Canal Ins. Co. v. Reed
| Decision Date | 18 January 1996 |
| Docket Number | No. 85680,85680 |
| Parties | , 21 Fla. L. Weekly S22 CANAL INSURANCE COMPANY, Petitioner, v. Richard Dewey REED, et al., Respondents. |
| Court | Florida Supreme Court |
George J. Dramis, Harry W. Lawrence and John A. Reed of Lowndes, Drosdick, Doster, Kantor & Reed, P.A., Orlando, for Petitioner.
Steven D. Turnage and Philip Barton of the Law Offices of Barton, Soraci, Frankenberger, Surrency & Turnage, Gainesville, for Respondents.
We have for review Canal Insurance Co. v. Reed, 653 So.2d 1085 (Fla. 1st DCA 1995), in which the district court held that a third-party declaratory judgment issued by the trial court in an insurance coverage dispute was not a final order and could not be reviewed until a final judgment was rendered in the principal action. After reaching its decision, the district court certified the following question as being one of great public importance:
Id. at 1090. We have jurisdiction. Art. V, Sec. 3(b)(4), Fla. Const. For the reasons expressed, we answer the question in the affirmative and find that the third-party declaratory judgment should be treated as a final order for purposes of appeal. In so holding, we note that this coverage issue could have been addressed in a separate declaratory judgment action rather than as a counterclaim in a third-party proceeding in the original action.
The record reflects the following relevant facts. The respondent, Richard Dewey Reed, was involved in an automobile accident. Michael York, a passenger in Reed's car at the time of the accident, sued Reed, alleging injuries caused by Reed's negligence during the vehicle's operation. This personal injury action between York and Reed has not been concluded and is pending resolution in the trial court based on the outcome of this proceeding. As part of the personal injury action, Reed brought a third-party complaint for liability coverage from his insurer, Canal Insurance Company (Canal). Reed also brought a third party complaint against Hodges Insurance Agency (Hodges) alleging misrepresentation in the issuance of the policy. Canal, by a counterclaim, filed a complaint for declaratory judgment for the purpose of determining whether Reed's insurance policy with Canal covered injuries sustained by passenger York. In the declaratory judgment action, Canal asserted that passenger York was specifically excluded from coverage under Reed's policy because York was Reed's employee at the time of the accident and was thus specifically excluded from coverage under Reed's policy. 1
The trial court severed this case into three distinct actions, specifically: (1) Canal's third-party counterclaim for declaratory judgment against Reed; (2) the third-party claim by Reed against Hodges on the misrepresentation issue 2; and (3) the underlying personal injury action between York and Reed. This case concerns only the first action, in which the trial court entered a declaratory judgment finding that Canal was required to provide liability coverage to York for the accident.
Canal, who is the petitioner in this case, appealed the trial judge's declaratory judgment, seeking appellate court jurisdiction on three alternative theories, arguing that: (1) the trial court's judgment was a final order; (2) the trial court's judgment was a non-final order that was subject to an immediate appeal; and (3) the trial court's judgment was subject to review through a petition for common law writ of certiorari. A unanimous district court of appeal rejected Canal's appeal. In reaching its decision, the district court relied on our opinion in Travelers Insurance Co. v. Bruns, 443 So.2d 959 (Fla.1984), to find that the declaratory judgment in this case was not ripe for review because "no opportunity for appellate review arises until a final judgment has been entered against the insured in the underlying action." Canal, 653 So.2d at 1090. In so holding, the district court recognized possible conflict with Georgia American Insurance Co. v. Rios, 491 So.2d 1290 (Fla. 2d DCA 1986), 3 and certified the aforementioned question.
In Bruns, this 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 as a non-final order under Florida Rule of Appellate Procedure 9.130(a)(3)(C)(iv). In Bruns, the trial court had resolved the coverage issue through summary judgment because the alleged tortfeasor's insurance carrier was a party to the underlying action between the injured party and the alleged tortfeasor. There was no separate declaratory judgment proceeding between the insured and the insurer.
Subsequent to the incident at issue in our Bruns decision, the legislative amendment to section 627.4136, the "non-joinder statute," became effective. That amendment precluded a plaintiff from including an alleged tortfeasor's insurance carrier as a party in a suit against the alleged tortfeasor. Sec. 627.4136, Fla.Stat. (1993) (Nonjoinder of Insurers). The public policy behind the nonjoinder statute is to ensure that jurors do not consider the existence of insurance coverage as a factor in determining liability. Justice Shaw predicted the effect that the amendment would have on the Bruns decision when he stated:
The incident here occurred prior to the effective date of section 627.7262 [currently section 627.4136] when it was at least possible to bring all the real parties in interest before the trial court and obtain a judgment as to the insurance coverage which aligned the parties. It will not be possible in the future as the revised section ... takes hold.... I venture no opinion as to what the judicial system's answer to all this will be, but eagerly anticipate hearing it.
Bruns, 443 So.2d at 961-62 (Shaw, J., specially concurring). We are now called to answer this question and find that our decision in Bruns is not controlling. We reach this conclusion in part because of the existence of section 627.4136, and in part because of section 86.011, Florida Statutes...
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