Cochrane v. American Sur. Co. of N.Y.

• Decision Date: 16 January 1959
• Docket Number: No. 436,436
• Citation: 108 So.2d 315
• Parties: J. P. COCHRANE, Appellant, v. AMERICAN SURETY COMPANY OF NEW YORK, Appellee.
• Court: Florida District Court of Appeals

Page 315

108 So.2d 315

J. P. COCHRANE, Appellant, v. AMERICAN SURETY COMPANY OF NEW YORK, Appellee.

No. 436.

District Court of Appeal of Florida, Second District.

Jan. 16, 1959.

Jones, Adams, Paine & Foster, West Palm Beach, for appellant.

Fulton, Sullivan & Burns, West Palm Beach, for appellee.

SHANNON, Judge.

This is an appeal by the plaintiff below from a summary judgment granted the defendant wherein the lower court held in part:

'The sole question here is whether or not the policy of insurance in question covers a claim for attorneys' fees incurred by J. P. Cochrane, Senior, in defending a suit brought against him for work performed in making an audit for the City of Lake Worth, Florida. The policy of insurance was written in favor of 'Cochrane & Cochrane, Certified Public Accountants, address 200 Peacock Building, Fort Pierce, St. Lucie County, Florida.' It is shown that Cochrane & Cochrane was a co-partnership composed of J. P. Cochrane, Senior and J. P. Cochrane, Junior.

'At the time in question, J. P. Cochrane, Senior, maintained an accounting business in an office in West Palm Beach, concerning which the co-partnership was not involved and had no interest. The work performed by J. P. Cochrane, Senior, for the City of Lake Worth was performed in his individual capacity as the owner and operator of the business carried on in the office in West Palm Beach. The suit which was later instituted was brought against him in his individual capacity. He was not sued in his capacity as a co-partner, and the co-partnership doing business at Fort Pierce, Florida was involved in no manner. Under these circumstances, it is the view of the court that the insurance policy in question does not cover the claim for attorneys' fees, and that defendant is entitled to summary judgment.'

The plaintiff has raised two points of law, but in deciding this case we think that the only real question is whether or not the malpractice insurance policy issued the Fort Pierce partnership of Cochrane & Cochrane should be extended to cover one of the partners in a wholly separate and individual business of accountancy in which he, the partner, was engaged in another city, neither the profits nor the expenses of which business were shared by the partnership business of Cochrane & Cochrane.

From the facts in the case, about which there is no dispute, it appears that J. P. Cochrane is a certified public accountant and was in partnership with his son, J. P. Cochrane, Jr., with an accounting firm having offices located at Fort Pierce, St. Lucie County, Florida. It was this firm that the defendant had insured under its policy of insurance. J. P. Cochrane, Sr. had another business of accountancy located in West Palm Beach, Palm Beach County, which operated under the name of J. P. Cochrane, C.P.A. Each business maintained its own accounting records and the profits of the business under the name of J. P. Cochrane were not divided with the firm of Cochrane & Cochrane. In 1952 the City of Lake Worth, Palm Beach County, employed J. P. Cochrane, C.P.A., to make an audit for that year. All the work was done by the employees in the Palm Beach office of J. P. Cochrane. The Fort Pierce office of Cochrane & Cochrane did not participate in any of the phases of the Lake Worth audit. Thereafter, Lake Worth brought suit against J. P. Cochrane, alleging facts that made the suit one of malpractice. The defendant declined to defend the suit on the grounds that the policy of insurance was for the benefit of Cochrane & Cochrane and not for the business then being operated by J. P. Cochrane.

In the policy of insurance there was contained the following provisions:

'I. Insuring Agreement

'To insure the Insured against direct pecuniary loss and expense arising from any claim made against the Insured during the Policy Period, or within the claim notification period specified in Condition 1, by reason of legal liability for damages caused or alleged to have been caused by the Insured or by any partner, officer or employee of the Insured in the performance of services in his professional capacity as accountant for others prior to the termination of this Policy.

'(a) through neglect, error or omission.

'(b) through dishonesty, misrepresentation or fraud, except if made or committed by the Insured or any partner or officer thereof with affirmative dishonesty or actual intent to deceive or defraud.

'II. Defense

'To defend in behalf of the Insured any suit, even if such suit is groundless, against the Insured...