Odom v. Canal Ins. Co., 90-2515
| Decision Date | 19 June 1991 |
| Docket Number | No. 90-2515,90-2515 |
| Citation | 582 So.2d 1203 |
| Parties | Edgar E. ODOM, Jr., William C. Millican and Irene Millican, his wife, Appellants, v. CANAL INSURANCE COMPANY, Appellee. 582 So.2d 1203, 16 Fla. L. Week. D1669 |
| Court | Florida District Court of Appeals |
Charles J. Kahn, Jr., Stephen H. Echsner and Lefferts L. Mabie, Jr. of Levin, Middlebrooks, Mabie, Thomas, Mayes & Mitchell, P.A., Pensacola, for appellants.
Donald H. Partington of Clark, Partington, Hart, Larry, Bond, Stackhouse & Stone, Pensacola, and R. William Roland of Karl, McConnaughhay, Roland and Maida, Tallahassee, for appellee.
Edgar E. Odom, Jr. and William and Irene Millican, the plaintiffs below, appeal a final summary judgment entered in favor of Canal Insurance Company, the defendant below. Because we find that issues of fact preclude the entry of summary judgment in Canal's favor, we reverse.
On July 19, 1983, William Millican was seriously injured when he was struck by a taxi operated by an agent of Edgar Odom, doing business as City Cab Company. Thereafter, Millican and his wife sued Odom, alleging that Millican's injuries were caused by the negligence of the taxi driver. Canal, Odom's liability insurer, investigated the claim and prepared to defend the suit. The Millicans offered to settle their claim against Odom for the policy limits of $10,000, but no settlement was reached because Canal's regional claims supervisor insisted upon including the United States as a co-payee on the settlement check. According to the supervisor, because the United States had furnished medical care to Millican, an officer of the United States Navy, the United States had a lien for the costs of the medical care it furnished pursuant to The Medical Care Recovery Act, 42 U.S.C.A. Secs. 2651-2653 (1973). Canal agreed to settle with the Millicans if the United States was made a co-payee on the settlement check or if they would agree to hold Canal harmless against any future claim which might be asserted by the United States for the costs of Millican's medical care. When negotiations failed, the case proceeded to a jury trial which resulted in a judgment in favor of the Millicans against Odom in the amount of $366,000, plus interest and costs. Sometime after the trial, Odom learned for the first time that the Millicans had offered to settle the case and that Canal had made a counteroffer. 1
Odom and the Millicans, his judgment creditors, then brought the instant bad faith claim against Canal. They alleged, inter alia, that Canal acted in bad faith when it (a) imposed an unreasonable condition upon its counteroffer, and (b) failed to advise Odom of settlement offers and negotiations and the possibility that an excess judgment might be entered against him. The parties filed cross-motions for summary judgment directed to the reasonableness of Canal's decision to condition its settlement offer upon the inclusion of the United States as a co-payee on the settlement check. The court concluded that Canal was entitled to so condition its settlement offer and granted its motion for summary judgment. This appeal followed.
The parties urge this court to determine whether the government could have made a claim against Canal for the costs of Millican's care back in 1983, when Canal made its conditional offer of settlement. The Medical Care Recovery Act provides that in any case in which the United States is authorized or required to furnish medical care to a person injured "under circumstances creating a tort liability upon some third person" to pay damages therefor, the United States shall have a right to recover from the tort-feasor the reasonable value of the care furnished, and shall be subrogated to any claim that the injured person has against the tort-feasor to the extent of the reasonable value of the care furnished. 42 U.S.C.A. Sec. 2651(a). Although the Act confers an independent right of action on the government, one must look to state law to determine whether there are "circumstances creating a tort liability upon some third person." Heusle v. National Mut. Ins. Co., 628 F.2d 833, 837 (3d Cir.1980), cited with approval in, United States v. Travelers Indem. Co., 729 F.2d 735, 737 (11th Cir.1984).
The appellants argue that in 1983, Odom was not liable to Millican for the cost of his medical care by operation of section 627.7372, Florida Statutes (1983), so the United States acquired no corresponding right to recover its costs for Millican's care. Section 627.7372 provides that in actions for personal injury arising out of the operation of a motor vehicle, the court shall admit into evidence the total amount of all collateral sources paid to the claimant, and shall instruct the jury to deduct from its verdict the value of all benefits received by the claimant from any collateral source. The appellants reference Prince v. American Indem. Co., 431 So.2d 270 (Fla. 5th DCA 1983), decided on May 12, 1983, as evidence that at the time of Canal's conditional offer, section 627.7372 was being interpreted to mean that providers of collateral source benefits to persons injured in automobile accidents had no claim for recovery of the amounts paid or the benefits provided. See Molyett v. Society Nat'l Life Ins. Co., 452 So.2d 1114 (Fla. 2d DCA 1984) and Blue Cross & Blue Shield of Florida, Inc. v. Ryder Truck Rental, Inc., 472 So.2d 1373 (Fla. 3d DCA 1985), rev'd 498 So.2d 423 (Fla.1986), for similar interpretations of the statute. By 1986, the supreme court had rejected the district courts' interpretation of section 672.7372, concluding in Blue Cross & Blue Shield of Florida, Inc. v. Matthews, 498 So.2d 421 (Fla.1986), that the statute does not bar a cause of action by either the plaintiff insured or his insurer, it simply limits the plaintiff's recovery to monies to which he is equitably entitled.
We need not determine, as...
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