Prime Ins. Syndicate v. B.J. Handley Trucking, 363 F.3d 1089, 11th Cir. (2004)
Prime Ins. Syndicate v. B.J. Handley Trucking, 363 F.3d 1089, 11th Cir. (2004)
3d 1089
In November 2000, Still and Stepney filed a Florida state court action against
Rick Handley, Handley Trucking, and Randall Summerville. Prime Insurance
disputed coverage on the grounds that Summerville was not insured under the
policy, the policy did not cover accidents occurring more than fifty miles from
Leeds, Alabama, and that Handley Trucking did not give timely notice of the
claim to Prime. Prime filed a Complaint for Declaratory Relief in federal
district court in Florida to resolve these coverage issues.
On September 6, 2002, Prime settled the Florida state court action and moved
to voluntarily dismiss its federal court claim for declaratory judgment. The
district court dismissed the claim, but retained jurisdiction to consider attorneys'
fees. The district court subsequently held that the defendants (counterclaimants-appellants) were not entitled to recover their attorneys' fees under
Alabama law. The defendants appeal.
II. Discussion
Florida's choice-of-law rules control which state's attorneys' fees laws apply to
this action. LaFarge Corp. v. Travelers Indem. Co., 118 F.3d 1511, 1515 (11th
Cir.1997) (citing Erie Railroad v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82
L.Ed. 1188 (1938)). The underlying dispute in this case was whether Handley
Trucking's insurance contract with Prime covered the accident. Under Florida's
choice-of-law rules, lex loci contractus 1 applies in contract matters, Fioretti v.
Mass. Gen. Life Ins. Co., 53 F.3d 1228, 1236 (11th Cir. 1995), unless a statute
modifies or abrogates a choice-of-law rule. Brown v. Case, 80 Fla. 703, 86 So.
684, 685 (1920).
The appellants contend that Fla. Stat. 627.428, 627.4135 abrogate the
common-law lex loci contractus rule in this case. First, the appellants argue
that Fla. Stat. 627.428 specifically provides for attorneys' fees when an
insured successfully sues its insurer.2 Fla. Stat. 627.401(2), however, provides
a safe harbor for insurance contracts not delivered in Florida nor issued for
delivery in Florida.3 Because the insurance policy between Prime and Handley
Trucking was not delivered in Florida nor issued for delivery in Florida, we
hold that the safe harbor applies to the insurance policy.4 Thus, the appellants
cannot recover attorneys' fees under Fla. Stat. 627.428.
7
The appellants claim that even if Fla. Stat. 627.428 does not cover the
insurance policy, this insurance contract is a "contract of casualty insurance"5
and Florida's attorneys' fees laws apply to actions regarding casualty insurance.
See Fla. Stat. 627.4135 ("All contracts of casualty insurance covering subjects
resident, located, or to be performed in this state shall be subject to the
applicable provisions of this part and to the other applicable provisions of this
code."). Again, the safe harbor provision of Fla. Stat. 627.401(2) removes this
insurance policy from the coverage of the casualty insurance provision.
Sheehan v. Lumbermens Mut. Cas. Co., 504 So.2d 776, 778 (Fla.
Dist.Ct.App.1987) (holding that "[t]he trial court found that since Ms. Feldman
was located in Florida at the time of the accident, section 627.726 [currently
section 627.4135] was controlling.... We disagree.... [S]ection 627.401(2) ...
limits the applicability of that section to policies issued for delivery or delivered
in the state.").
Because this insurance policy falls within the coverage of the safe harbor
provision of Fla. Stat. 627.401(2) and is outside the coverage of Fla. Stat.
627.428, 627.4135, lex loci contractus governs the substantive issues of the
contract. Lumbermens Mut. Cas. Co. v. August, 530 So.2d 293, 295 (Fla.1988)
(providing that the laws of the jurisdiction where the contract was executed
governs interpretation of the substantive issues regarding the contract).
10
The insured was an Alabama resident and located in Alabama at the time of the
oral agreement. The fortuitous timing of the accident occurring before the
written policy was actually delivered does not alter the fact that the Prime
had already communicated acceptance of the contract to Handley Trucking.
Therefore, the district court did not err in applying lex loci contractus to
determine that Alabama law governed this insurance contract.
11
Under Alabama law, absent a contractual provision to the contrary, the insured
may not recover its attorneys' fees from the insurer if the fees were incurred in a
declaratory judgment action to determine coverage under a liability policy. See,
e.g., Green v. Standard Fire Ins. Co., 477 So.2d 333, 335 (Ala.1985); Clark v.
Exchange Ins. Ass'n, 276 Ala. 334, 161 So.2d 817 (1984).
12
Notes:
*
Lex loci contractus "provides that the laws of the jurisdiction where the
contract was executed governs interpretation of the substantive issues regarding
the contract." Lumbermens Mut. Cas. Co. v. August, 530 So.2d 293, 295
(Fla.1988).
"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." Fla. Stat. 627.428
"No provision of this part of this chapter applies to ... (2) Policies or contracts
not issued for delivery in this state nor delivered in this state, except as
otherwise provided in this code." Fla. Stat. 627.401(2)
The defendants contend that actual physical delivery in another state is needed
to invoke the safe harbor, and therefore, the oral agreement between Prime
Insurance and Handley Trucking at the time of the accident does not fall within
the safe harborCelanese Coatings Co. v. American Motorists Ins. Co., 297
F.Supp. 598, 600 (S.D.Fla.1969). The defendants misinterpret Celanese
Coatings, however, which stands for the proposition that the safe harbor does
not apply if there is actual physical delivery in Florida.
A strict construction of the word "delivery" in this statute is actual physical
delivery. The statute specifically contemplates a type of constructive delivery
by using the words "issued for delivery." In this case it is clear that the policies
sued upon were not physically delivered in Florida. The determinative question
then becomes whether the policies can be said to have been "issued for
delivery" in Florida.... The policies were issued in New York for delivery to the
insured in New York or Kentucky. In no case was it intended that a policy be
delivered in Florida.... Delivery or intended delivery is the key which opens the
door to the recovery of attorneys' fees.... Such delivery or intended delivery is
simply not present in this case.... The essential fact ... [is] that delivery of such a
policy in Florida must be intended.
Id. Thus, the safe harbor covers the insurance policy in this case because this
policy (1) was not physically delivered in Florida and (2) was not intended for
delivery in Florida.
5
See Fla. Stat. 624.605(1) (including vehicle insurance and liability insurance
as types of casualty insurance).