Roess v. St. Paul Fire & Marine Insurance Company
Decision Date | 08 November 1974 |
Docket Number | No. 72-679-Civ-T-H.,72-679-Civ-T-H. |
Parties | Martin J. ROESS, Plaintiff, v. ST. PAUL FIRE AND MARINE INSURANCE COMPANY, Defendant. |
Court | U.S. District Court — Middle District of Florida |
Thomas C. MacDonald, Jr., and Robert R. Vawter, Jr., of Shackleford, Farrior, Stallings & Evans, P. A., Tampa, Fla., for plaintiff.
W. Donald Cox of Fowler, White, Gillen, Boggs, Villareal & Banker, P. A., Tampa, Fla., for defendant.
This is an action for breach of contract, jury trial demanded. Plaintiff Roess, as the insured, sues the Defendant under a contract of insurance claiming that he has suffered a loss within the purview of the policy and that the Defendant has breached its contract by refusing to pay. Defendant (St. Paul Fire) has consistently denied that the claim was within the coverage afforded by the policy.
A regularly scheduled pre-trial conference was conducted on May 21, 1974. Upon consideration of the pre-trial stipulation and the oral argument of counsel, it became apparent that the dominant issue in the case (coverage of the policy) should be resolved as a matter of law on the basis of certain fundamental, undisputed facts. The Court thus entered an order postponing the trial and directing the filing of briefs. A concise chronology of events will place the issue in proper perspective.
On November 22, 1967, a civil action was instituted in the state court of Pinellas County, Florida, by one Hubert Caulfield, as plaintiff, against Vlastimil Koubek and others as defendants. The action was filed by Caulfield in his capacity as a taxpayer, and the complaint generally challenged the legality of a proposed construction project in the City of St. Petersburg known as the Bayfront Plaza. Koubek was one of the developers of the proposed project pursuant to certain arrangements with the City.
On April 26, 1968, a final judgment was entered in the above case (the taxpayer's action). The judgment was adverse to the plaintiff Caulfield and in favor of defendant Koubek on the merits of the claim. However, the court also denied a motion made by Koubek to enjoin the institution of any further suits of like nature by plaintiff Caulfield or members of his taxpayers' class.
On May 3, 1968, the Defendant in this action, St. Paul Fire, issued the disputed policy of insurance to the Plaintiff, Martin J. Roess, entitled "Top Brass Personal Catastrophe Policy." Among other risks, the policy indemnified against liabilities due to "personal injuries" caused by the insured, including, by definition, "malicious prosecution."1
On May 8, 1968, Koubek filed an appeal to the Supreme Court of Florida from that portion of the state court's judgment denying injunctive relief against the filing of similar actions by Caulfield or members of his taxpayers' class; and on June 24, 1968, plaintiff Caulfield cross-appealed from the judgment on the merits.
On July 24, 1968, the Supreme Court of Florida entered its order and decision affirming the judgment of the state trial court in the taxpayer's action; and subsequently, on August 19, 1968, the Court denied a petition for rehearing. Koubek v. Caulfield, 213 So.2d 417 (Fla.1968).
On October 2, 1970, an amended complaint was filed in this Court in the case of Koubek v. Caulfield and Roess (Case No. 69-496-Civ.-T-K, assigned to Judge Krentzman). The suit was an action for malicious prosecution brought by Koubek against Roess alleging that Roess had financed the taxpayer's action in state court and had caused it to be maintained "knowing it to be frivolous and without probable cause and desiring to destroy Koubek's business venture in Bayfront Plaza . . ." Roess notified St. Paul Fire of the filing of the suit and demanded that the carrier assume his defense. The demand was rejected on the ground that the policy afforded no coverage with respect to Koubek's claim. Roess ultimately settled with Koubek by paying the sum of $67,500.00. He then initiated this action seeking to recover that payment from St. Paul Fire under his insurance policy.
Given these facts, the Court's pre-trial order of May 24, 1974, directed the submission of briefs concerning the following issues: (a) whether the policy afforded coverage with respect to the malicious prosecution claim asserted against Roess by Koubek; (b) since the policy was issued while the taxpayers' suit was in progress, if the policy afforded coverage, whether the insurer can limit its liability to damages accruing to Koubek after the policy was issued, or whether coverage extends to all damages incurred by Koubek by reason of the taxpayers' suit; and (c) whether the Plaintiff was obligated to inform the Defendant insurer of the pendency of the taxpayers' suit at the time the policy was issued, when the policy application did not solicit such information.
Simply stated, the specific dispute here is whether the operative occurrence triggering Roess' liability to Koubek transpired before or after the effective date of the policy. Plaintiff says it occurred after the issuance of the policy, while Defendant contends it occurred before. It will be remembered that the taxpayers' suit (the maliciously prosecuted action) was commenced and, indeed, was determined by judgment in the trial court prior to issuance of the policy, but was not ultimately terminated on appeal (by the Supreme Court of Florida) until after the date of issuance.
Both parties agree that, under Florida law, favorable termination of a maliciously prosecuted action is an essential element of the injured party's claim in tort.
Plaintiff's position, therefore, is quite simple. He says that Koubek's claim against him did not mature or accrue as a matter of law until the taxpayer's action was terminated in Koubek's favor by the Supreme Court of Florida, and that this event occurred after the issuance of the policy. Defendant counters, however, with two distinct arguments.
The first contention advanced by Defendant is derived entirely from the decision in Muller Fuel Oil Co. v. Insurance Company of North America, 95 N. J.Super. 564, 232 A.2d 168 (1967); and, to be sure, that is the only decision in point cited by either counsel. In that instance the insured initiated a criminal charge against one Thomas Policastro. The disputed insurance was obtained during the pendency of the criminal proceeding. Policastro was then acquitted, subsequent to the issuance of the policy; and, upon his acquittal, promptly sued the insured for malicious prosecution. Treating the issue as one of first impression, the New Jersey Court held that the policy afforded no coverage under those facts. The Court reasoned that the "essence" of the tort of malicious prosecution in New Jersey is the wrongful conduct of filing a criminal complaint with malice and without probable cause; and it referred to the necessity of termination in favor of the victim as in the nature of a "condition precedent" to suit rather than an essential element of the tort itself. The Court also stressed the fact that the victim suffers damage immediately upon arrest pursuant to a baseless criminal charge, and it utilized that point to distinguish the general rule in negligence cases that the tort is not consummated until damage occurs (even though the negligence antedates the injury by months or years). Finally, the Court said (232 A.2d at 175):
The only real basis upon which the Muller Fuel Oil decision might be distinguished from the case sub judice is the fact that Muller involved a malicious criminal prosecution whereas this case involves a maliciously prosecuted civil action. In a criminal case the principal act of a tortious nature is the filing of the charge or issuance of a warrant. The state thereafter controls the prosecution, not the accuser. Thus, as the New Jersey court noted, the "essence" of the tort in those circumstances is the initiation of the charge; and the victim's principal damage is usually suffered at that moment, i. e., upon arrest and the resulting stigma that attaches to one accused of crime. In a civil action, however, the malicious plaintiff remains in control of the prosecution of the suit, and the principal damage to the victim may or may not coincide with the filing of the case. The "essence" of the tort, in other words, may well be the continued prosecution of the claim rather than its mere initiation. While this difference clearly undermines the rationale of Muller as applied to the facts of this case, it must be recognized as a dubious point of distinction vis-a-vis the contractual relationship between the tortfeasor and his insurance carrier. Logically, as between those parties, it should make no difference as to the coverage afforded by the policy that the malicious prosecution was a...
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