Auto Mut. Indem. Co. v. Shaw

CourtUnited States State Supreme Court of Florida
Writing for the CourtPER CURIAM. PER CURIAM.
Citation184 So. 852,134 Fla. 815
PartiesAUTO MUT. INDEMNITY CO. v. SHAW.
Decision Date09 November 1938

184 So. 852

134 Fla. 815

AUTO MUT. INDEMNITY CO.
v.
SHAW.

Florida Supreme Court

November 9, 1938


On Rehearing December 16, 1938.

Error to Circuit Court, Orange County; Frank A. Smith, Judge.

Suit by John W. Shaw against the Auto Mutual Indemnity Company on an insurance policy, which was given to protect and save harmless on account of damages and injuries resulting from accidents or collisions while one J. B. Jarrell was conducting or doing a taxicab business. To review a judgment in favor of the plaintiff, the defendant brings error.

Judgment reversed and new trial granted as to the second count of the declaration.

BROWN, J., dissenting.

COUNSEL [184 So. 853]

[134 Fla. 816] G. B. Fishback, of Orlando, and C. L. Waller, B. A. Meginniss, and Chas. H. Spitz, all of Tallahassee, for plaintiff in error.

Maguire & Voorhis, of Orlando, for defendant in error.

OPINION

PER CURIAM.

This cause is here on writ of error to a judgment in behalf of the plaintiff below entered by the Circuit Court of Orange County, Florida. The suit was brought on an insurance policy which was given to protect and save harmless on account of damages and injuries resulting from accidents or collisions while one J. B. Jarrell was conducting or doing a taxi cab business in the City of Orlando. The declaration is in two counts. The first alleged the recovery of a judgment by plaintiff against J. B. [134 Fla. 817] Jarrell for the sum of $9500 for personal injuries sustained due to the negligence of the said J. B. Jarrell. The bodily injuries of the plaintiff were such as to come within the promise and undertaking of the said policy of insurance issued by the Auto Mutual Indemnity Company. Writ of execution issued on said judgment against J. B. Jarrell, doing business as the Economy Taxi Cab Company, and a return of nulla bona was made thereon by the Sheriff of Orange County, Florida.

The second count contained the material allegations of the first and charges negligence and bad faith on the part of the insurance company for not paying or settling the said claim against it, and other allegations thereof are, viz.:

'That the said Auto Mutual Indemnity Company undertook to defend * * * and * * * assumed complete charge of the investigation, nogotiation and defense of said claim of the said John W. Shaw. That it then and there became and was the duty of the said Auto Mutual Indemnity Company to exercise skill, care and good faith to the end of saving the said J. B. Jarrell harmless, as contemplated by the said policy of insurance. That it was the duty of the said Auto Mutual Indemnity Company to act honestly to effectually indemnify and save the said J. B. Jarrell harmless, to the extent that it [184 So. 854] must make whatever payment and settlement an honest judgment and discretion dictate, within the limits of the policy. That the defendant, Auto Mutual Indemnity Company well knew that the said accident occurred * * * in such circumstances as to come within the promise and undertaking of said policy, and to render liable and oblige the said defendant to insure the said J. B. Jarrell under the terms of the said policy and in accordance with the duty imposed on it by law and the contract. That the defendant knew, or by the exercise of reasonable care should have known, that the said accident was caused solely by the negligence [134 Fla. 818] of the said J. B. Jarrell * * * and occurred under such circumstances that the law imposed liability upon the said J. B. Jarrell for damages on account of bodily injuries suffered by the plaintiff, John W. Shaw, as the result of such accident. That the said John W. Shaw was thereby severely injured * * * and * * * was thereby permanently incapacitated; all of which was well known to defendant, Auto Mutual Indemnity Company, prior to and at the time of the institution of suit by the said John W. Shaw against the said J. B. Jarrell. * * * That the defendant then and there well knew that the injuries sustained by the said John W. Shaw were serious and permanent, and that the damages suffered by the said John W. Shaw greatly exceeded the sum of $6,000.00.
'That on June 27, 1935, the said John W. Shaw made to the defendant, Auto Mutual Indemnity Company, a compromise offer, without prejudice to his interests, to settle for $5,000.00 cash, and that such compromise offer would be withdrawn if payment should not be made within thirty days. Said compromise offer of $5,000.00 was within the policy limits of the said insurance policy. Yet the defendant then and there arbitrarily, wrongfully and oppressively in disregard of its obligation to the said J. B. Jarrell and to the said John W. Shaw, refused to make said settlement within the policy limits as aforesaid.
'That the defendant then and there well knew, or by the exercise of reasonable care and good faith, should have known that there was no reasonable prospect of securing a verdict for defendant on trial of the case and that there was a reasonable prospect that any verdict entered on trial would be for plaintiff in a sum greatly in excess of the limits specified in the said insurance policy. And the defendant negligently any carelessly failed to make any settlement within the policy limits or otherwise, and the defendant [134 Fla. 819] wrongfully and arbitrarily and in disregard of its duty as aforesaid refused to make settlement for $5,000.00. * * * That said action was thereafter defended, in the name and on behalf of the said J. B. Jarrell, by the said Auto Mutual Indemnity Company; * * * and a verdict was duly rendered therein in favor of the said plaintiff, John W. Shaw, in the sum of $9500.00 on December 16, 1935; * * * That the said Auto Mutual Indemnity Company knew there was no reasonable prospect of reversing the said judgment on appeal or writ of error, and in fact did not appeal therefrom; and said judgment has not been reversed, modified nor set aside, and is still in full force and effect.'

