Mr. Kapral then sued Geico, asserting, among other claims, that Geico had "failed to defend [him] in the underlying lawsuit" because Geico had assigned the defense to an attorney "who failed to represent [his] interests and provide competent legal services with a degree of knowledge and ordinary skill of which similarly situated Florida lawyers would exercise."

The case proceeded to trial and, after Mr. Kapral rested, Geico moved for a directed verdict on Mr. Kapral's inadequate defense claim.

The U.S. District Court for the Middle District of Florida granted its motion and, after closing arguments and hearing all of the evidence, the jury returned a verdict in Geico's favor on a separate claim.

Mr. Kapral moved for a new trial, contending that the district court had improperly directed a verdict on his inadequate defense claim. The district court denied his motion, and Mr. Kapral appealed to the Eleventh Circuit, contending that the district court had erred by granting Geico's motion for a directed verdict.

Mr. Kapral contended that his defense had been inadequate because counsel had failed to take certain actions, "and a jury could have reasonabl[y] concluded that those failures caused the Beitlich [personal injury] lawsuit not to settle."

The Eleventh Circuit's Decision

The circuit court affirmed.

In its decision, the circuit court explained that, under applicable Florida law, an insurer was not vicariously liable for the negligence of an attorney it retained to defend its insured, so long as the attorney was competent and qualified.

The circuit court then pointed out that Geico had presented evidence showing, among other things, that Mr. Kapral's attorney had been licensed in Florida for 18 years and had owned a law firm where he practiced personal injury law for eight years.

The circuit court acknowledged that Mr. Kapral had presented evidence that his attorney had not "evaluate[d] the Answers to Interrogatories or medical records after the lawsuit was filed," had not promptly sent certain items to a Geico adjuster, and had not "timely communicate[d] important information to [him]." The circuit court found, however, that Mr. Kapral's evidence showed, at most, "that counsel was negligent in representing him."

The circuit court then ruled that "even if counsel's performance was negligent, Geico cannot be held liable."

The Eleventh Circuit decided that the rule applied even though Mr. Kapral's counsel was not outside counsel but was salaried staff counsel, reasoning that under Florida law, an insurer had "no more right to exercise control over staff counsel's professional conduct and independent judgment than it [did] over outside counsel's conduct and judgment."

Accordingly, the circuit court concluded that because Mr. Kapral failed to present any evidence that counsel was not competent or qualified to defend him in the personal injury suit, and because the allegations and evidence underlying his inadequate defense claim all sounded in negligence or malpractice, the district court had not erred in granting Geico's motion for a directed verdict on his inadequate defense claim.

The case is Kapral v. Geico Indemnity Co., No. 17-11511 (11th Cir. Jan. 23, 2018). Attorneys involved include: For CORY R. KAPRAL, Plaintiff – Appellant: Michael S. Rywant, Rywant Alvarez Jones Russo & Guyton, PA, GAINESVILLE, FL; W. Scott Hamilton, James L. Price, Price Hamilton & Price, Chartered, BRADENTON, FL; Gavin David Magaziner, Kerry C. McGuinn, Jr., Carolyne V. Moomaw, Rywant Alvarez Jones Russo & Guyton, PA, TAMPA, FL. For GEICO INDEMNITY COMPANY, Defendant – Appellee: Billy Richard Young, Joshua John Cecil Hartley, Stephanie Ann McQueen, Young Bill Boles Palmer & Duke, PA, TAMPA, FL.

FC&S Legal Comment

Other courts have similarly recognized that an attorney's duties are to the client – that is, the insured – and not the insurer. See, e.g., Petition of Youngblood, 895 S.W.2d 322, 328 (Tenn. 1995) ("The obligation to defend the insured under a contract of insurance obviously contemplates representation by counsel who can exercise professional judgment and devote complete loyalty to the insured regardless of the circumstances. The same loyalty is owed the client whether the attorney is employed and paid by the client, is a salaried employee of the insurer, or is an independent contractor engaged by the insurer.").