Case Name: MERCURY INSURANCE COMPANY OF FLORIDA, Appellant, v. Cletus COOPER, Appellee
Court: Florida District Court of Appeal
Jurisdiction: Florida
Decision Date: 2005-11-23
Citations: 919 So. 2d 491
Docket Number: No. 3D04-1434
Parties: MERCURY INSURANCE COMPANY OF FLORIDA, Appellant, v. Cletus COOPER, Appellee.
Judges: Before WELLS, SHEPHERD, and CORTIÑAS, JJ.
Reporter: Southern Reporter, Second Series
Volume: 919
Pages: 491–501

Head Matter:
MERCURY INSURANCE COMPANY OF FLORIDA, Appellant, v. Cletus COOPER, Appellee.
No. 3D04-1434.
District Court of Appeal of Florida, Third District.
Nov. 23, 2005.
Rehearing and Rehearing En Banc Denied Feb. 15, 2006.
Alvarez, Sambol, Winthrop & Madson, and Griffith J. Winthrop, III and Julianne J. Flynn, Orlando, for appellant.
Langbein & Langbein, and Evan J. Langbein and Richard A. Friend, Miami, for appellee.
Before WELLS, SHEPHERD, and CORTIÑAS, JJ.

Opinion:
CORTIÑAS, Judge.
The plaintiff, Mercury Insurance Company of Florida ("Mercury"), appeals an order granting the insured/defendant, Cle-tus Cooper ("Cooper"), attorney's fees pursuant to Section 627.428, Florida Statutes (2004).
In November 2002, Cooper rented a van, which collided with another vehicle driven by Aldor Charles ("Charles"). Cooper was the sole authorized driver of the van and Mercury, Cooper's primary automobile insurer, was responsible for claims regarding the rental vehicle under the policy terms. Initially, Cooper told Mercury that Agatha Cooper was driving the van at the time of the accident but later, under oath, stated that his sister, Tanya Rolle, who was unlicensed, was the actual driver.
In June 2003, Charles made a claim to Mercury and demanded the $25,000 policy limit as an alternative to filing suit. Mercury then filed a declaratory judgment action to determine its rights and duties under the insurance policy. However, while the declaratory action was pending, Mercury decided to settle Charles' claim and pay him $2,500 as full settlement. Mercury did not negotiate a global settlement, which could have included a reservation of rights concerning attorney's fees. After settling with Charles, Mercury filed a voluntary dismissal of its declaratory judgment action. Cooper's counsel then filed a motion for attorney's fees under section 627.428(1), which was granted by the trial court.
After the trial court had granted the motion for attorney's fees, Mercury filed a motion for reconsideration on the ground that Cooper had been arrested for insurance fraud. The trial court held a hearing on the motion for reconsideration and denied the motion, citing to Florida cases holding that, where an insurance company settles a claim and dismisses a related declaratory judgment action, the provisions of section 627.428(1) are triggered, thus entitling the insured's counsel to attorney's fees under the statute.
Section 627.428(1) provides:
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 or the named beneficiary under a policy or contract executed by the insurer, the trial court or, in the event of an appeal in which the insured or beneficiary prevails, the appellate court shall adjudge or decree against the insurer and in favor of the insured or beneficiary a reasonable sum as fees or compensation for the insured's or beneficiary's attorney prosecuting the suit in which the recovery is had.
§ 627.428(1), Fla. Stat. (2004). Florida courts have held that this attorney's fees statute is triggered where an insurance company settles a claim and voluntarily dismisses a related declaratory judgment action without qualifying or limiting the dismissal. Unterlack v. Westport Ins. Co., 901 So.2d 387 (Fla. 4th DCA 2005); O'Malley v. Nationwide Mut. Fire Ins. Co., 890 So.2d 1163 (Fla. 4th DCA 2004). In Unterlack, the Fourth District stated that it was irrelevant whether the settlement preceded the dismissal or vice-versa. Unterlack, 901 So.2d at 389. The Unter-lack court held that the attorney's fees provision in section 627.428(1) is triggered when the voluntary dismissal of the declaratory judgment action and settlement are related to each other. Id.
Actual rendition of an order or decree is not required to trigger an insured's entitlement to attorney's fees under the statute. See Wollard v. Lloyd's & Cos. of Lloyd's, 439 So.2d 217, 218 (Fla.1983). In interpreting the purpose of section 627.428, the Florida Supreme Court in Wollard reasoned that:
[T]he statutory obligation for attorney's fees cannot be avoided simply by paying the policy proceeds after suit is filed but before a judgment is actually entered because to so construe the statute would do violence to its purpose, which is to discourage litigation and encourage prompt disposition of valid insurance claims without litigation.
Id. Thus, the court held that the "payment of the claim is, indeed, the functional equivalent of a confession of judgment or verdict in favor of the insured." Id.
Under Florida law, it is the insurer's unilateral decision to settle an insurance claim and dismiss a related declaratory judgment action that triggers the insured's entitlement to attorney's fees under the statute. See id. In deciding to settle Charles' claim and later dismiss its declaratory judgment action, Mercury set in motion the events which make it legally responsible to pay its insured's attorney's fees under section 627.428(1).
Mercury could have avoided its liability under section 627.428(1) by simply refusing to settle the claim or by denying coverage under the policy. Even assuming that Mercury was intent on settling the claim for cost-efficient reasons, it could have negotiated a global settlement which included a reservation of rights concerning attorney's fees. Mercury did none of these things, despite being fully aware of Cooper's fraud.
Instead, Mercury chose the precise legal conduct which has been held, under Florida law, to trigger an insured's entitlement to attorney's fees under section 627.428(1). As such, Mercury is responsible for the outcome of this case. By deciding to settle the insurance claim and dismiss a related declaratory judgment action, irrespective of its merit or lack thereof, Mercury became legally responsible for the concomitant obligation to pay attorney's fees to its insured.
Nevertheless, Mercury seeks a judicially crafted exemption to section 627.428(1) in cases where there is insurance fraud. The dissent is apparently willing to craft such an exemption under the guise that the legislature surely could not have contemplated the application of section 627.428(1) to the facts of this case. Although that may or may not be the case, we believe that modification of the statute to address false statements by an insured is best left to the legislature. We prefer to follow the literal text of the statute and abide by more than two decades of Florida case law holding that section 627.428(1) is triggered upon an insurance settlement and a related dismissal of a declaratory judgment action.
While a judicially crafted exemption would certainly relieve Mercury of its attorney's fees obligation in this case, the dissent ignores the consequences of creating such an exemption. It would trade very clear rules governing the application of section 627.428(1) for much murkier ones. It would require trial and appellate courts to examine the merits of settled claims to determine the validity of those claims and perhaps even the insurer's rationale for settling the claims. We respectfully decline this invitation, preferring instead to hold Mercury responsible for its own actions.
Based on the holdings in Wollard, O'Malley, and Unterlack, we affirm the granting of attorney's fees under section 627.428 as there is no dispute that the settlement and the voluntary dismissal of the declaratory judgment action were related to each other.
Affirmed.