Morgan v. General Ins. Co. of America

• Decision Date: 16 December 1965
• Docket Number: No. G-332,G-332
• Citation: 181 So.2d 175
• Parties: Clenton L. MORGAN and Ruth B. Morgan, Appellants, v. GENERAL INSURANCE COMPANY OF AMERICA, a corporation, Appellee.
• Court: Florida District Court of Appeals

Page 175

181 So.2d 175

Clenton L. MORGAN and Ruth B. Morgan, Appellants, v. GENERAL INSURANCE COMPANY OF AMERICA, a corporation, Appellee.

No. G-332.

District Court of Appeal of Florida, First District.

Dec. 16, 1965.

Rehearing Denied Jan. 12, 1966.

Harrell, Caro, Middlebrooks & Wiltshire, Pensacola, for appellants.

Beggs, Lane, Daniel, Gaines & Davis, Pensacola, for appellee.

STURGIS, Judge.

Appellants brought a tort action against the owners of Blue Flame Gas Company, not parties to this appeal, to recover damages resulting from an explosion and fire which destroyed appellants' home and contents. The fire loss was covered by an insurance policy issued by appellee, which was permitted to intervene as a party plaintiff while settlement negotiations were pending between appellants and Blue Flame Gas Company for the purpose of protecting its (appellee insurer's) right of subrogation under the terms of the insurance policy.

Appellee's subrogation claim derives from these facts: Prior to the institution of this suit appellants sued appellee in the state court to recover on the insurance policy. Appellee removed that cause to the United States District Court where it filed an answer admitting liability and tendered $11,175.31 into the registry of that court, contending that said amount was the extent of its liability under the policy. That suit is not involved on this appeal and the issue therein is moot due to the fact that pursuant to a settlement agreement and stipulation entered by all parties to this cause Blue Flame Gas Company paid into the registry of the state court, for distribution as hereinafter stated, an amount in excess of the amount claimed by appellants under the policy. This appeal involves a dispute between appellants and their insurer (appellee) over the distribution of the settlement proceeds derived from Blue Flame as made by the order appealed, which order was entered pursuant to said stipulation in pertinent part providing:

(1) That appellants' claim against appellee under the insurance policy on account of the loss is fixed at $11,175.31 (the amount tendered by appellee and deposited in the registry of the federal court), and that said sum constitutes 100% of the subrogation claim of appellee and is subject to disbursement in accordance with the provisions of the stipulation or other order of the trial court.

(2) That appellants and appellee desire to accept $14,567.00 from Blue Flame Gas Company in release and discharge of all claims against that concern, and that upon payment of said sum into the registry of the court it should stand fully released and discharged of all claims and demands on account of all the matters and things alleged in the complaint.

(3) That out of the $14,567.00 so paid there be paid forthwith to appellants and their attorney the sum of $3,391.69.

(4) That the remaining $11,175.31 be disbursed in accordance with a further order of the court in which the following questions should be determined: (a) whether appellee's subrogation claim is subject to reduction on account of appellants' claim that their entire cause of action against Blue Flame Gas Company had been compromised by them for a sum less than the full value thereof; (b) whether the amount to which appellee is entitled is subject to a claim for attorney's fees on account of the services of appellants' attorney in this cause and to payment of a proportionate part of the court costs.

(5) That the court make all appropriate orders based on said stipulation.

(6) That a copy of the stipulation be filed in the litigation pending in the federal court. It was provided, however, that by virtue of the recovery in this action against Blue Flame Gas Company, the issue of appellants' claim against appellee in the federal court of an amount in excess of $11,175.31 is moot except in respect to determining, in the state court, whether or not appellants are entitled to interest and attorney's fees and costs as a charge against appellee's subrogation claim as to the action in the federal court, and that nothing in the stipulation should preclude the assertion of those claims by appellants. It was also declared to be the intent of the stipulating parties 'to fix the liability under the policy and the amount of the subrogation claim at the same figure.'

Upon payment by Blue Flame of the settlement money into the registry of the state court, appellants filed their 'Petition for an Order of Disbursement and Other Relief,' praying, inter alia, (a) that they be fully compensated for their entire loss, including expenses, before appellee be entitled to any subrogation against the excess proceeds of settlement, and (b) that appellee be required to pay appellants their proportionate share of expenses, including costs, and attorney's fees incurred in the recovery to the extent of appellee's subrogation claim, or in general for the recovery of the $11,175.31 common fund. In support thereof appellants submitted proofs to the effect that their claim against Blue Flame Gas Company substantially exceeded the amount of the compromise settlement made herein with that concern, that the appellee had contributed little to the prosecution of this suit, that the negotiations for settlement had been substantially concluded prior to appellee's...