Canal Ins. Co. v. Reed

• Decision Date: 13 April 1995
• Docket Number: 94-1881,Nos. 94-1854,s. 94-1854
• Citation: 653 So.2d 1085
• Parties: 20 Fla. L. Weekly D950 CANAL INSURANCE COMPANY, Petitioner, v. Richard Dewey REED, Respondent, CANAL INSURANCE COMPANY, Appellant, v. Michael YORK, Appellee.
• Court: Florida District Court of Appeals

Page 1085

653 So.2d 1085

20 Fla. L. Weekly D950

CANAL INSURANCE COMPANY, Petitioner, v. Richard Dewey REED, Respondent, CANAL INSURANCE COMPANY, Appellant, v. Michael YORK, Appellee.

Nos. 94-1854, 94-1881.

District Court of Appeal of Florida,

First District.

April 13, 1995.

George J. Dramis of Lawrence & Landis, P.A., Orlando, for petitioner/appellant.

Steven D. Turnage, Gainesville, for respondent/appellee.

KAHN, Judge.

In case number 94-1854, petitioner, Canal Insurance Company ("Canal"), seeks certiorari review of a declaratory judgment order in favor of the respondent, Richard D. Reed. The order finds invalid an employee exclusion contained in a motor vehicle liability insurance policy issued to Reed by Canal and orders Canal to provide liability coverage for injuries sustained by Michael York in an accident involving Reed's truck. In this proceeding, Canal attempts to invoke this court's discretionary certiorari jurisdiction under Rule 9.100, Florida Rules of Appellate Procedure. In case number 94-1881, Canal has filed an appeal under Rule 9.130(a)(3)(C)(iv), ¹ seeking review of the same order. In that proceeding, Reed moves to dismiss on the basis that the order determining coverage is not an appealable non-final order. We have consolidated these two cases and, for the reasons discussed below, we deny the petition for certiorari, grant the motion to dismiss, and certify a question of great public importance to the Florida Supreme Court.

The underlying action commenced in July 1988 when York sued Reed and Canal for damages, alleging that he suffered injuries as a result of negligence in the operation of Reed's truck. When Canal denied coverage, Reed filed a third-party action against Canal and the insurance agency for misrepresentation in the issuance of his insurance policy. Canal, by counterclaim, brought a declaratory judgment action to determine whether its policy covered Reed for the injuries sustained by York. Canal relied on an employee exclusion contained in the insurance policy which, Canal argued, precluded coverage for York's injuries. ²

The circuit court granted Canal's motion to sever and later ruled that the three different causes of action would be tried separately, with Canal's declaratory judgment action tried first, the third-party action between Reed and the insurance agent tried second, and the underlying personal injury action between York and Reed tried last. The court further ordered that the declaratory judgment action would be tried in two parts, with a jury trial to determine York's employment status at the time of the accident and, if the jury determined York was Reed's employee, the court would then decide, in a non-jury proceeding, the enforceability of the employee exclusion contained in the Canal policy. A jury determined that York was an employee of Reed and that he was in the course and scope of his employment at the time of the accident. The trial court then found the employee exclusion invalid under Florida law and ordered Canal to provide liability coverage to York for the accident. Canal now seeks review of this order.

Although the Florida Supreme Court has not directly addressed review by certiorari of a trial court's determination regarding the applicability of such an exclusion in an insurance policy and the resulting duty to defend, that court has addressed a similar issue in the context of an appeal pursuant to Rule 9.130, Florida Rules of Appellate Procedure. ³ In Travelers Insurance Co. v. Bruns, the Florida Supreme Court held that a summary judgment on the issue of insurance coverage did not determine an issue of liability in favor of the party seeking affirmative relief and was therefore not appealable under Rule 9.130(a)(3)(C)(iv). 443 So.2d 959 (Fla.1984). The supreme court explained its decision as follows:

The resolution of a coverage issue concerning an alleged insured and insurer clearly does not determine the issue of liability in favor of a party seeking relief.... The thrust of rule 9.130 is to restrict the number of appealable non-final orders. The theory underlying the more restrictive rule is that appellate review of non-final judgments serves to waste court resources and needlessly delays final judgment.

