Spadaro v. Newark Ins. Co.

• Decision Date: 15 October 1963
• Citation: 244 N.Y.S.2d 249,40 Misc.2d 1042
• Parties: Angeline SPADARO, as Executrix of the Estate of Samuel Spadaro, Plaintiff, v. NEWARK INSURANCE COMPANY, of the Royal-Globe Insurance Group, Defendant.
• Court: New York Supreme Court

Page 249

244 N.Y.S.2d 249

40 Misc.2d 1042

Angeline SPADARO, as Executrix of the Estate of Samuel

Spadaro, Plaintiff, v. NEWARK INSURANCE COMPANY, of the Royal-Globe Insurance

Group, Defendant.

Supreme Court, Onondaga County.

Oct. 15, 1963.

Charles R. Rinaldo, Syracuse, for plaintiff.

Hiscock, Cowie, Bruce, Lee & Mawhinney, Syracuse, for defendant.

RICHARD ARONSON, Justice.

This is an action brought pursuant to Section 167 of the Insurance Law to enforce payment by the defendant insurance company of a judgment recovered by the plaintiff in the State of Florida against the defendant's assured. There is little dispute between the parties as to the pertinent facts. The deceased, Samuel Spadaro, on January 27, 1957, sustained injuries in an automobile accident occurring in Florida as a result of which injuries he subsequently died. The plaintiff, as executrix of his estate, brought an action in the Circuit Court of the Eleventh Judicial Circuit of Florida to recover damages for the decedent's wrongful death, the defendant in that action being the present defendant's assured, Ralph Palmisano. The plaintiff's complaint in that action alleged that Palmisano was the owner and operator of the vehicle in which Samuel Spadaro was riding and that Palmisano and the driver of the other car involved in the collision were negligent. The Trial Court directed a verdict in favor of the owner of the other car and this ruling was affirmed on appeal. However, we are not in any way concerned with that phase of the litigation in the present action. Palmisano, in a pretrial deposition, testified that he was driving the automobile in which Spadaro was riding. They had been friends of long standing and had frequently travelled together from Syracuse to Florida. In that trial counsel retained by the defendant herein to defend Palmisano, impeached his own client and witness by attempting to prove during the trial that the deceased, not Palmisano, was the driver of the car in contradiction of Palmisano's testimony. In addition, counsel in his opening and closing comments to the jury, raised an issue of fraud and collusion which was not covered by the pleading. The jury rendered a verdict of no cause of action.

An appeal was taken from the verdict to the District Court of Appeal of Florida, Third District, wherein judgment in favor of Palmisano was reversed and the case remanded for a new trial and proceedings as outlined in the Appellate Court's opinion in Spadaro v. Palmisano, Fla.App., 109 So.2d 418, at pages 421-422, in which the Court said:

'We do not attribute unethical conduct to counsel for the undisclosed insurance carrier since he made a full disclosure of his position to the court and was sustained in that position. However, counsel's comments to the jury in his opening and closing statements, as well as his obviously successful efforts to contradict and impeach the insured, did not escape the jury's attention. The issue of fraud and collusion injected into the trial not only tended to, but did, prejudice the appellant in the minds of the jury and caused its attention to be focused upon issues not covered by the pleadings. The issue of fraud and collusion should have been the subject of a plenary action between the insurer and the insured to determine who was driving the automobile at the time of the accident. The views expressed, and the procedure suggested, in Newman v. Stocker, 161 Md. 552, 157 A. 761, supra, and Katz v. Ross, 3 Cir., 216 F.2d 880, 48 A.L.R.2d 1233, supra, also seem to be acceptable methods of determining such issues. Once such issues are decided, either in a plenary action in another forum or as a result of the separate trial of such issues in the same case, the insurance carrier and its counsel would be bound by such adjudication and, if favorable, would not be subjected to the latter suit. Whether the former or the latter procedure is followed is generally determined by the time that counsel for the insured has reason to suspect that fraud or collusion exists. The facts and circumstances disclosed by the record in this cause require a reversal of the judgment entered upon the jury verdict.'

Thereafter counsel for the respective parties met at a pre-trial conference in Chambers with Hon. William H. Herin, Circuit Judge, to formulate the procedure for re-trial of the action pursuant to the District Court decision. It was there agreed that the negligence case, i. e., Spadaro v. Palmisano, be tried first and if a verdict be in favor of plaintiff, the issue between Palmisano and his insurance company should be tried at a later date.

