Bush Leasing, Inc. v. Gallo

• Decision Date: 24 March 1994
• Docket Number: 92-4362 and 92-4363,Nos. 92-3609,s. 92-3609
• Citation: 634 So.2d 737
• Parties: 19 Fla. L. Weekly D648 BUSH LEASING, INC., f/k/a Bush & Cook Leasing, Inc., Appellant/Cross Appellee, v. Jose GALLO, Appellee/Cross Appellant. BUSH LEASING, INC., f/k/a Bush & Cook Leasing, Inc., Appellant, v. Jose GALLO, Appellee. Jose GALLO, Appellant, v. BUSH LEASING, INC., f/k/a Bush & Cook Leasing, Inc., Appellee.
• Court: Florida District Court of Appeals

Page 737

634 So.2d 737

19 Fla. L. Weekly D648

BUSH LEASING, INC., f/k/a Bush & Cook Leasing, Inc., Appellant/Cross Appellee, v. Jose GALLO, Appellee/Cross Appellant.

BUSH LEASING, INC., f/k/a Bush & Cook Leasing, Inc., Appellant, v. Jose GALLO, Appellee.

Jose GALLO, Appellant, v. BUSH LEASING, INC., f/k/a Bush & Cook Leasing, Inc., Appellee.

Nos. 92-3609, 92-4362 and 92-4363.

District Court of Appeal of Florida,

First District.

March 24, 1994.

Rehearing Denied May 4, 1994 in No. 92-3609.

Douglas A. Walker, Boehm, Brown, Rigdon, Seacrest & Fischer, P.A., Ocala, for Bush Leasing, Inc., f/k/a Bush & Cook Leasing, Inc.

Terence J. Kann, A. Abbott Law Offices, P.A., Jacksonville, for Jose Gallo.

Robert J. Link and Stephen Pajcic, Pajcic & Pajcic, P.A., Jacksonville, for Linda Thompson as amicus curiae.

WOLF, Judge.

We have before us three appeals arising out of an action for damages against the lessor of an automobile as a result of an accident in which the leased vehicle was involved. In case number 92-3609, Bush Leasing, Inc. (Bush) asserts that it was improperly found to be subject to liability under the dangerous instrumentality doctrine. Jose Gallo (Gallo), the plaintiff in the trial court, filed a cross appeal, arguing that the trial court erred in granting Bush's motion to amend its answer to reflect an affirmative defense that it was neither the beneficial nor deemed owner of the vehicle involved in the accident. We find that there was competent substantial evidence to support the trial court's determination that Bush was subject to liability under the dangerous instrumentality doctrine; therefore, it is unnecessary to reach the issue on cross appeal.

In case number 92-4363, Gallo appeals from a posttrial order denying his request for attorney's fees and investigative costs pursuant to section 768.79, Florida Statutes (1989). We find that the conditional offer of judgment filed by Gallo failed to comply with the statute; therefore, the trial court did not err in denying the request for fees and costs.

In case number 92-4362, Bush appeals from an order granting prejudgment interest from June 24, 1992. We find that the granting of prejudgment interest constituted error, and we reverse.

On June 9, 1989, an automobile collision occurred between a 1989 Ford Bronco operated by James Johnigean and a Mazda RX7 driven by Jose Gallo in which Linda Thompson was a passenger. The 1989 Ford Bronco was titled and tagged to Bush. Bush entered into a lease agreement with James Johnigean, Wilma Johnigean, and ServPro of Alachua County for a 1989 Ford Bronco for a period of 49 months. The agreement was entered into on March 3, 1989, and the lessees took delivery prior to April 20, 1989. Under the terms of the lease, Bush had the right to declare the lease void should Johnigean fail to perform any of the conditions imposed by the lease. Some of the requirements were to operate the vehicle safely and to insure the vehicle against claims for bodily injuries and property damage with $500,000 single-limit coverage. The lease also limited who could ride as a passenger in the vehicle. Attached to the agreement was an executed addendum, incorporated by reference into the main document, which stated, "Lessee agrees to purchase at the expiration of the lease for $6,600."

On March 3, 1989, Wilma Johnigean (Wilma, a named lessee and the secretary of Johnigean, Inc.) contacted Heslin Insurance Agency and requested that the 1989 Ford Bronco be added to her personal policy which was written through State Automobile Mutual Insurance Company (State Auto). She asked that James Johnigean be listed as the principal driver. A copy of a State Auto Policy dated April 24, 1989, shows that coverage on the Bronco in the amount of $500,000 with Johnigean and Bush being named as insureds. Sometime in late March or early April, Wilma requested that the Ford Bronco be deleted. A change request form (dated April 14, 1989) was completed by an employee of Heslin and forwarded to State Auto. A representative of State Auto testified, however, that as of June 9, 1989, the records indicated that the Ford Bronco was insured in the amount of $500,000.

