The following is a real-time transcript taken as closed captioning during the oral argument proceedings, and as such, may contain errors. This service is provided solely for the purpose of assisting those with disabilities and should be used for no other purpose. These are not legal documents, and may not be used as legal authority. This transcript is not an official document of the Florida Supreme Court.

OKAY.,,
THE NEXT CASE THIS MORNING
IS, LUMBER MAN'S MUTUAL,
VERSUS RYAN.
AND CONTINENTAL CASUALTY
VERSUS RYAN.,,
>> GOOD MORNING, MAY IT
PLEASE THE COURT I'M
JONATHAN GAINS ON BEHALF OF
CONTINENTAL CASUALTY
COMPANY.
THIS CASE, PRESENTS A MUCH
SIMPLER ISSUE THAN THE LAST
ONE.
THIS IS THE CASE CONCERNING
WHETHER, 627.428, THE
INSURANCE ATTORNEY'S FEE
STATUTE CAN BE EXTENDED TO
PROVIDE ATTORNEYS FEES TO A
SURETY, IN THIS CASE
HARTFORD, WHO HAS PERFORMED
ON BEHALF OF ITS PRINCIPAL,
THEN IS SEEKING IN IT A
DECLARATORY ACTION ALONG
WITH ITS PRINCIPAL TO
ESTABLISH COVERAGE UNDER A
CGL POLICY.
>> IF WE QUASH.
J.S.U.B. THIS BECOMES MUTE.
>> THAT'S ABSOLUTELY RIGHT
IF JSUB IS QUASHED THIS IS
MOOT.
>> IF THERE IS ASSIGNMENT OF
RIGHTS YOU AGREE YOU CAN GET
ATTORNEY'S FEES UNDER 627?
>> IF THERE WAS ACTUAL
ASSIGNMENT UNDER ROBERTS
VERSUS CARTER ALL THOSE
CASES WE HAVE NO CONFLICT.
>> WHAT YOU HAVE HERE REALLY
THE INSURED AND THE SURETY
ARE BOTH SUING IN THE
DECLARATORY JUDGMENT ACTION.
>> THAT'S CORRECT.
>> AND THERE IS, WAS NO
QUESTION ABOUT GIVING FEES
TO THE, TO THE INSURED IN
THIS CASE?
>> TO THE INSURED, RYAN.
>> CORRECT.
>> WELL, THERE WAS A, A
MOTION FOR FEES FILED ON
BEHALF OF BOTH THE INSURED
AND THE SURETY IN THE CASE.
>> I THOUGHT RYAN ISN'T
APPEARING HERE AT LEAST
NOT --
>> THAT'S CORRECT.
>> AND THERE'S NO,
CONTROVERSY INSURED WOULD BE
ENTITLED TO FEES UNDER THAT
STATUTE IF IT PREVAILED ON A
COVERAGE QUESTION.
>> BUT AS A PRACTICAL MATTER
SINCE THE INSURED, IN THE,
SITUATION WHERE THERE IS A
SURETY IS GOING TO BE ON THE
HOOK IT, WOULD BE, DIFFICULT
FOR THE INSURED TO, JUST AS
SIGN AWAY ALL OF ITS RIGHTS.
SO WHY ISN'T THE CONCEPT OF
SUB ROW GAGS, WHICH IS
YOU'RE STANDING IN THE SHOES,
THE VEHICLE BY WHICH YOU GOT
GET ATTORNEYS FEES?
IN THAT I LIKE YOU TO
ADDRESS THE ALWAYS CASE
WHICH SEEMS TO' QUITE ALMOST
ASSIGNMENT AND SUBROGATION
OF BECAUSE ALWAYS DIDN'T
HAVE A FORMAL ASSIGNMENT.
>> THEY HAD AN ASSIGNMENT BY
IMPLICATION OF THE
CIRCUMSTANCES IN THAT CASE.
AND I THINK THE, MAIN
DIFFERENCE BETWEEN, BETWEEN
THAT CASE AND THIS CASE IS
THAT HERE, A STATUTE THAT
SAYS, A POLICY IS ASSIGNABLE
OR NOT ACCORDING TO ITS
TERMS.
WE HAVE A POLICY HERE THAT
SAYS, CANNOT BE ASSIGNED
UNLESS THERE IS WRITTEN
CONSENT.
WE HAVE HERE NO ALLEGATION
OF SUCH AN ASSIGNMENT OF
SUCH CONSENT.
NO EVIDENCE, NO, ALLEGATION
OTHER THAN THAT WE'RE A SU
SUBROGATION.
>> THERE IS NO PROHIBITION
UNDER THAT ANTI-ASSIGNMENT
CLAUSE TO ASSIGNMENT AFTER
THE LOSS OCCURS?
>> NO THERE ISN'T.
>> OKAY.
>> WE HAVE HERE A VERY LATE
ARGUMENT IN THE BRIEFING AND
ARGUMENTS GOING BACK AND
FORTH WHAT WE'RE REALLY
TALKING ABOUT HERE IS AN
ASSIGNMENT AND NOT
SUBROGATION.
BUT I DON'T THINK THE RECORD
BEARS THAT OUT.
THERE IS REALLY NO
ASSIGNMENT IN THE RECORD.
AND WHAT YOU HAVE IS, AN
ATTEMPT TO USE THE CONCEPT
OF SUBROGATION TO SHOEHORN
INTO THIS ATTORNEYS FEE
STATUTE --
>> FROM A PRACTICAL POINT OF
VIEW IF YOU HAD BOTH OF THEM
IN THERE, AND, SO IT'S
REALLY A QUESTION WHO IS
REALLY GOING TO CARRY THE
BALL.
IF THERE IS AN AGREEMENT
THAT THE, INSURED'S WILLING
TO USE THE SURETY'S LAWYER
SO TO SPEAK, YOU GET THE
SAME, DOESN'T, DON'T WE HAVE
THE SAME OUTCOME?
>> WELL I MEAN THERE HAS
BEEN A LOT OF TALK IN THE
CASE ABOUT THE CARRYING OF
THE BALL AND HOW THAT
DECISION WAS MADE.
AND FRANKLY I DON'T KNOW HOW
THAT DECISION WAS MADE BUT,
HOWEVER IT WAS MADE, AT THE
TIME IT WAS MADE ALL OF
THESE STATUTES AND CASE LAW
WERE IN EFFECT AND,
APPLICABLE HERE AND --
>> LET ME MAKE SURE I
UNDERSTAND WHAT THE
UNDERLYING, THE UNDERLYING
CLAIM AND THE HOLDING OF THE
SECOND DISTRICT WAS THAT,
THE, THERE HADN'T --
SHOULDN'T HAVE BEEN A
SUMMARY JUDGMENT ON THE
UNDERLYING CLAIM AS TO
WHETHER THIS DEFECT OCCURRED
BEFORE OR AFTER THE PROJECT
WAS COMPLETED, CORRECT?
>> WELL THE SECOND DISTRICT --
THE UNDERLYING CLAIM IN THE
TRIAL COURT, SUMMARY
JUDGMENT WAS BASED UPON
LAMARSH WHOLE LINE OF CASES
PREJESA.
IN THE INTERIM THAT WENT UP
ON APPEAL.
IN THE INTERIM THE SECOND
DISTRICT DECIDED.
JASUP CASE.
THEREFORE WHEN THIS CASE
CAME UP BEFORE THE SECOND
DISTRICT THEY DETERMINED
WE'RE BOUND BY THE PRIOR
PANEL DECISION IN JESA --
>> WHAT I'M TRYING TO GET
STRAIGHT IN MY MIND WHERE
THE SUBROGATION, IF THERE
WAS A SUBROGATION CLAIM, THE
SURETY WOULD HAVE HAD TO,
HAVE, PAID AND, ON, THE,
THERE WOULD HAVE BEEN A
CLAIM AGAINST THE SURETY,
FOR FAILURE TO PERFORM THE
CONTRACT.
