Insurance
— Automobile liability — Attorney’s fees and costs — Trial court properly
awarded attorney’s fees and costs against insurer jointly and severally with
insured pursuant to plaintiff’s proposal for settlement — Where policy index
indicated that insurer would make additional payments under liability coverages
for legal expenses and court costs, subsection of Additional Payments provision
stated that insurer would cover all investigative and legal costs, and another
subsection of the same provision provided that insurer would pay all reasonable
costs incurred by an insured at the insurer’s request, policy was ambiguous
regarding whether attorneys’ fees were included or excluded from coverage —
Ambiguity must be construed in favor of coverage — Insurer’s argument that
“reasonable expenses incurred by insured at insurer’s request” did not cover
attorney’s fees and costs under offer of judgment statute is without merit, as
insurer had control over settling case

GOVERNMENT EMPLOYEES INSURANCE
COMPANY, Petitioner, v. ALYSIA M. MACEDO, et al., Respondent. Supreme Court of
Florida. Case No. SC16-935. July 13, 2017. Application for Review of the
Decision of the District Court of Appeal — Certified Direct Conflict of
Decisions First District-Case No. 1D15-2896 (Okaloosa County). Counsel: B.
Richard Young and Joshua J. Hartley of Young, Bill, Boles, Palmer & Duke,
P.A., Pensacola, for Petitioner David A. Simpson and Jonathan D. Simpson of
Simpson Law Firm, Fort Walton Beach, for Respondent Alysia M. Macedo Dale
Swope, Darrell Hinson, and Stephanie Miles of Swope, Rodante P.A., Tampa,
Florida; and Elizabeth Munro of Florida Vanguard Attorneys, LLC, Tampa, for
Respondent Zackery R. Lombardo Jack R. Reiter, Jordan S. Kosches, and Veronica
A. Meza of GrayRobinson, P.A., Miami, for Amicus Curiae Property Casualty
Insurers Association of America.

(POLSTON, J.) Government Employees
Insurance Company (GEICO) seeks review of the decision of the First District
Court of Appeal in Government Employees Insurance Co. v. Macedo, 190 So.
3d 1155 (Fla. 1st DCA 2016).1 As explained below, we approve the
First District’s decision and hold that the ambiguous Additional Payments
section of the insurance policy must be construed in favor of coverage for the
costs and attorneys’ fees awarded against the insured pursuant to section
768.79, Florida Statutes, the offer of judgment statute.

I.
BACKGROUND

Zackery R. Lombardo’s automobile
insurance with GEICO provided bodily injury liability coverage for up to
$100,000 per person and $300,000 per incident. The policy also gave GEICO the
sole authority to settle any claim or suit.

Alysia M. Macedo sued Lombardo for
damages resulting from bodily injuries she sustained in an April 2012 automobile
collision with Lombardo. On May 1, 2014, Macedo served Lombardo with a proposal
for settlement for $50,000, which was not accepted. The case proceeded to
trial, and the jury returned a verdict in favor of Macedo in the amount of
$243,954.55.2 “Macedo then joined GEICO to the
judgment, see § 627.4136(4), Fla. Stat., and sought taxable fees and
costs pursuant to section 768.79, which the trial court awarded against GEICO
jointly and severally with its insured.” Macedo, 190 So. 3d at 1156.

On appeal, the First District
affirmed the trial court’s judgment based upon its prior decision in New
Hampshire Indemnity Co. v. Gray, 177 So. 3d 56 (Fla. 1st DCA 2015), which
had held “that the insurer’s policy provision stating that it would cover
‘other reasonable expenses incurred at our request’ included costs associated
with choosing to litigate a case instead of settling it.” Macedo, 190
So. 3d at 1156 (explaining its decision in Gray and quoting the policy
at issue in Gray). The First District explained that “GEICO’s policy
with Mr. Lombardo gave it the sole right to litigate and settle claims, and
contractually obligated it to pay for ‘all investigative and legal costs
incurred by us’ and ‘all reasonable costs incurred by an insured at our
request.’ ” Id. (quoting the Additional Payments section of the policy).
The First District reasoned that “[a]ny such expression, or request [to
litigate rather than settle], necessarily encompasses incurring litigation
costs, which may mean not only the insurer’s litigation costs, but also those
incurred by the opposing party should that party prevail.” Id. at 1157
(quoting Gray, 177 So. 3d at 63). Finally, the First District certified
that its decision in Macedo conflicts with the Second District’s
decision in Steele v. Kinsey, 801 So. 2d 297 (Fla. 2d DCA 2001). Id.