On April 20, 1989, Wilma insured the Ford Bronco and James Johnigean through Southern Guaranty Insurance Company (Southern Guaranty). The Southern Guaranty policy had single policy limits of $300,000. Prior to trial, the full policy limits of both policies were paid to Linda Thompson.

Gallo filed a complaint in which he alleged that he was injured in a wreck when his car was struck by a Bronco operated by Johnigean and owned by Bush. Bush filed an answer in which it admitted ownership of the Johnigean vehicle. After a pretrial conference, Bush moved for summary judgment, alleging that it was a long-term lessor and was immune from the dangerous instrumentality doctrine. The trial court denied this motion on February 5, 1992. On May 13, 1992, Bush moved for leave to amend its answer to allege that pursuant to chapter 324, Florida Statutes, it was neither the beneficial or deemed owner of the Johnigean vehicle. The motion was denied. The case proceeded to trial on June 22, 1992. Johnigean admitted responsibility for the wreck. During the course of the trial, Bush stipulated that as a result of the accident, Gallo suffered permanent injuries and incurred damages of $1,000,000. This figure was to encompass all claims of Gallo that Gallo might have arising from the collision. Bush then renewed its motion to amend its answer, which was granted over objection from Gallo.

The trial began again within hours on the ownership issue. At the conclusion of the trial, the court found that the Bronco was owned by Bush, and that Bush was responsible for the damages suffered by Gallo, pursuant to the dangerous instrumentality doctrine. A judgment was entered in the amount of $1,000,000 pursuant to the stipulation as to damages.

On November 15, 1991, Gallo had served on Bush a demand for judgment, pursuant to section 768.79, Florida Statutes, offering to settle all claims against all the defendants in exchange for $300,000. In the demand pursuant to section 768.79, Gallo stated that the offer was strictly and specifically contingent upon Gallo's successfully obtaining from his uninsured motorist carrier, Allstate, its authority to accept $300,000 and to issue a full and complete release. The defendants did not respond to the offer, and thus, by operation of law, it expired on December 15, 1991.

On August 25, 1992, Gallo filed a motion to tax costs, assess fees and costs, and determine entitlement to interest based upon the judgment being well in excess of 125 percent of the $300,000 offer.

On November 17, 1992, the trial court conducted a hearing and then entered an order denying plaintiff's motion to assess attorney fees. The court ordered, however, that prejudgment interest be paid from June 24, 1992.

Case No. 92-3609

In case number 92-3609, Bush asserts that it could not be found liable because the lease agreement was a contract for purchase or a conditional sales contract, and thus, Bush was not an owner for the purpose of Florida's dangerous instrumentality doctrine. In the alternative, Bush argues that if it is considered a lessor-owner, then the lease is for more than one year; and it argues that because the insurance policies on the automobile comply with section 324.021(9)(b), Florida Statutes, it is exempt from liability, pursuant to that statutory provision.

Gallo asserts that the agreement between Bush, the Johnigeans, and ServPro was a lease, as the vehicle, tag, and title remained in Bush's name, and Bush retained a great level of control over the vehicle. Gallo further argues that the insurance policy maintained on the vehicle did not comply with section 324.021(9), Florida Statutes (1989).

Kraemer v. General Motors Acceptance Corp., 572 So.2d 1363 (Fla.1990) (Kraemer I), held that a long-term lessor could be liable under the dangerous instrumentality doctrine because it entrusts the use of an automobile to another party. In Kraemer I, the court distinguished between a long-term lease and a conditional sales contract:

A sale has been consummated under a conditional sales contract even though the vendor holds legal title as security for the payment of the purchase price. On the other hand a lease is an agreement for the delivery of property to another under certain limitations for a specified period of time after which the property is to be returned to the owner.

Id. In determining whether a document is a lease or a conditional sales contract, the court must look at the level of beneficial ownership maintained by the lessor:

Despite GMAC's contention that the beneficial ownership had passed to Green, its lease prohibited the operation of the automobile by certain drivers, limited the geographic area in which the automobile could be operated, prohibited certain uses of the automobile and restricted the installation of equipment in the automobile.

Kraemer v. General Motors Acceptance Corp., 572 So.2d at 1366.

In the instant case, while there was a requirement on the part of the lessee to purchase the vehicle at the end of the lease period, Bush retained some level of beneficial control over the vehicle. Bush had the right to cancel the lease and to dictate who rode as a passenger in the vehicle, and remained the named entity on the title and tag, and required a significant payment at the end of the lease prior to the transfer of the title. Under these circumstances, we find no error in the trial court's determination that the lease in this case was actually a lease under the dangerous instrumentality doctrine.

Section 324.021(9)(b), Florida Statutes (1989) reads as follows:

Owner/lessor.--Notwithstanding any other provision of the Florida Statutes or existing case law, the lessor, under an agreement to lease a motor vehicle for 1 year or longer which requires the lessee to obtain insurance...