The Florida Supreme Court recently held that an insurer is liable for a plaintiff’s attorneys’ fees and costs awarded pursuant to Florida’s offer of judgment statute due to an ambiguity in the “Additional Payments” provision of the insured’s policy. GEICO v. Macedo, 2017 WL 2981812 (Fla. Jul. 13, 2017).

The plaintiff sued the insured for damages resulting from an automobile collision and served the insured with a proposal for settlement. The proposal for settlement was not accepted, and the case went to trial. The jury returned a verdict in favor of the plaintiff in an amount that triggered the plaintiff’s entitlement to reasonable attorneys’ fees and costs incurred after the date the proposal for settlement was served. After the plaintiff joined the insurer, the trial court held the insured and the insurer jointly and severally liable for the plaintiff’s reasonable attorneys’ fees and costs. The insurer argued that the policy did not cover the plaintiff’s attorneys’ fees and costs because the “Additional Payments” provision of the policy covered only “costs” which do not include attorneys’ fees and because such costs are recoverable only when they are incurred at the insurer’s “request.” A Florida appellate court affirmed, and the insurer appealed.

The Florida Supreme Court affirmed, finding the policy ambiguous because it referenced “legal expenses” in addition to “costs.” In addition, the Florida Supreme Court held that the phrase regarding an insurer’s “request” is also ambiguous given that the insurer controlled the litigation strategy and that the insured was required to cooperate with the insurer under other terms of the policy. Thus, because of the ambiguity regarding whether the “Additional Payments” provision of the policy provided coverage for the plaintiff’s attorneys’ fees and costs, the Supreme Court construed the policy in favor of coverage for attorneys’ fees and costs awarded against the insured and the insurer.