Forsyth v. Southern Bell Tel. & Tel. Co., F-203

• Decision Date: 14 April 1964
• Docket Number: No. F-203,F-203
• Citation: 162 So.2d 916
• Parties: Cecil King FORSYTH, Petitioner, v. SOUTHERN BELL TELEPHONE AND TELEGRAPH COMPANY, a New York corporation, etc., and Clayton Register, Respondents.
• Court: Florida District Court of Appeals

Page 916

162 So.2d 916

Cecil King FORSYTH, Petitioner, v. SOUTHERN BELL TELEPHONE AND TELEGRAPH COMPANY, a New York corporation, etc., and Clayton Register, Respondents.

No. F-203.

District Court of Appeal of Florida, First District.

April 14, 1964.

J. B. Hodges, Lake City, for petitioner.

H. W. Russell, Brannon, Brown, Norris & Vocelle, Lake City, Nathan Wilson, and Dawson, Galant, Maddox & Sulik, Jacksonville, for respondents.

WIGGINTON, Judge.

One of the judges of the Circuit Court of the Third Judicial Circuit for Columbia County has certified to this Court, in accordance with the applicable rule pertaining thereto, ¹ the following propositions of law for our determination:

'WHERE AN INSURED HAVING PARTIAL INSURANCE COVERAGE AND THE INSURANCE CARRIER ASSERTS ITS RIGHT OF SUBROGATION CLAIMING THE ENTIRE AMOUNT DESPITE THE FACT THAT THE SETTLEMENT WAS ON A PARTIAL BASIS, AND THE INSURANCE COMPANY FAILED TO MAKE OR OFFER TO MAKE ITSELF A PARTY TO THE ACTION AGAINST THE DEFENDANT OR IN ANY MANNER TO ASSIST IN THE PROSECUTION OF THE CLAIM, OR CONTRIBUTE TOWARD THE SUIT EXPENSES, ALTHOUGH HAVING FULL KNOWLEDGE OF ITS PENDENCY AND OBJECT, AND HAVING SPECIFICALLY ADVISED PLAINTIFF'S COUNSEL NOT TO REPRESENT SUCH INSURANCE COMPANY:

'(A) IS THE INSURED ENTITLED TO RETAIN A PROPORTIONATE SHARE OF THE EXPENSES, INCLUDING ATTORNEY FEES INCURRED IN THE RECOVERY FROM WHICH THE INSURANCE COMPANY WILL BENEFIT TO THE EXTENT OF ITS SUBROGATION CLAIM, UPON A SUPPLEMENTAL PETITION THEREFOR? AND

'(B) IS THE ATTORNEY FOR THE INSURED ENTITLED TO ATTORNEY FEES FOR HIS SERVICES IN SUCH PROCEEDINGS FOR THE RECOVERY OF INSURED'S PROPORTIONATE SHARE, COSTS AND ATTORNEY FEES INVOLVED?'

The circuit judge certifies that the question of law above stated is determinative of the cause; is without controlling precedent in this state; can be answered without regard to the other issues in the cause and without affecting the jurisdiction of this Court or the circuit court; and, an answer to the question by this Court will facilitate the proper and final disposition of the cause. It is our view that the question certified to us is entitled to an answer. ²

The facts out of which the foregoing certified question arose, and which are not in dispute, may be briefly summarized as hereinafter set forth. Plaintiff, Forsyth, owned an automobile on which he procured a policy of insurance from Columbia Casualty Insurance Company of New York. The policy, among other things, insured Forsyth against loss resulting from property damages suffered by his insured vehicle. A collision occurred between the vehicle owned and operated by Forsyth and another owned by defendant Southern Bell Telephone and Telegraph Company and operated by its employee, Clayton Register.

