Schuck v. Habicht

• Decision Date: 20 March 1996
• Docket Number: Nos. 94-2344 and 94-3223,s. 94-2344 and 94-3223
• Citation: 672 So.2d 559
• Parties: 21 Fla. L. Weekly D717 David SCHUCK and Sally Schuck, Appellants, v. Michael T. HABICHT, Maritime Insurance Group, Inc., a Florida Corporation, Compagnie Europeenne D'Assurances Industrielles S.A., and Compagnie D'Assurances Maritimes Aeriennes Et Terrestres, Appellees.
• Court: Florida District Court of Appeals

Page 559

672 So.2d 559

21 Fla. L. Weekly D717

David SCHUCK and Sally Schuck, Appellants, v.Michael T. HABICHT, Maritime Insurance Group, Inc., a Florida Corporation, Compagnie Europeenne D'Assurances Industrielles S.A., and Compagnie D'Assurances Maritimes Aeriennes Et Terrestres, Appellees.

Nos. 94-2344 and 94-3223.

District Court of Appeal of Florida Fourth District.

March 20, 1996.

Rehearing and Rehearing En Banc Denied May 14, 1996.

Ben J. Weaver of Weaver & Weaver, P.A., Fort Lauderdale, for appellants.

Domingo C. Rodriguez of Rodriguez & Aronson, P.A., Miami, for appellees.

PARIENTE, Judge.

The issue in this appeal is whether appellants(plaintiffs) are entitled to bring a direct action as third-party beneficiaries of a marine insurance policy.This issue turns on whether the policy is interpreted to be an indemnity policy, as the trial court found, or whether it should be interpreted to be a liability policy.Because we find that the policy contains language and provisions consistent with either a liability policy or an indemnity policy, in accordance with DaCosta v. General Guaranty Insurance Co., 226 So.2d 104(Fla.1969), the policy should be interpreted to afford the insured the greater coverage--coverage for liability rather than loss paid indemnity.We accordingly reverse the order of dismissal.

In April 1989, plaintiffs rented a motorboat from Susi's Watersports.While piloting the boat, plaintiffDavid Schuck was injured.Thereafter, plaintiffs filed suit against Susi's Watersports and ultimately obtained a judgment against it.This judgment was not satisfied.Susi's Watersports, who never appeared in or defended the lawsuit, was insured by a marine insurance policy issued by Maritime Insurance Group (Maritime) and underwritten by two French insurance companies, Compagnie Europeenne D'Assurances Industrielles S.A.(CEDI) and Compagnie D'Assurances Maritimes Aeriennes Et Terrestres (CDMAT).

Plaintiffs, as third-party beneficiaries, sued Maritime, CEDI, CDMAT and Michael T. Habicht, Maritime's agent, (collectively, defendants).They alleged that the marine insurance policy provides third-party liability coverage and that, by denying coverage for plaintiffs' injuries, the insurers breached their duty to act in good faith on behalf of their insured.Defendants, in moving to dismiss the complaint, countered that the marine policy was an indemnity policy with payment by the insured as a condition precedent to the right of the insured to recover under the policy and the obligation of the insurer to satisfy the judgment.

The trial court granted the defendants' motions to dismiss on grounds that the subject insurance policy was not a liability policy; but rather, it was an indemnity policy.It concluded that, as an indemnity policy, the proceeds of the policy were intended only to reimburse Susi's Watersports for the amounts which it paid out within the policy limits and that no benefits were to be paid directly to plaintiffs.Therefore, the trial court held that plaintiffs were not entitled to maintain a direct action against defendants because they were only incidental third-party beneficiaries of an indemnity policy.SeeMetropolitan Life Ins. Co. v. McCarson, 467 So.2d 277, 279(Fla.1985).

The distinctions between an indemnity policy and a liability policy critically affect whether an injured plaintiff has the right to recover directly against an insurer as a third-party beneficiary when no payment has been made by the insured.The eleventh circuit in Weeks v. Beryl Shipping Co., 845 F.2d 304, 306(11th Cir.1985), explained the distinctions between a liability policy and an indemnity policy based on Florida law:

Under a liability policy, the insurer is liable for "damages for bodily injury or property damage for which any covered person becomes legally liable, up to the applicable policy limits."McCarson, 467 So.2d at 279.In other words, the insurer must pay the damages if the insured is found liable.Under an indemnity policy, on the other hand, the insurer is liable only for "loss actually paid " the injured party by the insured.DaCosta v. General Guaranty Ins. Co., 226 So.2d 104, 105(Fla.1969)(emphasis added).Thus, actual payment by the insured is a condition precedent to any obligation on the part of the insurer.

Similar to the facts of this case, in DaCostathe plaintiff had obtained a judgment against an insured and instituted supplementary proceedings against the insurer to enforce its judgment.The policy contained language indicative of either a liability policy or an indemnity policy.It was entitled a "Protection and Indemnity" policy and it contained a provision which stated that:

The Assurer hereby undertakes to make good to the Assured ... all such loss and/or damage and/or expense as the Assured shall as owners of the vessel named herein have become liable to pay and shall pay on account of the liabilities, risks, events and/or happenings herein set forth....

226 So.2d at 105.The policy in DaCosta also provided that any action against the insurer must be brought within one year after the final judgment against the insured.Id.

Our supreme court found that the clauses in the insurance policy created a patent ambiguity.Id.It found the "pay to be paid" clause to be ambiguous "depending upon placement of emphasis and punctuation by the reader."Id. at 106.While that clause could be indicative of an indemnity policy, the provision requiring that an action be brought against the assurer within one year of entry of the judgment against the assured was more consistent with a liability policy.The supreme court found repeated references to the word "liability" contributed to the ambiguity of the policy:

The repetitive appearance after the initial assuring provision of fourteen clauses, twelve of which begin with the words 'liability for,' necessarily gives the policy reader the overall impression that protection is in the nature of liability indemnity rather than loss paid indemnity.

Id. at 107.

In construing the policy, the supreme court also found the absence of a "no action" clause to be significant:

The presence of a 'no action' clause providing that no action will lie against an insurer unless brought for losses actually sustained and paid in money is generally indicative of an indemnity rather than a liability policy.The absence of this type of no action clause in the policy before us likewise indicates that the policy is one of protection against liability rather than against loss actually paid.

DaCosta, 226 So.2d at 106-07.

The supreme court determined that because the policy as a whole was ambiguous and subject to differing interpretations, following established principles governing interpretation of insurance contracts, the ambiguity and confusion should be resolved in favor of providing the greater indemnity to the insured--indemnity against liability.Id.

In this case, the marine insurance policy at issue contains...