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United States Fidelity & Guaranty Co. v. Liberty Surplus Insurance

Citations: 485 F. Supp. 2d 1326; 2007 U.S. Dist. LEXIS 32232Docket: No. 6:06-cv-1180-ORL-31JGG

Court: District Court, M.D. Florida; May 2, 2007; Federal District Court

Narrative Opinion Summary

The case involves a motion to dismiss filed by One Beacon America Insurance Company against a contribution claim made by Liberty Surplus Insurance Corporation in the context of a third-party complaint. The original plaintiff, USF&G, sought recovery from general contractor Callahan's insurers, including Liberty Surplus, after settling claims against Callahan. Liberty Surplus pursued third-party claims against subcontractors and insurers, arguing coverage was provided for Callahan. One Beacon contended that contribution under Florida law requires the status of joint tortfeasors, which Liberty Surplus did not claim, focusing instead on insurance coverage. The court, interpreting the complaint favorably for Liberty Surplus, concluded that Florida law permits an excess insurer to pursue equitable subrogation or contribution from a primary insurer. Additionally, the court addressed One Beacon's argument regarding attorney's fees, noting Florida law allows insurers to recover such fees in subrogation cases. One Beacon's motion was denied, with the court correcting a misidentification of claims in the pleadings. The ruling was finalized on May 2, 2007, affirming Liberty Surplus's right to pursue its claims against One Beacon.

Legal Issues Addressed

Contribution and Subrogation between Insurers

Application: Florida law permits an excess insurer to claim equitable subrogation or equitable contribution from a primary insurer without being joint tortfeasors.

Reasoning: Florida law allows an excess carrier to pursue a primary carrier for equitable subrogation or equitable contribution.

Dismissal of Complaint under Florida Law

Application: The court must favorably interpret the complaint for the plaintiff and will only dismiss if no facts could support a claim for relief.

Reasoning: In addressing the motion to dismiss, the Court emphasizes that it must interpret the complaint favorably for the Plaintiff and focus solely on the pleadings.

Misidentification of Claims in Legal Motions

Application: The court clarified the misidentification of the relevant claim in the motion, recognizing the correct counts in the original and amended complaints.

Reasoning: Ultimately, the court denied One Beacon's motion to dismiss the contribution claim, clarifying that the relevant claim was misidentified in the motion—Count XIX in the original complaint and Count XXIX in the amended complaint.

Recovery of Attorney's Fees by Insurers

Application: Insurers may recover attorney's fees in subrogation cases under certain circumstances, even when the duty to defend is personal to the insurer.

Reasoning: Florida Statute 627.428 allows an attorney's fee recovery only to a prevailing named insured or beneficiary; however, insurers may recover fees in subrogation cases under certain circumstances.

Requirement of Joint Tortfeasor Status for Contribution

Application: Under Florida Statute 768.31(2), contribution between insurers is not permissible unless they are joint tortfeasors, a condition not met in this case.

Reasoning: One Beacon argues that under Florida law, contribution between insurers is not permissible unless they are joint tortfeasors, as defined by Florida Statute 768.31(2).