confession of judgment that entitles Betancourt and Blue Horse to an award of attorneys' fees from Trisura. (ECF No. 84 at 3). Trisura opposes the Motion on several grounds. (ECF No. 85). As set forth below, I conclude that Betancourt and Blue Horse are entitled to an award of reasonable attorneys' fees.
Betancourt and Blue Horse's Motion relies on § 627.428(1), Florida Statutes. It states, in pertinent part:
Upon the rendition of a judgment or decree by any of the courts of this state against an insurer and in favor of any named or omnibus insured or the named beneficiary under a policy or contract executed by the insurer, the trial court ... shall adjudge or decree against the insurer and in favor of the insured or beneficiary a reasonable sum as fees or compensation for the insured's or beneficiary's attorney prosecuting the suit in which the recovery is had.
Fla. Stat. § 627.428(1).
“The purpose of this statute is ‘to discourage the contesting of valid claims against insurance companies and to reimburse successful insureds for their attorney's fees when they are compelled to defend or sue to enforce their insurance contracts.'” State Farm Mut. Auto. Ins. Co. v. Coker, 505 Fed.Appx. 824, 826 (11th Cir. 2013) (quoting Ins. Co. of N. Am. v. Lexow, 602 So.2d 528, 531 (Fla. 1992)).
Florida law permits an award of attorneys' fees under this statute when “the insured and insurer settle an action.” Canal Ins. Co. v. SP Transport, Inc., 272 Fed.Appx. 825, 827 (11th Cir. 2008) (citing Wollard v. Lloyd's & Cos. of Lloyd's, 439 So.2d 217, 218 (Fla. 1983)). In Wollard, the Florida Supreme Court explained that such that the insured is entitled to attorneys' fees under § 627.428. Wollard, 439 So.2d at 218. The rule also applies when “an insurer settles a claim against the insured and that settlement moots a related action filed by the insurer for declaratory relief.” Canal, 272 Fed.Appx. at 826.
Trisura argues that the Court cannot award Defendants their fees because “there is no final judgment”. (ECF No. 85 at 7). I reject this argument and conclude that the Court need not enter a judgment against Plaintiff, for Betancourt and Blue Horse to recover their attorneys' fees.[1]
Trisura opposes the Motion on three grounds. First, Trisura claims that Betancourt and Blue Horse cannot obtain their attorneys' fees because the settlement in the underlying State Court lawsuit rendered this action moot, and this divests this Court of jurisdiction. (ECF No. 85 at 3-7). Trisura is correct that this action is now moot (and Betancourt and Blue Horse agree). However, this does not mean the Court lacks jurisdiction to enter an award of attorneys' fees. To the contrary, courts must still address an award of fees under § 627.428. See Canal Ins. Co., 272 Fed.Appx. at 826 ( ); see also Atain Specialty Ins. Co. v. Henry's Carpet & Interiors, Inc., 564 F.Supp.3d 1265, 1271 (S.D. Fla. 2021) (...
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