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Where Actions of Insurer Were Not Based Solely on Its Own Interest No Bad Faith * Policy Exclusion for Expected or Intended Injury Extends to Pool Technician Aberrant Sexual Actions * Proposal for Settlement by One Defendant Which Released All Defendants Was Not Ambiguous

Tuesday, August 12th, 2014 •

August 1, 2014

CASE LAW UPDATE

Dear Ladies and Gentlemen:

The United States District Courts in Florida and the Florida District Courts of Appeal have recently issued several opinions concerning coverage and bad faith that may be of interest to you.

 EXECUTIVE SUMMARY

In Joshua Moore v. Geico General Insurance Company,[1] the United States District Court for the Middle District of Florida granted summary judgment in favor of an insurance carrier finding that based on the facts of the case, no reasonable jury could conclude that the insurance carrier was acting solely on the basis of its own interests and had acted in bad faith.

In Chestnut Associates, Inc. v. Assurance Company of America, the United States District Court for the Middle District of Florida granted an insurance carrier’s motion for summary judgment finding that it had no duty to defend or indemnify its insured in an underlying lawsuit filed against its insured because: (1) the insured’s employee who committed the acts alleged in the underlying lawsuit was not an insured under the insured’s policy because he was not within the scope of his employment at the time of the incident; (2) if the employee’s acts were imputed to the insured, the acts of the employee were excluded from coverage under the policy provision excluding coverage for intended or expected injuries; and (3) the damages alleged by the Plaintiffs in the underlying lawsuit were excluded pursuant to the pollution exclusion of the insured’s policy. 

In Mathis v. Cook, the Fifth District Court of Appeal reversed a trial court’s order denying a Defendant’s motion for attorney’s fees and finding that the Defendant’s proposals for settlement served on two Plaintiffs were ambiguous.  The court found that the proposals were sufficiently clear to allow the Plaintiffs to make an informed decision without additional clarification and were in compliance with Florida statute section 768.79(1) and Florida Rule of Civil Procedure 1.442 and therefore were enforceable.

I.       Joshua Moore v. Geico General Insurance Company, 2014 WL 2938430 (M.D. Fla. June 30, 2014)

FACTS AND PROCEDURAL HISTORY

This matter involved a lawsuit filed by Plaintiff, Joshua Moore, for bad faith against its insurance carrier, Geico General Insurance Company (“Geico”).  On May 11, 2010, Joshua Moore was involved in a motor vehicle accident with two vehicles, a vehicle operated by Mr. Richard Walters and a second vehicle operated by Ms. Amy Krupp.  As a result of the collision, Ms. Krupp’s vehicle was run off the road and hit a ditch.  Ms. Krupp and her son were severely injured.  At the time of the accident, Joshua Moore was insured under his parents’ automobile insurance policy issued by Geico which provided bodily injury policy limits of $10,000 per person and $20,000 per occurrence and property damage limits of $10,000.

On May 12, 2010, Mr. Joshua Moore’s mother, Mrs. Lisa Moore reported the accident to Geico and Geico Claims Examiner, Ms. Kecia Sirmans was assigned to handle the claim.  On May 17, 2010, Geico sent letters to Mr. Joshua Moore and Mrs. Moore advising them that Geico’s preliminary investigation revealed that the total claims for the accident may exceed their coverage and that Geico would make an effort to settle the claims within their policy limits.  Further, these letters indicated that if the claims could not be settled within the policy limits, they could be held personally liable for any amount in excess of their limits. On May 19, 2010, Geico authorized the tender of the full $20,000 bodily injury limits to Ms. Krupp and her minor son.  Ms. Sirmans contacted Attorney Lance Holden, attorney for Ms. Krupp and her son on May 19th, 20th, and 21st and left messages requesting that he contact her.  On May 24, 2010, Ms. Sirmans obtained information which indicated that Ms. Krupp had died from her injuries on May 20, 2014.  On that same day, Ms. Sirmans instructed a Geico field representative to go to Attorney Holden’s office and tender the $20,000 bodily injury checks.

