Gallagher v. Dupont

• Decision Date: 09 December 2005
• Docket Number: No. 5D04-3155.,5D04-3155.
• Parties: Tom GALLAGHER, as Insurance Commissioner and State Treasurer, and Risk Management Trust Fund, Appellants/Cross-Appellees, v. Michael C. DUPONT, Appellee/Cross-Appellant.
• Court: Florida District Court of Appeals

Page 342

918 So.2d 342

Tom GALLAGHER, as Insurance Commissioner and State Treasurer, and Risk Management Trust Fund, Appellants/Cross-Appellees, v. Michael C. DUPONT, Appellee/Cross-Appellant.

No. 5D04-3155.

District Court of Appeal of Florida, Fifth District.

December 9, 2005.

Rehearing Denied January 20, 2006.

COPYRIGHT MATERIAL OMITTED

Charles J. Crist, Jr., Attorney General, and James A. Peters, Special Counsel, and J. Clifton Cox, Assistant Attorney General, Tallahassee, for Appellants/Cross-Appellees.

James N. Charles, Celebration, for Appellee/Cross-Appellant.

THOMPSON, J.

Michael C. Dupont sought to enforce by writs of mandamus and garnishment a federal § 1983 civil rights judgment for $527,670.70 obtained by Coblentz¹ agreement against the Estate of Sebastian Tangusso, a former state employee. The circuit court granted final summary judgment in favor of Tom Gallagher, in his capacity as Insurance Commissioner and State Treasurer, and head of the State Risk Management Fund ("Fund"), but denied their motion for attorney's fees under section 57.105, Florida Statutes (2003). Gallagher and the Fund appeal the denial of attorney's fees, and Dupont cross-appeals the final summary judgment. We reverse the final summary judgment and affirm the denial of section 57.105 fees.

Background

The civil rights lawsuit arose in the wake of "Operation Handyman," a reverse sting operation conducted jointly by the Department of Business and Professional Regulation ("DBPR") and the State Attorney's Office in 1994. Dupont, a self-employed painter living in Daytona Beach, placed an advertisement in the "Pennysaver" to perform roof, concrete, and acoustic ceiling cleaning and painting that caught the attention of DBPR in its effort to target unlicensed contractors. Sebastian Tangusso was the lead DBPR investigator for Operation Handyman.

DBPR unsuccessfully attempted to lure Dupont into agreeing to perform contracting services for which he was unlicensed. Tangusso nevertheless swore out an arrest affidavit that resulted in Dupont's forcible surprise arrest and prosecution under the unlicensed contractor statute. During one court proceeding, he was arrested and handcuffed again because the original arrest warrant had remained active. After the trial court acquitted Dupont of the charges, he filed the § 1983 federal civil rights lawsuit.

The Fund retained the services of the Attorney General to defend Tangusso in the civil rights lawsuit. The Fund provides federal civil rights liability insurance for employees under section 284.30, Florida Statutes (2001), and owed a duty to defend its insured.

While the civil rights lawsuit was pending, Tangusso died, and the Attorney General filed a suggestion of death. The district court subsequently entered an order substituting the Estate of Tangusso. A newly assigned assistant attorney general agreed to provide any information the agency had in Tangusso's personnel file regarding his Estate. A week later, however, the assistant attorney general advised counsel she had not obtained any information regarding the Estate and further questioned whether the Attorney General should represent it.

Dupont obtained a clerk's default against the Tangusso Estate. His counsel learned that probate of the Tangusso Estate had closed, and the Estate's attorney advised that no one from the State had ever notified him of a pending lawsuit against Tangusso at the time of his death.

The Attorney General was refusing to defend the Tangusso Estate, but the office remained attorney of record for the Estate. Upon Dupont's motion for evidentiary hearing to determine the amount of damages and for entry of default judgment, the federal district court noticed an evidentiary hearing to determine damages and for entry of a default judgment. At the hearing, the assistant attorney general present filed a "Notice to the court on the status of defense representation," requesting to be relieved from any appearance because no defendant was entitled to representation by the Attorney General. The Attorney General asserted that its representation did not extend to private estates of deceased employees or their personal representatives. At the hearing, the district court declined to proceed with the evidentiary hearing and instead directed counsel to provide memoranda to the court outlining their respective positions regarding representation of the Tangusso Estate.