THE BASIC CONSTRUCTION
CONTRACT, CORRECT?
>> THAT'S CORRECT.
>> AND THE SURETY WOULD HAVE
HAD TO BE MAKING A CLAIM
AGAINST RYAN TO, RECOVER FOR
THE BREACH OF THE
CONSTRUCTION CONTRACT?
>> TO RECOVER UNDER ITS
INDEMMIFICATION, RIGHT.
>> THAT WOULD BE PRIOR TO
THE PROJECT BEING COMPLETED?
>> WELL THAT'S CERTAINLY OUR
POSITION AND THAT'S THE
ISSUE THAT IS BACK BEFORE
THE TRIAL COURT NOW.
THEY DETERMINED, SECOND
DISTRICT TERMED THAT THERE
WAS ISSUE OF FACT WHETHER
THIS WAS A COMPLETED
OPERATION OR NOT AT THE TIME
THAT THIS DEFECTIVE, IT WAS
DEFECTIVE GRASS ON A GOLF
COURSE.
IT WAS NOT JENETTE I CANLY
PURE AND, THAT WAS THE
DAMAGE IN THIS CASE.
IT WAS ISSUE RECORD WASN'T
CLEAR ON TIMING OF THAT
DAMAGE MANIFESTING ITSELF.
>> COMING BACK TO THE
NONASSIGNABILITY CLAUSE AND
THE POLICY UNDERLYING THAT,
IS THAT POLICY, REALLY
SERVED BY, NOT ALLOWING
REALLY, SOMEBODY THAT STEPS
IN THE SHOES OF THE
RESPONSIBLE PARTY, AND SAYS
WE'LL GO AHEAD AND PAY IT
AND WE'LL GO AND CHALLENGE
THE INSURANCE CARRIER HERE?
IT SEEMS TO ME, NONAS
SIGNABILITY CLAUSE, CLEARLY
WAS INTENDED FOR OTHER
REASONS NOT FOR A SITUATION
LIKE THIS WHERE IN ESSENCE
YOU'VE GOT SORT OF A, FOR
USE AND BENEFIT KIND OF
THING OF THE OLD PRACTICE
WHERE, YOU FILED THE SUIT
AND THE NAME OF THE INSURED,
AFTER YOU PAID THE CLAIM FOR
THEM AND SAID, WE'LL GO
AHEAD AND PAY IT AND THEN,
WE'LL GO AHEAD AND PROSECUTE
THIS CLAIM.
JUST HAVING A LOT OF
DIFFICULTY WITH ANY POLICY
REASONS THAT ARE SET OUT IN
ALL THE CASE LAW AND,
STATUTES NONAS SIGNABILITY
BEING APPLICABLE TO A
SITUATION LIKE THIS.
>> THAT MIGHT BE THE CASE.
THE REASON I SAY THIS IS A
SIMPLE ARGUMENT BECAUSE WE
HAVE THE ATTORNEYS FEE
STATUTE AND LEGION OF CASES
SAY IT HAS TO BE STRICTLY
CONSTRUED.
AND, IF ACQUIRING RIGHTS BY
SUBROGATION TO THE EXTENT
THIS IS A VALID SUBROGATION
RIGHT THAT'S NOT WITHIN THE
TERMS OF THE STATUTE.
EVERYTHING WITHIN THE REALM
OF THE STATUTE THAT HAS EVER
BEEN HELD TO BE COVERED IS
IN THE REALM OF CONTRACT --
>> WOULD THERE BE ANYTHING,
ANYTHING TO PREVENT THE
INSURED, THE PERSON THAT YOU
INSURED THOUGH, FROM
PROSECUTING AN ACTION EVEN
THOUGH THEY HAD BEEN PAID BY
THE SURETY AND COLLECTING,
OBVIOUSLY, ASSUMING THAT
THEY PREVAIL, WHICH IS, SORT
OF THE UNUSUAL POSTURE WE
FIND OURSELVES IN TERMS
OF -- ANYTHING TO PREVENT
THE INSURED FROM DOING THAT
AND THEREFORE, TRIGGERING
THE, FEES, STATUTE AND, EVEN
THOUGH THEY HAVE BEEN PAID
BY A SURETY?
>> WELL, THE PERSON WHO WAS
PAID BY THE SURETY WAS NOT
THE INSURED.
IT WAS THE OBLIGEE THE
PRINCIPAL.
TO ANSWER YOUR QUESTION
THERE IS NOTHING TO PREVENT
PRINCIPAL HERE RYAN, HAVING
PURSUED THIS CLAIM AGAINST
THE INSURANCE COMPANY.
>> THEY DID.
>> I MEAN ON ITS OWN I MEAN.
>> THEY DID AND, I JUST WANT
TO MAKE CLEAR BECAUSE, WHAT
JUSTICE ANSTEAD SAID, YOU
HAVE AGREED THERE IS NOTHING
IN THE ANTI-AS SIGNABILITY
PROVISIONS WOULD HAVE HE
PREVENTED RYAN ITS RIGHTS TO
PURSUE A COVERAGE QUESTION
TO, HARTFORD.
>> THE ONLY THING THAT WOULD
PREVENT RYAN FROM ASSIGNING
RIGHTS UNDER THE POLICY IS
LACK OF CONSENT.
>> I THOUGHT AFTER A LOSS
YOU DIDN'T NEED CON --
CONSENT?
>> BELIEVE UNDER THE POLICY
IT MAY NOT BE AS SIGNABLE
WITHOUT WITHOUT CONSENT.
IS NOT ASSIGNABLE WITHOUT
CONSENT.
I DON'T KNOW THAT IT WOULD
HAVE BEEN CONSENTED TO BUT
THERE IS NOTHING HERE THAT
WOULD HAVE PREHAVEN'TED RYAN,
AS THEY SAY CARRYING BALL
ALONE AND BASED ON THE FACT
TO LIABLE TO INDEMNIFY THE
SURETY THE AMOUNT PAID TO
THEABLELY GEE ALREADY.
IF YOU PAY ON THAT.
INSURED COULD COLLECT ITS
ATTORNEYS FEES DIRECTLY.
THERE IS NO REASON THE
SURETY HAD TO COME IN AND
CARRY THE BALL FOR THE
INSURED.
AND THERE'S NO BASIS UNDER
THE ATTORNEYS FEE STATUTE
FOR THOSE FEES TO BE PAID --
>> BUT WHEN YOU HAVE A CLEAR
OBLIGATION TO THE PRINCIPAL,
THAT IS, THAT YOU NOBODY
DISPUTES IT, JUST, YOU KNOW,
THE LOSS HE OCCURS AND
THAT'S IT, YOU'RE ON THE
HOOK, AND, REALLY PUTTING
FORM OVER SUBSTANCE?
>> WELL, I DON'T KNOW IF
IT'S FORM OVER SUBSTANCE BUT
IT IS DEFINITELY CONSTRUING
THE STATUTE ONLY WITHIN THE
BOUNDARIES WHAT THE
LEGISLATURE HAS ENACTED.
PEOPLE ARE ALWAYS DIRECTING
THEIR ACTIVITIES TO COMPLY
WITH, COME WITHIN THE TERMS
OF STATUTES OR NOT.
AND --
>> BUT ISN'T THE UNDERLYING
POLICY THERE TO, THAT OF
PUTTING INSURANCE COMPANIES
ON NOTICE, THAT IF THEY'RE
GOING TO DENY COVERAGE,
THEY'RE FACING THE RISK AND
THE RISK IS NOT ONLY,
EVENTUALLY HAVING TO PAY THE
LOSS, BUT ALSO, IN ESSENCE,
FINANCING THE, SUIT THAT
FORCED THEM TO RECOGNIZE
THEIR RESPONSIBILITY?
>> TO THEIR INSURED, YES.
I THINK EVERYONE'S ON NOTICE
OF THE BOUNT DRIES OF
STATUTE.