On May 25, 2010, the Geico field representative went to Attorney Holden’s office to tender the checks, but Attorney Holden was not in the office and no one would accept the checks.  Later that day, Ms. Sirmans sent letters to Attorney Holden advising him that Geico’s field representative attempted to tender the $20,000 bodily injury limit checks, but no one would accept them.  Thus, Ms. Sirmans had enclosed the checks along with releases in the letters.  The settlement check for Ms. Krupp’s minor child was made payable to the minor child’s guardian and the hospital where he received treatment after the accident, based on Geico’s assumption that the hospital may have been a lien hospital.

On May 28, 2010, Attorney Holden sent correspondence to Ms. Sirmans responding to her May 25, 2010 correspondence and rejecting Geico’s offer to settle Ms. Krupp’s and her son’s claims against Mr. Joshua Moore and his parents.  Additionally, Attorney Holden advised that he was returning the settlement checks because neither of the hospitals, where Ms. Krupp and her son received treatment after the accident, were lien hospitals.  Attorney Holden also informed Ms. Sirmans that “paragraph #4 [was] unacceptable and any attempt to include such paragraph on any release in response to our good faith offer will act as a rejection of the offer.”  Joshua Moore v. Geico General Insurance Company, 2014 WL 2938430 at 4.  However, the letter was not clear whether Attorney Holden’s reference to “paragraph #4” referred to the fourth paragraph of the letter or of the release.[2]  Further, Attorney Holden advised that his clients had authorized him to offer to Geico’s insureds, in exchange for payment of $10,000 in property damage and $20,000 in bodily injury limits a release of all claims.  Attorney Holden stated that his clients would not accept a release which released anyone other than the insureds and the inclusion of anyone other than the insureds would result in a rejection of his offer.[3]  Attorney Holden requested an affidavit from each insured or their insurance agent with respect to no other insurance coverage for the claim.  Attorney Holden requested the conditions and the tender of the property damage and bodily injury liability limits within twenty-one (21) days of the offer which was June 18, 2010.

On June 4, 2010, a Geico supervisor instructed Ms. Sirmans to send Attorney Holden’s demand letter and affidavits of no other insurance to Mr. Joshua Moore and his parents.  There was no evidence that the demand letter was sent to them.  However, Ms. Sirmans spoke to Mrs. Moore on June 7th, 9th and 15th with respect to the affidavits.[4]  On June 14, 2010, Geico faxed a release to Attorney Holden and requested he advise Geico if he had any requested revisions to the release.  In contradiction to the demand letter, the release included a provision which not only released Mr. Joshua Moore and his parents but “all officers, directors, agents, or employees of the forgoing, their heirs, executors, administrators, agents, or assigns.”  Moore, 2014 WL 2938430 at 5.  Also in contradiction to the demand deadline of June 18, 2010, the release included a provision regarding payment that indicated that payment should not be due until twenty (20) days after the fully executed release had been delivered to Geico.

On June 15, 2010, Geico sent a letter to Attorney Holden enclosing a $30,000 check with the proposed releases.  The letter stated that if there were any questions regarding the releases or any requested revisions, to contact Geico immediately.  That same day, Ms. Sirmans faxed to Attorney Holden the affidavits of no other insurance coverage executed by Mr. Joshua Moore and his parents.  However, Geico failed to tailor the affidavits according to the underlying facts.  Thus, both affidavits included hand-written edits made by Mr. Joshua Moore and his parents.  Mr. and Mrs. Moore’s affidavits included handwritten language which stated that they were not the drivers of the vehicle involved in the accident.  The affidavits of Mr. Joshua Moore’s parents did not specifically state that they owned the vehicle involved in the subject accident and each affidavit inaccurately stated that each of them individually owned the vehicle and no one else had an ownership interest.  Thus, the affidavits failed to conform to Attorney Holden’s condition requesting affidavits from Mr. Joshua Moore and his parents indicating that there was no other insurance coverage for the claim.

