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(Article from Insurance Law Alert, February 2018)

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The Eleventh Circuit ruled that even assuming that appointed counsel was negligent in defending the policyholder, the insurer cannot be held vicariously liable, so long as appointed counsel was “competent and qualified.”  Kapral v. Geico Indem. Co., 2018 WL 509308 (11^th Cir. Jan. 23, 2018).

Kapral was sued by a party injured in an automobile accident.  Geico appointed counsel to represent Kapral in the suit.  When judgment was issued against Kapral in an amount above policy limits, Kapral sued Geico, asserting that Geico failed to adequately defend him, among other claims.  Following a trial, the district court granted Geico’s motion for a directed verdict on the inadequate defense claim.  The Eleventh Circuit affirmed, holding that “[u]nder Florida law, an insurer is not vicariously liable for the negligence of the attorney it retains to defend the insured, so long as the attorney is competent and qualified.”  Thus, even assuming counsel was negligent, the court held that Geico could not be liable because the record established that the attorney had substantial legal experience in practicing personal injury law.  The court acknowledged that governing precedent involved outside counsel, rather than staff counsel (as was the case here), but deemed that distinction immaterial.  The court explained:  “Nor should the result be different [based on the use of staff counsel] because under Florida law an insurer has no more right to exercise control over staff counsel’s professional conduct and independent judgment than it does over outside counsel’s conduct and judgment.”