I SEE MY TIME IS UP.
>> YOU'VE BEEN VERY CANDID.
WE'RE ALL VERY APPRECIATIVE.
>> THANK YOU.,,
>> CANDID, DOESN'T MEAN BY
THE WAY CONCEDING YOUR --
>> MAY IT PLEASE THE COURT.
I'M PAT MALONEY I'M
REPRESENTING LUMBER MENS
MUTUAL CASUALTY.
>> YOU'RE FROM CHICAGO BUT I
HAVE A FLORIDA QUESTION TO
ASK YOU, I'VE KIND OF LOOKED
AND SIDE WHY WASN'T THERE
ASSIGNMENTS.
I'M LOOK AT, I HAVE IT IN
FONT OF FRONT OF ME I HAVE
TO QUOTE.
WELL SETTLED RULE
ANTI-ASSIGNMENT PROVISIONS
DO NOT PROVIDE ASSIGNMENT
AFTER LAW.
WEST LAW, GROCERY, VERSUS
TUTONIA FIRE, FROM 1917.
IS IT YOUR POSITION THERE
COULDN'T HAVE BEEN
ASSIGNMENT OF THE, RYAN'S
CAUSE OF ACTION TO, HARTFORD
BECAUSE OF, THE
ANTI-ASSIGNMENT CLAUSE?
>> I THINK THE WAY THE FACTS
IN THIS CASE ARE PRESENTED
TO THIS COURT, THAT IS
CORRECT.
>> IT COULD NOT HAVE?
>> JUDGE ANSTEAD TO YOUR
EARLIER QUESTION --
>> WEST FLORIDA GROCERY WAS
A DIFFERENT SITUATION?
>> WHAT WE HAVE TO DO IS
DEAL WITH WHAT THE FACTS ARE
IN THIS CASE, YOUR HONOR.
IN THIS CASE THERE IS AN A
NONASSIGNMENT CLAUSE IN THE
POLICY.
THE INSURED HAS NOT ASKED
FOR CONSENT FROM THE CARRIER
TO WAIVE THAT
ANTI-ASSIGNMENT CLAUSE.
AND THIS COURT HAS FOUND,
JUDGE ANSTEAD, THAT THOSE,
ANTI-ASSIGNMENT CLAUSES ARE
DISPOSITIVE.
>> WE HAVE A POSTURE OF AN
INSURER DENYING ANY
RESPONSIBILITY OR LIABILITY
AND THEN SAYING BY THE WAY,
YOU HAVE TO ASK US FIRST
WHETHER OR NOT YOU CAN AS
SIGN THIS AFTER, A LOSS HAS
OCCURRED?
ISN'T THAT A RATHER INCON
GREWOUS POSITION TO TAKE?
IT'S HEADS I WIN OR TAILS
YOU LOSE PROPOSITION.
>> I DON'T SEE IT AT ALL
THAT WAY.
I THINK WHAT WE'RE WE'RE
LOOKING AT LOSS MAY BE --
>> HOW CAN INSURER DENYING
ANY RESPONSIBILITY THEN
DEMAND THAT THE OTHER SIDE
COMPLY WITH SOME CONDITION
ARE IN A POLICY?
>> WE'RE NOT DENYING THAT
THE INSURED IN THIS CASE HAS
A RIGHT UNDER 627.428.
THAT'S NOT THE ISSUE.
THE ISSUE IS THAT HARTFORD,
AN INSURANCE CARRIER, HAS
NOT OBTAINED AN ASSIGNMENT
OF THOSE RIGHTS, AND, IS NOT
A PARTY THAT'S ENTITLED TO
RECOVER.
>> WHAT ARE THE POLICY
REASONS BEHIND HAVING A
NONAS SIGNABILITY CLAUSE.
WHAT DOES IT SAY ABOUT ALL
THAT.
>> TO PROTECT INSUREDS FROM
INSURANCE CARRIERS THAT'S
THE POLICY THERE IS NO
QUESTION ABOUT THAT.
WE ALSO HAVE TO LOOK AT WHAT
IS, HOW IS THIS COURT
INTERPRETED THAT STATUTE.
AND FIRST OF ALL I THINK THE
CRUX OF THIS CASE, IF I
COULD GO ON FOR JUST ONE OR
TWO MINUTES, IS THAT THE
ANTI-, I'M SORRY THE, FEE
TRANSFER TYPE OF STATUTE IS
AGAINST THE COMMON LAW AND
IS PENAL IN NATURE.
THIS COURT, AND OTHER COURTS
IN THIS STATE HAVE HELD WE
HAVE TO STRICTLY CONSTRUE
SUCH A STATUTE.
AND THE STATUTE HERE VERY
CLEARLY SAYS, THAT THE ONLY
PEOPLE ENTITLED TO RECOVER
ARE THE NAMED INSURED UNDER
THE INSURANCE POLICY, OR A
NAMED BENEFICIARY UNDER THE
INSURANCE POLICY.
>> AREN'T WE ALMOST
ENCOURAGING FRAUDULENT
CONDUCT OR OTHER SUCH
CONDUCT IF WE ENFORCE THAT
IN THE SENSE THAT, IT'S
ALMOST LIKE THE SURETY AND
THE INSURED THEN, THE
PRINCIPAL, SAY, WELL,
BECAUSE THE ATTORNEYS FEES
WON'T BE RECOVERABLE, IF YOU
GO AHEAD AND PAY US, AND
THEN YOU GO AFTER THE
INSURANCE COMPANY, THEN,
LET'S DELAY THE PAYMENT OR
MAKE IT SOMEHOW CONTINUING
ANTI-AND THEN WE'LL GO AFTER
THE INSURANCE COMPANY AND
RECOVER FEES, YOU KNOW THAT
ARE NECESSARY TO FORCE,
AREN'T WE REALLY
COMPLICATING A SITUATION
THAT, GOOD SENSE WOULD CALL
FOR, NOT COMPLY INDICATING?
-- COMPLICATING?
>> I DON'T THINK SO.
WHAT MY CO-COUNSEL POINTED
OUT THE PAYMENT DOESN'T GO
TO THE PRINCIPAL.
THE PAYMENT GOES TO THE
OBLIGEE.
IN TERMS OF FORM OVER
SUBSTANCE THIS IS NOT A FORM
OVER SUBSTANCE ISSUE.
THE FACT OF THE MATTER THINK
ABOUT THIS FOR A SECOND,
THIS VERY CASE, HARTFORD
PAID THE OBLIGEE IN THIS
CASE.
HARTFORD HAS A COMPLETE
RIGHT UNDER THEIR SURETY
POLICY TO PURSUE 100% OF
THEIR RECOVERY AGAINST THE
INSURED.
THEIR INSURED BEING RYAN.
THEY ELECTED NOT TO DO THAT.
I DON'T FLOW WHY BECAUSE,
THEY GET 100% OF THEIR
RECOVERY IF THEY DO THAT.
NEVER HAVE TO FILE AND
PARTICIPATE IN THIS
DECLARATORY JUDGMENT.
NEVER HAVE TO INCUR
ATTORNEYS FEES.
ONLY REASON WE COULD
POSSIBLY SPECULATE WHY THAT
HAPPENED IS THAT RYAN MAY
NOT BE COLLECTABLE.
MAYBE THEY COULDN'T GET IT
FROM RYAN.
>> THAT IS LEGITIMATE -- NOW
STILL GET THIS ISSUE FROM
THE LAST CASE WHICH WHETHER
THIS KIND OF POLICY WOULD
EVEN, YOU KNOW PAY OFF ON
THIS LOSS.
SO, BURKES IF WE GET BACK TO
IT, IT'S ALWAYS APPROPRIATE,
IT'S NOT LIKE COLLUSION, TO
SAY, JEEZ, EAR IT'S IN
RYAN'S INTEREST AND
HARTFORD'S INTEREST TO GET
COULD HAVEAGE -- COVERAGE
UNDER THE POLICY IF SUCH
COVERAGE EXISTS.