On June 17 and June 18, 2010, Ms. Sirmans contacted Attorney Holden’s office to confirm receipt of the settlement documents.  She was advised that she needed to speak with an individual who was out of the office until June 21, 2010.  On June 18, 2010, Attorney Holden faxed and mailed a letter to Geico rejecting Geico’s settlement attempt.  In this letter, Attorney Holden alleged that Geico had relayed a counteroffer rather than accept his clients’ offer and his clients had declined to accept the counteroffer.  With respect to the release, Attorney Holden stated that in contradiction to his demand, the release required his clients to release Mr. Joshua Moore and his parents and Geico (as the agent of the insureds) and other individuals.  Attorney Holden alleged that this was done intentionally to protect Geico as Mr. Joshua Moore and his parents’ agent from any claims that may be brought against Geico.  Specifically, Attorney Holden advised that Geico’s “attempt to protect Geico by sneaking Geico in as a released party to [the] good faith offer was a clever but ineffective way for Geico to put its own interests over its insureds.” Moore, 2014 WL 2938430 at 9.  Attorney Holden further asserted that the provision in the release which indicated that the check should not be due until twenty (20) days after the fully executed release had been delivered to Geico was unacceptable.  However, Attorney Holden did acknowledge that the settlement proceeds were sent in advance.  With respect to the affidavits of no other insurance coverage, Attorney Holden advised that they did not clarify whether the driver and the owners of the vehicle had any other insurance coverage other than the Geico policy as they “made no sense.”  In this same correspondence, Attorney Holden informed Geico that his clients had authorized him to make a new offer to Geico only for the property damage claim in the amount of $10,000.  He requested a check be tendered within 14 days and requested a release which released only the property damage claims.[5]

On June 24, 2010, Ms. Sirmans sent a letter to Mr. Joshua Moore advising him that their settlement attempt was unsuccessful.  On June 25, 2010, Ms. Sirmans sent letters to Mr. Joshua Moore and his parents including a copy of Holden’s June 18, 2010 demand to settle the property damage claim.  The letters also advised them that if Geico could not settle the property damage claim within their policy limits, they could be personally liable for the amount in excess of their policy limit.

On June 30, 2010, GEICO sent a letter to Attorney Holden accepting the demand for settlement of the property damage claim for $10,000 and a release. The enclosed release only released Mr. Joshua Moore and his parents and did not include language stating that the settlement payment would not be due until 20 days after Geico received the executed release.  Additionally, the letter responded to Attorney Holden’s allegations with respect to Geico’s failure to comply with the demand.[6]  Geico advised that it had complied with the conditions of his demand and it was not its intention to release anyone other than the insureds.  Geico stated that it was willing to pay the bodily injury limits and had acted in the Moores’ best interest in tendering all available bodily injury limits and property damage limits.  Lastly, Geico extended to his clients the bodily injury liability limits for settlement of the claim.

T.R. Unice, Esq. was retained to represent Mr. Joshua Moore and his parents with respect to a potential lawsuit filed.  On July 9, 2010, Attorney Holden sent correspondence to Geico acknowledging settlement of the property damage claim.  He indicated that he would still be asserting bodily injury claims on behalf of Ms. Krupp and her son.  On July 15, 2010, Ms. Sirmans sent Mr. Joshua Moore and his parents letters updating them on the status of the bodily injury claims and stating that if Geico was unable to resolve the claims, a lawsuit could be filed against them.[7]  On July 15, 2010, Geico responded to Attorney Holden’s July 9, 2010 letter, informing him that Geico had retained Attorney Unice as counsel for Mr. Joshua Moore and his parents.  Geico once again offered the full $20,000 bodily injury limit to settle the bodily injury claims.  Attorney Holden failed to accept Geico’s offer to settle, and a lawsuit was filed against Mr. Joshua Moore and his parents on August 9, 2010.

Sometime after the lawsuit was filed, Mr. Joshua Moore and his parents retained personal counsel, Kim Wells, Esq.  On October 9, 2012, while the underlying lawsuit was pending, Attorney Wells sent a letter to Attorney Unice and Attorney Holden proposing that the underlying car accident litigation be stayed and that the parties enter into a Cunningham agreement, which would allow a bad faith claim against Geico to be tried prior to the underlying car accident litigation being tried.  Further, he proposed that if Geico won the bad faith litigation, the bodily injury claims of Ms. Krupp and her son would be completely satisfied by the payment of the $20,000 bodily injury limit.  However, if Geico lost the bad faith litigation, the underlying car accident case would then go forward and Geico would be liable for any judgment. Attorney Holden agreed to the proposal, but Geico did not.

