Highland Holdings, Inc. et al v. Mid-Continent Casualty Company

Filing 97

ORDER denying 94 --motion for attorney fees. Signed by Judge Steven D. Merryday on 9/5/2017. (BK)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
HIGHLAND HOLDINGS, INC.
and ROBERT J. ADAMS,
Plaintiffs,
v.

CASE NO. 8:14-cv-1334-T-23TBM

MID-CONTINENT
CASUALTY COMPANY,
Defendant.
____________________________________/

ORDER
In 2013, a third party sued Highland Holdings and a Highland corporate
officer, Robert Adams, for copyright infringement.1 While the third-party action
pended, Highland and Adams sued in this action and requested a declaratory
judgment that Mid-Continent Casualty Company, which insured Highland under a
general commercial policy, owed a duty to indemnify Highland and Adams’
prospective damages in the third-party action. After settling the third-party action for
$650,000, Highland and Adams added a claim in this action for breach of the
insurance policy.
In 2015 Mid-Continent proposed to Highland and Adams a “joint” offer of
judgment under Section 768.79, Florida Statutes, and Rule 1.442, Florida Rules of

1

Case 8:13-cv-2448-EAK (M.D. Fla.).

Civil Procedure. (Doc. 94 at 45) The offer, which proposes settling the action for
$200,000, resolves “all claims that were made . . . by Highland and Adams in this
Coverage Action.” Highland and Adams declined the offer.
On summary judgment, the district court held that Highland and Adams failed
to establish Mid-Continent’s duty to indemnify Highland and Adams’ damages in the
third-party action, and the Eleventh Circuit affirmed. Mid-Continent moved in the
Eleventh Circuit for an attorney’s fee, and the Eleventh Circuit transferred the
motion (Doc. 94) to the district court.
DISCUSSION
If a defendant in an “action for damages” proposes an offer of judgment, if the
plaintiff declines the offer, and if the plaintiff recovers nothing, Section 768.79
permits the defendant to recover the attorney’s fee incurred after the offer.
Section 768.79 constitutes “substantive law for Erie purposes.” Jones v. United Space
All., L.L.C., 494 F.3d 1306, 1309 (11th Cir. 2007).
Objecting to the requested attorney’s fee, Highland and Adams argue that
Mid-Continent cannot recover an attorney’s fee in this action because the complaint
requests equitable relief.2 In Diamond Aircraft Indus., Inc. v. Horowitz, 107 So. 3d 362
(Fla. 2013), the plaintiff requested both specific performance and monetary damages.
Because Section 768.79 applies only to an action “for damages,” Horowitz holds that
a party to an action that includes a request for equitable relief cannot recover an
2

Because Diamond Aircraft and National Indemnity preclude an attorney’s fee, this order
declines to resolve Highland and Adams’ other arguments against an attorney’s fee.

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attorney’s fee under Section 768.79 unless the offer of judgment disavows settling the
equitable claim. 107 So. 3d at 374 (“[S]ection 768.79 does not apply to an action in
which a plaintiff seeks both damages and equitable relief, and in which the defendant
has served a general offer of judgment that seeks release of all claims.”).
Highland and Adams argue that their request for a declaratory judgment
constitutes “equitable relief ” that precludes an attorney’s fee. In National Indemnity
Co. of the South v. Consolidated Insurance Serv., 778 So. 2d 404 (Fla. 4th DCA 2001)
(Warner, J.), which Diamond Aircraft cites with approval, the plaintiff requested a
declaratory judgment that the defendant owed a duty to indemnify the plaintiff in a
third-party tort action. Affirming the circuit court’s denial of an attorney’s fee,
National Indemnity holds that a dispute over “insurance coverage for an underlying
tort action” is not an action “for damages.” 778 So. 2d at 408. Like National
Indemnity, the plaintiffs in this action requested a declaratory judgment about
“insurance coverage for an underlying tort action.” Because the request for a
declaratory judgment constitutes “equitable” relief under Diamond Aircraft and
National Indemnity and because Mid-Continent proposed a “general offer of
judgment,” Mid-Continent cannot recover an attorney’s fee under Section 768.79.
The motion (Doc. 94) for an attorney’s fee is DENIED.
ORDERED in Tampa, Florida, on September 5, 2017.

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