Asphalt Paving, Inc. v. Ulery, D-276

• Citation: 149 So.2d 370
• Decision Date: 29 January 1963
• Docket Number: No. D-276,D-276
• Parties: ASPHALT PAVING, INC., a corporation, Appellant, v. Lennie L. ULERY, Ronald K. Ulery, Arnold D. Ulery and Carl D. Ulery, and Charles Ulery and Elsie Marie Ulery, minors, by Yula S. Burns as their next friend, Appellees.
• Court: Florida District Court of Appeals

Page 370

149 So.2d 370

ASPHALT PAVING, INC., a corporation, Appellant, v. Lennie L. ULERY, Ronald K. Ulery, Arnold D. Ulery and Carl D. Ulery, and Charles Ulery and Elsie Marie Ulery, minors, by Yula S. Burns as their next friend, Appellees.

No. D-276.

District Court of Appeal of Florida, First District.

Jan. 29, 1963.

Rehearing Denied Feb. 22, 1963.

Ulmer, Murchison, Kent, Ashby & Ball, Jacksonville, for appellant.

Barnes & Slater and Crawford & May, Jacksonville, for appellees.

STURGIS, Judge.

Appellees, who are the widow and surviving children of Crawford E. Ulery (herein called 'Ulery'), brought this suit to obtain an adjudication that they were subrogated to certain rights of their coplaintiffs, Westfield Corporation and Orr & Company, Inc. (herein called 'Westfield' and 'Orr'), against the appellant, Asphalt Paving, Inc. (herein called 'Asphalt'), one of the defendants below. Their claim of subrogation is based on the theory that they were the beneficiaries (under Section 222.13, Florida Statutes ¹) of two $25,000 insurance policies on Ulery's life, who prior to death had assigned the policies to Westfield and Orr, respectively, as collateral security for debts of Asphalt, and that upon Ulery's death the entire proceeds of each policy had been paid to Westfield and Orr for application on such debts of Asphalt.

On a former appeal this court reversed an order of the circuit court dismissing the complaint as to Asphalt and remanded the cause for further proceedings. (119 So.2d 432.) Thereafter the trial court granted appellees' motion to strike Asphalt's amended answer, denied Asphalt's motion to further amend its answer, and on the pleadings entered final judgment in favor of appellees, hence this appeal.

The complaint against Asphalt and Gulf Life Insurance Company, the insurer in the two policies on Ulery's life here involved, alleged that during 1953 and 1954 Ulery was President and principal stockholder of Asphalt; that on April 13, 1954, being the owner of said policies, he assigned one to Westfield and the other to Orr as collateral security for obligations then due by Asphalt to Westfield and Orr and also to secure future advances by assignees to Asphalt; that Ulery died on June 16, 1958, at which time Asphalt owed Westfield and Orr, respectively, amounts in excess of the proceeds of the respective policies assigned; that at the time of Ulery's death there was no named beneficiary in either of the policies and that by operation of Section 222.13, Florida Statutes, F.S.A., appellees became the beneficiaries thereof, subject only to said assignments to Westfield and Orr; that defendant Gulf Life Insurance Company refused to pay the proceeds of the policies either to Westfield and Orr or to the appellees. Appellees prayed the court to require the insurer to pay over the policy proceeds to Westfield and Orr pursuant to Ulery's assignment of the policies as security for Asphalt's debt, and to adjudicate that appellees were then subrogated to the rights of Westfield and Orr against Asphalt in the amount of such proceeds.

On motion of Asphalt the complaint was dismissed as to Asphalt on the premise that it failed to show that appellees had any right of subrogation against Asphalt. While a petition for rehearing on said order of dismissal was pending, Westfield and Orr moved for summary judgment against the insurer and furnished Asphalt with notice of the hearing thereon and a copy of the proposed summary judgment. The only issue presented by said motion for summary judgment was the right of Westfield and Orr to recover from the insurer the proceeds of the policies of insurance assigned to them by Ulery on April 13, 1954. Asphalt does not question Ulery's title to the policies at that time or the validity of the assignments to Westfield and Orr and did not appear at the hearing on said motion for summary judgment. Pursuant to said motion the trial court found that there was no genuine issue as to Ulery's ownership of the policies on the date he assigned them to Westfield and Orr as collateral security for Asphalt's debt, or as to the validity of his assignments, or as to the fact that the amount of the debts so secured exceeded the amount of the proceeds of the policies; and thereupon entered summary final judgment in favor of Westfield and Orr against Gulf Life Insurance Company in the amount of the entire proceeds of the two policies.