On January 18, 2013, Attorney Holden made an offer to settle the bodily injury claims against Mr. Joshua Moore’s parents for the $20,000 bodily injury limit. Moore’s parents accepted the offer, and the claims remained against Mr. Joshua Moore only.  On January 24, 2013, Attorney Wells again made the same proposal with respect to the Cunningham agreement.  Attorney Wells pointed out that this was an opportunity for Geico to fully protect Mr. Joshua Moore from a potential verdict against him for significant money damages. Geico declined the proposal. The underlying car accident case went to trial, and on May 3, 2013, a judgment in excess of $4 million was entered against Mr. Joshua Moore.  Subsequently, on June 14, 2013, Mr. Joshua Moore filed the instant bad faith lawsuit against Geico.  Both Geico and Mr. Joshua Moore filed cross-motions for summary judgment.

Mr. Joshua Moore contended that Geico acted in bad faith by: (1) failing to advise him of Attorney Holden’s May 28, 2010 offer to settle and the conditions for settlement; (2) by submitting a release that released more than Moore and his parents in response to the May 28th offer to settle; (3) by submitting a release that stated that Geico’s settlement payment was not due until 20 days after the release was executed in response to the May 28th offer to settle; (4) by submitting affidavits of insurance that were not tailored to the facts of the case in response to the May 28th offer to settle; and (5) failing to enter into a Cunningham agreement that would have protected him.  Mr. Joshua Moore moved the court for partial summary judgment requesting the court to find that Geico was obligated under Florida law, as part of its duty to communicate with its insured, to timely provide Mr. Joshua Moore and his parents a copy of the May 28, 2010 settlement demand letter.  Geico moved for summary judgment alleging that it did not act in bad faith.

UNITED STATES DISTRICT COURT DECISION

The United States District Court denied Mr. Joshua Moore’s partial motion for summary judgment and granted Geico’s motion for summary judgment finding that no reasonable jury could conclude that Geico was acting solely on the basis of its own interests and had acted in bad faith considering the totality of the circumstances standard set forth in Berges v. Infinity Insurance Company, 896 So.2d 665 (Fla. 2005).

With respect to Mr. Joshua Moore’s motion for summary judgment which requested the court to find that Geico was obligated under Florida law to timely provide Mr. Joshua Moore and his parents a copy of the May 28, 2010 settlement demand letter, the court cited to Berges, 896 So.2d at 680, and explained that the failure to inform an insured of a settlement opportunity was evidence of bad faith and the failure to do so should be considered in the determination of finding whether the insurer acted in bad faith.  However, the court noted that Berges did not stand for the proposition that a settlement offer letter must be sent to the insured, what was relevant is what was communicated to the insured.  Moore, 2014 WL 2938430 at 17.  Accordingly, the court found that failure to forward the settlement offer letter to the insureds did not provide a basis for summary judgment.

As to Geico’s motion for summary judgment, the court began its analysis by citing to Berges and concluding that Geico’s failure to enter into a Cunningham agreement did not constitute bad faith.  The Court indicated that Mr. Joshua Moore had provided no authority to the court which supported the proposition that failure to enter into a Cunningham agreement can be considered when evaluating the totality of the circumstances for making a bad faith determination.

The Court noted that Geico’s conduct in failing to provide releases that conformed to Attorney Holden’s requirements, drafting affidavits of no insurance that were poorly drafted, and the fact that there was no evidence that Attorney Holden’s May 28, 2010 settlement demand were sent to the insureds could be described as “sloppy, bordering negligent.” Moore, 2014 WL 2938430 at 18.  Citing to Novoa v. Geico Indemnity Co., 542 Fed. Appx. 794, 796 (11^th Cir. 2013), the court explained that Geico’s conduct could not be described as acting in bad faith.[8]  It is bad faith conduct, not negligent conduct, upon which liability is premised.

