INSURED’S CLAIM FOR DECLARATORY RELIEF IN COVERAGE DISPUTE

Posted on June 23, 2020June 23, 2020 by Edward Garber

In an insurance coverage dispute, it is common for the insured or the insurer to file a lawsuit that includes a claim for declaratory relief — asking the court to render a ruling as to the coverage issue. This claim is proper if an insurer denied coverage or a part of coverage relating to an exclusion or endorsement in the policy, or even if there is the argument that the loss or occurrence did not take place within the policy period. An insurer or insured pursuing an action for declaratory relief must allege:

[1] there is a bona fide dispute between the parties, [2] that the moving party has a justiciable question as to the existence or non-existence of some right, status, immunity, power or privilege, or as to some fact upon which the existence of such right, status, immunity, power or privilege does or may de[p]end, [3] that plaintiff is in doubt as to the right, status, immunity, power or privilege, and [4] that there is a bona fide, actual, present need for the declaration.

Security First Ins. Co. v. Phillips, 45 Fla. L. Weekly D1426b (Fla. 5^th DCA 2020) (citation omitted).

An action for declaratory relief is appropriate in an insurance coverage dispute even if it requires a determination of certain facts under which the obligations under the insurance policy at-issue depends. Id.

If you are involved in an insurance coverage dispute with your insurer, consult with counsel. Please contact me if I can be of assistance. Do NOT try to navigate these waters by yourself. There will be complicated factual and legal issues at stake that will be specifically tied to a coverage determination. You want to make sure the facts are best positioned under the law to maximize an argument for insurance coverage.

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

DO YOU HAVE A FLORIDA’S DECEPTIVE AND UNFAIR TRADE PRACTICES ACT CLAIM

Posted on January 18, 2020January 18, 2020 by Edward Garber

In previous articles, I discussed Florida’s Deceptive and Unfair Trade Practices Act referred to as “FDUTPA”…but, it has been awhile. (For more information on FDUTPA, check here and here.) Now is as good of a time as any to discuss it again because FDUTPA provides a private cause of action and, perhaps, there may be a consideration as to whether such claim can be (or is) properly asserted in the context of your circumstances.

FDUTPA is a statutory scheme designed, “To protect the consuming public and legitimate business enterprises from those who engage in unfair methods of competition, or unconscionable, deceptive or unfair acts or practices in the conduct of any trade or commerce.” Fla. Stat. s. 501.201(2). In doing so, FDUTPA authorizes three avenues of legal recourse against an offending party: “(1) declaratory relief; (2) injunctive relief; and (3) [monetary] damages.” Webber v. Bactes Imaging Solutions, Inc., 45 Fla. L. Weekly D125a (Fla. 2d DCA 2020);Fla. Stat. s. 501.211.

“An unfair practice is ‘one that “offends established public policy” and one that is ‘immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers.’” Webber, supra, (citation omitted).

“A deceptive practice is one that is ‘likely to mislead’ consumers.” Webber, supra, n.6 (citation omitted).

By way of example, even though this is not a construction dispute, in Webber, the plaintiff pursued a FDUTPA claim seeking declaratory relief, injunctive relief, and damages — the three avenues of relief the statute provides. The plaintiff claimed that the defendant overcharged for copies of medical records when the request for records was made by a patient’s lawyer versus the patient directly. The defendant charged for copies $1 per page after the first 25 pages when the request for medical records was made by the patient’s lawyer. The plaintiff claimed this violated law that set the maximum rate at $.25 per page for patients who request such records. The defendant countered that it was able to charge higher because the request was made by a lawyer, an “other entity,” instead of the patient directly. The trial court found no FDUTPA violation occurred. The Second District Court of Appeal reversed finding differently:

We conclude that [defendant’s] conduct in charging the “other entities” rate when a lawyer submits a request for copies of medical records on behalf of his or her client, the patient, is an unfair act or practice…. The only way the patient — who is being represented by legal counsel — can obtain his or her records is to either pay the “other entities” rate merely because the medical records request was submitted by his or her lawyer or for the patient to submit a separate medical records request directly to the practitioner. But [defendant] has already been instructed by the trial court that its policy of charging the “other entities” [higher] rate in such circumstances violates rule 64B8-10.003. And requiring a patient to jump over an additional hurdle to obtain his or her own medical records — where that patient has already signed a release indicating that the patient gives express permission for the records to be released to the lawyer — is a practice that we construe to be offensive to public policy. We likewise conclude that it is “oppressive, unscrupulous or substantially injurious to consumers” where a party frustrates patient access to medical records by charging higher than permissible rates for copies despite already being instructed that it was not permitted to do so.