I DON'T SEE WHAT THE PROBLEM
IS?
>> THE PROBLEM IS, JUDGE,
WHEN YOU GET AHEAD OF
YOURSELF SAYING IT'S FORM
OVER SUBSTANCE, IF HARTFORD
NEVER COULD COLLECT IT FROM
RYAN, THEN, IT'S NOT A
MATTER OF WELL, GEE WHIZ,
AREN'T WE FORM OVER
SUBSTANCE REALLY HERE IF WE
DON'T GIVE IT TO RYAN THEY
COULD HAVE DONE IT, HARTFORD
WILL GO GET IT BACK LATER
ON.
THAT'S NOT THE FACT IF
THEY'RE NOT CHECKABLE.
INSURANCE COMPANIES, I'VE
BEEN REPRESENTING INSURANCE
COMPANIES FOR 35 YEARS.
THE INSURANCE COMPANIES
DON'T FILE THE LITIGATION
FOR SAKE OF GETTING FEES
THEY WILL GET IN FILING
LITIGATION ONLY.
>> DID HARTFORD RESPOND TO
THE OBLIGEE IN ATTORNEYS
FEES UNDER 428?
OR DID IT RESPOND --
>> OH, NO.
HARTFORD HASN'T, HARTFORD IS
SEEKING RECOVERY UNDER 428.
>> I UNDERSTAND THAT.
BUT WAS THERE A CLAIM MADE
BY THE OBLIGEE?
>> YES.
OH THE OBLIGEE, NO.
OBLIGEE IS NOT PART OF THE
CLAIM.
CLAIM WAS MADE BY RYAN
PRINCIPAL IN THIS CASE AS
WELL AS HARTFORD.
>> HARTFORD HAS NOT PAID OUT,
THERE L JUST SEEKING
ATTORNEYS FEES?
>> CORRECT.
>> FOR GOING ON YOUR POLICY?
>> THEY'RE SEEKING ATTORNEYS
FEES THEY'RE DECLARING IN
THE DECLARATORY JUDGMENT
ACTION.
>> WHEN THEY PAID OUT THEY
PAID OUT 4 1/2 MILLION
DOLLARS.
>> HE IS THAT THE UNDERLYING
ACTION, JUDGE.
WE'RE NOT TALKING ABOUT THAT
AT ALL.
THAT HAS NOTHING TO DO WITH
THIS CASE.
WE'RE STRICTLY TALKING ABOUT
ATTORNEYS FEES GENERATED BY
HARTFORD IN THE DECLARATORY
JUDGMENT CASE.
THOSE FEES IT'S NOT DISPUTED
THE FEES INCURRED IN THE
UNDERLYING CASE ARE COVERED
BY THE CONTINENTAL POLICY.
>> THERE IS NO QUESTION HERE
THAT, HARTFORD HAS AN
ABSOLUTE RIGHT TO PURSUE,
CONTINENTAL AND LUMBERMENS
FOR COVERAGE BECAUSE THEY
STOOD IN THE SHOES BY PAYING
OUT 4 1/2 MILLION DOLLARS?
>> THE ONLY THING I WOULD
DISAGREE WITH THE STANDING
IN THE SHOES.
THEY'RE A SUB ROW GEE.
AS A SUBROGEE THEY HAVE
RIGHT TO ROOFER EVERRECOVER
THE ACTION UNTIL 426.
THEY HAVE NO RIGHT TO
RECOVER THE ATTORNEYS FEES.
>> I FORM OVER SUBSTANCE
COMES THIS WAY.
RYAN AND HARTFORD IN THE
CASE.
NOW THEY KNOW NEXT TIME
HARTFORD CAN'T GET THEIR
ATTORNEY FEES.
INSTEAD OF HARTFORD TAKING
BY HARTFORD'S THEIR ATTORNEY
THEY GO NOW, RYAN'S ATTORNEY
DOES TWICE AS MUCH, AND
YOU'RE STILL ON THE HOOK FOR
FEES.
IN OTHER WORDS UNDER ANY
SITUATION, THERE CAN'T BE I
WOULD THINK JUST BECAUSE
HARTFORD AND RYAN ARE IN
THERE THEY CAN BOTH RECOVER
FOR DUPLICATIVE TIME FOR
PROSECUTING A CASE.
I DON'T SEE HOW IN THE END
ONCE YOU GET BY THE STATUTE
THERE IS REALLY ANYTHING,
QUOTE, OF A PROBLEMATIC
NATURE ESPECIALLY IF YOU
DON'T ALLOW THE ASSIGNMENT
TO BEGIN WITH.
AND HAVING BOTH SUB ROGEE
AND INSURED ENTITLED TO
RECOVER THEIR ATTORNEYS
FEES.
>> I WOULD RESPOND IN THIS
RESPECT.
THAT,,
HARTFORD EVEN AS AS SIGN EIN
THIS CASE.
IS STILL INSURED.
NO COURT IN THIS CASE
ALLOWED INSURANCE CARRIER TO
RECOVER FEES UNDER 428.
NO COURT IN THIS STATE
ALLOWED SURETY AS SUB ROW
DEOR OTHER BUYS WISE TO
RECOVER A FEES UNDER THAT
STATUTE.
THIS COURT WOULD HAVE TO
OVERTURN A BODY OF LAW, THIS
STATE AND OTHER APPELLATE
COURTS IN THE STATE HAVE
FOUND CARRIERS ARE NOT
ALLOWED TO RECOVER UNDER THE
STATUTE AND INSUREDS, AND
SURETIES ARE INSURERS.
>> BUT THOSE CASES DEAL WITH
DISTINCTLY DIFFERENT
SITUATIONS ALTHOUGH HARTFORD
IS AN INSURER, IN THIS
SITUATION IT'S NOT SEEKING
FEES BASED ON ITS STATUS AS
AN INSURER.
IT'S SEEKING FEES AS STATUS
AS SOMEBODY WHO SUBROGATED
TO THE RIGHTS OF RYAN.
>> CORRECT N WESTERN WORLD
AND CITY OF OPA LOCKA
ADDRESSED THAT ISSUE.
SAYING A MERE SUBROGEE DOES
NOT QUALIFY AS A PERSON WHO
CAN OBTAIN FEES UNDER THE
STATUTE.
THE STATUTE COULD EASILY BE
AMENDED.
STATUTE DOESN'T SAY A NAMED
INSURED, NAMED BENEFICIARY
OR A SUBROGEE.
>> BUT IT DOESN'T SAY AN AS
SIGNEE EITHER.
>> ASSIGNEE IS DIRECT
RELATIONSHIP.
SUBROGEE IS NOT.
DID I SAVE ANY TIME?
>> YOU'VE SAVED 11 SECONDS.
>> THAT'S NOT ENOUGH EXCEPT
FOR ME TO SAY THANK YOU TO
THIS COURT.
I APPRECIATE THE
OPPORTUNITY.
PRIVILEGE TO ADDRESS YOU AND
I APPRECIATE YOU GRANTING MY
MOTION TO BE ADMITTED PRO
HOC.
>> THANK YOU.
>> MAY IT PLEASE THE COURT,
STEVE.
SHEMBER.
REPRESENT THE SURETY
HARTFORD.
MY PARTNER DUANE, DIKERT IS
WITH ME.
KEY POINT TRYING TO GET TO
THE NUB OF IT, IS THE FACT
THAT THE NAMED INSURED UNDER
THEIR INSURANCE POLICIES IS
RYAN.
THAT NAMED INSURED, RYAN, IS
LIABLE IN THIS CASE, IN THE
TRIAL COURT, IN THE SECOND
DISTRICT AND WHEN WE GO BACK
DOWN TO THE TRIAL COURT ON
REMAND FOR EVERY PENNY OF
THE LEGAL FEES THAT'S
GENERATED IN THIS CASE.
>> THAT'S A POLICY ARGUMENT.
