VOLUME XXI, NUMBER 4
April, 2009

FROM THE CORNER OFFICE

Powers McNalis Torres & Teebagy is pleased to announce the addition of Stephen Barker and Robyn Feibusch to our roster of 23 attorneys. Mr. Barker and Ms. Feibusch will be working with the Property Practice Group under the management of Partners Steven Teebagy & Stephanie Luongo.

Powers, McNalis, Torres & Teebagy handles all aspects of recovery practice inclusive of subrogation, indemnification and contribution. We have been successful in representing both domestic and international carriers on a variety of recovery matters such as products liability, mold losses, fire losses, water losses, deficient construction, negligence and warranty claims.

It seems that there always are new challenges facing the insurance industry. This past year has witnessed uncertainty to the Surplus Lines industry from the Essex vs. Zota decision along with evolving Surplus Lines legislation, impact of the current economy, resurgence of supplemental hurricane claims and an influx of Chinese Drywall claims. Powers, McNalis, Torres & Teebagy remains at the forefront of these issues and we strive to provide outstanding service even during the most challenging of times.

STEPHEN BARKER’s primary practice area will be handling subrogation/recovery cases. Prior to joining Powers, McNalis, Torres & Teebagy, Mr. Barker worked for 8½ years in the subrogation department of White and Williams, LLP in Philadelphia, Pennsylvania, exclusively litigating property damage recovery actions. During this period, Mr. Barker generated in excess of $1,000,000.00 per year in subrogation recoveries for insurance industry clients.

Mr. Barker has been practicing civil litigation since graduating in 1993 from George Washington School of Law in Washington, D.C. Stephen Barker has independently litigated over 100 state and federal court actions relating to fire, water and storm damage losses, construction defects and product liability actions. Mr. Barker has successfully resolved hundreds of cases by way of jury trial, court-mandated and inter-company arbitration, and mediation.

Mr. Barker is admitted to practice in State and Federal Courts in Florida, Pennsylvania and New Jersey. Mr. Barker has also been specially admitted to practice in the State Courts of New York, Massachusetts, New Hampshire, Rhode Island, Connecticut, Maryland, Delaware, Virginia and Tennessee. Mr. Barker is a member of the National Association of Subrogation Professionals (NASP).

Powers, McNalis, Torres & Teebagy is proud to have Robyn Feibusch join our first party property group which includes former Assistant State Attorneys, Arson Prosecutors, and seasoned civil trial lawyers with many years of experience litigating fraud matters.

ROBYN FEIBUSCH’s primary practice area will be handling first party property coverage and fraud issues for Powers, McNalis, Torres & Teebagy.

Prior to joining Powers, McNalis, Torres & Teebagy, Ms. Feibusch spent 20 years as an Assistant State Attorney in the Office of the State Attorney, Palm Beach County, 15 th Judicial Circuit. For more than 10 years she was assigned to the Economic Crime Unit specializing in complex, document intensive, financial and computer crimes. Following the hurricanes that moved through Florida beginning in 2004, Ms. Feibusch handled disaster related crimes including charity fraud, contractor fraud, identity theft and insurance and benefits fraud. In 2008, through a grant from the State of Florida, Division of Insurance, Ms. Feibusch was designated as Palm Beach County's first Insurance Fraud Prosecutor overseeing and directing Division of Insurance Fraud investigations and prosecuting all types of fraudulent claims.

Ms. Feibusch is a seasoned and versatile trial lawyer with extensive courtroom, bench and jury trial experience. Ms. Feibusch holds a Bachelor of Science Degree from Florida State University and a Masters Degree from Barry University. In 1988, Ms. Feibusch graduated from the Shepard Broad Law Center at Nova Southeastern University. At Nova Law, Ms. Feibusch received the distinguished Book Award for Child Advocacy in the Law.

Powers, McNalis, Torres & Teebagy

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REQUEST FOR A RELEASE IN RESPONSE TO POLICY LIMITS DEMAND DOES NOT CONSTITUTE COUNTEROFFER

In Mercury Insurance Company of Florida v. Fonseca, 34 Fla. L. Weekly D332, the Third District Court of Appeal held that where there is a demand for policy limits and where, in response, there is a tender of the policy limits but the tender is accompanied by a request for a release, the request for a release is not a counteroffer but can be deemed part of the acceptance.

In Mercury, the claimant Fonseca was injured in a car accident which was allegedly caused by Mercury Insurance Company of Florida’s policyholder. Fonesca sued the policyholder but the policyholder raised the existence of a settlement as an affirmative defense. In a separate action, the carrier sought a declaratory judgment as to the validity of the same settlement. The two cases were consolidated for determination of the issue of whether there was a binding settlement based on correspondence between the parties. The trial court ruled that the correspondence in question was not sufficient to form a settlement. The Third District Court of Appeal disagreed and reversed the trial court’s decision.