II.
ANALYSIS

Insurance policy construction is a
question of law subject to de novo review. Wash. Nat’l Ins. Corp. v.
Ruderman, 117 So. 3d 943, 948 (Fla. 2013). Courts construe insurance
contracts according to their plain language. Fayad v. Clarendon Nat’l Ins.
Co., 899 So. 2d 1082, 1086 (Fla. 2005). However, “any ambiguity which remains
after reading each policy as a whole and endeavoring to give every provision
its full meaning and operative effect must be liberally construed in favor of
coverage and strictly against the insurer.” Ruderman, 117 So. 3d at
949-50. A provision is ambiguous if it is “susceptible to two reasonable
interpretations, one providing coverage and the other excluding coverage.” Fayad,
899 So. 2d at 1086. The ambiguity must be genuine, and the lack of a definition
for an operative term “does not, by itself, create an ambiguity.” Botee v.
S. Fid. Ins. Co., 162 So. 3d 183, 186 (Fla. 5th DCA 2015). “When a term in
an insurance policy is undefined, it should be given its plain and ordinary
meaning, and courts may look to legal and non-legal dictionary definitions to determine
such a meaning.” Id.

Here, the relevant portion of the
Additional Payments section of Lombardo’s policy with GEICO states:

ADDITIONAL
PAYMENTS WE WILL MAKE UNDER THE LIABILITY COVERAGES

1. All
investigative and legal costs incurred by us.

. . . .

4. We will
upon request by an insured, provide reimbursement for the following items:

. . . .

(c) All
reasonable costs incurred by an insured at our request.

Additionally, the index of the
policy lists “Legal Expenses And Court Costs” as items that are covered under
the Additional Payments section.

A.

First, GEICO contends that the
policy does not cover the awarded attorneys’ fees because the Additional
Payments section refers only to costs, which generally do not include
attorneys’ fees. However, because the section is ambiguous, we disagree.

Contrary to GEICO’s argument, the
section does not only reference costs. As just mentioned, the policy index
indicates that GEICO will make additional payments under the liability
coverages for “[l]egal [e]xpenses [a]nd [c]ourt [c]osts.” Then, subsection (1)
of the Additional Payments provision states that GEICO will cover “[a]ll
investigative and legal costs,” while subsection (4)(c) of the same provision
discusses “[a]ll reasonable costs.” These phrases are not defined. Although the
absence of a definition does not render these phrases ambiguous, in this case,
the use of the term “costs” along with “legal expenses” creates an ambiguity
regarding whether attorneys’ fees are included or excluded. Referring to “legal
expenses” in conjunction with “court costs” signifies that there are “legal
expenses” aside from costs that are also covered; otherwise, the language would
be superfluous.

Accordingly, because there are
multiple reasonable interpretations regarding whether attorneys’ fees are
included by the terms “expenses” and “costs,” the Additional Payments section
is ambiguous and must be construed in favor of coverage. See Geico Gen. Ins.
Co. v. Hollingsworth, 157 So. 3d 365, 368 (Fla. 5th DCA 2015) (stating that
“[i]n light of the case law . . . combined with the principle that an ambiguous
policy must be interpreted against the insurer and in favor of coverage, we are
compelled to” hold that the attorneys’ fees granted pursuant to the offer of
judgement statute must be considered a “court cost” under the additional payments
provision); see also Geico Gen. Ins. Co. v. Rodriguez, 155 So. 3d 1163,
1171-72 (Fla. 3d DCA 2014) (holding that attorneys’ fee sanction was covered as
a “court cost” under the additional payments provision of the insurance
policy); Tri-State Ins. Co. of Minn. v. Fitzgerald, 593 So. 2d 1118,
1119 (Fla. 3d DCA 1992) (holding that attorneys’ fees sanction fell within the
coverage provided by the policy’s language of “all costs taxed against the
Insured, in any suit defended by the Insurer(s)”).

B.