On January 11, 1960, a new trial of the wrongful death action was held in the Circuit Court before Judge Herin and the jury returned a verdict for the plaintiff, Angeline Spadaro, as executrix, against Ralph Palmisano, in the amount of $10,648. It is this amount that the plaintiff in the present action seeks to recover from the defendant insurance company. At the aforesaid trial, pursuant to the decision of the Appellate Court no issues as to any conflict between Palmisano and the defendant herein were permitted to be raised.

In accordance with the procedure outlined at the pre-trial conference between the attorneys for the respective parties and the court, the defendant herein as plaintiff, brought at action in the Circuit Court on March 9, 1960, against Palmisano for a declaratory judgment to determine the issue that existed between them, viz., who was in fact driving the vehicle in which the deceased was riding at the time the accident occurred. The verdict and judgment in this action were in favor of the defendant herein, the jury finding as a result of a directed verdict that Spadaro and not Palmisano was the driver at the time of the accident. It is apparent that the two trials held pursuant to the procedure promulgated by the District Court and concurred in at the pre-trial conference resulted in inconsistent and diametrically opposed verdicts.

The plaintiff in the present case, Angeline Spadaro, as executrix, disputes the validity of the judgment rendered in the action brought by the defendant herein which resulted in a verdict in its favor. She asserts that it was a declaratory judgment action over the subject matter of which the Court had no jurisdiction and, therefore, is a nullity and that since the judgment she obtained against the assured of the defendant herein remains unsatisfied for more than thirty days from the service of a notice of entry thereof, she has brought this action against the defendant herein under Section 167 of the Insurance Law. She further contends that the trial in which she obtained the judgment upon which she is suing resolved all issues of fact and law and consequently the defendant herein is now estopped from asserting any defense thereto because it assumed full control of the defense of the action for wrongful death and she moves for summary judgment herein.

The defendant has made a cross-motion for summary judgment contending that the Florida Court did have jurisdiction to render the declaratory judgment exonerating it from liability and that the trial held on March 9, 1960, in which the deceased was found to be the driver was valid and that plaintiff herein is, therefore, estopped from collaterally attacking the verdict and judgment since the adjudication made therein is a complete defense to the present action.

The Court is of the opinion that the action brought by the defendant herein against Ralph Palmisano was one in which it asked the court to render a declaratory judgment involving a question which according to the decisions of the Florida Courts, was not the proper subject matter of a suit for a declaratory judgment in that state; that the Court had no jurisdiction to entertain the action and that the judgment rendered therein is null and void. The sole issue that was to be determined therein was whether Palmisano or the deceased was driving the car at the time of the accident. Affirmative relief in the nature of executory process or other coercive mandate did not follow as of course and, according to the recitations in the judgment, it appeared that an issue of fact was presented and a declaration rendered and that no further process or prosecution was necessary to effectuate the terms of the judgment. Watson v. Claughton, 160 Fla. 217, 221, 34 So.2d 243, at page 245, where the Court stated:

"Declaratory Decrees' are to be distinguished from others: 'The distinctive characteristic of a declaratory judgment is that the declaration stands by itself; that is, no executory process follows as of course. In other words, such a judgment does not involve executory or coercive relief.' 16 Am.Jur., Declaratory Judgments, Sec. 3, p. 275.'

The statutory authority for this form of action is found in Chapter 87 of the Florida Statutes Annotated:

'87.02 Power to construe, etc.

'Any person claiming to be interested or who may be in doubt as to his rights under a deed, will, contract or other article, memorandum or instrument in writing or whose rights, status or other equitable or legal relations are affected by a statute, or any regulation made under statutory authority, or by municipal ordinance, contract, deed, will, franchise, or other article, memorandum or instrument in writing may have determined any question of construction or validity arising under such statute, regulation, municipal ordinance, contract, deed, will, franchise, or other article, memorandum or instrument in writing, or any part thereof, and obtain a declaration of rights, status or other equitable or legal relations thereunder. Laws 1943, c. 21820, § 2.'

The plaintiff contends that inasmuch as there was no question of a construction of the terms of the insurance policy involved or any doubt as to Palmisano's rights thereunder, a declaratory judgment action was not authorized under the Florida statutes. Reading Chapter 87 of the Florida Statutes...