Florida’s District Court of Appeals Clarifies When an Assignee Can Be Awarded Attorney’s Fees and Costs

Universal Property & Casualty Insurance Company appealed an order awarding True Builders—the assignee of Universal’s insured—attorney fees and costs for a dismissed circuit court lawsuit (the First Case) and a then filed a county court lawsuit (the Second Case).

The First Case was initially filed by True Builders alleging they received the right, through an assignment agreement, to sue Universal for breach of contract of the Joinders’ insurance policy for emergency dry-out services (which were performed) and the right to rebuild the alleged damaged property. The Joinders argued they never intended to assign their rights to the rebuild portion of the alleged contract with True Builders, only the right for True Builders to sue for the work they performed. This resulted in the Joinders filing suit against Universal for the rebuild portion.

A course of motion practice ensued in which Universal first moved to consolidate the True Builders’ and the Joinders’ lawsuit, alleging True Builders did not meet the subject matter jurisdiction threshold for circuit court jurisdiction. The court consolidated the cases, and a second assignment agreement was signed between True Builders and the Joinders which clarified the scope of the assignment. 

Thereafter, True Builders attempted to transfer its portion of the lawsuit from circuit court to county court, to which Universal objected, arguing it would be inefficient to litigate two cases based on the same claim. After multiple requests to transfer, True Builders’ case was dismissed without prejudice.

True Builders then decided to file the Second Case. Subsequently, Universal reached a settlement with True Builders in the Second Case. A term for settlement was Universal stipulating that True Builders was entitled to recover attorney fees and costs. After filing the appropriate motion, the county court awarded True Builders its attorney fees and costs for both cases, in addition to fees incurred before filing the First Case. The county court analogized this situation to prior cases in which the same relief was granted and Universal acted unreasonably by not covering the assigned loss in the first place.

The Sixth District Court of Appeals looked first to the words of the statute, which states “… a court shall adjudge against the insurer … a reasonable sum as fees or compensation for … prosecuting the suit in which the recovery is had.” Fla. Stat, § 627.428(1). It is clear, on its face, that True Builders did not recover anything in the First Case. The Court of Appeals did not agree with True Builders’ argument that the court should extend the statute because of the confession of judgment doctrine. The court rejected that argument as it would ignore the statute’s plain language. 

The Court also declined to award fees for the First Case based on True Builders’ argument that Universal prolonged litigation and increased fees for both sides. Despite the court agreeing with the sentiment, the case True Builders relied on only mentions this “requirement” in dicta and is not binding on the court.

As a result, Florida’s Sixth District Court of Appeals reversed the county court’s order with instructions that an amended judgment must be entered omitting attorney fees and costs that True Builders incurred in the first case. 

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