Forsyth reported the property damage loss to Columbia Casualty who in turn paid Forsyth the full amount of his loss, less the agreed deductible amount set forth in the insurance policy. At the time of this payment, Columbia Casualty took from Forsyth an executed document entitled 'Loan Receipt' in which Forsyth acknowledged receipt of payment from Columbia Casualty in the sum of $604.12 as a loan, without interest, which amount was repayable only in the event of a recovery by Forsyth against any third person responsible for the damages suffered by his motor vehicle. As a part of the loan agreement Forsyth covenanted to promptly present claim and, if necessary, to commence, enter into and prosecute suit against such person or persons, corporation or corporations, through whose negligence the loss was caused, or who may otherwise be responsible therefor, with all due diligence, in his own name, but at the expense of and under the exclusive direction and control of the said Columbia Casualty Insurance Company.

Columbia notified Southern Bell in writing of its rights under the foregoing loan receipt and asked for a separate settlement of the amount due it. Southern Bell refused to settle a part of Forsyth's claim without a full release of the total amount of damages claimed by him.

Forsyth instituted suit against Southern Bell and Register, claiming damages for the personal injuries suffered by him as well as loss resulting from the damage to his motor vehicle, which latter loss had already been paid Forsyth by Columbia Casualty. Southern Bell and Register answered pleading general denial and contributory negligence. After suit was filed, Columbia Casualty notified Forsyth's attorney that the insurance company would handle the collection of its claim and the attorney was instructed not to represent Columbia Casualty's interest as far as its subrogation claim was concerned. Forsyth's attorney replied to Columbia Casualty requesting that he be advised as to who would handle their subrogation claim. Columbia Casualty replied that it was its intention to handle its claim directly with Southern Bell, and it did not feel at that time it was necessary to have legal representation. Thereafter, Columbia Casualty took no part in the pending litigation between Forsyth and Southern Bell.

After the foregoing transactions occurred and the case was set for trial, Forsyth's attorney entered into a settlement agreement with Southern Bell whereby the total amount of damages claimed by Forsyth was discounted by two-thirds resulting in a payment of $1,500.00 in full settlement of Forsyth's claim. The latter sum was paid in two drafts, one of which was in the exact amount of Columbia Casualty's payment to Forsyth of $604.12 and made payable to Columbia Casualty, Forsyth, and the latter's attorney; the remaining draft being for the balance of the settlement and payable only to Forsyth and his attorney.

After Forsyth's attorney received the Southern Bell draft in the sum of $604.12 payable as above stated, he made demand upon Columbia Casualty for payment of a reasonable attorney's fee for his services in recovering the fund realized by the settlement with Southern Bell, and a prorata share of the court costs incurred in that litigation. Upon refusal of Columbia Casualty to comply with this request, Forsyth's attorney filed a petition before the Circuit Court of Columbia County alleging the foregoing facts and praying for the entry of an appropriate order for the disbursement of the funds held by him, allowing him a reasonable attorney's fee for the services rendered in producing the fund, and for a pro rata share of the ocurt costs. Columbia Casualty answered the petition denying that Forsyth's attorney was entitled to the payment from it of any attorney's fee or court costs. It takes the position that Forsyth's attorney was not employed by it and he acted with notice that Columbia Casualty would handle its own claim and did not desire legal representation to effectuate recovery or settlement on its behalf.

Under the conditions and obligations of the loan receipt given by Forsyth to Columbia Casualty, the former agreed to repay Columbia Casualty the amount of its outlay in the event of recovery by Forsyth from Southern Bell. Forsyth also obligated himself to institute and carry to a conclusion an action at law against Southern Bell for the damages so suffered by him. We emphasize at this point that the cause of action for damages against Southern Bell was vested in Forsyth alone. Since Columbia Casualty took from Forsyth only a loan receipt at the time it discharged its obligations under its insurance contract, it did not thereby acquire a separate cause of action which would have supported a suit by it against Southern Bell for the amount advanced under its insurance policy with Forsyth. Because of this, Forsyth had no option but to claim in his suit against Southern Bell not only damages for the personal injuries suffered by him, but also the property damages suffered by his automobile for which he had been previously reimbursed by Columbia Casualty. Had he failed to do this, he would have breached his obligations under the loan receipt and could not thereafter institute a suit in his name, or in the name of Columbia Casualty, to recover from Southern Bell the damages to his vehicle. Any attempt to have done this would have constituted a splitting of...