… and it is not a statutory "coverage defense" requiring mutually agreeable counsel in Florida.
In the case of Maronda Homes, Inc. v. Progressive Express Insurance Co., 118 F. Supp. 3d 1332, 1336 n.4 (M.D. Fla. 2015) (Presnell, J.), appeal docketed, No. 15-13998 (11th Cir. Sept. 8, 2015), a liability carrier provided a defense and then did what many liability carriers do in Florida; it reserved rights to issue a reservation of rights letter later if coverage issues arose later:
Maronda's claim that Progressive should have provided mutually agreeable counsel because Progressive proceeded under a reservation of right is without merit. Progressive's response to Maronda's request for insurance information included the statement: “There are no coverage defenses at this time, however, we reserve the right to amend this portion of our response, should any issues arise in the future.” (See Doc. 90 at 5–6). That statement is not offering a defense under a reservation of rights to assert a coverage defense then in existence—it states that, as of that moment, Progressive believed it had a duty to defend Maronda. While the duty to defend might have changed by subsequent events, there was no reservation of the right to deny coverage based on the facts at the time, and therefore no obligation for Progressive to provide mutually agreeable counsel pursuant to Florida Statutes, section 627.426(2).
There being no reservation of a right to deny a defense to the policyholder in the underlying case (and there being no "coverage defense" requiring mutually agreeable, independent counsel under the Florida Statute), and especially there being no denial of a defense to the insured nor record proof in this case that the defense provided to the insured was inadequate, in the eyes of the Court the insured had no right of action for breach of the liability carrier's contractual duty to defend the insured:
While an insured certainly has the right to hire its own attorney it cannot do so at the insurer's expense unless the insurer has failed to provide an adequate defense….
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Maronda is, of course, free to hire its own counsel, but the issue here is whether Progressive has a contractual duty to pay for that counsel. Having considered the matter fully, the Court concludes that Progressive did not breach its duty to defend and has no obligation to compensate Maronda for services provided by its own counsel ….
Maronda Homes, Inc. v. Progressive Express Insurance Co., 118 F. Supp. 3d 1332, 1336-37 (M.D. Fla. 2015) (Presnell, J.), appeal docketed, No. 15-13998 (11th Cir. Sept. 8, 2015).
Please Read The Disclaimer. ©2016 by Dennis J. Wall, author of Litigation and Prevention of Insurer Bad Faith (3d ed. Thomson Reuters West in 2 Volumes, with Supplements). The necessary proof of an inadequate defense in Florida and in other jurisdictions, which would entitle a policyholder to provide its own defense and have its liability carrier pay for it, is addressed in Volume 1 of id., in §§ 3:90 & 5:50. All rights reserved.
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