The law of contracts governs settlements. On appellate review, the question of whether a contract was formed is reviewed de novo. To answer the question, the court examined the letters between the parties.

Fonseca’s counsel sent Mercury a policy demand letter stating that “This letter shall serve as a formal demand for a tendering of any and all available policy limits including umbrella coverages.” Two days later, Mercury responded as follows: “As requested, this carrier is tendering it’s[sic] bodily injury policy limits. Accordingly, enclosed is this carrier’s settlement check in the amount of $10,000.00. Also enclosed is a proposed settlement release which is not intended to be a final instrument until you have approved. If you should require any changes or additions, please advise. Otherwise, please see that [Fonseca] executes the release.” Id.

The first question which the court examined was whether there was an offer. The court noted that the type of demand letter sent by Fonseca’s counsel was not unique and the question of whether it constitutes an offer has been previously answered in Peraza v. Robles, 983 So.2d 1189 ( Fla. 3d DCA 2008). In Peraza, the demand letter stated “Please tender the policy limits within fifteen (15) days or we will consider [the insurance company] is acting in bad faith.” The court in Peraza stated that the demand letter constituted an offer. The demand letter in Mercury therefore constituted an offer to settle.

The court then examined whether there was an acceptance of the offer. For guidance, the court looked to Erhardt v. Duff, 729 So.2d 529 (Fla. 4 th DCA 1999) which presented similar facts. The Erhardt court held a request for a release did not transform the insurance company’s acceptance into a counteroffer and that the execution of the release was implicit as part of the tender, and not an additional element of the agreement. Relying upon Erhardt, supra, the court in Mercury stated that a document releasing an insurance company from liability for claims arising from the same incident for which the full policy limits were tendered, particularly where the injured party is permitted to modify such a release, is the kind of usual settlement document which is implicit in any settlement agreement. The court found that Fonseca offered to settle and Mercury accepted. As such, an enforceable contract was formed and the parties were bound by the settlement.

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MIDDLE DISTRICT RE-EMPHASIZES FORUM DEFENDANT RULE

In the case of North v. Precision Airmotive Corporation; Precision Airmotive, LLC; Precision Air South, Inc.; Precision Air, Inc.; Consolidated Fuel Systems, Inc.; Kelly Aerospace, Inc.; and Approved Turbo Components-Florida, Inc., (USDC Middle District, Orlando Div., Feb. 26, 2009), Fed. Fla. L. Weekly No. 43 (Vol. 21) D541, the United States District Court for the Middle District of Florida held that a non-forum Defendant that has not yet been served is permitted to remove a State Court action to a Federal Court pursuant to 28 U.S.C. §1441(b) even though the Plaintiff has already joined, but not yet served, a forum defendant. Also, this Court held that a surviving spouse may not have separate and distinct damages recoverable from a defendant when serving as the Personal Representative of the Estate in a wrongful death action.

The Plaintiff was the spouse of a decedent who died as a result of a plane crash in Vermont. The decedent was a resident of Vermont. The Plaintiff brought suit in Volusia County, Florida, as she was a resident of Florida. Prior to being served, one of the defendants removed the action to Federal Court based on diversity, 28 U.S.C. §1332 and §1441(b). All the defendants consented to the removal and no defendant was served prior to the one defendant’s removal. The Plaintiff attempted to remand the case by trying to defeat diversity in the action.

The Court held that the Plaintiff’s citizenship could not be considered in her individual capacity. The Court held that Florida’s Wrongful Death Statute applied and mandates that all survivors must assert their claim in that action that arise from the wrongful death and therefore, a Plaintiff who serves as the Personal Representative cannot assert any claims in her own individual capacity arising out of the wrongful death. As such, it was determined that her citizenship is the same as the decedent’s, Vermont. Some of the defendants were Florida corporations. The forum defendant rule provides that all actions centered upon diversity are removable if none of the parties in interest properly joined and served as defendants is a citizen of the state in which the action is brought. Therefore, the Plaintiff tried to argue that since some of the defendants were residents of Florida, that there was no diversity such that the case could be removed. The Defendant countered that at the time of removal, the defendants had not been joined and served. The Court, in looking at a majority of courts and opinions on this rule, determined that the defendants were permitted to remove unserved, non-forum defendants under §1441. The motion for remand was therefore, denied.

The case is instructive for a discussion of the elements constituting diversity and the mechanics of removal. The case also contains a thorough discussion of how citizenship is determined and how this may play out with respect to when service has not yet been effectuated over a forum defendant.

Nancy I. Stein-McCarthy