Opinion
Case No. 6:00-cv-489-Orl-28KRS
June 20, 2001
REPORT AND RECOMMENDATION
TO THE UNITED STATES DISTRICT COURT
This cause came on for consideration without oral argument on the following motion filed herein: MOTION: DEFENDANT PTI'S MOTION FOR AWARD OF COSTS AND ATTORNEY'S FEES (Doc. No. 81) FILED: February 7, 2001 THEREON RECOMMENDED DENIED
it is that the motion be . I. BACKGROUND.The plaintiff General Accident Insurance Company of America ("General"), a commercial general liability insurer, is the insurer of Plastic Tubing Industries, Inc. ("PTI"). In August 1999, a vehicle owned by PTI and driven by a PTI employee, Keith Brown, was involved in a multi-vehicle accident. Kashmirah Shah died as a result of injuries suffered in the accident.
The estate and family of Kashmirah Shah (the "Shahs") offered to settle their claims against PTI and Brown if General accepted their settlement offer within thirty days after it was tendered. General allowed the thirty-day settlement offer to expire. The Shahs filed suit against PTI and Brown in Florida state court. PTI and the Shahs have accused General of acting in bad faith in failing to settle the case.
General brought this interpleader action in an effort to have this Court adjudicate the bad faith claim before the state action was resolved. Florida law provides that a bad faith action is not ripe for adjudication until the insured is determined to be liable or until all the involved parties stipulate that judgment in excess of the limits of the insurance policy will be rendered. ( See Doc. No. 80). Based on this law, among other things, this Court dismissed General's interpleader complaint for lack of jurisdiction.
PTI filed this motion for attorneys' fees and costs incurred in defending this interpleader action, to which General responded. (Doc. Nos. 81, 82). The Honorable John Antoon II, presiding District Judge, referred this motion to me for issuance of a report and recommendation. For the reasons set forth herein, I respectfully recommend that the motion be DENIED.
II. ANALYSIS.
PTI argues that it is entitled to attorneys' fees and costs under Florida Statutes § 627.428 and § 624.155. I will discuss each of these legal theories.
General filed this action pursuant to 28 U.S.C. § 1335. the federal interpleader statute. The interpleader statute does not specifically provide for an award of attorneys' fees. PTI does not seek fees pursuant to this statute. Therefore, I will not address General's argument that attorneys' fees and costs should not be awarded under the interpleader statute.
A. Attorneys' Fees and Costs Under Florida Statute § 627.428 .
Florida Statute § 627.428(1) provides in pertinent part as follows:
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 . . . under a policy or contract executed by the insurer, the trial court . . . shall adjudge or decree against the insurer and in favor the insured . . . a reasonable sum as fees or compensation for the insured's . . . attorney prosecuting the suit in which the recovery is had.
PTI argues that because it is General's insured, and it prevailed on its motion to dismiss General's complaint, it is entitled to attorneys' fees and costs pursuant to section 627.428(1). In support of its argument, PTI cites cases in which fees have been awarded under section 627.428(1) to insureds who prevailed in declaratory judgment actions brought by their insurers. (Doc. No. 81 at 7) ( citing Aries Ins. Co. v. Espino, 736 So.2d 792 (Fla. 3rd Dist.Ct.App. 1999); Travelers Ins. Co. v. Horton, 366 So.2d 1204 (Fla. 3rd Dist.Ct.App. 1979); Johnson v. Atlantic Nat'l Ins. Co., 163 So.2d 340 (Fla. 3rd Dist.Ct.App. 1964); Nat'l Fire Ins. Co. v. Bd. of Public Instruction, 239 F.2d 370 (5th Cir. 1957)). General asserts that section 627.428(1) is inapplicable because PTI did not obtain a judgment on the merits.
I find General's reading of the law to be correct. In O.A.G. Corp. v. Britamco Underwriters, Inc., 707 So.2d 785 (Fla. 3rd Dist.Ct.App. 1998), Florida's Third District Court of Appeal considered whether section 627.428(1) required an award of attorneys' fees in a declaratory judgment action filed by the insurer against its insureds. The insurer took a voluntary dismissal of its complaint before a decision on the merits was entered. The insureds argued that they were prevailing parties and entitled to attorneys' fees under section 627.428(1). The court found that attorneys' fees should not be awarded because "[t]he insurer's dismissal was without prejudice and thus did not constitute an adjudication on the merits. . . . There is therefore no prevailing party for purposes of an award of attorneys fees under Section 627.428." Id. at 787.
As an alternative basis for its conclusion that the insureds were not entitled to attorneys' fees, the court stated: "Under Section 627.428, an insured must obtain some form of recovery due to the voluntary dismissal to be considered a prevailing party for attorney's fees. . . . In this case, the insureds recovered nothing from [the insurer's] voluntary dismissal" Id. In a footnote, the court elaborated further. it stated: "Section 627.428(1) requires the insureds to obtain a judgment greater than any offer of settlement previously tendered by the insurer in order to be a prevailing party. . . . `Absent that, the insured or beneficiary is entitled to no fee award.'" Id. at 787 n. 2 (quoting Danis Indus. Corp. v. Ground Improvement Techniques, Inc., 645 So.2d 420, 421 (Fla. 1994), and citing Baker Protective Serv. v. FP Inc., 659 So.2d 1120 (Fla. 3rd Dist.Ct.App. 1995)).
PTI's request for attorneys' fees and costs fails under both rationales used in the O.A.G. Corporation decision. A dismissal for lack of jurisdiction is not a decision on the merits. See, e.g., DeShiro v. Branch, 183 F.R.D. 281, 286 (M.D. Fla. 1998); Daugherty v. Westminster Schools, Inc., 174 F.R.D. 118, 121-22 (N.D Ga. 1997). Therefore, PTI is not a "prevailing party" in this litigation. Because PTI is not a prevailing party, it does not qualify for an award of attorneys' fees and costs under section 627.428.
Further, PTI recovered nothing from General as a result of the dismissal of the complaint. Because PTI did not obtain a judgment in an amount greater than any offer of settlement that may have been made by General, it also is not entitled to attorneys' fees and costs under section 627.428.
B. Attorneys' Fees and Costs Under Florida Statute §§ 624.155(3) .
Florida Statute § 654.155(3) states in pertinent part as follows:
Upon adverse adjudication at trial or upon appeal, the insurer shall be liable for damages together with court costs and reasonable attorney's fees incurred by the plaintiff.
Even though PTI was not the plaintiff in this litigation, it contends that this Court may award it attorneys' fees and costs under a novel "reverse bad faith" theory. PTI concedes that there are no cases that have discussed or adopted its reasoning.
I find that PTI's argument is without merit. Section 654.155(3) on its face applies only after a finding that the insurer is liable for violation of section 654.155(1). General was not found liable for violating any provision of section 654.155(1) in this case, nor could it have been because this Court lacked subject mailer jurisdiction over the bad faith failure to settle claim. Therefore, PTI is not entitled to recover attorneys' fees and costs pursuant to section 654.155(3).
III. RECOMMENDATION.
For the reasons stated above, I respectfully recommend that Defendant's Motion for Award of Costs and Attorney's Fees (Doc. No. 81) be DENIED.
Failure to file written objections to the proposed findings and recommendations contained in this report within ten (10) days from the date of its filing shall bar an aggrieved party from attacking the factual findings on appeal.
Respectfully recommended in Orlando, Florida this 20th day of June, 2001.