Attorneys' Title Ins. Fund, Inc. v. Punta Gorda Isles, Inc.

• Decision Date: 11 August 1989
• Docket Number: No. 88-02664,88-02664
• Citation: 547 So.2d 1250,14 Fla. L. Weekly 1908
• Parties: 14 Fla. L. Weekly 1908 ATTORNEYS' TITLE INSURANCE FUND, INC., a Florida corporation, Appellant, v. PUNTA GORDA ISLES, INC., a Florida Corporation, Appellee.
• Court: Florida District Court of Appeals

Page 1250

547 So.2d 1250

14 Fla. L. Weekly 1908

ATTORNEYS' TITLE INSURANCE FUND, INC., a Florida corporation, Appellant, v. PUNTA GORDA ISLES, INC., a Florida Corporation, Appellee.

No. 88-02664.

District Court of Appeal of Florida Second District.

Aug. 11, 1989.

Dwight A. Whigham, Fort Myers, for appellant.

No appearance for appellee.

ALTENBERND, Judge.

Attorneys' Title Insurance Fund, Inc. (The Fund), appeals an order dismissing without prejudice its third party complaint against Punta Gorda Isles. Although the order does not preclude a separate, subsequent lawsuit, it does permanently dismiss Punta Gorda Isles as a party to this action. Accordingly, we have jurisdiction to review this partial final judgment. Fla.R.App.P. 9.110(k). See New Hampshire Ins. Co. v. Petrik, 343 So.2d 48 (Fla. 1st DCA 1977).

The Fund issued an owners' title insurance policy to Immobiliere Des Pins (Immobiliere) in June 1982, insuring property in Charlotte County, Florida. Immobiliere, a Canadian corporation, purchased the property from Punta Gorda Isles and received a warranty deed.

In 1986, Immobiliere was sued by an adjacent landowner who claimed superior title to a ten-foot strip on the western edge of the property. Immobiliere notified The Fund of the lawsuit and requested both coverage and a defense under the policy. The Fund acknowledged liability under the title policy, but disputed the damages.

Immobiliere then filed this lawsuit against The Fund for payment under the title policy. The Fund immediately filed a third party complaint against Punta Gorda Isles alleging that, if it was liable to pay under its insurance policy, in its capacity as subrogee of Immobiliere, it was entitled to recover against Punta Gorda Isles for breach of the warranty deed.

Punta Gorda Isles moved to dismiss the complaint on grounds that The Fund had not yet made any payment to its insured and that the action was premature. Punta Gorda Isles relied upon decisions from the Third District. National Union Fire Ins. Co. v. Southeast Bank, N.A., 476 So.2d 766 (Fla. 3d DCA 1985); Quinones v. Fla. Farm Bureau Mut. Ins. Co., 366 So.2d 854 (Fla. 3d DCA 1979). The lower court agreed that the subrogation claim was premature because The Fund had not yet entered into any settlement or payment of a claim and, thus, dismissed the action without prejudice.

The issue presented by this case is whether Florida Rule of Civil Procedure 1.180 permits the expedited presentation of a subrogation claim and allows the claim to be pursued as a contingent claim prior to payment. Recognizing conflict with the Third District, we hold that subrogation claims, similar to contribution and indemnity claims, are appropriate controversies for expedited presentation under rule 1.180. ¹

In several cases, the Third District has ruled that subrogation claims are not controversies which can be expedited under the third party practice permitted by rule 1.180. In Indiana Insurance Co. v. Collins, 359 So.2d 916 (Fla. 3d DCA 1978), the Third District considered a case in which the plaintiff had sued his automobile liability insurance carrier for uninsured motorist coverage. The uninsured motorist carrier, in turn, filed a third party complaint against the alleged tortfeasors. The Third District ruled that the insurance carrier must first pay its insured before a mature right of subrogation would exist against the tortfeasors. In Quinones and National Union, the Third District followed the reasoning of Collins and dismissed third party complaints for subrogation. The Quinones and National Union cases also reasoned that a third party complaint for subrogation was inappropriate because a "cause of action" for subrogation did not exist until the payment had been made, and that payment was a condition precedent to any subrogation action.

We decline to follow the Third District's prohibition against third party subrogation claims for several reasons. First, virtually all third party claims involve situations in which a cause of action does not technically exist at the time the third party complaint is filed. For example, the statutory right of contribution does not exist until the tortfeasor "has paid more than his pro rata share of the common liability...." § 768.31(2)(b), Fla.Stat. (1987) (emphasis added). Nevertheless, a claim for contribution can be brought as a cross-claim or a third party claim, on a contingent basis, prior to the payment. Nationwide Mut. Ins. Co. v. Fouts, 323 So.2d 593 (Fla. 2d DCA 1975); Wallace v. Strassel, 479 So.2d 231 (Fla. 4th DCA 1985); Petrik; Mount Sinai Hosp. of Greater Miami v. Mora, 342 So.2d 1063 (Fla. 3d DCA 1977). Likewise, a claim for indemnity does not accrue until the underlying claim has been paid, but rule 1.180 permits the accelerated presentation of a claim for indemnity. Mims Crane Serv., Inc. v. Insley Mfg. Corp., 226 So.2d 836 (Fla. 2d DCA), cert. denied, 234 So.2d 122 (Fla.1969).

The Third District's analysis of rule 1.180 does not sufficiently recognize a defendant's option to implead a person who "may be liable to the defendant for all or a part of the plaintiff's claim against the defendant...." Fla.R.Civ.P. 1.180(a). This rule is intended to permit the expedited presentation of contingent claims when that practice will avoid the probability of multiple lawsuits arising from one set of facts. Mims Crane; see generally 3 Moore's Federal Practice p 14.04 (1989). Certainly, subrogation claims, like contribution and indemnity claims, can result in multiple lawsuits arising from common issues of fact or law. Thus, the rationale presented by the Third District in Collins, Quinones, and National Union does not justify the holding.

Second, we see no rationale which would justify treating subrogation claims in a manner which is substantially different from indemnity or contribution claims. If anything, a comparison of subrogation, contribution, and indemnity supports the greater need for third party practice concerning subrogation claims. For example, in the absence of third party practice, parties with potential subrogation rights can lose those rights while the initial litigation is pending because of the statute of limitations. By statute, a claim for contribution can be brought within one year after the payment. § 768.31(4), Fla.Stat. (1987). Likewise, a cause of action for indemnity does not accrue until payment, and the statute of limitations only begins to run at that time. Mims Crane. On the other hand, a claim for contractual subrogation is a claim in which the subrogee stands in the shoes of the subrogor. Thus, the statute of limitations runs from the date of injury to the subrogor. Allstate Ins. Co. v. Metro. Dade County, 436 So.2d 976 (Fla. 3d DCA 1983), review denied, 447 So.2d 885 (Fla.1984).

Moreover, it is well established that a judgment rendered against an indemnitee is conclusive for the purposes of res judicata and estoppel by judgment against an indemnitor who has been given timely notice and an opportunity to defend the action. Hull & Co. v. McGetrick, 414 So.2d 243 (Fla. 3d DCA 1982). By contrast, unless the tortfeasor or party breaching the contract is a third party defendant in the initial action between a subrogor and a subrogee, that party is not typically bound by the judgment or the findings of fact in the initial action. If the subrogee is required to sue the tortfeasor or the party breaching the contract in a subsequent lawsuit, inconsistent results can easily occur. ²

Subrogation is similar to contribution and to most indemnity claims in that a defendant who desires to file a third party claim for subrogation is merely impleading a party whom the plaintiff could...