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The 3d DCA clarified in Starr Indemnity & Liability Co. v. Morris, 40 Fla. L. Weekly D147c (Fla. 3d DCA Jan. 7, 2015) that Florida's non-joinder statute precludes a single lawsuit for negligence and insurance coverage, regardless of whether plaintiff makes a direct coverage claim that he or she is an insured. When a plaintiff claims that he or she is an insured under the terms of the policy, the appropriate remedy is to sever the coverage claim from the negligence claim.

Starr Indemnity & Liability Co. ("Starr") was the liability insurer for Matador Sport Fishing, LLC ("Matador"), a company that provides charter fishing trips in the Florida Keys. On July 13, 2013, the plaintiff, Morris, slipped and fell on the deck of a ship owned by Matador sustaining significant injuries.

Morris filed suit against Matador and the ship captain for negligence. However, the complaint also named Starr and asserted an action for breach of contract alleging that Morris was an omnibus insured under the policy's medical coverage clause and therefore Morris was entitled to recover her medical costs directly from Starr.

Starr filed a motion to dismiss or in the alternative to sever Morris's breach of contract claim based on Florida's non-joinder statute (627.7136, Fla. Stat. (2014)). The statute provides that a liability insurer cannot be joined in a tort suit against the insured until a settlement or verdict is entered. The trial court denied the motion claiming the statute did not apply because Morris's allegations were that she was an insured and therefore had a direct action against Starr. The judge later denied Starr's motion for reconsideration, resulting in an appeal for certiorari relief.

The 3d DCA determined that the trial court had incorrectly applied the non-joinder statute which was a departure from the essential requirements of law resulting in irreparable harm when it denied Starr's motion to sever the contract claim. In reaching its conclusion, the 3d DCA highlighted the intent of the non-joinder statute which is to ensure that the availability of insurance has no influence on the jury's determination of an insured's entitlement to damages.

The 3d DCA pointed out that the plain language of the non-joinder statute precludes a plaintiff, who is not an insured, from bringing a cause of action against a liability insurer. In such instances, a dismissal with prejudice is appropriate. However, even though Morris alleged that she was an omnibus insured under the policy, the non-joinder statute still applied and the proper procedural course was to sever the claims between Starr and Matador. Even where a plaintiff alleges he or she is an insured, the action must be severed to serve the legislature's intent behind the non-joinder statute to prevent jurors from becoming aware that an insurance company may be responsible for a judgment against the insured in a negligence action.



 

This summary was prepared by Kelley Lester of our firm.


Kelley Lester

 

 


40 Fla. L. Weekly D147c

 

Torts -- Insurance -- Nonjoinder of insurer in tort action against insured -- Trial court did not err in denying motion to dismiss with prejudice plaintiff's breach of policy claim against insurer, but court departed from essential requirements of law in denying motion to sever plaintiff's breach of policy claim against insurer from negligence claim against insured

STARR INDEMNITY & LIABILITY CO., Petitioner, vs. HELON S. MORRIS, Respondent. 3rd District. Case No. 3D14-2733. L.T. Case No. 14-472. Opinion filed January 07, 2015. A Writ of Certiorari to the Circuit Court for Monroe County, Luis Garcia, Judge. Counsel: Hamilton, Miller & Birthisel, LLP, and Jerry D. Hamilton, Robert M. Oldershaw, and Michael J. Dono, for petitioner. Robby Thomas Cook (St. Augustine); and Thomas E. Woods (Islamorada), for respondent.

(Before SUAREZ, ROTHENBERG, and LOGUE, JJ.)

(ROTHENBERG, Judge.) Starr Indemnity & Liability Co. ("Starr") petitions this Court for a writ of certiorari based on the trial court's denial of its motion to dismiss or, in the alternative, to sever Helen S. Morris's ("Morris") claim against Starr based on Florida's nonjoinder statute, section 627.4136 of the Florida Statutes (2014). Because the trial court's failure to sever Morris's coverage claim against Starr from Morris's tort suit against Starr's named insured is a departure from the essential requirements of law that would cause Starr irreparable harm, we grant the petition in part and direct the trial court to sever the coverage claim from the tort suit.

Starr is the insurance provider for Matador Sport Fishing, LLC ("Matador"). Matador is a sport fishing company that allows customers to board its vessel (also named the Matador) and angle for various types of fish in the Florida Keys. Matador's insurance policy comprises coverage for various types of loss, including liability coverage should one of Matador's customers be injured while aboard one of its vessels under certain circumstances.

Morris boarded Matador's ship to go fishing with her granddaughter on July 11, 2013. Morris apparently slipped, fell, and landed on a bucket on the deck of the ship, thereby incurring substantial injury. Morris subsequently brought a negligence action against Matador (Count I) and the captain of the vessel (Count II) and a breach of contract action against Starr (Count III). Morris's breach of contract claim against Starr is not premised on Starr's liability coverage of Matador, through which Starr may ultimately be held responsible if Matador is found liable for negligence, but rather, the breach of contract claim alleges that Morris is an omnibus insured under Starr's policy's Medical Coverage clause who is contractually entitled to recover medical costs directly from Starr.

