Prince v. American Indem. Co., 82-246
| Citation | 431 So.2d 270 |
| Decision Date | 12 May 1983 |
| Docket Number | No. 82-246,82-246 |
| Parties | James Quincy PRINCE, Sr., et ux. Appellants, v. AMERICAN INDEMNITY COMPANY, Appellee. |
| Court | Court of Appeal of Florida (US) |
Paul Bernardini of LaRue & Bernardini, P.A., Daytona Beach, for appellants.
H. David Luff of Sanders, McEwan, Mims & McDonald, Orlando, for appellee.
The Princes appeal from a declaratory judgment which permitted American Indemnity, their insurance carrier, to assert its subrogation rights to a portion of a settlement received by Mrs. Prince. We hold that American Indemnity is not entitled to subrogation or reimbursement and reverse the judgment.
In 1980, Mrs. Prince was injured in a motor vehicle collision. Pursuant to the terms of the Princes' insurance policy, American Indemnity paid Mrs. Prince $1,000 in medical benefits. Mrs. Prince ultimately settled her claim with the tortfeasor and his insurance carrier, State Farm, for $15,000.
In settling the claim, State Farm issued two checks: one check for $14,000 was made payable to the Princes (and their attorney) and one check for $1,000 was made payable to the Princes (and their attorney) and American Indemnity. The Princes' attorney informed American Indemnity that, in his opinion, the company's subrogation rights were extinguished by the collateral source rule (section 627.7372) and therefore it was not entitled to reimbursement for the medical benefits payment. American Indemnity did not agree with this interpretation and refused to endorse the $1,000 check over to the Princes.
The American Indemnity policy provides for subrogation and reimbursement as follows:
5. Our Right to Recover Payment
A. If we make a payment under this policy and the person to or for whom payment was made has a right to recover damages from another we shall be subrogated to that right. That person shall do whatever is necessary to enable us to exercise our rights and shall do nothing after loss to prejudice them.
B. If we make a payment under this policy and the person to or for whom payment is made recovers damages from another, that person shall hold in trust for us the proceeds of the recovery and shall reimburse us to the extent of our payment.
Whether American Indemnity has a right of subrogation depends upon the insured's "right to recover damages from another." Likewise, whether American Indemnity has a right to reimbursement depends upon the nature of the $1,000 payment from State Farm. If Mrs. Prince has a "right to recover damages from another" or if she has in fact recovered damages from another, then American Indemnity is entitled to assert its rights under the policy. Conversely, if Mrs. Prince does not have a right to recover damages, then American Indemnity is not entitled to assert its rights. 1
The resolution of this issue depends upon the provisions of the Florida Automobile Reparations Reform Act, sections 627.730-627.741, Florida Statutes (1979). Section 627.7372, the collateral source rule, provides in part as follows:
(1) In any action for personal injury or wrongful death arising out of the ownership, operation, use, or maintenance of a motor vehicle, the court shall admit into evidence the total amount of all collateral sources paid to the claimant, and the court shall instruct the jury to deduct from its verdict the value of all benefits received by the claimant from any collateral source.
(2) For purposes of ...
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