You are here: Home // Lawyers, Sponsored // GEICO v. Macedo – Auto Insurer Must Pay Plaintiff Attorney Fees

GEICO v. Macedo – Auto Insurer Must Pay Plaintiff Attorney Fees

A recent decision by Florida’s 1st District Court of Appeal affirmed a trial court order requiring an auto insurer liable for a $200,000 car accident judgment to pay reasonable attorney’s fees and costs, in accordance with F.S. 768.79(6)(b)carcrash9

Normally, all attorney fees for auto accident lawsuits are doled out on a contingency fee basis by the plaintiff, which means they are based on a percentage of the final damage award and are only paid if the case is won. However, what F.S. 768.79(6)(b) says is that if a plaintiff serves a settlement offer to the defense which is rejected and then the plaintiff goes on to secure a judgment that is at least 25 percent higher than that settlement offer, plaintiff is to be awarded reasonable costs, including investigative expenses and attorney’s fees incurred from the date the offer was served.

That means a portion of your legal bill could be paid by the defendant if they refuse to take you up on a reasonable settlement offer. It’s intended as a means to encourage settlement to save the time and expense of trial. 

In the recent case at issue, GEICO v. Macedo, plaintiff suffered injuries after a Florida car accident with a driver who was insured by defendant company. Before the case went to trial, plaintiff extended an offer to the defense for $50,000. At the time, GEICO was not a party to that case, which is common, as people can’t sue insurance companies right off the bat. They must first establish liability of the insured, and then pursue the insurer for payment.

However, even though GEICO wasn’t a party to the case, it was providing the insurer with a defense, pursuant to the terms of the auto insurance policy, as is also common. So when plaintiff extended her proposed settlement agreement, it was GEICO, by and through the legal counsel it was providing to defendant, who turned down that offer.

The case went to trial and the jury sided in favor of plaintiff. What’s more, jurors decided to award plaintiff four times as much as her proposed settlement agreement.

From there, plaintiff joined GEICO as a defendant to the action and sought collection of costs and fees, pursuant to F.S. 768.79(6)(b). The trial court granted her request.

GEICO appealed. The argument was that because it wasn’t a defendant in the initial action, it could not be liable for the decision of legal counsel not to agree to the settlement.

The appeals court disagreed. As it determined in the earlier case of New Hampshire Indemnity Company v. Gray, in which the court found the insurer’s notation in the policy that it would cover “other reasonable expenses incurred at our request” to include expenses associated with deciding to take a case to trial rather than settle it. Just like in the Gray case, the insurer in Macedo extended a policy that gave it the sole right to litigate and settle claims. It was also contractually required to pay for all legal costs it incurred in doing so. There was no definition of legal costs, nor was there any mention of exclusions.

Therefore, insurer will be required to pay those costs. However, the court did certify conflict with a sister court on the same issue.

If you have been a victim of a traffic accident, call Chalik & Chalik at (954) 476-1000 or 1 (800) 873-9040.

Additional Resources:

GEICO v. Macedo, May 6, 2016, Florida’s First District Court of Appeal

More Blog Entries:

Car Accident Lawsuit Names Snapchat as Defendant, May 3, 2016, Miami Car Accident Attorney Blog

comment closed

Copyright © 1995 - 2010 Kazor.com World Community News. All rights reserved.