The case was tried on a plea of legal tender as to the first count and a plea of not guilty as to the second count. The plaintiff filed two replications as to the plea of legal tender. On November 21, 1936, a verdict and judgment for the plaintiff was entered, viz.:

'And on the 20th day of November, A. D. 1936, during the Fall Term of said Court, came the respective parties in person and by their attorneys and submitted said cause on the issues joined between them to a jury, to-wit: J. M. Simmons and five others, who having been duly sworn according to law, and having heard the evidence, the argument of counsel for the respective parties, and the charge of the court, and having retired and considered the same, returned the following verdict in open court, to-wit:

'We, the Jury, find for the plaintiff on the first court, and assess his damages at the total of the following sums: $5000.00 plus $63.80 plus $533.97 as surgical aid made necessary by such accident plus $800.00 as a reasonable sum as fees or compensation for plaintiff's attorneys in this cause.

'We, the jury, find for the plaintiff on the second count and assess his damages at $10,097.77. So say we all.

'J. M. Simmons, Foreman.

[134 Fla. 820] 'And the court having determined that the plaintiff is now entitled to recover the said sum of $10,097.77 and that defendant has paid into Court the sum of $5764.59, [184 So. 855] which sum the Clerk is directed to pay to plaintiff's attorneys,

'It is thereupon considered, ordered and adjudged by the Court that the said plaintiff, John W. Shaw, do have and recover of and from the said defendant, Auto Mutual Indemnity Company, a corporation organized and existing under the laws of the State of New York, the sum of Four Thousand three handred thirty-three and 18/100 Dollars ($4,333.18), together with his costs herein expended and herein taxed at $82.62, for which let execution issue.' $A motion was made by the defendant for a new trial and overruled and denied by the lower court when final judgment was entered and writ of error taken, transcript of record perfected, and the cause is here for review on a number of assignments of error. The pertinent portions of the insurance policy are, viz.:

'Auto Mutual Indemnity Company of New York (Hereinafter called the Company)

'Section I--Agreements

'Does Hereby Agree. * * *

'1. Bodily injuries. To pay, within the limits specified in Statement 3, the loss from the liability imposed by law upon the Assured for damages on account of bodily injuries, including death resulting at any time therefrom, suffered or alleged to have been suffered by any person or persons as the result of such accidents. * * *

'3. Defense. To defend, in the name and on behalf of the Assured, any claim or suit against the Assured, even if groundless, to recover damages on account of bodily injuries and/or property damage covered hereby.

[134 Fla. 821] '4. Expense. To pay: (a) for the immediate surgical aid made necessary by such accidents; (b) all expenses incurred by the Company for investigation, negotiation, and defense of claims and suits; (c) all premiums on attachment and/or appeal bonds, and all costs taxed against the Assured, in suits for damages on account ob bodily injuries and/or property damage covered hereby; (d) all interest accruing on the full amount of any judgment in such suit (less that part, if any, of the judgment which is for property damage if Agreement 2 is not in effect), if on account thereof the Company is liable for any payment under any of the foregoing Agreements, until the Company shall have delivered its check, to the judgment creditor or to his attorney of record, in payment of its liability under said Agreements.

'5. Insolvency or Bankruptcy of Assured. The insolvency or bankruptcy of Assured shall not release the Company from any payment...

