Fidelity and Cas. Co. of New York v. Cope
| Decision Date | 10 January 1985 |
| Docket Number | No. 64825,64825 |
| Citation | 462 So.2d 459,10 Fla. L. Weekly 33 |
| Parties | 10 Fla. L. Weekly 33 FIDELITY AND CASUALTY COMPANY OF NEW YORK, Petitioner, v. James L. COPE, as personal representative of the Estate of Anna L. Cope, deceased, Respondent. |
| Court | Florida Supreme Court |
Jonathan L. Alpert of Fowler, White, Gillen, Boggs, Villareal & Banker, Tampa, for petitioner.
Robert W. Holman of Hammond & Holman, Pinellas Park, and G. Robert Schultz, St. Petersburg, for respondent.
We have for review Fidelity & Casualty Co. v. Cope, 444 So.2d 1041 (Fla. 2d DCA 1984), which the district court has certified to be in direct conflict with Kelly v. Williams, 411 So.2d 902 (Fla. 5th DCA), review denied, 419 So.2d 1198 (Fla.1982). We have jurisdiction, article V, section 3(b)(4), Florida Constitution, and quash Cope.
The issue presented is whether an injured party who has secured a judgment in excess of a tortfeasor's insurance coverage can maintain a "bad faith" excess claim against the insurer when the injured party has executed a release of his claims against the tortfeasor who has satisfied the judgment. 1 We hold that, absent a prior assignment of the cause of action, once an injured party has released the tortfeasor from all liability, or has satisfied the underlying judgment, no such action may be maintained.
On March 30, 1978, while driving a vehicle owned and occupied by Jacqueline Gehan, Daniel Brosnan ran a stop sign and struck a car occupied by James and Anna Cope. The collision killed Mrs. Cope and injured Mr. Cope and Gehan. Brosnan had a 10/20 liability policy with Fidelity and Casualty Company of New York (Fidelity) and Gehan had a 10/20 liability policy with Hartford Accident and Indemnity Company (Hartford). 2
Cope's attorney demanded that Fidelity pay $10,000 for James Cope's claim and $10,000 for the estate's claim. 3 Fidelity's adjuster responded by acknowledging that the injuries were serious enough to warrant the policy limits, but also advised that Gehan's counsel had put them on notice of a potential claim. It advised that it would tender the $20,000 if Cope's counsel and Gehan's counsel could work out a settlement satisfactory to all parties concerned. Approximately two months later Cope's counsel filed suit against Brosnan, Gehan, and their insurers, Fidelity and Hartford. Fidelity unsuccessfully sought to interplead its $20,000 limits in this action. A jury trial resulted in a $100,000 final judgment for the Cope estate. 4 Fidelity and Hartford each paid policy limits of $10,000 to the estate.
Cope then brought an excess judgment action against Hartford based upon its bad faith failure to settle. Fidelity was not a party to this claim. Hartford settled the bad faith action for $50,000 in return for Cope's execution of a release and a satisfaction of judgment in favor of Hartford, Gehan, and Brosnan. Fidelity was not named in the release and Cope, in dealing with Hartford, did not intend to release Fidelity from an excess claim suit.
Cope thereafter filed this action against Fidelity for the $30,000 which remained unpaid on the final judgment. After a nonjury trial, the trial court found that Fidelity had acted in bad faith during settlement negotiations and ordered Fidelity to pay $30,000 to Cope. The trial court rejected Fidelity's argument that the release and satisfaction of judgment in favor of its insured, Brosnan, barred any subsequent bad faith action. The district court affirmed, holding that an insurer's bad faith constitutes a separate tort which is not extinguished with the release of an insured by an injured party. The district court acknowledged and certified the direct conflict between its decision and Kelly v. Williams.
The Fifth District Court of Appeal in Kelly v. Williams correctly stated:
The essence of a "bad faith" insurance suit (whether it is brought by the insured or by the injured party standing in his place), is that the insurer breached its duty to its insured by failing to properly or promptly defend the claim (which may encompass its failure to make a good faith offer of settlement within the policy limits)--all of which results in the insured being exposed to an excess judgment.
411 So.2d at 904 (footnote omitted). The district court noted that a stipulation entered in the cause completely released the insured. Because the insured could not be exposed to any loss or damage from the alleged bad faith of the insurer, no cause of action for bad faith remained for anyone.
In this case the second district disagreed with Kelly, holding that the injured party's bad faith claim is a separate cause of action and citing Thompson v. Commercial Union Insurance Co., 250 So.2d 259 (Fla.197...
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