International Surplus Lines Ins. Co. v. Markham

Decision Date10 May 1991
Docket NumberNo. 91-00255,91-00255
Citation16 Fla. L. Weekly 1300,580 So.2d 251
PartiesINTERNATIONAL SURPLUS LINES INSURANCE COMPANY, Petitioner, v. L. Gail MARKHAM and Markham, Norton & Co., P.A., Respondents. 580 So.2d 251, 16 Fla. L. Week. 1300
CourtFlorida District Court of Appeals

Ronald L. Kammer and Jeffrey A. Blaker of Hinshaw & Culbertson, Miami, for petitioner.

Jeanne T. Tate of Shackleford, Farrior, Stallings & Evans, P.A., Tampa, for respondents.

PER CURIAM.

International Surplus Lines Insurance Company (ISLIC) has filed a petition for writ of mandamus, or alternatively, a writ of certiorari to review an order that abated its declaratory judgment action against its insured pending the outcome of a liability action between the insured and an alleged injured party. We treat the petition as one for writ of certiorari. See Fla.R.App.P. 9.040(c); Briggs v. Salcines, 392 So.2d 263 (Fla. 2d DCA 1980); review denied, 397 So.2d 779 (Fla.1981); cert. denied, 454 U.S. 815, 102 S.Ct. 92, 70 L.Ed.2d 84 (1981); Sachlas v. Sachlas, 440 So.2d 1289 (Fla. 4th DCA 1983). For the reasons stated below, we grant the petition, quash the trial court's order, and remand for further proceedings.

Robin Raeburn filed a complaint against respondent, L. Gail Markham and others seeking recision of an investment contract and damages for the defendants' alleged fraud and misrepresentation in the transaction. Counts V and VI of the complaint pleaded causes of action against Markham, individually, for breach of fiduciary duty and professional negligence.

The following facts are central to all causes of action in the complaint. Markham is a certified public accountant and a partner in Markham, Norton & Company, P.A. (the firm). Raeburn employed Markham to advise her on business and financial matters, including investments. During the course of the professional relationship, Markham became Raeburn's "friend and confidant." Because of this professional and personal relationship, Raeburn relied upon Markham's superior knowledge in financial and investment matters. As such, in 1985 Raeburn sought Markham's advice on how she could protect her interest in a parcel of property on which she held a second mortgage in the amount of $500,000. The first mortgage on the property was in default.

Markham advised Raeburn that she was a member of a real estate development group, Chiquita Development Corporation, which was comprised of "distinguished Lee County citizens" who had successfully developed other properties. Markham introduced Raeburn to the other members of the development group. As a result of the group's solicitation of Raeburn to invest in Chiquita, she purchased 400 shares of the corporation for $500,000.

The complaint further alleges that Markham and the other individuals, who are also defendants in Raeburn's action, made material misrepresentations and failed to disclose material facts about the investment and the corporation. Raeburn has claimed damages in excess of $750,000, which represents the initial $500,000 stock purchase and more than $250,000 in additional capital call contributions, plus interest.

ISLIC is defending Markham in the Raeburn suit pursuant to a reservation of rights proviso in an accountants' professional liability insurance policy that ISLIC issued to Markham's firm.

ISLIC filed a separate declaratory action against the firm seeking to determine its rights under the policy and contending that it had no duty to defend or indemnify Markham in the Raeburn suit because of failure to disclose material information and because of exclusions in the policy. After the firm filed its answer and affirmative defense, ISLIC filed a motion for summary judgment. The motion alleged that ISLIC had no duty to defend or indemnify Markham because the allegations contained in Raeburn's amended complaint fell within two policy exclusions. The firm then filed a motion to abate ISLIC's declaratory judgment action pending the outcome of Raeburn's liability suit, citing Insurance Company of North America v. Whatley, 558 So.2d 120, 122 (Fla. 5th DCA 1990) ("liability should properly be decided prior to the coverage issue").

After a hearing on both motions, the trial court denied ISLIC's motion for summary judgment and granted the firm's motion to abate the declaratory judgment action. ISLIC timely filed the present petition, seeking review only of the abatement.