The petition for rehearing of the mentioned order dismissing the complaint as to Asphalt was denied and on appeal that order was reversed (119 So.2d 432), and Asphalt then filed its amended answer admitting that Ulery validly assigned the policies to Westfield and Orr to secure Asphalt's debts; admitting that at Ulery's death the debts so secured exceeded the amount of the policy proceeds, and that on Ulery's death Westfield and Orr became entitled to all the proceeds of the policies.

Asphalt's answer denied, however, that Ulery was the owner of the policies at the time of his death and denied that appellees were entitled to be subrogated to Westfield and Orr's rights against Asphalt; and thereunto alleged that in November 1956, Asphalt was indebted to various corporations owned and controlled by Wayland T. Coppedge (herein called 'Coppedge Corporations') in a substantial sum which it was unable to pay; that Coppedge Corporations agreed to forbear suit thereon in consideration of Asphalt's execution and delivery to them of a promissory note covering said indebtedness, and in consideration of Ulery's personal endorsement of the note in blank; that subsequently Ulery requested that he be released from liability on his endorsement of the note and in consideration for such release offered to assign to Coppedge Corporations, or their nominee, all of the outstanding stock in Asphalt and all of his right, title and interest in the said life insurance policies, subject to the then existing assignment to Westfield and Orr as collateral security for Asphalt's debts to them; that Coppedge Corporations accepted said offer and on January 23, 1957, executed and delivered to Ulery an instrument releasing him from liability as endorser of said note, and in consideration thereof Ulery simultaneously assigned to Coppedge Corporations all the outstanding stock in Asphalt and at the same time, in order to carry out his agreement to assign the life insurance policies to Asphalt, wrote identical letters to Westfield and Orr as follows:

'Gentlemen:

'This is to advise you that upon payment or satisfaction of the indebtedness for which you hold as collateral an assignment of life insurance on my life, issued by Gulf Life Insurance Company, being policy # * * * [the correct policy number is set forth in each letter], the policy is to be reassigned to Asphalt Paving, Inc., the owner of the policy, rather than to myself. The beneficiary of the policy upon its reassignment is to be Asphalt Paving, Inc.

'Very truly yours,

'C. E. Ulery';

that said letters were delivered to Wayland T. Coppedge on behalf of Asphalt; that Ulery thereby divested himself of all beneficial interest in the policies and Asphalt thereby acquired all such interest and became in equity the beneficiary of the policies, so that appellees had no interest therein at the time of Ulery's death.

Pending motion of appellees to strike said answer, Asphalt moved for leave to file an amendment thereto adding two additional defenses, which were tendered. One of the additional defenses so tendered alleged that at a time when Asphalt had no right, title or interest in the policies and while Ulery was in control of Asphalt, he wrongfully diverted funds of the corporation to the payment of premiums on the two policies in the aggregate amount of $9,119.68, and by reason thereof Asphalt claimed a lien against the proceeds, subject only to the prior rights of Westfield and Orr. The other defense so tendered alleged that the use of Asphalt's funds to pay said premiums constituted Asphalt the cestuique trust of a constructive or resulting trust in the proceeds of the policies, and thereby created in Asphalt equities tantamount to the equities, if any, of the appellees.

On motion of appellees the trial court entered the order and judgment appealed, denying Asphalt's said motion to further amend, striking Asphalt's amended answer, and entering judgment for appellees against Asphalt in the amount of $50,000.00 plus interest.

The issues on appeal may be summarized as follows: (1) whether Asphalt's second defense alleges facts which, if duly established by the proofs, would operate to deprive appellees of any interest in the subject policies of insurance. (2) Whether the trial court erred in denying Asphalt's motion to further amend its answer. (3) Whether the summary judgment entered against the insurer herein precludes Asphalt from raising the defenses presented herein. For the purpose of passing on appellees' motion to strike Asphalt's amended answer, all well-pleaded allegations of fact are to be taken as true.

The theory of Asphalt's second defense is that Ulery, by the hereinabove quoted letters addressed to Westfield and Orr, respectively, and delivered to Wayland T. Coppedge as agent for Coppedge Corporations, made a complete assignment of his interest in the subject insurance policies to Coppedge Corporations, subject only to the rights of Westfield and Orr who held said policies by prior assignments from Ulery as collateral security for payment of Asphalt's then existing indebtedness to Westfield and Orr, and to secure any indebtedness of Asphalt to Westfield and Orr thereafter accruing. As part of said defense Asphalt attached a copy of a release agreement between Coppedge Corporations on the one part and Ulery on the other, whereby the former, in consideration of the assignment and transfer by Ulery of 75 shares of common stock in Asphalt, was discharged of all liability on his personal endorsement of the above...