Beta Eta House Corp., Inc. of Tallahassee v. Gregory
| Decision Date | 01 July 1970 |
| Docket Number | No. 39388,39388 |
| Parties | BETA ETA HOUSE CORPORATION, INC. OF TALLAHASSEE, Florida, a nonprofit Florida corporation, and General Accident Fire and Life Insurance Company, Limited, a foreign corporation, Petitioners, Cross-Respondents, v. William E. GREGORY, a minor, by his mother and next friend, Lucy A. Gregory, and Lucy A. Gregory, individually, Respondents, Cross-Petitioners. |
| Court | Florida Supreme Court |
H. O. Pemberton, E. Harper Field, and Helen C. Ellis, of Keen, O'Kelley & Spitz, Tallahassee, for petitioners, cross-respondents.
Spence, Payne & Masington, Miami, Henderson, Buchanan & Phipps, Tallahassee, and Robert Orseck, Miami, for respondents, cross-petitioners.
Bert Lane, Pensacola, amicus curiae.
This cause is here on petition for writ of certiorari supported by certificate of the District Court of Appeal, First District, that its decision reported in 230 So.2d 495, is one which involves a question of great public interest. See Fla. Const. art. V, § 4(2), F.S.A.
The opinion of the District Court of Appeal contains the following language:
'In order that the Beach and Bar may have the benefit of an authoritative decision of statewide application, it shall be our purpose to certify this decision to the Supreme Court as one involving a question of great public interest in order that the purpose and effect of the decisions rendered in the Bussey-Shingleton case may be evaluated and a pronouncement made as to whether (a) the principles announced therein are applicable not only to automobile liability insurance but also to other forms of liability insurance; and, (b) whether the suggested procedure for preserving the substantive law of Florida by ordering separate trials pursuant to Rule 1.270(b), Rules of Civil Procedure, in those cases where the liability insurance carrier is joined as a defendant in a tort action against its insured should be followed by the trial courts of this state.' 230 So.2d 500.
A minor sued Beta Eta House and its liability insurance carrier for damages because of the alleged negligence by Beta Eta House in the maintenance of its premises, resulting in personal injuries to the minor plaintiff who was proceeding to the fraternity house for the purpose of attending a Chapter meeting. The insurance carrier was joined as a party defendant under the doctrine of Shingleton v. Bussey, 223 So.2d 713 (Fla. 1969).
The insurance carrier moved for dismissal and the motion was denied. When the motion to dismiss was denied, the carrier filed a petition for common law writ of certiorari with the District Court of Appeal. The petition was denied in the decision and opinion now before this Court for review.
Answering the questions certified to us, we hold as follows:
(a) The principles announced in Shingleton v. Bussey, Supra, are applicable not only to automobile liability insurance but also to other forms of liability insurance; and
(b) The trial court May on motion of either party order separate trials pursuant to Rule 1.270(b), Florida Rules of Civil Procedure (30 F.S.A.), in those cases where the liability insurance carrier is joined as a defendant in a tort action against its insured.
The District Court of Appeal in its opinion stated (230 So.2d 500):
The purpose of Shingleton v. Bussey, Supra, was to require the parties to 'lay their cards on the table' in discovery proceedings, settlement negotiations, and pre-trial hearings. The existence or amount of insurance coverage has no bearing on the issues of liability and damages, and such evidence should not be considered by the jury.
In the event the carrier denies coverage, this issue may be determined by a separate trial before, as well as after, the trial on the merits. Where the issue of coverage is raised by the carrier and a separate trial is granted on this issue, a question arises as to whether the provisions of Fla.Stat. § 627.0127, F.S.A., relating to attorneys' fees in an action on an insurance policy, are applicable. This question is not before us in the case Subjudice.
If coverage is admitted or determined by a prior trial, the carrier is bound by the ultimate judgment in the trial on the merits to the extent of such elements as the validity of the insurance policy and the amount of the judgment. Following the verdict on the merits, judgment against the insurer within the policy limits may be entered.
The separate trial is not necessarily limited to the issue of coverage. The question of whether or not the carrier exercised good faith in the settlement of a claim against the insured could also be determined by a separate trial after the determination of the case on the merits.
The opinion of the District Court of Appeal, First District, as modified, is approved and the writ of certiorari heretofore issued is discharged.
The majority opinion affirms the holding of the District Court of Appeal, First District, that 'absent extraordinary circumstances' the trial court should authorize separate trials under Rule 1.270(b) F.R.C.P., for the defendant tortfeasor and his insurer. The rule in question provides as follows:
'The court in furtherance of convenience or to avoid prejudice may order a separate trial of any claim, cross-claim, counterclaim or third party claim or of any separate issue or of any number of claims, cross-claims, counterclaims, third party claims or issues.'
The holding of the District Court requires an automatic severance when a liability insurer is codefendant in a suit with its insured 'absent extraordinary circumstances.' This holding is contrary to our very recent decision in Shingleton v. Bussey. 1 Further, the District Court's decision distorts the law of severance by requiring special treatment of liability insurance carriers not afforded other codefendants. Equal protection and due process are offended by this procedure.
The decision of the District Court impairs the discretion of trial courts in granting of severances and imposes an absolute rule where insurance is involved. This Court in the Bussey case stated that the existence of insurance and coverage should go to the jury and that only where complicated coverage issues exist should there be a separation for the purposes of trial.
The result of the majority opinion, while purporting to extend the Bussey decision to all forms of liability insurance, is actually to completely reverse the remedial aspects of Bussey. The District Court in its opinion states that a procedure requiring automatic severance 'would preserve for the plaintiff those desirable benefits flowing from the privilege of being able to bring a direct action against the insurer which are discussed by the Supreme Court in Shingleton v. Bussey, supra.' 2 The District Court does not indicate what these 'benefits' might be since the result of its holding is to allow any insurance company joined in the suit to obtain severance.
After extensive consideration, argument and research, this Court concluded in Shingleton v. Bussey, supra, that in the absence of a showing that severance was necessary to assure a fair trial, the insurance carrier would participate as a defendant in the trial along with its insured. We specifically held that in our opinion modern juries are sufficiently informed and sophisticated to reach a fair verdict without prejudice or discrimination against an insurance liability carrier. Nothing was shown in the record then nor in the present proceeding to contradict this view.
Only a few months have passed since publication of the Bussey case. The Court is not aware of any ill effect to, or unfair treatment of, insurance companies because of our holding as stated above. If such information should be properly demonstrated then, and only then, should we reconsider and possibly modify our prior holding. Consistency in law is a primary requisite if the legal profession is to survive. We should not issue an...
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