Commercial Union Insurance Co. of New York v. Reichard
| Decision Date | 26 December 1968 |
| Docket Number | No. 26103.,26103. |
| Citation | 404 F.2d 868 |
| Parties | COMMERCIAL UNION INSURANCE COMPANY OF NEW YORK, Appellant, v. Russell REICHARD et al., Appellees. |
| Court | U.S. Court of Appeals — Fifth Circuit |
William M. Hoeveler, William J. Flynn, Miami, Fla., for appellant; Knight, Underwood, Peters, Hoeveler & Pickle, Miami, Fla., of counsel.
Harry G. Carratt, Oakland Park, Fla., Thomas E. Byrd, Fort Lauderdale, Fla., for appellee, Paul Dye; Carlisle, Zeiher & Byrd, Ford Lauderdale, Fla., of counsel.
Before TUTTLE and AINSWORTH, Circuit Judges, and MITCHELL, District Judge.
In this diversity case we deal with a field of state law as to which this court has probably already played a sufficient role. By our decision and opinion in Northwestern National Casualty Company of America v. McNulty (5 Cir. 1962), 307 F.2d 432, we held that the Florida law did not permit the recovery on a public liability policy for payments made by an insured resulting from a successful claim for punitive damages under certain circumstances. These circumstances are carefully spelled out in the McNulty opinion. We said:
We are told by counsel that this federal court opinion properly enunciates the state law of the State of Florida.
In this case one Dye, the insured, was sued by persons injured by a vicious assault by an employee, Mobley. The suit claimed compensatory and punitive damages. The jury verdict was for $30,000 actual and $30,000 punitive damages. Having paid the insured his expenditure in satisfying the claim for actual damages, the insurer brought this action for declaratory judgment, seeking to be relieved of the obligation to pay the amount representing punitive damages.
The original lawsuit charged Dye, the insured, with liability under the doctrine respondeat superior, and also for the negligent hiring of a person with "dangerous propensities," which were known or should have been known by Dye.
The jury, in its verdict for compensatory damages did not specify whether it was holding Dye on his vicarious liability or because of his alleged negligent hiring of Mobley. Neither did the jury specify as to its verdict for punitive damages.
The insurance carrier claims that the jury could have posited its punitive damage award on either basis, and that it is not liable if the jury made its award on non-vicarious grounds. It claimed that the burden of proof was on the assured to bring himself within the coverage of the policy, and since it was impossible to read the jury's mind, Dye could not carry this burden. Hence, it claimed its motion to be relieved of liability must be granted.
The trial court held that the rule of non-insurability of a person's own misconduct resulting in a punitive judgment against him was defensive matter; that the burden of proof was on the appellant insuror, and gave judgment for Dye.
We agree that if the jury could have based its verdict for punitive damages on either the vicarious liability of Dye, as employer, or Dye's own misconduct, it would be impossible to determine from this verdict which produced the verdict. It would then be...
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