Commercial Ins. Consultants, Inc. v. Frenz Enterprises, Inc.

• Decision Date: 30 May 1997
• Docket Number: No. 96-1297,96-1297
• Citation: 696 So.2d 871
• Parties: 22 Fla. L. Weekly D1359 COMMERCIAL INSURANCE CONSULTANTS, INC., Appellant, v. FRENZ ENTERPRISES, INC., et al., Appellees.
• Court: Florida District Court of Appeals

Page 871

696 So.2d 871

22 Fla. L. Weekly D1359

COMMERCIAL INSURANCE CONSULTANTS, INC., Appellant, v.FRENZ ENTERPRISES, INC., et al., Appellees.

No. 96-1297.

District Court of Appeal of Florida Fifth District.

May 30, 1997.

Rehearing Denied July 10, 1997.

Donald L. O'Dell of McDonough, O'Dell, Beers, Wieland, Williams & Krakar, Orlando, for Appellant.

Dante Mattioni and Stephen M. Martin of Mattioni, Mattioni & Mattioni, Ltd., Philadelphia, PA, for AppelleeFrenz Enterprises, Inc.

Thomas E. Watts, Jr., Nashville, for AppelleeDredge & Marine Corporation.

PETERSON, Chief Judge.

Commercial Insurance Consultants, Inc.(CIC), appeals a final judgment entered after a jury verdict found that it had breached its contract with Frenz Enterprises, Inc.(Frenz) to procure insurance on a dredge leased to Frenz by Dredge and Marine Corp.(DMC).The dredge was swamped by a passing boat and sank.

The jury found that CIC breached its obligation to procure insurance and we will not disturb that finding.The determination of whether an insurance broker has failed to procure insurance is ordinarily a question of fact which will not be disturbed if supported by sufficient evidence.Caplan v. LaChance, 219 So.2d 89(Fla. 3d DCA1969).Conflicting evidence was presented by CIC and Frenz on this issue and the conflict was resolved by the jury in favor of Frenz.

We reverse, however, the judgment entered in favor of appellee DMC on its cross-claim against co-defendant, CIC.Frenz, under its lease agreement with DMC, was obligated to obtain proper insurance.Frenz failed to obtain the necessary insurance but DMC apparently never sued Frenz for the breach.Florida permits an insurance broker to be held liable to third parties when the broker is negligent in procuring coverage for a customer, which coverage, had it been in place, would have been available to pay a third party's claim against the customer.But before a third party may seek to recover against the insurance broker, the third party must first be successful in its action against the customer who did not have adequate insurance.Schuck v. Habicht, 672 So.2d 559(Fla. 4th DCA1996)(injured lessee of insured's boat could bring direct action against insurance agent for breach of oral contract with insured to provide liability insurance coverage for injuries suffered by customers while using rental motorboats since judgment against insured could not be satisfied);Robinson v. John E. Hunt & Assoc., Inc., 490 So.2d 1291(Fla. 1st DCA1986)(injured party may bring direct third party action against insurance agent for agent's alleged negligence in failing to provide tortfeasor adequate insurance, but injured party must first be successful in her action against tortfeasor);Hamer v. Kahn, 404 So.2d 847(Fla. 4th DCA1981)(personal representative of estate of subcontractor's employee who was killed in accident on construction site could bring direct action against insurance agent who allegedly failed to perform his agreement with general contractors to procure insurance policy which would have inured to her benefit; plaintiff must first, however, prevail in her suit against various key players before suit can be brought against the insurance agent).Accordingly, it was error to enter judgment in favor of DMC as DMC had to first prevail against Frenz Enterprises.

CIC also asserts that Frenz failed to present any evidence of the terms of a policy that CIC allegedly failed to obtain and that moreover, the jury improperly included in its award the recovery of lost profits.Frenz, however, produced an "inland marine policy" issued by Old Dominion Insurance Co., a policy that had been customarily used by Frenz and CIC.This policy provided the following relevant coverage:

2.Your Duties After Loss.In case of a loss to which this insurance may apply, you shall see that the following duties are performed:

(a) Protection of Property--Protect the property from further loss and take all steps possible to minimize the loss.If expenses are incurred in doing so, they shall be borne by you and us proportionate to our respective interests.

* * * * * *

3.Loss Settlement.Unless otherwise stated in this policy, the value of the property insured is not agreed upon but shall be ascertained at the time of loss or...