The Fourth District Court of Appeal decided a matter of first impression and published the first Florida opinion on the issue of whether the cost of an insurer providing a defense could be included in the $15,000 threshold amount in controversy required to invoke the subject matter jurisdiction of a Florida circuit court. The court answered in the affirmative, and expressly held that “the pecuniary value of an insurer’s obligation to tender a defense to its insured in the underlying suit implicating the coverage issue is properly considered in determining the existence of the jurisdictional amount in an action to determine coverage.”
Accordingly, the court rejected the appellant’s argument that the circuit court lacked jurisdiction to enter a final declaratory judgment in favor of Geico because the amount in controversy was based upon the policy’s $10,000 limit. Noting that no Florida court has addressed this issue, the Fourth District found guidance from federal courts that addressed this issue in Stonewall Ins. Co. v. Lopez, 544 F.2d 198 (5th Cir. 1976), Dairlyland Ins. Co. v. Chadwick, 2008 WL 912428, *3 (M.D. Fla. April 1, 2008), and Clarendon Am. Ins. Co. v. Miami River Club, Inc., 417 F. Supp. 2d 1309, 1316 (S.D. Fla. 2006).
These federal cases held that because the amount in controversy in a declaratory coverage action is determined from the insurer’s perspective, the monetary value of the obligation to defend the underlying lawsuit is properly considered in determining the jurisdictional amount in controversy.