Budget Rent A Car Systems, Inc. v. Taylor, 92-1955
| Decision Date | 13 October 1993 |
| Docket Number | No. 92-1955,92-1955 |
| Parties | 18 Fla. L. Weekly D2204 BUDGET RENT A CAR SYSTEMS, INC., Appellant, v. Robert Mark TAYLOR, and Valley Forge Insurance Company, Appellees. |
| Court | Florida District Court of Appeals |
Richard A. Sherman of the Law Offices of Richard A. Sherman, P.A., Fort Lauderdale, and Joseph W. Ligman of Ligman, Martin & Evans, Coral Gables, for appellant.
Betsy E. Gallagher and Gail Leverett of Kubicki, Draper, Gallagher & McGrane, P.A., Miami, and Peterson & Bernard, Fort Lauderdale, for appellees.
Appellant, Budget Rent A Car Systems, Inc., appeals from a non-final order entered in an action for declaratory relief in favor of appellees, Robert Mark Taylor and Valley Forge Insurance Company. The order appealed from holds that appellant, Budget, owed appellee, Taylor, a continuing duty to defend Taylor in a tort action arising out of the use of a leased automobile.
It appears that Taylor leased an automobile from Budget, a licensed, automobile rental agency, pursuant to a written contract. While using said automobile, Taylor was involved in an accident which resulted in the underlying suit for damages by one, Murphy, against Taylor and Budget. After that suit was commenced and Budget had assumed the defense thereof, Budget advised Taylor that it intended to settle the claim against Budget for $10,000, the amount of coverage it was required to pay under its rental contract as a self-insurer. Prior to trial, Budget did, in fact, pay Murphy the sum due under its contract and in due course received a complete release of Budget and a partial release of Taylor to the extent of the amount Budget paid Murphy. Taylor had a personal liability insurance policy with appellee, Valley Forge Insurance Company, and Valley Forge assumed the defense of Taylor in the tort action which ultimately resulted in a jury verdict for Murphy of $23,000. Judgment was thereupon entered for Murphy for $13,000 after setting off the amount paid by Budget.
Thereafter, Taylor and Valley Forge commenced this suit to obtain a judicial declaration that Budget had breached its duty to defend Taylor and for damages incurred by Taylor's insurer, Valley Forge, in assuming the Taylor defense of the tort action. After a non-jury trial, based upon stipulated facts, the trial court entered the order appealed from in which it found that Budget had a duty to defend through the conclusion of the Murphy tort action. It also held that once Budget had assumed the defense of itself and Taylor, the duty to defend continued throughout that litigation.
On appeal, Taylor and Valley Forge suggest the sole issue involved to be whether "having undertaken the renter's defense, Budget was permitted to withdraw that defense prior to obtaining a complete release of Taylor, or until the conclusion of the trial." Budget would answer that proposed question in the negative based on this record because it argues that the rental contract does not call upon Budget to continue the defense of the case after it has, in good faith, paid the amount of coverage for which Taylor contracted.
The rental contract entered into by the parties provides in pertinent part:
LIABILITY INSURANCE: IF THERE IS NO VIOLATION OF ANY OF THE USE RESTRICTIONS IN PARAGRAPH 5 ABOVE, Renter and any Authorized Driver shall, while operating the Vehicle, be provided with liability coverage in accordance with the standard provisions of a Basic Automobile Liability Insurance Policy or in accordance with the requirements of a qualified self-insurer instead of such coverage, for protection against liability for causing bodily injury (including death) and property damage with one of the following applicable coverage limits:
coverage limits imposed by the state financial responsibility law where this rental transaction takes place; OR
coverage limits of $100,000 each person, but not more than $300,000 for each occurrence and property damage limits of up to $25,000 for each occurrence if a Renter, at time of rental, possessed valid Budget CorpRate or Sears Checklist Charge credentials ...
A. All coverages automatically conform to the basic requirements of any "No-Fault" law which may be applicable. RENTER WAIVES UNINSURED AND UNDERINSURED MOTORIST, SUPPLEMENTAL NO-FAULT AND OTHER OPTIONAL COVERAGES.
B. If any coverages herein cannot be excluded or waived, Renter agrees that such coverages shall be automatically reduced to the minimum requirements of the applicable financial responsibility law and that such coverages shall be excess to any other applicable insurance.
C. Renter agrees to cooperate fully in the investigation and defense of and to deliver to the renting location every document relating to any accident, claim or lawsuit.
D. Renter will defend and indemnify the renting location, Budget and Sears, from all loss, liability, and expense in excess of the coverages available under the terms of the Agreement.
(Emphasis added).
Budget is a self-insurer and provides liability coverage for its renters in the amount of $10,000, in accordance with the contract. To qualify as a self-insurer under section 324.171, Florida Statutes (1989), Budget was required to obtain a certificate of self-insurance from the Department of Highway Safety & Motor Vehicles. One of the conditions for obtaining such certificate, was the furnishing of evidence of financial responsibility as provided in section 324.021(7). Budget did so by demonstrating its ability to respond to damages for liability on account of accidents arising out of the use of motor vehicles to the extent of $10,000. In the context of this case it is noteworthy that this requirement for liability coverage appears not in the Florida Insurance Code but in the section of the statutes dealing with motor vehicles.
As stated above, when the underlying tort action commenced against Budget and Taylor, Budget entered upon the defense thereof as to its own individual liability, as owner, and on behalf of Taylor as the alleged tort-feasor. In due course, Budget settled with Murphy, and received the above-described releases. It also advised Taylor that payment of that obligation terminated its obligation under the contract. Whereupon, the defense of the tort action was assumed by Taylor's personal liability carrier with coverage of $250,000. As pointed out above, a trial of the case resulted in a judgment for Murphy, which Valley Forge paid. Thereafter, Valley Forge and Taylor commenced this suit for declaratory relief contending Budget was responsible to them for the expenses incurred in taking on the defense of the case after Budget refused to further defend...
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