The court noted that at all times Geico was attempting to settle the claims against Mr. Joshua Moore and his parents which was evidenced by Geico obtaining authorization to tender the full $20,000 bodily injury policy limits by May 19, 2010, contacting Attorney Holden for three days after receiving the authorization, and attempting to tender the check with proposed releases to Attorney Holden before a demand was ever made.  After the May 28, 2010 demand was made and before the twenty-one (21) day deadline, Geico had given Attorney Holden proposed releases, which Attorney Holden failed to revise or request revisions.  Further, Geico had sent correspondence prior to the demand deadline requesting Attorney Holden to inform Geico whether he had any requested revisions to the release.  Instead, Attorney Holden rejected Geico’s proposed acceptance instead of communicating with Geico prior to the deadline to address the alleged deficiencies.  Additionally, Attorney Holden did not communicate to Geico that he found the affidavits of no insurance coverage to be unacceptable although Geico had faxed the affidavits prior to the demand deadline.

With respect to Attorney Holden’s objection to the language in the releases that payment would not be provided until twenty (20) days after Geico received the executed releases, the court found that this language was of no consequence and its inclusion by Geico was not evidence of bad faith.  As to Attorney Holden’s objection to the language in the releases that released other individuals in addition to the insureds, the court concluded that the rejection of the release on that basis was based on “[Attorney Holden’s] hyper-technical conformance requirement that placed form over substance” since there were no claims that existed against Geico that Attorney Holden’s clients would be releasing.  Moreover, Mr. Joshua Moore provided no evidence that inclusion of that language was done because there were claims that could be asserted against Geico that Geico was trying to release.  Moore, 2014 WL 2938430 at 21.

The Court went on to indicate that:

[T]he rejection of Geico’s settlement attempt appears to be based more on the creation of a bad faith claim against Geico than on truly attempting to settle the claimants’ claims. The releases and affidavits of no insurance, while sloppy, could have been corrected prior to the demand deadline had Holden simply picked up the phone.  Failure of Holden to do so, when Geico was so clearly attempting to settle these claims and to do so within Holden’s time-line, shows that there was not a realistic possibility of settlement and Geico’s alleged errors were not the real reason that the claims against Moore did not settle.

Moore, 2014 WL 2938430 at 22.

Moreover, Mr. Joshua Moore argued that Geico’s failure to inform him of the specific conditions within Attorney Holden’s demand letter was evidence of bad faith.  The court acknowledged that failure to inform an insured of settlement opportunity can be evidence of bad faith and was a factor to consider in determining whether an insurer acted in bad faith.  However, the court found that no reasonable jury could conclude that the failure to advise Mr. Joshua Moore of the conditions in the demand letter was evidence of bad faith as it cannot be said that this was done by Geico to put its interests above Mr. Joshua Moore’s interests.  “This was not a situation in which Geico failed to communicate a settlement offer because it simply did not want to pay out to settle the claim.  Instead, the facts show that at all times Geico was trying to settle the claims and to comply with the conditions in the demand.” Id. at 22.  Geico’s conduct did not rise to the level of bad faith.

Lastly, the court indicated that based on the rejection of Geico’s settlement attempts, there was no reason to believe that a realistic possibility of settlement existed.  The court recognized that the accident was a tragic accident.  However, the court refused “to turn Geico’s limited insurance policy into an available deep pocket to pay the bodily injury claims.”  Id. at 23.

II.       Chestnut Associates, Inc. v. Assurance Company of America, 2014 WL 1711579 (M.D. Fla. April 29, 2014)

FACTS AND PROCEDURAL HISTORY

This case involved a declaratory action filed against an insurance carrier by its insured, Chestnut Associates, Inc. d/b/a Pinch-a-Penny (“Chestnut”), to determine whether the insurance carrier had a duty to defend and indemnify Chestnut in a lawsuit filed against Chestnut under its insurance policy.  Mr. Brian Jansen and Ms. Cheryl Jansen (the “Jansens”) filed a complaint against Chestnut for two counts of intentional infliction of emotional distress for an incident involving Chestnut’s pool service technician.  According to the Complaint, the technician had gone to the Jansens’ home to service their pool.  While at their home, the technician had removed his clothes and “brought sexual behavior to conclusion by casting ejaculate into the [Jansens’] pool.”  Chestnut Associates, Inc. v. Assurance Company of America, 2014 WL 1711579 at 2.  The Complaint further alleged that the pool service technician knew or would have known that emotional distress would likely result of [Jansen] as a result of his behavior.  Id.