BUT WE GOT A STATUTE THAT
DOESN'T GIVE YOU AS, A, SURETY
WHO IS SUBROGATED, RIGHTS.
WHERE IN THE CASE LAW, YOU
LOOK AT, YOU KNOW THE
ROBERTS VERSUS CARTER IT
SAYS THERE HAS TO BE AN
ASSIGNMENT.
I'M HAVING TROUBLE GETTING,
WHETHER IT'S A GOOD IDEA OR
NOT, GETTING PAST THE PLAIN
LANGUAGE OF THE STATUTE
ABSENT AN ASSIGNMENT.
NOW, I, I WASN'T AWARE, NOT
SURE I AGREE WITH IT, THAT
YOU COULDN'T HAVE GOTTEN AS
ASSIGNMENT WITHOUT THEIR
CONSENT.
ADDRESS THE ISSUE DIFFERENCE
BETWEEN A WRITTEN ASSIGNMENT
WHERE YOU'VE GOTTEN THE
RIGHTS ASSIGNED AND
SUBROGATION AS TO WHY, THE
ATTORNEYS FEES STATUTE WOULD
GIVE YOU THOSE RIGHTS IF
WE'VE SAID IT HAS TO BE
STRICTLY CONSTRUED?
>> WELL, I THINK THERE ARE A
COUPLE OF ANSWERS TO THAT.
FIRST OF ALL, I THINK, IF,
AS, JUDGE WALLACE HAS
POINTED OUT, WE DO IN FACT
STAND IN THE SHOES OF
RYAN --
>> THEY'RE IN THE SAME --
BUT THEY'RE STILL IN THE
SHOES.
UNLIKE A TRUE SUBROGATION
SITUATION WHERE, THE PERSON
WHO IS IN THE SHOES BEFORE
STEPS OUT OF THE SHOES, RYAN
STAYED IN THE SHOES.
THERE IS TWO PEOPLE IN
RYAN'S SHOES.
>> THAT'S CORRECT.
THAT'S A PROBLEM BECAUSE,
RYAN HAS PAID SOME OF THE
DAMAGES IN THIS CASE AND
RYAN HAS ALSO INCURRED SOME
ATTORNEYS FEES IN THIS CASE.
AND SO, THE, THE PROBLEM
WITH AN ASSIGNMENT UNDER
THOSE CIRCUMSTANCES IS THAT
IF RYAN ASSIGNS ALL ITS
RIGHTS THEN IT'S GIVING UP
ITS RIGHTS TO RECOUP THE
DAMAGES IT HAS PAID AND THE
ATTORNEYS FEES IT HAS
INCURRED WHICH IS TOTALLY
INEQUITY!!IABLE.
>> STOP RIGHT THERE, JUST
FOR MY BENEFIT, SEPARATE OUT
WHAT WE'RE TALKING ABOUT AS
FAR AS RYAN HAS PAID OUT.
RYAN PAID OUT TO THE
OBLIGEE?
>> YES, SIR.
I'M SORRY.
LET ME MAKE THAT CLEAR.
>> AND THESE ARE ATTORNEYS
FEES THAT RYAN INCURRED IN
DEFENDING AGAINST THE CLAIM
OF THE OBLIGEE THAT YOU'RE
TALKING ABOUT THAT RYAN
INCURRED?
>> NO, SIR -- YES, THEY HAVE
INCURRED THOSE FEES BUT
NOBODY IS DISPUTING --
>> DID RYAN OWE ANY FEES
UNDER THE CONSTRUCTION
CONTRACT TO THE OBLIGEE?
>> YES.
WELL --
>> NO OR ONLY THE BONDING
COMPANY OWED AN ATTORNEYS
FEES ON THE CLAIM OF THE
OBLIGEE?
>> CORRECT.
>> UNDER 428.
CORRECT?
>> YES.
RYAN DID NOT PAY ATTORNEYS
FEES TO THE OBLIGEE IN THE
UNDERLYING ACTION.
>> YOU AGREE ONLY ATTORNEYS
FEES WE'RE TALKING ABOUT IS
AS CORRECTLY STATED BY YOUR
OPPONENT, THAT IS THE
ATTORNEYS FEES IN THE DEC
ACTION?
>> YES, SIR.
THAT'S CORRECT EXACTLY
RIGHT.
>> COME BACK AND ADDRESS
PIECE BY PIECE, YOU KNOW WE
HAVE ENOUGH DIFFICULTY WITH
AMBIGUOUS LEGISLATION.
>> I'M SORRY, LET ME -- RYAN
HAS INCURRED ATTORNEYS FEES
IN THIS CASE.
>> IN THIS CASE, RIGHT.
>> THEY OCCURRED THEM IN THE
UNDERLYING CASE BUT --
>> THIS CASE.
>> THIS CASE RIGHT BEFORE
YOU RIGHT NOW.
>> COMING BACK TO PIECE BY
PIECE, AS I WAS SAYING WE
HAVE ENOUGH DIFFICULTY, WITH
AMBIGUOUS LEGISLATION.
ALL RIGHT?
THE LEGISLATURE HAS MADE IT
VERY CLEAR HERE WHO IS
ENTITLED TO ATTORNEYS FEES.
AND WE'VE THEN BACKED THAT
UP, AND SAID, SINCE THAT'S
NOT THE ORDINARY RULE, THAT
WE'RE GOING TO CONSTRUE
STATUTES LIKE THAT, OR
PROVISIONS LIKE, VERY,
STRICTLY.
SO, WE'VE GOT, AN EXPRESS
PROVISION IN A STATUTE SAYS
ONLY, THE, INSURED AND WE
HAVE THAT BACKED UP, BY,
CASE LAW, THAT SAYS, WE'RE
GOING TO STRICTLY CONSTRUE
THAT.
HOW DO YOU GET OVER THOSE
HURDLES AS NICE A GUY AS YOU
ARE AND YOUR CLIENT, AND THE
FACTS AND CIRCUMSTANCES OF
THE CASE AND ALL THE
EQUITIES AND ALL THAT?
THIS IS STRICTLY A LEGAL
ISSUE.
SO HOW DO WE GET OVER THOSE
HURDLES?.
>> WITH RESPECT, JUDGE,
FIRST OF ALL I THINK AGAIN,
THIS COURT HAS RECOGNIZED
THAT, AN AS SIGNEOF RIGHTS
UNDER THE POLICY EVEN THOUGH
THE STATUTE SAYS NOTHING
ABOUT ASSIGNEES.
THAT THEY GET TO ASSERT TO
SAME RIGHTS UNDER THE
STATUTE.
>> YOU'RE NOT AN ASSIGN E.
>> I THINK WE ARE BUT I
DON'T SEE A DISCERNIBLE,
DIFFERENCE OTHER THAN
EXALTING FORM OVER SUBSTANCE
BETWEEN AN ASSIGNEE AND
BROAD FORM OF EQUITIABLE
SUBROGEE THAT THE SURETY
HAS.
NOT INSURANCE WHERE
INSURANCE COMPANY GETS TO GO
AFTER THE WRONGDOER, A SURETY
HAS ALL RIGHTS OF THE
INSURED UNDER INSURANCE
POLICIES, RECEIVEABLES,
CONTRACTS, OF ANY SORT
WHATSOEVER.
WE STEP INTO THE SHOES OF
OUR PRINCIPAL FOR PURPOSES
OF ASSERTING THAT
PRINCIPAL'S RIGHTS.
I WOULD ASSERT THAT THAT
LEGALLY THERE'S, THERE'S NO
DIFFERENCE BETWEEN AN
ASSIGNMENT AND THAT BROAD
FORM OF SUBROGATION THAT THE
SURETY HAS.
NOW IN ADDITION TO THAT,
JUDGE, AS WE POINTED OUT IN
OUR BRIEF WE HAVE AN
ASSIGNMENT, A WRITTEN
ASSIGNMENT FROM THE INSURED,
RYAN, OF ALL RIGHTS ARISING
OUT OF OR RELATED TO THE
BONDED CONTRACT.