In light of the delay in ruling on Dupont's motion for default final judgment, the Estate's and Dupont's counsel began discussing the option of a Coblentz agreement and consent judgment. The district court subsequently granted the Attorney General's motion to withdraw as counsel for the Tangusso Estate. The district court also denied without prejudice Dupont's motion for default judgment.

In July 2002, Dupont and the personal representative of the Estate executed a written settlement agreement. The probate court entered an order reopening the Estate and approved the stipulation. On 6 September 2002, the district court granted Dupont's motion for entry of final order based on the settlement and entered judgment for Dupont in the amount of $527,670.70. The Estate agreed to the entry of a judgment against it and in favor of Dupont for $527,670.70; assigned to Dupont any and all judgments, settlements, proceeds that it may obtain against the Fund, as well as against any other person or entity responsible for the refusal of the Fund to provide coverage; and agreed that Dupont shall choose counsel to bring the bad faith action against the Fund. Dupont agreed to seek satisfaction of the judgments only from the proceeds that the Estate may collect in such lawsuit against the Fund.

Dupont's counsel served a demand letter on the Department of Insurance on 19 September 2002, advising that recently it had been awarded a final judgment against an insured under the Fund's civil rights liability coverage and enclosed a copy of the final judgment. He requested that the Department make contact to discuss payment of the judgment and further advised that the Estate had assigned its rights under the liability coverage to Dupont. He did not attach a copy of the settlement agreement to the letter. Dupont's counsel cautioned the Department that its failure to timely respond would result in proceedings against the Fund under the assignment for satisfaction of the judgment. The Department objected to the settlement agreement and assignment in the probate court and did not pay the demand.

State Court Proceedings

The state court litigation commenced with an ex parte hearing, resulting in a writ of garnishment and alternative writ of mandamus based upon the representation that "the Tangusso Estate had protected its interest by entering into a Coblentz agreement for consent judgment and assignment."

In Count I, Dupont sought a writ of mandamus against Gallagher, as head of the Department of Insurance that administers the Fund, alleging that Gallagher had a "legal duty to direct the fund to follow the requirements of Florida Statutes ... by paying the judgment entered in favor of Dupont against the Tangusso Estate." In Count II, Dupont sought garnishment pursuant to section 77.01, Florida Statutes (2002).

Gallagher and the Fund filed a motion for summary judgment with a request for attorney's fees, arguing that neither count had any merit under the law or facts. Dupont's counsel filed an affidavit in opposition to the motion for summary judgment and attached the federal judgment.

The court ordered Dupont to file an amended complaint, and the defendants subsequently filed amended motions for summary judgment. Dupont's amended complaint did not attach the ordered Coblentz agreement; it was still premised upon the demand letter.

The court granted final summary judgment to Gallagher and the Fund, concluding that the agreement required as a condition precedent that the Estate file suit against the Fund and recover a judgment, that the Estate had never filed any such lawsuit, and that the demand letter failed to inform the recipient that Dupont would receive an assignment only when the Estate received a judgment in a successfully litigated suit against the Fund. The court deemed its ruling dispositive and denied without explanation their motions for section 57.105 attorney's fees. This appeal ensued.

Final Summary Judgment

Dupont argues that the trial court erred in concluding that the settlement agreement was incorporated into the federal district court judgment and in allowing the Fund as a nonparty to the agreement and lawsuit to collaterally attack the terms of the consent agreement between Dupont and the Tangusso Estate. We agree.

The standard of review for construction of a contract and for summary judgment is de novo. FCCI Ins. Co. v. Horne, 890 So.2d 1141 (Fla. 5th DCA 2004). In order to determine the propriety of a summary judgment, this court must resolve whether there is any genuine issue as to any material fact and whether the movant is entitled to judgment as a matter of law. Krol v. City of Orlando, 778 So.2d 490, 491-492 (Fla. 5th DCA 2001). We must consider the evidence contained in the record, including any supporting affidavits, in the light most favorable to the nonmoving party. Id. at 492.

The federal court judgment did not approve or incorporate the settlement agreement into the final order. The judgment recites that the parties had resolved their differences and entered into a stipulation for settlement and consented to the entry of judgment. Although a judgment may be entered pursuant to a settlement, once the judgment is entered, its enforceability is not tied to the terms of the settlement. Sands v. Granoff, 508 So.2d 543 (Fla. 3d DCA 1987). In Sands, the trial court was not precluded from enforcing a final judgment based on a stipulated settlement, despite the contention that, prior to entry of judgment, the parties changed their agreement and...