Defendant, Assurance Company of America had issued a Precision Portfolio Policy to Chestnut as the named insured.  The Policy provided:

SECTION I—Coverages

1.   Insuring Agreement

a.  We will pay those sums that the insured becomes legally obligated to pay as damages because of “bodily injury” or “property damage” to which this insurance applies. We will have the right and duty to defend the insured against any “suit” seeking those damages. However, we will have no duty to defend the insured against any “suit” seeking damages for “bodily injury” or “property damage” to which this insurance does not apply. We may, at our discretion, investigate any “occurrence” and settle any claim or “suit” that may result. . . .

b.  This insurance applies to “bodily injury” and “property damage” only if:

(1)  The “bodily injury” or “property damage” is caused by an “occurrence” that takes place in the “coverage territory”; . . .

2.  Exclusions

This insurance does not apply to:

a.  Expected or Intended Injury

“Bodily injury” or “property damage” expected or intended from the standpoint of the insured . . .

f.   Pollution

(1)  “Bodily injury” or “property damage” arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of pollutants” . . .

SECTION V—DEFINITIONS

3.   “Bodily injury” means bodily injury, sickness or disease sustained by a person. This includes mental anguish, mental injury, shock, fright or death resulting from bodily injury, sickness or disease.

13.  “Occurrence” means an accident, including continuous or repeated exposure to substantially all the same general harmful conditions

15.  “Pollutants” mean any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste includes materials to be recycled, reconditions or reclaimed

17.  “Property damage” means:

a.  Physical injury to tangible property, including all resulting loss of use of that property. All such loss of use shall be deemed to occur at the time of the physical Injury that caused it; or

b.  Loss of use of tangible property that is not physically injured. All such loss of use shall be deemed to occur at the time of the “occurrence” that caused it.

Assurance Company of America and Maryland Casualty Company (“Assurance”) moved for summary judgment seeking a declaration that Assurance had no obligation to defend or indemnify Chestnut for the lawsuit for intentional infliction of emotional distress.

Chestnut had contended that based on the allegations in the underlying complaint against Chestnut, the conduct which caused the Jansens’ damages was intentional conduct by the technician.  As such, the intentional conduct was not within the definition of an “occurrence” and was excluded from coverage by the pollution exclusion of the policy.  Chestnut countered this argument by contending, inter alia, that there could not have been an expected or intended injury.  Further, Chestnut argued that the complaint contained sufficient allegations of property damage to fall within the insuring language of the subject policy.

UNITED STATES DISTRICT COURT DECISION

The United States District Court for the Middle District of Florida granted Defendant’s Assurance motion for summary judgment finding that Assurance had no duty to defend or indemnify Plaintiff Chestnut for several reasons.[9]  First, the court concluded that Chestnut’s employee was not within the scope of his employment at the time of the incident.  Although the complaint alleged that the pool service technician was acting within the scope and course of his employment, the pool technician’s act of “sexually pleasuring himself [and] ejaculating into the Jansens’ pool” was not an act of pool maintenance.  Id. at 6. It is well-established law that liability of a principal for the torts of its agents is limited to those committed while the agent was acting within the course and scope of his employment.  “A master’s liability does not arise when the wrongful act is committed by the agent to accomplish his own purpose and not to serve the interests of the principal.”  Id. at 6.  The court noted that where facts are undisputed, the question of whether an employee was acting within the course and scope of his employment was an issue of law.

In the present case, the Chestnut insurance policy contained a provision which defined who was an insured under the policy.  An insured was defined as, inter alia, “[y]our employees…. but only for the acts within the scope of their employment by you or while performing duties related to the conduct of your business.”  Id. at 6.  Based on the subject policy, the court concluded that the pool service technician was not an insured under the policy since he was not performing acts within the scope of his employment.  His wrongful acts were not the kind the pool service technician was hired to perform and he stepped away from his employer’s business and had performed his acts solely for his benefit.

