This is the conclusion of an article that began with the post here on Sunday, February 24, 2013.
The dissenting Judge on this 3-Judge Panel emphasized for a good reason that there was no conflict over Insurance Coverage in this case. In Florida, by Statute only, independent Counsel is required to be provided to an Insured under a Liability Insurance Policy only when the Liability Carrier asserts a statutory "coverage defense," meaning that the Carrier is required to provide mutually agreeable, independent counsel under the Florida Statute only when the Carrier asserts a defense to Coverage that otherwise exists. See Fla. Stat. § 627.426. Parenthetically, even when the Florida Statute is not complied with, the statutory sanction is that the Liability Carrier will not be permitted to raise the statutory "coverage defense" in question.
Or, as the dissenting Judge put it in the University of Miami v. Great American case: "Similarly in the case before us, the University of Miami has not alleged (or shown) how the disparity in potential liability between it and Magicamp affected in any way the joint defense provided it under the Great American policy." University of Miami v. Great American Insurance Co., 2013 WL 616156 *7 (Fla. 3d DCA February 20, 2013)(Shepherd, J., dissenting).
The Majority's holding in this case therefore appears to be based on one of two reasons. Either the holding represents the making of new law in Florida, or it represents a determination that the Liability Carrier in the case acted in "Bad Faith". The latter determination could not, in this case, include a failure to settle or a poorly provided defense, certainly, or either event would have been mentioned in the Majority Opinion and in the Dissent, but there is no mention of them by either the Majority or by the Dissent. If there is a determination of "Bad Faith" inherent in the holding in this case, it therefore has to be the equivalent of a holding that the Liability Carrier in this case wrongfully refused to defend the Additional Insured-University of Miami.
If the holding in this case represents new law in Florida, nothing more needs to be said here.
If the holding in this case is based on a wrongful refusal to defend, Attorney's Fees and Costs are ordinarily recoverable in such a case in Florida and in many other jurisdictions. 2 DENNIS J. WALL, LITIGATION AND PREVENTION OF INSURER BAD FAITH § 13:13, "Attorney's Fees--Settlement or Defense of Third Party's Claim" (THIRD EDITION WEST PUBLISHING CO., 2013 SUPPLEMENT IN PROCESS).
In neither case does it mean that either the two Judges in the Majority were correct in their holding, or that the one dissenting Judge was correct in his dissent. It means only that the holding was based either on making new Florida law, or on a determination that in this case the Additional Insured, the University of Miami, was wrongfully denied a defense by the Named Insured's Liability Carrier when the Carrier refused to provide the University with separate, independent defense counsel given potentially conflicting legal positions of the two Insureds, if presented in defense to individual active negligence claims against the Named Insured and against the Additional Insured.
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