Further, GEICO contends that
Additional Payments subsection 4(c), “[a]ll reasonable costs incurred by an
insured at our request,” does not cover the costs and attorneys’ fees awarded
against Lombardo under the offer of judgment statute because they were not “incurred
by an insured at [GEICO’s] request.” We disagree because GEICO had control over
settling the case. See Fla. Ins. Guar. Ass’n, Inc. v. Johnson, 654 So.
2d 239, 240 (Fla. 4th DCA 1995) (finding coverage when the insurance policy
stated that the insurer would pay for “[o]ther reasonable expenses
incurred at our request,” because the expenses incurred by the insured “as a
result of the insurance company’s choice not to settle . . . were incurred at
the insurer’s request”); Gray, 177 So. 3d at 63 (explaining that
“choosing to litigate is no different than a request or ‘expressing a desire’
to do so”).

In contrast to our interpretation,
the Second District in Steele, 801 So. 2d at 299, determined that a
policy provision that the insurer would pay “expenses incurred at our request”
did not provide coverage for plaintiff’s attorneys’ fees awarded against the
insured under the offer of judgment statute. The Second District reasoned as
follows:

The common
meaning of “request” is “the act of asking, or expressing a desire, for
something; solicitation or petition.” Webster’s New World College Dictionary
1218 (4th ed. 2001). The legal meaning of the word is “[a]n asking or petition.
The expression of a desire to some person for something to be granted or done,
particularly for the payment of a debt or performance of a contract.” Black’s
Law Dictionary 1172 (5th ed. 1979). Both of these commonly understood
definitions reinforce the clear use of the term within the context of the
policy — that the insurer intended to pay for expenses that it had authorized
and over which it had control, such as the selection of a service or product of
known value and cost.

Id.

But the Second District’s
interpretation in Steele does not account for the provision of a policy
that gives the insurer discretion to settle the case and the obligation of the
insured to cooperate with the insurer. See Ruderman, 117 So. 3d at 948
(explaining that when construing insurance contracts courts should “read each
policy as a whole”). Here, because GEICO was authorized to settle the case, and
could have settled in this case for half of the policy limit, it did not have
to ask Lombardo to accept or reject settlement offers. Further, if such request
were made, it would not fit the generally understood meaning of “request”
because under the terms of the policy, Lombardo would not truly have an option
whether to grant such request.

Moreover, the definition of the term
“request” on which the Second District relied in Steele can also be used
to conclude that the insurer did “request” the costs and attorneys’ fees
incurred under the offer of judgment statute. Specifically, the Second District
in Steele stated that to “request” something means that “the insurer
intended to pay for expenses that it had authorized and over which it
had control.” Steele, 801 So. 2d at 299 (emphasis added). Here, GEICO
could have authorized a settlement, and in essence GEICO controlled the
litigation. It follows that any cost or fee incurred as a result of GEICO
exercising its authority and control is something that it intended to pay. The
fact that the language the Second District in Steele used to exclude
coverage can also be interpreted to provide coverage highlights the ambiguity.

Accordingly, because there are
multiple reasonable interpretations, the provision is ambiguous and must be
construed in favor of coverage. See Auto-Owners Ins. Co. v. Anderson,
756 So. 2d 29, 35 (Fla. 2000) (construing ambiguity, which arose when a clause
was read in conjunction with the entire policy, in favor of coverage).

III.
CONCLUSION

For the foregoing reasons, we hold
that the ambiguous Additional Payments section of the GEICO insurance policy
must be construed to provide coverage for the costs and attorneys’ fees awarded
against Lombardo pursuant to the offer of judgment statute. Therefore, we
approve the First District’s decision in Macedo and disapprove the
Second District’s decision in Steele to the extent it is inconsistent
with our decision.

It is so ordered. (LABARGA, C.J.,
and PARIENTE, QUINCE, CANADY, and LAWSON, JJ., concur. LEWIS, J., concurs in
result.)

__________________

1We have jurisdiction. See
art. V, § 3(b)(3), (4), Fla. Const.

2In the final judgment, the trial
court ordered Lombardo to pay Macedo $172,965.91 because the jury found Macedo
25% responsible for her injuries and Macedo had received $10,000 in personal
injury protection benefits.

* * *