Opinion ID: 1760779
Heading Depth: 1
Heading Rank: 2

Heading: The Effect of Section 744.357

Text: Having determined that attorney's fees may be awarded under section 627.428, we must next address whether such attorney's fees are limited by section 744.357 to the amount of the bond. In this regard, we disagree with the district court's conclusion that section 744.357 limits the damages to the face amount of the bond in all cases. As previously stated, section 744.357 provides that [n]o surety for a guardian shall be charged beyond the property of the ward. Although this provision does appear to limit the amount of recovery from a surety to the face amount of a guardianship bond, this Court has previously recognized an exception to such limitations on recovery. In Gedney, we concluded that prejudgment interest could exceed the face amount of a bond given to secure the payment of child support even thought the debt itself was limited by the penalty named in the bond. 136 Fla. at 13, 185 So. at 844. In so holding, we explained: The reason for the rule permitting recovery of interest as damages beyond the penalty of a bond against the sureties thereon is, that the penalty of the bond covers the misconduct of the principal, while the interest allowed on the penalty is for the misconduct of the sureties for the delay in payment. Id. at 13, 185 So. 844 (quoting Note, 55 L.R.A. 381, 384 (1902)). This Court further explained that, in requiring the surety to pay interest, the surety was simply being charged interest from the date the debt should have been paid, and that if any interest accrued, the surety alone was to blame based on its own neglect and lack of diligence or refusal to pay the claim when it was due. Id. Thus, this Court specifically recognized a distinction between the misconduct of the principal, which the sum of the bond covers, and the neglect of the surety for delay in payment, which is covered by interest on the amount of the bond. In the instant case, Nichols is seeking attorney's fees and costs that fall into the same category as the interest penalty awarded against the surety in Gedney. Like the interest penalty awarded in that case, the attorney's fees and costs in this case were incurred because Preferred failed to diligently investigate the claim and to timely pay Nichols' claim under the bond when the principal failed to perform his guardianship duties. Preferred alone is to blame for the attorney's fees and costs incurred by Nichols because, had Preferred timely paid the claim, no such fees and costs would have accumulated. Neither Nichols as the new guardian nor the beneficiaries of the guardianship bond should be forced to reduce the payment received under the bond by the amount of attorney's fees and costs incurred as a result of the surety's delay. To ensure that sureties are protected from having to pay amounts over the face amount of the bond due to a principal's misconduct but that the beneficiaries are not required to reduce the amount received under the bond when the surety itself is negligent or unreasonable in failing to timely pay a claim, we hold as follows: When principals misappropriate guardianship funds or insufficiently discharge their duties, attorney's fees and costs for a claim based solely on this negligence are limited to the face amount of the bond pursuant to section 744.357; however, when the trial court specifically determines that attorney's fees and costs were incurred because a surety failed to act diligently and unreasonably delayed the payment of a claim, such attorney's fees and costs are not protected by section 744.357. In this case, the trial court made such a finding. Thus, attorney's fees and costs over the face amount of the bond were properly awarded to Nichols. In reaching our conclusion today, we emphasize that the filing of a claim, by itself, does not justify an award of costs and attorney's fees over the amount of the bond. A surety must be given a reasonable time to investigate and pay the claim. It is for the trial court to determine whether any delay in paying the claim was unreasonable. Each claim will present different circumstances and must be evaluated on a case-by-case bases to determine whether the surety was proceeding reasonably. In the instant case, the record establishes that the trial court found that Preferred acted unreasonably in delaying payment of the claim and that, but for that delay, Nichols would not have been forced to file and pursue this action all the way to a garnishment proceeding. We also emphasize that this case involves unreasonable delay and negligence rather than bad faith. Accordingly, we approve that portion of the district court's opinion holding that section 627.428 applies to an award of attorney's fees and costs in a guardianship bond action, and we answer the certified question in the affirmative. However, we quash the district court's decision limiting attorney's fees and costs to the face amount of the bond, and we remand this case with directions that the trial court judgment be reaffirmed. It is so ordered. KOGAN, C.J., and SHAW, GRIMES, HARDING, WELLS and ANSTEAD, JJ., concur.