Generally, abatement of a subsequent action is proper upon a showing that a prior action involving the same parties and the same or substantially similar causes of action is pending in the same court or another court of comparable jurisdiction. See Lightsey v. Williams, 526 So.2d 764 (Fla. 5th DCA 1988); Koehlke Components, Inc. v. South East Connectors, Inc., 456 So.2d 554 (Fla. 3d DCA 1984); Bartlett v. Bennett, 360 So.2d 1144 (Fla. 2d DCA 1978). This standard has not been met in the present case. Although ISLIC and the firm are in privity, their interests are antagonistic in both suits. See Whatley, 558 So.2d at 122.

Nevertheless, the firm argues that abatement of the declaratory judgment action is appropriate because (1) the similarity of several key issues; (2) the risk of inconsistent verdicts; (3) avoidance of multiple or duplicative litigation if the complaint in the Raeburn suit was further amended or facts subsequently developed in that action supported a new theory of liability; and (4) the impropriety of resolving fact issues in a declaratory judgment action. These arguments, however, are without merit.

An insurer's duty to defend an insured is determined from the allegations of the complaint brought against the insured. Nat'l Union Fire Ins. Co. v. Lenox Liquors, 358 So.2d 533 (Fla.1977); State Farm Mutual Automobile Insurance Co. v. Culver, 576 So.2d 918 (Fla. 2d DCA 1991); C.A. Fielland, Inc. v. Fidelity & Casualty Co. of New York, 297 So.2d 122 (Fla. 2d DCA 1974), cert. denied, 309 So.2d 6 (Fla.1975). Only where such complaint alleges facts within the coverage provided in the policy issued to the insured will the insurer be required to defend the action brought against the insured. Nat'l Union Fire Ins. Co., 358 So.2d at 535. If the complaint in the liability suit alleges facts that bring the action within the insurance policy and facts that exempt the insurer from its duty to defend, the insurer will still be required to defend...

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19 cases
  • Westmoreland v. Lumbermens Mut. Cas. Co.
    • United States
    • Florida District Court of Appeals
    • December 24, 1997
    ...regarding the duty to indemnify should be reserved until the issue of the insured's liability is determined. Int'l Surplus Lines v. Markham, 580 So.2d 251, 254 (Fla. 2d DCA 1991). Hence, we must determine only for the purposes of providing a defense whether, even considering this exclusiona......
  • Higgins v. State Farm Fire and Cas. Co.
    • United States
    • Florida Supreme Court
    • September 30, 2004
    ...must be weighed. We agree with Judge Diamantis that the resolution of the timing issue in accord with International Surplus Lines Insurance Co. v. Markham, 580 So.2d 251 (Fla. 2d DCA 1991), in which the court indicated that the duty to defend issue should be resolved early but the insurance......
  • Hagen v. Aetna Cas. and Sur. Co.
    • United States
    • Florida District Court of Appeals
    • May 24, 1996
    ...policy, the insurer is obligated to defend the entire suit), rev. denied, 621 So.2d 1065 (Fla.1993); International Surplus Lines Ins. Co. v. Markham, 580 So.2d 251, 253 (Fla. 2d DCA 1991) ("If the complaint in the liability suit alleges facts that bring the action within the insurance polic......
  • State Farm Fire and Casualty Co. v. Higgins
    • United States
    • Florida District Court of Appeals
    • January 3, 2001
    ...should be deferred until liability [was] decided." As authority for this proposition, Marr cites to International Surplus Lines Insurance Co. v. Markham, 580 So.2d 251 (Fla. 2d DCA 1991). Like Marr, Markham was a case primarily concerned with an insurer's duty to defend. In the last sentenc......
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1 books & journal articles
  • The intentional acts exclusion.
    • United States
    • Florida Bar Journal Vol. 71 No. 5, May - May 1997
    • May 1, 1997
    ...Co. v. Conde, 595 So. 2d 1005 (Fla. 5th D.C.A. 1992). Compare International Surplus Lines Ins. Co. v. Markham, Norton & Co. P.A., 580 So. 2d 251 (Fla. 2d D.C.A. Racy Raffles Gunn is an attorney with the Tampa law firm of Fowler, White, Gillen, Boggs, Villareal and Banker, P.A. Her pract......

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