Mlekush v. Farmers Inc. – Car Accidents and the American Rule

Some injury cases are taken on a contingency fee basis, meaning lawyers who agree to pursue the cases aren’t paid anything upfront and they don’t get paid unless they win.
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Under the so-called “American rule,” attorneys’ fees in civil litigation aren’t covered by the losing party unless there is some contract, statute or court rule that allows it. Florida does follow the “American rule,” but also abides by F.S. 627.428, which holds that if a judgment is made against an insurer, plaintiff may collect “reasonable” attorney’s fees.

The American rule contrasts with the English rule, in which the losing party always pays the prevailing party’s attorney’s fees.

Our Fort Lauderdale injury lawyers do recognize that costs can be a significant concern for potential clients, and we do our best to accommodate injured victims who are struggling financially. That could be through a contingency fee arrangement or some other reimbursement schedule that takes into account income, the complexity of the case, the severity of one’s injuries and the time and resources necessary to prevail.

In the recent case of Mlekush v. Farmers Inc., the Montana Supreme Court ruled on a case that dealt with the issue of the American rule.

According to court records, plaintiff was involved in a vehicle collision with another driver in 2011. The other driver conceded liability for the crash, which resulted in injuries to plaintiff. At-fault driver’s insurer paid the maximum policy limit of $50,000 for bodily injuries.

At the time of the accident, plaintiff’s vehicle was insured under a policy that included a $200,000 underinsured motorist coverage limit. Plaintiff contacted an attorney, who agreed to take her case on a contingency fee basis. Attorneys contacted insurer and requested opening a medical claim, and correspondence continued for several months. Plaintiff claimed medical bills, continuing injuries and lost wages.

In 2013, attorneys helped plaintiff file a complaint against insurer, alleging insurer had not paid sums owed. Insurer conceded it was liable, but insisted it didn’t have enough information to ascertain validity of client’s claims. Insurer also filed a third-party lawsuit against at-fault driver, seeking indemnification.

Court eventually granted summary judgment to at-fault driver on the third-party claim, finding the insurer’s subrogation action was in bad faith because at-fault driver had already been held accountable, and those could not be subject to judgment in the case, which in turn diminishes damages injured victim would be able to recover.

A number of settlement offers were on the table, but injured plaintiff’s case against insurer went to trial and jury awarded $450,000.Plaintiff agreed to a stipulated entry of judgment for the UIM policy limit of $200,000.

After that, plaintiff sought attorney’s fees. She asserted her attorney fees and nontaxable costs were owed under the insurance exception to the American rule. District court denied the motion, but the Montana Supreme Court reversed. The case was remanded, however, with instructions for district court to determine whether defense actions forced plaintiff to assume the legal burden of filing a lawsuit to obtain her UIM benefits. If that is the case, defendant will have to cover plaintiff’s attorney fees.

Call Fort Lauderdale Injury Attorney Richard Ansara at (954) 761-4011. Serving Broward, Miami-Dade and Palm Beach counties.

Additional Resources:
Mlekush v. Farmers Inc., Oct. 20, 2015, Montana Supreme Court
More Blog Entries:
Nissan Motor Co. v. Maddox – Seat Belt Fails to Protect Larger Passenger, Oct. 11, 2015, Fort Lauderdale Car Accident Lawyer Blog