Nationwide Mut. Ins. Co. v. McNulty
| Decision Date | 17 December 1969 |
| Docket Number | No. 38676,38676 |
| Citation | 229 So.2d 585 |
| Parties | NATIONWIDE MUTUAL INSURANCE COMPANY, Petitioner, v. Kendrick D. McNULTY, Respondent. |
| Court | Florida Supreme Court |
Lee Weissenborn of Weinstein, Weissenborn & Burr, Miami, for petitioner.
Larry S. Stewart of Frates, Fay, Floyd & Pearson, Miami, for respondent.
This cause is before us on petition for writ of certiorari to the District Court of Appeal, Third District. That Court has certified that its decision, reported at 221 So.2d 208, is one passing on a question of great public interest, to-wit:
'Whether a claim of the insured judgment debtor against the insurer for excess of judgment over the policy limit for alleged bad faith in refusal to settle within the policy limit, may be maintained against the insurer by the judgment creditor on the basis of an assignment thereof to him.'
Respondent McNulty was struck and injured by a vehicle belonging to Peter Timothy Garvey. McNulty sued Garvey and obtained a judgment for $18,000. Garvey was insured under an automobile liability indemnity policy issued by petitioner Nationwide. The coverage limitation for injury to one person was $10,000. Prior to and again during the pendency of the suit, McNulty made offers to settle for an amount within the policy limit. His offers were refused by the insurer without counter offer.
After the entry of the judgment of $18,000 against Garvey, Garvey assigned to McNulty his claim against Nationwide for the excess of the judgment over the coverage. On the basis of that assignment McNulty then brought suit against Nationwide alleging negligence and bad faith refusal to settle within the policy limits.
The trial court granted motion to dismiss on the ground that suit could not be maintained by an assignee. The District Court reversed the judgment of dismissal, holding: 1
Petitioner admits that Florida follows the majority rule permitting 'bad faith excess' suits by insured against insurer, but urges that 'public policy' should prevent judgment creditors from bringing suit under an assignment of the insured's right of action. The case of Sturgis v. Canal Insurance Co. 2 is cited by petitioner in support of its contention that such suit violates 'public policy.' In that case we held that a judgment creditor could not maintain suit directly against the insurer for recovery of a judgment in excess of policy limits because of the alleged negligence or had faith of the insurer in conduct or handling of the suit, in the absence of a policy provision allowing such a suit. No assignment was involved.
Petitioner contends that the assignment in the instant case was void and of no effect, because it says it is champertous. Champerty is defined as follows: 3
'A bargain by a...
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