State Farm Fire & Cas. v. FLEET FINANCIAL
| Decision Date | 18 December 1998 |
| Docket Number | No. 98-612.,98-612. |
| Citation | 724 So.2d 1218 |
| Parties | STATE FARM FIRE AND CASUALTY COMPANY, Appellant, v. FLEET FINANCIAL CORPORATION, et al., Appellee. |
| Court | Florida District Court of Appeals |
David H. Simmons and Patrick C. Howell of Drage, Debeaubien, Knight, Simmons, Romano & Neal, Orlando, for Appellant.
Lamar D. Oxford of Dean, Ringers, Morgan & Lawton, Orlando, for Appellee.
In this declaratory judgment action, the trial court sua sponte entered a final summary judgment against State Farm Fire & Casualty Company (State Farm). We reverse because the court erred in failing to afford State Farm an opportunity to amend its complaint prior to entering its summary judgment order.
United Services Automobile Association and USAA Casualty Insurance Company (USAA) sued Fleet Financial Corporation, Inc., and United Claims Corporation, Inc., (Fleet), in federal district court claiming that Fleet had operated a scheme designed to defraud USAA and other insurers. Specifically, USAA alleged that various rental car operators had contracted with Fleet to process insurance claims resulting from vehicles damaged while rented, and that Fleet had systematically inflated the claims.
While USAA's federal action was pending, State Farm filed this declaratory judgment action in the circuit court seeking a determination as to whether it was obligated to defend or indemnify Fleet with regard to USAA's lawsuit. State Farm insured Fleet under a comprehensive business policy, and Tudor Insurance Company insured Fleet under an error and omission policy. Fleet filed an answer and affirmative defenses alleging that there was no present controversy to be decided because USAA's federal lawsuit had been settled.
State Farm moved for summary judgment. The day the motion was set for hearing, Fleet served State Farm with a motion to strike or abate. Although not timely noticed for hearing, the trial court allowed Fleet to argue its motion to strike. Fleet argued that the trial court lacked jurisdiction over the declaratory judgment action because USAA's federal lawsuit had been settled by the parties. State Farm responded by explaining that, although a settlement had been reached, the settlement agreement provided, among other things, that State Farm could reserve its right to continue its declaratory judgment action in the circuit court. State Farm also requested permission to amend its complaint so as to make reference to the settlement agreement. Upon consideration, the trial court denied State Farm's motion to amend stating:
The trial court thereafter entered final summary judgment in favor of Fleet, apparently persuaded that it lacked subject matter jurisdiction over the declaratory judgment action because the underlying federal lawsuit had been settled, and therefore, there was no justiciable controversy left pending. See Jacobs & Goodman, P.A. v. McLin, Burnsed, Morrison, Johnson & Robuck, P.A., 582 So.2d 98
(Fla. 5th DCA 1991); see also § 86.011, Fla. Stat. (1997).
State Farm contends that the disposition of the federal lawsuit did not divest the trial court of jurisdiction over this declaratory judgment action because the issue as to State Farm's duty to defend or indemnify Fleet remained unresolved. State Farm maintains that the terms of the parties' settlement agreement included an agreement that State Farm could continue to pursue this declaratory judgment action. Unfortunately, the parties' settlement agreement was not made a part of the record before the summary judgment hearing was conducted. At the hearing State Farm requested permission to amend its complaint to include a reference to the settlement agreement; however, this request was denied. We reverse this ruling.
It is the public policy of Florida to freely allow amendments to pleadings so that cases may be resolved on their merits. All...
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