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107 practice notes
  • Jones v. Continental Ins. Co., No. 86-1922-Civ.
    • United States
    • United States District Courts. 11th Circuit. United States District Courts. 11th Circuit. Southern District of Florida
    • September 22, 1987
    ...as a person of ordinary care and prudence should exercise in the management of his own business. Auto Mutual Indemnity Co. v. Shaw, 134 Fla. 815, 184 So. 852 (1938).15 Further, the duty of good faith involves diligence and care in the investigation and evaluation of the claim against the in......
  • U.S. Fidelity & Guaranty Co. v. Evans, No. 42540
    • United States
    • United States Court of Appeals (Georgia)
    • June 6, 1967
    ...police limits, has been held not to constitute bad faith.' 7A Appleman, 567, § 4712. This rule was adopted in Auto Mut. Ind. Co. v. Shaw, 134 Fla. 815, 184 So. 852; Best Building Co. v. Employers' Liab. Assur. Corp., 247 N.Y. 451, 160 N.E. 911, 71 A.L.R. 1464; Henke v. [116 Ga.App. 104] Iow......
  • Venn v. St. Paul Fire and Marine Ins. Co., Nos. 94-3423
    • United States
    • United States Courts of Appeals. United States Court of Appeals (11th Circuit)
    • November 20, 1996
    ...the insurer must act in good faith and be diligent in Page 1065 its effort to negotiate a settlement. Auto Mutual Indemnity Co. v. Shaw, 134 Fla. 815, 184 So. 852 (1938). The insurer breaches its duty if it fails to act in good faith and the third party obtains a judgment against the insure......
  • Continental Cas. Co. v. City of Jacksonville, No. 3:04-cv-1170-J-20MCR.
    • United States
    • United States District Courts. 11th Circuit. United States District Court of Middle District of Florida
    • September 11, 2007
    ...are rooted in the common law, and were first recognized in Florida in 1938. Ruiz, 899 So.2d at 1125 (citing Auto Mut. Indem. Co. v. Shaw, 134 Fla. 815, 184 So. 852 (1938)). In either type of action, when determining whether an insurer has acted in bad faith and failed to "act[] fairly and h......
  • Request a trial to view additional results
107 cases
  • Jones v. Continental Ins. Co., No. 86-1922-Civ.
    • United States
    • United States District Courts. 11th Circuit. United States District Courts. 11th Circuit. Southern District of Florida
    • September 22, 1987
    ...as a person of ordinary care and prudence should exercise in the management of his own business. Auto Mutual Indemnity Co. v. Shaw, 134 Fla. 815, 184 So. 852 (1938).15 Further, the duty of good faith involves diligence and care in the investigation and evaluation of the claim against the in......
  • U.S. Fidelity & Guaranty Co. v. Evans, No. 42540
    • United States
    • United States Court of Appeals (Georgia)
    • June 6, 1967
    ...police limits, has been held not to constitute bad faith.' 7A Appleman, 567, § 4712. This rule was adopted in Auto Mut. Ind. Co. v. Shaw, 134 Fla. 815, 184 So. 852; Best Building Co. v. Employers' Liab. Assur. Corp., 247 N.Y. 451, 160 N.E. 911, 71 A.L.R. 1464; Henke v. [116 Ga.App. 104] Iow......
  • Venn v. St. Paul Fire and Marine Ins. Co., Nos. 94-3423
    • United States
    • United States Courts of Appeals. United States Court of Appeals (11th Circuit)
    • November 20, 1996
    ...the insurer must act in good faith and be diligent in Page 1065 its effort to negotiate a settlement. Auto Mutual Indemnity Co. v. Shaw, 134 Fla. 815, 184 So. 852 (1938). The insurer breaches its duty if it fails to act in good faith and the third party obtains a judgment against the insure......
  • Continental Cas. Co. v. City of Jacksonville, No. 3:04-cv-1170-J-20MCR.
    • United States
    • United States District Courts. 11th Circuit. United States District Court of Middle District of Florida
    • September 11, 2007
    ...are rooted in the common law, and were first recognized in Florida in 1938. Ruiz, 899 So.2d at 1125 (citing Auto Mut. Indem. Co. v. Shaw, 134 Fla. 815, 184 So. 852 (1938)). In either type of action, when determining whether an insurer has acted in bad faith and failed to "act[] fairly and h......
  • Request a trial to view additional results

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