Sanctions awarded after court determines insurer knew/should have known its improper venue defense was not supported by application of existing law to material facts where same clause had been determined ambiguous by District Court of Appeal.

This suit involved the defendant’s failure to pay the plaintiff’s claim for PIP benefits for treatment rendered to Mr. Rither. This was originally a two-count complaint, with Count I being a claim for declaratory relief and Count II being a claim for breach of contract. In response, the defendant filed a motion to dismiss the plaintiff’s complaint for improper venue, pursuant to the policy’s forum selection clause. 

The forum selection clause in question restricted venue to the county where the policy was issued, which in the instant case was Miami-Dade County. During the course of litigation, the plaintiff withdrew the count for declaratory relief while the defendant withdrew its motion to dismiss. However, upon filing its answer and affirmative defenses, the defendant asserted improper venue as an affirmative defense. The plaintiff then served the defendant with a proposed motion for sanctions pursuant to Fla. Stat. § 57.105. The defendant did not withdraw the affirmative defense, and the plaintiff eventually filed its motion with the court and set it for hearing. 

The day before the hearing, the defendant withdrew its affirmative defense. In ruling on the plaintiff’s motion for sanctions, the court looked to a First District Court of Appeals decision that addressed the same issue, policy and argument put forth by the defendant in the instant case. In Robles v. United Auto Ins. Co., No. 1d20-1335, 2021 WL 1743606 (Fla. Dist. Ct. App. May 4, 2021) [46 Fla. L. Weekly d1009a], the district court held that the term “issued” could have different meanings and that an insurer may not attempt to narrowly define the term through the testimony of a corporate representative after the formation of the contract. As the forum selection clause in the instant case was identical to the one in Robles, the court ruled that the defendant knew or should have known that the defense was not supported by current law. For this reason, along with the fact that the plaintiff complied with the notice requirement of Section 57.105(4), the court ruled that the plaintiff was entitled to reasonable attorney’s fees pursuant to Fla. Stat. § 57.105. 

The implications of this case highlight the need for carriers to be aware of recent decisions pertaining to their policy language. However, having said that, sanctions could have been avoided with a timely withdrawal of the affirmative defense during the 21-day safe harbor period.
 

_{Case Law Alerts, 3rd Quarter, July 2023 is prepared by Marshall Dennehey to provide information on recent developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. Copyright © 2023 Marshall Dennehey, all rights reserved. This article may not be reprinted without the express written permission of our firm.}