Webber, supra.

Clearly, the actual facts here are not construction-related. But do the facts, or the finding that the facts constituted an “unfair trade practice” under FDUTPA, give you a basis that a FDUTPA claim applies to the facts in your case, or conversely, should not apply? Although the Second District did not need to decide whether the facts also constituted a deceptive practice, it footnoted that the facts likely did rise up to a deceptive practice. Webber, supra, n.6.

INSURER’S DUTY TO INDEMNIFY NOT RIPE UNTIL UNDERLYING LAWSUIT AGAINST INSURED RESOLVED

Posted on November 3, 2019November 3, 2019 by Edward Garber

A liability insurer has two duties: 1) the duty to defend its insured; and 2) the duty to indemnify its insured.

With respect to the second duty – the duty to indemnify – this duty is typically “not ripe for adjudication unless and until the insured or putative insured has been held liable in the underlying action.” Hartford Fire Ins Co. v. Beazer Homes, LLC, 2019 WL 5596237, *2 (M.D.Fla. 2019) (internal quotation omitted).

For instance, Beazer Homes involved an insurance coverage dispute stemming from construction defects. An owner sued its general contractor for construction defects relating to stucco problems. The general contractor paid for the repairs. The general contractor then sued its stucco subcontractor to recover the costs it incurred. The subcontractor tendered the defense of the lawsuit to its commercial general liability insurer which is defending its insured-subcontractor under the commonly issued reservation of rights.

During the pendency of the general contractor’s lawsuit against its subcontractor, the subcontractor’s commercial general liability insured filed an action for declaratory relief in federal court seeking a declaration as to whether it owes its subcontractor a duty to indemnify. The issue was whether this action for declaratory relief was ripe since there was no adjudication against the insured-subcontractor in the general contractor’s lawsuit against the subcontractor. The Middle District Court of Florida held that it was not ripe: “The Eleventh Circuit agreed that an insurer’s duty to indemnify is not ripe until the underlying lawsuit is resolved.” Beazer Homes, 2019 WL at *2 (internal quotation omitted)

INTERPRETING THE LANGUAGE IN AN INSURANCE POLICY

Posted on July 4, 2019April 23, 2020 by Edward Garber

Lawsuits by an insured against an insurer that include a claim for declaratory relief are common when an insurer denies coverage. The insured will argue that there are ambiguities in the policy. One argument may pertain to the use or definition of a term (or language) in the policy that is not defined in the policy. Another argument may pertain to an exclusion or limitation in the policy that ultimately renders insurance coverage illusory.

[I]n construing insurance policies, courts should read each policy as a whole, endeavoring to give every provision its full meaning and operative effect. When the language of an insurance policy is clear and unambiguous, a court must interpret it according to its plain meaning, giving effect to the policy as it was written. A policy term is not ambiguous simply because it is complex or requires analysis.

Arguelles v. Citizens Property Insurance Corp., 44 Fla. L. Weekly D1726a (Fla. 3d DCA 2019) (internal quotations and citations omitted).

When a term in an insurance policy is not defined in the policy (and there is an argument that there is an ambiguity), a court may look to dictionary definitions. Id. (looking to dictionary definition of the term “reside” which was not a defined term in the policy). This is because a dictionary definition contains a common acceptance of the meaning of the word. Id.

If a limitation or exclusion completely swallows up an insuring provision, then there is an argument that coverage is illusory. Id. citing Warwick Corp. v. Turetsky, 227 So.3d 621, 625 (Fla. 4^thDCA 2017). “When limitations or exclusions [in the policy] completely contradict the insuring provisions, insurance coverage becomes illusory.” Purrelli v. State Farm Fire and Cas. Co., 698 So.2d 618 (Fla. 2d DCA 1997).

It is important to work with counsel when dealing with an insurance coverage dispute. Counsel will help you maximize insurance coverage based on the facts and the law.