In Coverage Case, Florida Court Expansively Construes Costs To Include Attorney's Fees

In GEICO General Ins. Co. v. Hollingsworth, 2015 WL 376406 (Fla. 5th DCA January 30, 2015), the Fifth District Court of Appeal considered whether GEICO's automobile insurance policy provided additional coverage for attorney's fees awarded against the insured pursuant to section 768.79, Florida Statutes. The plaintiff had served a proposal for settlement to the insured, which was not accepted. Because plaintiff's judgment exceeded his proposal by more than 25%, the trial court awarded attorney's fees to the plaintiff. The trial court later held that the attorney's fee judgment was covered by GEICO's policy. In addition to the policy limit for damages, the policy covered "all court costs charged to an insured in a covered lawsuit."

The Fifth District agreed that the attorney's fee judgment was covered. Based on other DCA precedent, involving sanctions awarded against insureds, the Fifth District held that plaintiff's attorney's fees constituted "costs" for purposes of GEICO's policy.

The Fifth District found that the term "costs" was ambiguous, and it faulted GEICO for not providing a definition. But, under Florida law, a term is not ambiguous simply because there is no definition. Swire Pacific Holdings, Inc., v. Zurich Ins. Co., 845 So. 2d 161, 166 (Fla. 2003). Florida law holds that, when there is no definition, "common everyday usage determines its meaning." Siegle v. Progressive Consumers Insurance Company, 819 So. 2d 732, 735 (Fla. 2002).

In Hollingsworth, the court did not discuss the "common everyday" meaning of "costs," other than to note the DCA cases involving sanction awards. In the "everyday" judicial system, "costs" and "attorney's fees" are treated as separate and distinct matters. For example, Civil Rule 5.525 addresses the procedure to tax "costs, attorneys' fees, or both." The taxable cost statute, section 57.071, does not include attorney's fees. The Statewide Uniform Guidelines For Taxation Of Costs In Civil Actions do not include attorney's fees, but do provide that travel time and travel expenses of attorneys should not be taxed as costs.

The language of the proposal for settlement statute demonstrates that costs and fees are considered separate. Section 768.79(1) expressly allows the successful plaintiff to recover "reasonable costs and attorney's fees" Although the statute defines costs to include investigative expenses, in subsection (6)(b), it always treats fees as separate from and in addition to the costs; and...