>> NOW YOU'RE TALKING ABOUT
THE WRITTEN INDEMNITY
AGREEMENT?
>> YES, THAT IS THE GIA.
YES, MA'AM..
>> BUT ISN'T THAT AN
ASSIGNMENT IN THERE, FIRST
OF ALL THAT'S WHERE THE
ANTI-ASSIGNMENT STATUTE
COMES INTO EFFECT AND THEY
COULDN'T AS SIGN AHEAD OF
TIME WHATEVER THEIR RIGHTS
WOULD BE IN TERMS OF --
>> WITH RESPECT, JUDGE, THE
ASSIGNMENT IS SIGNED AHEAD
OF TIME BUT IT DOESN'T GO
INTO EFFECT UNTIL THERE'S
BEEN A CLAIM MADE OR A
DEFAULT.
IN OTHER WORDS, WE DON'T, WE
DON'T, THAT ASSIGNMENT
DOESN'T BELONG TO US SO LONG
AS THERE, AS LONG AS THE
CONTRACTOR'S NOT IN DEFAULT,
THERE ARE NO CLAIMS MADE
AGAINST THE BOND, WE DON'T
OWN ANY OF THOSE CONTRACTUAL
RIGHTS.
OUR RIGHTS, OUR ASSIGNMENT
RIGHTS KICK IN AT THE TIME
THE CLAIM WAS MADE.
SO WE WOULD SAY THAT'S, I
MEAN THE CLAIM HAS BEEN MADE
AND THEREFORE, THE
ASSIGNMENT IS POST-THE
CLAIM.
>> I GUESS WHAT I'M
SAYING -- COULD YOU GO BACK
TO ONE THING I WANT TO MAKE
SURE ABOUT IN THE RECORD.
I HAVE THAT YOU PAID OUT
APPROXIMATELY $4.7 MILLION
IN CLAIMS FEES AND
EXPENSES?.
>> THE SURETY AND RYAN COME
BIND PAID OUT.
>> AS COMBINED.
DOES THE RECORD REFLECT HOW
MUCH RYAN PAID OF 4.7
MILLION?
>> THE RECORD DOES NOT
REFLECT THAT.
>> BUT IT DOES REFLECT THAT
THEY BOTH PAID, BOTH
HARTFORD AND RYAN PAID?
>> YES THE SETTLEMENT
AGREEMENT SHOWS THAT THEY
BOTH PAID.
IT'S A CONFIDENTIAL
SETTLEMENT AGREEMENT BUT --
>> ONE SEALED, WERE YOU ON
THE FIRST CASE?
>> I HEARD ALL THAT, JUDGE.
I WAS TOTALLY CONFUSED.
>> OKAY, BUT SO ON ONE HAND
YOU SAID IT WOULDN'T BE FAIR
TO HAVE AN ASSIGNMENT
BECAUSE RYAN STILL HAS A
RIGHT TO PURSUE ITS PORTION
OF WHATEVER IT
CONFIDENTIALLY PAID OUT.
AND ON THE OTHER HAND,
YOU'RE SAYING, BUT THERE WAS
AN ASSIGNMENT.
SO I'M HAVING A LITTLE
TROUBLE WITH SAYING THOSE
TWO THINGS AND, RECONCILING
THEM.
>> FRANKLY, JUDGE, IT'S AN
EITHER OR SITUATION.
OUR BASIC ARGUMENT HERE IS
THAT THE SURETY, BECAUSE OF
ITS UNIQUE AND DUANE STATUS
AS A SURETY AND, EQUITIABLE
SUBROGATION RIGHTS IT HOLDS
SHOULD BE ENTITLED TO STAND
IN THE SHOES OF ITS
PRINCIPAL WITH RESPECT TO
ASSERTING ALL CLAIMS UNDER
AN INSURANCE POLICY, NOT
JUST CLAIMS FOR THE DAMAGES
UNDER THE POLICY --
>> BUT YOU'RE MAKING THIS
CLAIM AS A SUBROGEE.
YOU'RE NOT MAKING IT AS A
ASSIGNEE.
AT LEAST THAT'S WHERE THE
SECOND DISTRICT CAME DOWN.
THE SECOND DISTRICT
RECOGNIZED A RIGHT OF
SUBROGATION HERE.
>> THAT'S EXACTLY WHAT THE
SECOND DISTRICT SAID, JUDGE.
THAT'S OUR FUNDAMENTAL
POSITION IN THIS CASE, IS
THAT BECAUSE WE ARE A
SUBROGEE, WE ARE ENTITLED TO
ASSERT THE SAME RIGHTS AS
OUR PRINCIPAL WHO IS THE
NAMED INSURED UNDER THESE
POLICIES.
AND THAT MEANS ALL RIGHTS,
NOT JUST SOME OF THE RIGHTS,
ALL RIGHTS WHICH INCLUDES
THE RIGHT TO ASSERT A CLAIM
FOR ATTORNEY'S FEES.
AND OUR POSITION IS, IT
WOULD BE INEQUITY!!IABLE NOT TO
ALLOW THAT BECAUSE IN THE
END IT'S THE NAMED INSURED
UNDER THE POLICY WHO IS
GOING TO END UP PAYING IT IN
THE END.
>> OKAY.
>> DOES THE CONCEPT OF
SUBROGATION FLOW EXCLUSIVELY
BECAUSE THE CONTRACTUAL
RELATIONSHIP THAT YOU, YOUR
CLIENT HAS, WITH RYAN?
OR IS THE CONCEPT OF
SUBROGATION OR EQUITIABLE
SUBROGATION MUCH BROADER
THAN THAT?
>> IT'S MUCH BROADER THAN
THAT, JUDGE LEWIS.
>> WHERE DOES THAT TAKE US?
TELL ME YOUR UNDERSTANDING
OF WHERE SUBROGATION OR
EQUITIABLE SUBROGATION GOES.
IS IT A SITUATION WHERE
THERE THERE ISING THAT ONE
PERSON OUGHT TO PAY BUT
SOMEONE ELSE PAYS IT AND
THEN YOU CAN THEREFORE,
EXERCISE THE RIGHTS OF THE
PERSON WHO OUGHT TO HAVE
PAID?
IS THAT WHERE WE GO INTO?
>> WELL THE, SEMINAL CASES,
RELIANCE VERSUS PEARL MAN
YOU CITED THAT IN THE DADELAND
DECISION I KNOW YOU KNOW
THAT CASE.
FEW THINGS ARE MORE
WELL-SETTLED IN THE LAW FOR
RIGHT OF SURETY TO BE
SUBROGATED.
>> RIGHT.
>> TO THE EXTENT IT'S MADE
PAYMENT.
>> YOU'RE SAYING SURETY
ONLY?
THERE IS NOTHING ELSE TO
OPEN THIS UP TO ANY AREA OF
THE LAW SURETY ONLY?
>> STRICTLY SURETIES.
BECAUSE OF THEIR UNIQUE
STATUS AS GUARANTORS OF
THESE OBLIGATIONS.
THAT'S WHY PEARLMAN FOR
EXAMPLE GIVES SURETY RIGHTS
AHEAD OF THE IRS SO THEY ARE
VERY BROAD RIGHTS.
>> THAT'S WHERE I AM
STUMBLING ON, TRYING TO,
BREAK THIS DOWN INTO WHAT
WE'RE ACTUALLY DEALING WITH,
BECAUSE SEEMS TO ME, THAT
THERE IS A DIFFERENCE
BETWEEN, WHAT THE SURETY IS
SUBROGATED TO AS TO WHAT THE
PRINCIPAL HAS RESPONSIBILITY
TO THEABLELY GEE TO PAY.
-- ON LA GEE.
AND WHAT THE SURETY IS
TRYING TO COME FROM A THIRD
PARTY INSURER.
