Spadaro v. Newark Ins. Co.

• Decision Date: 22 May 1964
• Citation: 21 A.D.2d 226,249 N.Y.S.2d 753
• Parties: Angeline SPADARO, as Executrix of the Estate of Samuel Spadaro, Appellant-Respondent, v. NEWARK INSURANCE COMPANY, of the Royal Globe Insurance Group, Respondent-Appellant.
• Court: New York Supreme Court — Appellate Division

Page 753

249 N.Y.S.2d 753

21 A.D.2d 226

Angeline SPADARO, as Executrix of the Estate of Samuel Spadaro, Appellant-Respondent, v. NEWARK INSURANCE COMPANY, of the Royal Globe Insurance Group, Respondent-Appellant.

Supreme Court, Appellate Division, Fourth Department.

May 22, 1964.

Charles R. Rinaldo, Syracuse, for appellant-respondent (Bernard Samuels, Syracuse, of counsel).

Hiscock, Cowie, Bruce, Lee & Mawhinney, Syracuse, for respondent-appellant (Philip T. Young, Syracuse, of counsel).

Before BASTOW, J. P., and GOLDMAN, HENRY, NOONAN and DEL VECCHIO, JJ.

DEL VECCHIO, Justice.

This action is brought under Insurance Law, § 167 to require defendant insurance company to pay to plaintiff the amount of a judgment recovered by her against the insured, Ralph Palmisano, in the Circuit Court of the Eleventh Judicial District in and for Dade County, Florida.

The complaint in the Florida action alleged, among other things, that on January 29, 1957 Palmisano was driving his automobile on a public highway near Tampa, Florida, with Samuel Spadaro, plaintiff's testate, riding as a passenger; that the vehicle collided with one owned by Gulf Oil Corporation; that the operator of the Gulf Oil vehicle was negligent; that Palmisano was grossly negligent; that as a result of the accident Spadaro sustained severe personal injuries and subsequently died.

In the action against Palmisano and Gulf Oil Corporation a directed verdict in favor of Gulf was granted by the court and the jury returned a verdict in favor of defendant Palmisano. On appeal by plaintiff, the District Court of Appeal of Florida affirmed the judgment as to Gulf Oil, but reversed the judgment as to Palmisano. (Spadaro v. Palmisano, Fla.App., 109 So.2d 418) The appellate court acknowledged that the physical evidence and the testimony of eye witnesses would support the inference, urged by Palmisano's counsel, that the deceased, Spadaro, and not the insured had been driving the Palmisano car, but held that the attorney for Palmisano's insurance company had improperly brought fraud and collusion into the case when he had attempted to impeach Palmisano's testimony to the effect that he (Palmisano) was driving at the time of the accident. Such an attempt constituted a violation of the attorney-client relationship which existed between the insured and his counsel, the attorney employed by his insurer. The District Court of Appeal ordered a retrial of the action against Palmisano and a determination of the issue of fraud and collusion 'either in a plenary action in another forum or as a result of the separate trial of such issues in the same case', stating that 'the insurance carrier and its counsel would be bound by such adjudication and, if favorable, would not be subjected to the latter suit.' (Spadaro v. Palmisano, supra, 109 So.2d 418, 422)

Thereafter at a pre-trial conference, it was determined by the Florida trial court that the main case between the plaintiff executrix and the insured, Palmisano, would first be retried. It was further decided that if upon such retrial the Spadaro estate obtained a verdict again Palmisano the former 'will no longer be concerned with the subsequent conflict between (Palmisano) and (his) insurer, but plaintiff's case will be terminated with the rendition of a judgment upon the verdict.' The court concluded by directing that '(t)he issue between (Palmisano), in such an event, and (Palmisano's) insurer will then be made between the insurer as plaintiff and (Palmisano) as defendant, and will proceed without any further filing of an additional case, but in the normal procedure provided by the Rules to bring us to issue and to trial.' Counsel for the plaintiff expressed agreement with these determinations and directions and with the statement of defense counsel that it was not necessary for plaintiff to have notice of the second trial between Palmisano and his insurer.

On retrial of the negligence claim against Palmisano, without litigating the identity of the driver of the car, plaintiff recovered a verdict of $10,648 in the Circuit Court of Florida, which is the subject of the present action. Thereafter, in the same court and before the same judge who had presided at the pre-trial conference and the negligence trial, Newark Insurance Company, as plaintiff, and Palmisano, as defendant, presented evidence before a jury upon the same pleadings on the single issue of who was driving the car at the time of the accident on January 29, 1957. At the close of the evidence the court directed a verdict in favor of the plaintiff insurance company and a judgment was granted determining that Palmisano was not the driver of the car and that Newark was relieved of any obligation which might accrue to it had Palmisano been the driver. Although both Palmisano, and his personal attorneys, and the plaintiff herein, through her attorneys, had notice of this determination, no appeal was taken from the judgment entered thereon.

In denying defendant insurance company's motion for summary judgment dismissing the complaint in the present action, Special Term concluded that the judgment last rendered in the Florida Circuit Court was one which was rendered without jurisdiction, was wholly void and was therefore not entitled to full faith and credit in this state. That conclusion was based upon determinations (1) that the controversy between the insurance carrier and the insured was litigated in a declaratory judgment action and (2) that use of the declaratory judgment procedure to resolve the factual issue of the identity of the driver of the car, as contrasted with an issue involving the interpretation of the insurance contract, was absolutely prohibited by Florida decisional law and rendered any such judgment void.

In our view, however, no declaratory judgment action was prosecuted. Although the Florida District Court of Appeal in its reversal of the original judgment for Palmisano authorized a...