Schwab v. Town of Davie

• Decision Date: 16 July 1986
• Docket Number: No. 85-926,85-926
• Citation: 11 Fla. L. Weekly 1561,492 So.2d 708
• Parties: 11 Fla. L. Weekly 1561 Delores J. SCHWAB, as personal representative of the Estate of John F. Schwab, etc., et al., Appellants, v. The TOWN OF DAVIE, Florida, United States Fidelity and Guaranty Company, and Allstate Insurance Company, Appellees.
• Court: Florida District Court of Appeals

Page 708

492 So.2d 708

11 Fla. L. Weekly 1561

Delores J. SCHWAB, as personal representative of the Estate of John F. Schwab, etc., et al., Appellants, v. The TOWN OF DAVIE, Florida, United States Fidelity and Guaranty Company, and Allstate Insurance Company, Appellees.

No. 85-926.

District Court of Appeal of Florida Fourth District.

July 16, 1986.

Rehearing Denied Sept. 4, 1986.

Shelley H. Leinicke of Wicker, Smith, Blomqvist, Tutan, O'Hara, McCoy, Graham & Lane, Fort Lauderdale, for appellants.

Burton E. Burdick, Fort Lauderdale, and Jeanne Heyward, Miami, for appellee Allstate Ins. Co.

HERSEY, Chief Judge.

This case presents the question of whether an insurer, Allstate, is entitled to subrogation by virtue of payments made by Allstate to its insured by way of uninsured motorist coverage where the insured subsequently makes a recovery from one who was a joint tortfeasor with the uninsured motorist.

Appellants in their representative capacities received in excess of $190,000 from Allstate after arbitration of their claim arising from the negligently caused death of their minor son. Subsequently, appellants successfully pursued a claim against the Town of Davie for negligent construction and maintenance of the roadway on which the accident occurred, which claim was settled for $100,000. The trial court found Allstate to be entitled, by way of subrogation, to the funds held by the town's insurer, United States Fidelity and Guaranty Company (USF & G), by virtue of having paid uninsured motorist benefits. USF & G was ordered to distribute the $100,000 to Allstate, which order is the subject of this appeal.

Appellants unsuccessfully argued below and maintain here that: (1) subrogation does not apply because the Town of Davie was not an owner or operator of a motor vehicle in connection with the negligence which gave rise to recovery; (2) appellee, Allstate, is not entitled to subrogation because the applicable policy provisions are ambiguous; (3) because Allstate was never a proper party below, it is not entitled to recover; and (4) in any event, appellants are entitled to the attorney's fees and costs incurred in their efforts to secure the $100,000 fund.

An insurer's right to subrogation does not violate public policy, Blue Cross of Fla., Inc. v. O'Donnell, 230 So.2d 706 (Fla. 3d DCA 1970), and may arise either by agreement or by operation of law. The general rule is that an insurer is entitled to be subrogated to any right of action which the insured has against third persons who caused the injury. Indiana Ins. Co. v. Collins, 359 So.2d 916 (Fla. 3d DCA 1978). Contrary to appellants' assertions, the provisions of the insurance policy involved here are not ambiguous, and the language of Condition 6(b)(1) and particularly the language in subsection (ii) of that paragraph, buttressed by paragraph (a) of Section 7, rather clearly defeat an interpretation that Allstate is not entitled to subrogation. Even if it were not so, the release and subrogation agreement...