AND, AND THAT, WHERE DOES
THE INTEREST OF -- HOW DOES
SUBROGATION, FIT WITHIN THE
STATUTE FOR ATTORNEYS FEES
WHEN YOU'RE DEALING WITH IN
IT THAT CONCEPT?
>> IF THE ANSWER, IF YOU
UNDERSTAND YOUR QUESTION,
THE ANSWER IS, IN THE END,
THE STATUTE, THE POLICY
BEHIND THE STATUTE AS
MR. MALONEY SAID, IS TO
COMPENSATE INSUREDS WHEN
THEY HAVE TO SUE THEIR
INSURERS.
AND IN THIS CASE, RYAN
BECAUSE, THE NAMED INSURED
BECAUSE THEY'RE GOING TO BE
ULTIMATELY LIABLE FOR THE
FEES, SHOULD BE ENTITLED TO
BE COMPENSATED UNDER THE
ATTORNEYS FEE STATUTE.
>> WOULD THEY BE OBLIGATED
FOR THE FEES YOU TAKING OFF
AND, CHASING ON BEHALF OF
HARTFORD SOME TYPE OF
INSURANCE CLAIM TO COLLECT
FOR HARTFORD?
>> OH, YES, SIR.
RYAN IS ABSOLUTELY LIABLE TO
HARTFORD FOR ALL THE FEES
HARTFORD INCURS IN PURSUING
REMEDIES IN THIS CASE.
>> UNDER THE CONTRACT?
>> UNDER THE CONTRACT AND AT
COMMON LAW.
>> UNDER COMMON LAW.
>> THEY WOULD BE HAPPIER TO
GET, I MEAN IT STILL
BENEFITS THE, PRINCIPAL
BECAUSE IF YOU CAN RECOVER,
SAY YOU PAID MOST OF THE
4 1/2 MILLION DOLLARS, FOR
THEM TO OH, BUT THEY HAVE TO
PAY THE FEES, IT'S BETTER,
YOU STILL BENEFITED THEM
FROM, GOING AFTER LUMBER
MEN'S AND CONTINENTAL BEFORE
YOU TRY TO GET THE --
>> ABSOLUTELY.
>> BEFORE AS WE'RE GOING TO
START CRYING --
>> KRE WE CAN PURSUE
REMEDIES, IN FACT WE ARE
PURSUING REMEDIES AGAINST
RYAN BUT WE'RE ALSO PURSUING
THESE REMEDIES HERE AND
OBVIOUSLY WE'RE NOT GOING TO
COLLECT TWICE.
BUT WE FEEL WE'RE GOING TO
PURSUE THESE REMEDIES --
>> OF COURSE IF YOU TAKE THE
LAST SET OF ARGUMENTS A
SURETY WOULD NEVER EVER BE
IN A POSITION OF PURSUING A
UNDER A GENERAL LIABILITY
POLICY.
SO I GUESS HARTFORD, AT
LEAST HARTFORD FIRE THINKS
THERE ARE SITUATIONS WHERE
THERE CAN BE COVERAGE UNDER
THESE, THESE GENERAL
LIABILITY POLICIES WE'RE
TALKING ABOUT HERE?
>> THIS CASE, WHAT THE,
SECOND DCA HELD THIS CASE
FALLS WITHIN THE
SUBCONTRACTOR EXCEPTION OF
J.S.U.B. SO THAT'S WHERE WE
ARE.
>> YOU'VE, HERE AS HARTFORD
FIRE ASSURETY BUT HARTFORD
I'M ASSUMING, WRITE GENERAL
LIABILITY POLICIES?
>> YES, SIR.
I MEAN, YES, MA'AM..
>> SO IF WE, I ISSUE WHETHER
A SURETY, IF WE DECIDE IN
J.S.U.B. THERE IS NO SUCH
THING AS COVERAGE FOR
SOMETHING THAT IS UNDER A
CONTRACT, THEN YOU DON'T
HAVE TO WORRY ABOUT IT AT
ALL.
I MEAN THAT'S WHY WE PUT
THAT CASE FIRST.
>> THERE'S AN INTERESTING
QUESTION, JUDGE BECAUSE THE,
THE, ISSUE OF COVERAGE IN
THIS CASE, HAS BEEN FINALLY
DETERMINED.
I MEAN WE'RE GOING FAR
AFIELD HERE.
I DON'T, IT MAY, THAT, THE
ISSUE OF COVERAGE IN THIS
CASE MAY BE FINAL.
AND --
>> WE WON'T HAVE TO WORRY --
YOU'RE RIGHT.
>> THAT'S A WHOLE OTHER
ISSUE.
>> THE CASE CITES J.S.U.B.
SO IT HAS TO HINGE ON WHAT
WE DO.
IT SEEMS TO ME THAT THE
ARGUEMENT YOU'RE MAKING THAT
SURETIES WHO ARE SUBROGATED,
UNLIKE OTHER SUBROGATION
SITUATIONS IT'S A GOOD
POLICY FOR THEM TO GET THEIR
ATTORNEYS FEES STRIKES ME AS
SOMETHING THAT THE
LEGISLATURE SHOULD CONSIDER,
NOT THIS COURT BECAUSE IT
SEEMS THAT YOU'RE MAKING A,
PUBLIC POLICY ARGUMENT ABOUT
ALLOCATION OF RISK AND FEES
AS OPPOSED TO A, STATUTORY
CONSTRUCTION ARGUMENT.
>> WELL, WITH RESPECT, I
THINK THE LEGISLATURE'S
ALREADY MADE THAT POLICY
DECISION WHEN THEY ENACTED
627.428.
BECAUSE THEY SAY, INSUREDS
SHOULD BE ABLE TO RECOVER
THEIR FEES FROM INSURERS.
AND IN THIS CASE, IF, IF
HARTFORD'S FEES ARE NOT
AWARDED IN THIS CASE, THE
INSURED, RYAN, IS GOING TO
END UP STUCK WITH ATTORNEYS
FEES FOR PURSUING THIS CLAIM
AGAINST THE INSURANCE
COMPANY.
THE POLICY BEHIND THE
STATUTE IS COMPLETELY
FRUSTRATED.
IN FACT NO POLICY IS, IS
FOLLOWED BY THAT.
>> YOU MENTIONED A REASON
THAT THERE COULDN'T BE, THAT
AN ASSIGNMENT WOULD MEAN
RYAN COULDN'T PURE SUE THEIR
PORTION OF THE RECOVERY.
DO YOU TAKE THE POSITION YOU
COULDN'T HAVE GOTTEN
ASSIGNMENT WITHOUT THE
CONSENT OF LUMBERMENS AND
CONTINENTAL?
>> I AGREE WITH
MR. MALONEY'S BRIEF, AND I
BELIEVE I THINK YOU'VE
STATED THE LAW, THAT THAT
ONLY APPLIES PRIOR TO THE
TIME THAT THE CLAIM AROSE.
>> SO NOTHING, OTHER THAN
THE FACT THAT, RYAN EITHER,
AGAIN BECAUSE THEY'RE GOING
TO BE ON THE HOOK SO THEY
CERTAINLY HAVE AN INTEREST
IN PURSUING IT AND BEING
PAID OUT WOULD HAVE
PREVENTED YOU FROM GETTING
AN ASSIGNMENT?
>> FRANKLY JUDGE, THIS WHOLE
ISSUE OF ASSIGNMENT DIDN'T
COME UP UNTIL WE GOT IN
FRONT OF THIS COURT.
>> YOU HAD WESTERN WORLD WAS
OUT THERE.
IT'S NOT LIKE IT IS A
SURPRISE UNTIL WESTERN WORLD
WAS HOW MANY YEARS AGO?
>> WE KNEW WESTERN WORLD WAS
THERE.
BUT WESTERN WORLD DOESN'T
SAY ANYTHING ABOUT
ASSIGNMENTS.
IT JUST SAYS THAT THE SURETY
CAN RECOVER FOR DAMAGES.