Second, the court found that if the employee’s acts were imputed to Chestnut, the acts of the pool technician were excluded from coverage under the policy provision excluding coverage for intended or expected injuries.  The court noted that a cause of action for intentional infliction of emotional distress was an intentional tort and the complaint under this count contained allegations of intentional acts.  Further, the complaint included allegations that the pool service technician knew or should have known that emotional distress would likely result.  As such, the alleged intentional acts were not an occurrence within the policy.  Moreover, the subject policy specifically excluded coverage for conduct that the insured expected or intended.  In the present case, the determination of whether the mental or emotional harm was expected or intended was a question of law.

Third, the court concluded that the damages alleged by the Jansens, economic losses from the alleged diminution in value of the property, were excluded pursuant to the pollution exclusion of the subject policy.  The court explained that natural bodily substances have been determined to be a “pollutant” where they satisfy the definition of an insurance policy.

III.       Mathis v. Cook, 140 So.3d 654 (Fla. 5th DCA 2014)

FACTS AND PROCEDURAL HISTORY

This case arose from a personal injury action filed by an employee of Walgreens and her husband against a cleaning company after the employee slipped and fell on chemicals used to clean the floor where she worked.  Mrs. Marjorie Mathis and her husband, William Mathis, sued Joseph D. Cook, John Cook and Quality Cleaning, Inc., alleging negligence for injuries Marjorie sustained when she slipped and fell on chemicals used to clean the floor at the Walgreens where she worked.[10]  The case proceeded to trial and the jury returned a verdict in favor of the Defendants, finding the Cooks were not negligent.  The trial court entered final judgment in favor of the Cooks. Mr. John Cook then moved to tax his attorney’s fees on the basis of two unaccepted proposals for settlement.  Mr. John Cook had previously served proposals for settlement on both Marjorie and William Mathis.  The proposals stated that they were made on behalf of John Cook and contained a condition of acceptance requiring execution of the attached release which released John Cook, Joseph Cook and Quality Cleaning.

The trial court denied Mr. John Cook’s motion on the basis that the proposals for settlement were ambiguous.  The Mathises appealed the final judgment and Mr. John Cook cross-appealed the order denying his attorney’s fees.  Mr. John Cook contended that the trial court erred when it determined that the proposals for settlement he served on the Mathises were ambiguous and unenforceable.

APPELLATE COURT DECISION

The District Court of Appeal reversed the order of the trial court denying Mr. John Cook’s motion for attorney’s fees and remanded to the trial court to consider his request for attorney’s fees.  On appeal, Mr. John Cook argued that the proposals for settlement were not ambiguous because they referenced and incorporated the attached releases which required as a condition of acceptance, the release of the two codefendants.  In opposition, the Plaintiffs argued that the proposals were ambiguous because the body of the proposal stated that John Cook would be released while the releases attached stated that all three Defendants would be released.

The court cited to State Farm Mut. Auto. Ins. Co. v. Nichols, 932 So.2d 1067 (Fla. 2006), which interpreted Florida Rule of Civil Procedure 1.442, and explained that the rule only requires that the “settlement proposal be sufficiently clear and definite to allow the offeree to make an informed decision without needing clarification.” Mathis v. Cook, 140 So.3d 654, 657 (Fla. 5th DCA 2014).  Further, the court noted that courts have found proposals for settlement were not ambiguous where made by one plaintiff on separate defendants, conditioned on the dismissal of both defendants.

In the present case, the proposals were sufficiently clear to allow Mrs. Marjorie Mathis and Mr. William Mathis to make an informed decision without additional clarification.  The proposals clearly stated it was being made on behalf of Mr. John Cook and as a condition of acceptance, the three defendants had to be released.  This did not create an ambiguity or “transform the separate offers into undifferentiated joint offers.”  Id. at 658.  In conclusion, the proposals for settlement complied with Florida statute section 768.79(1) and Florida Rule of Civil Procedure 1.442.  Thus, they were enforceable.

We hope you find the above cases helpful and insightful.  Should you have any questions with respect to the foregoing, please do not hesitate to contact the undersigned at your earliest convenience.

Very truly yours,

JOHN BOND ATKINSON

VERONICA RUBIO

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