Nearhoof v. International Sales-Rentals Leasing Co.

• Decision Date: 29 June 1971
• Docket Number: 70--1035,70--842,SALES-RENTALS,Nos. 70--841,70--1034,70--856 and 70--857,s. 70--841
• Citation: 251 So.2d 717
• Parties: Peggy Ann NEARHOOF, a minor, etc., et al., Appellants, v. INTERNATIONALLEASING COMPANY, Appellee. GOVERNMENT EMPLOYEES INSURANCE COMPANY, Appellant, v. Peggy Ann NEARHOOF, a minor, etc., et al., Appellees.
• Court: Florida District Court of Appeals

Page 717

251 So.2d 717

Peggy Ann NEARHOOF, a minor, etc., et al., Appellants, v. INTERNATIONAL SALES-RENTALS LEASING COMPANY, Appellee.

GOVERNMENT EMPLOYEES INSURANCE COMPANY, Appellant, v. Peggy Ann NEARHOOF, a minor, etc., et al., Appellees.

Nos. 70--841, 70--842, 70--1034, 70--1035, 70--856 and 70--857.

District Court of Appeal of Florida, Third District.

June 29, 1971.

Rehearing Denied Sept. 15, 1971.

Ligman, Shepherd & Nettlow, Miami, for Nearhoof and others.

Adams, George & Wood, Miami, for International Sales-Rentals Leasing Co.

Dixon, Bradford, Williams, McKay & Kimbrell, Miami, for Government Emp. Ins. Co.

Before CHARLES CARROLL, HENDRY and SWANN, JJ.

HENDRY, Judge.

This court consolidated two set of appeals concerning the right to a set-off under § 768.041, Fla.Stat., F.S.A. ¹ and to subrogation under Florida's uninsured motorist statute, § 627.0851(4), Fla.Stat., F.S.A. ²

In the first set of appeal, Nos. 70--841, 842, 1034, 1035, plaintiff-appellants, the Nearhoofs, seek review of two orders amending the final judgment. These two orders, dated July 16 and September 24, 1970, allowed a set-off in favor of Government Employees Insurance Company ('GEICO'), the uninsured motorist carrier. The $19,500 set-off was the amount of uninsured motorist benefits GEICO had paid the Nearhoofs. We hold that the trial court erred in allowing the set-off, and therefore we reverse the orders amending the final judgment and remand the cause.

In the second set of appeals, Nos. 70--856 and 70--857, the appellant GEICO, intervenor below, seeks review of the order and final judgment denying its motion for judgment. GEICO sought contribution from a negligent, insured joint tort-feasor for amounts GEICO paid its insureds, the Nearhoofs, appellees in this second set of appeals, under the uninsured motorist coverage. We hold that the carrier is not entitled to contribution from a negligent, insured joint tortfeasor. Therefore, that order and final judgment dated July 13, 1970, is affirmed.

The underlying facts in these two appeals are not contested. The Nearhoofs sued International Sales-Rentals Leasing Co. ('International') and others in July, 1968. In March, 1969, the Nearhoofs setled their uninsured motorist claim against GEICO for $19,500. In May, 1969, GEICO intervened in the tort suit. In December, 1969, the jury verdict returned was for $70,000. After post trial motions, International filed the appeal in International Sales v. Nearhoof, Fla.App.1971, 251 So.2d 349 (3rd Dist.Ct.App. released this date.)

We have examined the several contentions of the parties herein, but deem it necessary only to resolve the issues as to the correctness of the set-off and the availability of the subrogation right. Both these issues will be dealt with in the following discussion.

To begin with, Florida courts have repeatedly ruled that the uninsured motorist statute, § 627.0851, Fla.Stat., F.S.A., was designed to make available the full statutory minimum amount of coverage to those persons injured by uninsured motorists. ³ The purpose of the uninsured motorist statute, is

'* * * to make each policy providing uninsured motorist coverage enforceable to the full statutory minimum to exactly the same extent that a policyholder would be legally entitled to recover damages from the third party tortfeasor. * * *'

Tuggle v. Government Employees Insurance Company, supra.

GEICO argues that §§ 627.0851(4) and 768.041, Fla.Stat., F.S.A., allow an insurance carrier to be subrogated to a recovery by its insured against an insured motorist because the statutes are couched in broad language. GEICO also raises the spectre of a 'windfall' or double recovery by the injured party and the simultaneous loss of its statutory, and contractual, right to subrogation. These are serious arguments, and have lead other courts to adopt the conclusions similar to the one GEICO advances. ⁴

We hold that (1) the public policy of Florida, as expressed in the Tuggle, Sellers, and Gavin cases and (2) the collateral source rule require that the set-off herein be disallowed. The First District Court in Phoenix Insurance Company v. Kincaid, Fla.App.1967, 199 So.2d 770, 775 had occasion to comment upon the subrogation rights of the insurance carrier; in that case the subrogation rights were considered subject to the right to uninsured motorist protection. See also Kaplan v. Phoenix of Hartford Insurance Company, Fla.App.1968, 215 So.2d 893, cert. den. with opinion Fla.1969, 220 So.2d 365, 366, affirmed after remand Fla.App.1970, 242 So.2d 806; and R. E. Walsh, 'Subrogation Under Uninsured Motorist Insurance,' 10 Boston College Industrial and Commercial Law Review 77 (Fall 1968). The rule we announce herein is in keeping with the general principles that legal subrogation is based upon equitable principles. American Motorists Company v. Thompson, 253 Or. 76, 453 P.2d 164 (1969) (en banc). See also McGee v. Hovart, supra, 260 N.Y.S.2d at p. 350. As to the collateral source rule, Georgia holds, and we agree, that uninsured motorist coverage is tantamount to a separate contract such as hospitalization insurance, so that recovery thereunder may not be set-off from a judgment against a tortfeasor. Thompson v. Milam, 115 Ga.App. 396, 154 S.E.2d 721 (1967).

The same authorities and reasoning disposes of GEICO's reliance upon certain contractual provisions in the insurance policy and trust agreements. See also: Lyon v. Hartford Accident and Indemnity Company, 25 Utah 2d 311, 480 P.2d 739 (1971). The statutory provision and public policy favoring the right to minimum coverage prevails over the contractual limitations in the insurance policy.

There is no argument that GEICO may proceed against the uninsured motorist. It argues that its subrogation rights may be wiped out by an application of § 768.041, Fla.Stat., F.S.A.; the Nearhoofs argue to the contrary relying on Woodley Lane, Inc. v. Truly Nolen, Fla.App.1962, 147 So.2d 569, and Panzavecchia v. State, Fla.App.1967, 201 So.2d 762. A...