>> AND IT CAN'T RECOVER FOR
ITS ATTORNEYS FEES.
>> CAN'T RECOVER THE FEES.
WE KNEW THAT AND JUDGE
WALLACE KNEW THAT.
HE SAID I DISAGREE WITH
WESTERN WORLD WHICH IS WHY
WE'RE HERE.
BUT THE ISSUE OF THE
ASSIGNMENT, HAVING TO GET A
WRITTEN ASSIGNMENT, WASN'T
RAISED UNTIL WE GOT UP HERE.
>> EXCEPT THAT ROBERTS
VERSUS CARTER SAYS THAT,
ABSENT AN ASSIGNMENT YOU
CAN'T GET ATTORNEYS FEES.
>> I GUESS MY QUESTION, IN
THAT'S WHAT THIS CASE IS
ABOUT, ALL WE NEED TO DO GO
BACK GIVE RYAN A WRITTEN
ASSIGNMENT AGAIN WE'RE
ELEVATING FORM OVER
SUBSTANCE.
THE IDEA SHOULD BE THAT THE
SURETY BECAUSE OF THE BROAD
RIGHTS IT ALREADY HAS,
SHOULD BE ALLOWED TO STAND
IN THE SHOES OF ITS INSURED
BECAUSE, BECAUSE OF THE VERY
IMPORTANT FACT THAT THE IT'S
THE INSURED THAT IS GOING TO
END UP PAYING THE FEES IN
THE END.
THAT'S THE KEY DIFFERENCE
BETWEEN THIS CASE AND
OPA LOCKA, WHICH IS JUST AN
INSURANCE COMPANY CASE
THERE.
WAS NO INDEMNITY OBLIGATION
IN THE OPA LOCKA CASE.
SO ALL OF THE CASES THEY
CITE THAT INVOLVE INSURANCE
CARRIERS DON'T APPLY BECAUSE
THERE HAVE IS NO INDEMNITY
AGREEMENT BETWEEN THE
PRINCIPAL AND THE, THE
INSURED AND THE INSURER AS
THERE IS IN THIS CASE.
ONE REAL, LAST QUICK
COMMENT.
THE FINAL REMARK WAS THIS IS
JUST A, ARGUMENT BETWEEN TWO
INSURERS.
WITH ALL DUE RESPECT WE BEG
TO DIFFER.
THIS COURT HAS HELD VERY
RECENTLY, IT'S AWKWARD TO
TELL YOU WHAT YOU'VE HELD IN
A VERY RECENT DECISION BUT
THAT, CERTAINLY FOR MANY,
MANY PURPOSES UNDER THE
INSURANCE CODE, SURETIES ARE
CONSIDERED TO BE INSURERS.
HOWEVER THE COURT ALSO SAID,
THE SURETY RELATIONSHIP
POSSESSES CHARACTERISTICS
THAT ARE UNIQUE AND DISTINCT
FROM THE TRADITIONAL
LIABILITY INSURANCE
RELATIONSHIP AND THEREFORE,
OUR ANALYSIS DOES NOT END
HERE.
AND AS I READ YOUR OPINION
YOU WENT ON TO SAY, BECAUSE
OF THE UNIQUE AND DISTINCT
DIFFERENCES BETWEEN
SURETISHIP AND TRADITIONAL
INSURANCE IN MANY INSTANCES
THOSE DIFFERENCES HAVE TO BE
ANALYZED.
IN FACT YOU SAY, AN
ASSESSMENT OF THE ACTUAL
NATURE OF THE SURETY
RELATIONSHIP AND ITS
CLASSIFICATION IN OUR
STATUTORY PROVISION THAT'S
REQUIRED.
AND SO, I WOULD SUBMIT TO
YOU, FOLLOWING YOUR DECISION
IN DADE LAND, IF YOU ANALYZE
THE UNIQUE AND DISTINCT
CHARACTERISTICS OF
SURETISHIP IN THIS CASE.
CARL: IE, THE INDEMNITY
OBLIGATION OF THE PRINCIPAL
TO PAY BACK THE SURETY YOU
IN LIGHT OF THE POLICY IN
LIGHT OF 627.428 TO
COMPENSATE INSUREDS WHEN
THEY HAVE TO SUE INSURERS,
THAT DISTINCT RELATIONSHIP
MANDATES THAT YOU AFFIRM
JUDGE WALLACE IN THIS CASE.
>> MY CONCERN IS RYAN'S IN
TERMS OF THAT ARGUMENT SEEMS
TO BE ONE THAT RYAN SHOULD
BE HERE MAKING, NOT HARTFORD
SINCE, AGAIN, YOU WILL
ASSUMING THEY'RE SOLVENT GET
YOUR ATTORNEYS FEES BACK
FROM RYAN.
THEY'RE JUST NOT HERE
BECAUSE, DO WE KNOW WHY IN
THE RECORD WHY THEY'RE NOT
UP HERE AS AN INTERESTED
PARTY?
>> MR. WOODSON'S THOUGHT WE
COULD CARRY THE BALL.
>> SO NO ATTORNEYS FEES FOR
THEM ON APPEAL, HUH?
>> THINK THEY'RE TRYING TO
SAVE SOME, JUDGE.
UNLESS THE COURT HAS FURTHER
QUESTIONS, THANK YOU VERY
MUCH.
>> THANK YOU.
LET'S SEE WE HAVE A LITTLE
BIT OF REBUTTAL TIME LEFT,
MR. MARSHALL.
YES.
>> JUST VERY BRIEFLY, A
COUPLE OF QUICK POINTS.
FIRST OF ALL, WHETHER RYAN
MUST REIMBURSE HARTFORD FOR
THESE FEES IS, AT LEAST
QUESTIONABLE.
AS WE CITED IN OUR BRIEF.
WHETHER, THE ISSUE IS
WHETHER IT'S A NECESSARY
ADJUNCT TO HARTFORD'S
SURETISHIP FUNCTIONS
PURSUING THESE FEES ON THEIR
OWN BEHALF AGAINST A THIRD
PARTY, TGL CARRIER WE ARGUE
IT'S NOT.
THAT IT'S A FIGHT BETWEEN
HARTFORD AND RYAN.
UNDER THE BARNETT CASE WE
CITED IN OUR REPLY BRIEF IT
HAS TO BE A NECESSARY
ADJUNCT OR IT WOULD NOT BE
RECOVERABLE.
AND THE OTHER POINT IS,
WHETHER RYAN IS LEFT HOLDING
THE BAG, IS ALSO
QUESTIONABLE.
HARTFORD'S OWN BRIEF ARGUES,
THAT, ANY FEES RYAN HAD TO
PAY HARTFORD, ANY FEES THAT,
THAT RYAN HAD TO REIMBURSE
HARTFORD FOR, WOULD BE,
CONSIDERED, PART OF THEIR
PROPERTY LOSS UNDER THIS CGL
CARRIER, UNDER THE CGL
POLICY SO THEY WOULD BE
REIMBURSED BY THE POLICY
THIS WAS THEIR THIRD PARTY
CLAIMANT THEORY OF RECOVERY,
NUMBER THREE, IN THEIR
BRIEF.
SO UNDER THAT CIRCUMSTANCE
RYAN WOULD NOT BE LEFT
HOLDING THE BAG AND THERE IS
NO REASON HERE TO CONTORT
THE ATTORNEYS FEES STATUTE
BEYOND RECOGNITION TO TRY TO
SERVE THAT POLICY WHICH
ISN'T REALLY PRESENT THIS
DAY.
THANK YOU.
>> THANK YOU VERY MUCH.
WE APPRECIATE THE
ARGUEMENTS.
WE'LL TAKE THE CASE UNDER
ADVISEMENT.
THE COURT WILL STAND IN
RECESS UNTIL WEDNESDAY
MORNING.
>> PLEASE RISE.,,
>> THE COURT IS NOW
ADJOURNED.,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,