Starr filed a motion to dismiss the breach of contract action based on Florida's nonjoinder statute, which generally provides that a liability insurer cannot be joined in the tort suit against its insured until a settlement or verdict is entered. §627.4136. The trial court denied that motion, ruling that the nonjoinder statute did not apply because Morris's breach of contract action was based on her allegations that she was an insured under the terms of the contract and had a direct action to recover. Starr filed a motion for reconsideration of its motion to dismiss the action or, in the alternative, to sever the contract action against Starr from the negligence action against its named insured. The trial court denied this motion for the same reason. Starr then timely filed this certiorari petition.

In order to obtain certiorari relief, Starr must establish that the trial court's order constitutes a departure from the essential requirements of law resulting in irreparable harm, i.e., material injury for the remainder of the case that cannot be corrected by a postjudgment appeal. Citizens Prop. Ins. Corp. v. San Perdido Ass'n, 104 So. 3d 344, 351 (Fla. 2012). The law is well established that a trial court's incorrect application of Florida's nonjoinder statute establishes the irreparable harm necessary for certiorari relief. See Lantana Ins., Ltd. v. Thornton, 118 So. 3d 250, 251 (Fla. 3d DCA 2013); General Star Indem. Co. v. Boran Craig Barber Engel Constr. Co., 895 So. 2d 1136, 1138-39 (Fla. 2d DCA 2005); Merchs. & Businessmen's Mut. Ins. Co. v. Bennis, 636 So. 2d 593, 595 (Fla. 4th DCA 1994). Thus, we must examine whether the trial court's order departs from the essential requirements of law. We hold that it does.

Florida's nonjoinder statute provides, in relevant part:

627.4136. Nonjoinder of insurers. --

(1) It shall be a condition precedent to the accrual or maintenance of a cause of action against a liability insurer by a person not an insured under the terms of the liability insurance contract that such person shall first obtain a settlement or verdict against a person who is an insured under the terms of such policy for a cause of action which is covered by such policy.

. . . .

(3) Insurers are affirmatively granted the substantive right to insert in liability insurance policies contractual provisions that preclude persons who are not designated as insureds in such policies from joining a liability insurer as a party defendant with its insured prior to the rendition of a verdict. The contractual provisions authorized in this subsection shall be fully enforceable.

§ 627.4136. " 'The legislative intent behind the [nonjoinder] statute is to ensure that the availability of insurance has no influence on the jury's determination of the insured's liability and damages.' " GEICO Gen. Ins. Co. v. Harvey, 109 So. 3d 236, 238 (Fla. 4th DCA 2013) (quoting Boran Craig, 895 So. 2d at 1138); Mid-Continent Cas. Co. v. United Rentals, Inc., 62 So. 3d 1173, 1175 (Fla. 4th DCA 2011); see also Nevarez v. Friskney, 817 So. 2d 856, 858 (Fla. 5th DCA 2002). Thus, the trial court should either dismiss or sever related actions against a liability insurer to prevent prejudice.

Morris contends that section 627.4136 does not apply in this instance because she has pled a direct claim against Starr as an omnibus insured under the policy. Morris is correct that section 627.4136 does not technically apply when a claimant alleges that he or she is an insured under the policy terms. See Mucha v. Atlas Van Lines, Inc., 989 So. 2d 697, 698 (Fla. 5th DCA 2008). Accordingly, the trial court correctly denied Starr's motion to dismiss the action with prejudice. Id. However, the legislative intent underlying section 627.4136 mandates that the direct action against Starr be severed to prevent jurors from discovering that an insurance company may be held responsible for some or all of the judgment in the negligence suit against Matador. Boran Craig, 895 So. 2d at 1138 (holding that the trial court abuses its discretion by not severing the action even when there is a direct policy claim against an insured due to the risk of jury prejudice).

As the Fourth District Court of Appeal held in Bennis: "There is no reason for [a policy coverage action against the liability insurer and a negligence suit against its insured] to be tried together. Trying the coverage issues with the liability and damages claims defeats the purpose and policy of the non-joinder statute." 636 So. 2d at 595. Such claims "are essentially unrelated and constitute separate and distinct legal actions." Id. Thus, the trial court departed from the essential requirements of law by refusing to sever Morris's breach of policy claim against Starr from her negligence suit against Matador. We grant the petition insofar as it challenges the trial court's denial of the motion to sever the actions but deny the portion of the petition challenging the trial court's denial of Starr's motion to dismiss the action with prejudice.

Petition granted in part; denied in part.

 



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