Id. at 960-61. In our view, the Bruns court made a judicial economy based policy determination that an order deciding a coverage issue could not be appealed until a final judgment of liability had been reached. This policy determination similarly controls this case. Indeed, although Bruns concerned an appeal of a non-final order, if a remedy by certiorari had been available, the supreme court would have treated the appeal as a petition for certiorari in accordance with Rule 9.040(c). ⁴ Indeed, one may fairly conclude that the court considered and rejected the possibility of review by certiorari, because the Fourth District said as much when it reviewed the case. Travelers Ins. Co. v. Bruns, 429 So.2d 317 (Fla. 4th DCA 1982). The supreme court approved the decision of the district court. Bruns, 443 So.2d at 961. Denial of certiorari is also consistent with prior decisions of this court. See Dairyland Ins. Co. v. McKenzie, 251 So.2d 887 (Fla. 1st DCA 1971) (denied certiorari review of interlocutory order finding petitioner, a named defendant in damages suit, legally bound to afford coverage to its insured because until judgment is rendered against petitioner or its insured, no injury will be suffered by petitioner); Sapp v. LaViolette, 242 So.2d 483 (Fla. 1st DCA 1970) (legal effect of order was partial summary judgment against defendant insurance company limiting extent of liability to that provided under policy; order was thus interlocutory in character and could be reviewed only by interlocutory appeal or by direct appeal from final judgment and not by certiorari).

Canal relies, however, on Sunshine Dodge, Inc. v. Ketchem in arguing that this court may review, through a petition for certiorari, a disputed issue of insurance coverage. 445 So.2d 395 (Fla. 5th DCA 1984), overruled on other grounds, Maryland Casualty Co. v. Reliance Ins. Co., 478 So.2d 1068 (Fla.1985). The Sunshine case concerned a suit by injured parties, the Ketchems, against the driver of a leased automobile, the lessee, the lessee's insurer, and the lessor, Sunshine. 445 So.2d at 396. The lessee cross-claimed against Sunshine, alleging that Sunshine was obligated to defend the action on behalf of the driver, lessee, and lessee's insurer, and to indemnify them up to the limits of the policy referred to in the lease agreement. Id. The trial court entered summary judgment against Sunshine on the indemnification claim and Sunshine appealed. Id. The court cited Bruns in reaching its decision to treat the appeal as a petition for writ of certiorari:

Based on the recent Florida Supreme Court case of Travelers Ins. Co. v. Bruns, 443 So.2d 959 (Fla.1984), we recognize that a trial court's determination of a disputed issue of coverage which precedes a determination of liability owing to the claimant ... cannot serve as the basis for a plenary appeal under Rule 9.100 or for an appeal of a non-final order under [Rule] 9.130(a)(3)(C)(iv). We therefore treat this application as a petition for writ of certiorari.

Sunshine, 445 So.2d at 396. After discussing the law applicable to the circumstances of the case, the court determined that the partial summary judgment did not depart from the essential requirements of law and denied the petition for certiorari. Id. at 397. Therefore, although the Sunshine court denied certiorari, Canal argues that this court should grant certiorari because the Sunshine court treated the appeal as a petition for certiorari and the case involved an insurance company required to defend its insured pursuant to a lower court's determination, preceding a finding of liability, that the insurance company was required to defend and indemnify the plaintiffs. Support for this argument may be found in subsequent cases decided by the Fifth District Court of Appeal. See State Auto. Mut. Ins. Co. v. Quarles, 560 So.2d 358 (Fla. 5th DCA 1990); Florida Ins. Guar. Ass'n v. Sechler, 478 So.2d 365 (Fla. 5th DCA 1985); Dixie Ins. Co. v. Beaudette, 474 So.2d 1264 (Fla. 5th DCA 1985). We note conflict with these Fifth District cases and adhere to the reasoning of the supreme court and its policy preference not to allow piecemeal review. Granting certiorari in a case such as this would create an exception that would not only swallow the judicial economy rule announced in Bruns, but would also ignore the implicit rejection of certiorari jurisdiction by the supreme court in that case. ⁵

This court's decision in BE & K v. Seminole Kraft Corp. supports the position we have taken here. 583 So.2d 361 (Fla. 1st DCA 1991). In that case, the court considered the review of a non-final order granting partial summary judgment on a third-party claim and finding a property owner entitled to indemnification from a contractor if the owner and contractor were found jointly negligent for the plaintiff's injury. Id. at 362-63. BE & K attempted to seek review of the order under Rule 9.100 as a petition for common law certiorari or under Rule 9.130. Id. at 362. The court denied certiorari because BE & K had not shown that the partial summary judgment could not be remedied on appeal from a final judgment after a determination of the existence and scope of the property owner's liability to the plaintiffs:

The only prejudice argued by BE & K is that it will be wrongfully deprived of the right to raise whether the indemnity agreement complies with section 725.06, a defensive issue that presumably was considered by the trial court before it entered summary judgment. But whether the court erroneously failed to consider that defense, or whether it has erred in rejecting that defense can be adequately rectified upon appeal from final judgment, if one is ever entered against BE & K on the indemnity...