State Farm Fire and Casualty Co. v. Higgins

• Decision Date: 03 January 2001
• Docket Number: No. 4D99-2989.,4D99-2989.
• Citation: 788 So.2d 992
• Parties: STATE FARM FIRE AND CASUALTY COMPANY, Appellant/Cross-Appellee, v. Charles B. HIGGINS, and Cheryl L. Ingalls, f/k/a Cheryl L. Steele, Appellees/Cross-Appellants, and Maureen Bradley, f/k/a Maureen Higgins, Appellee.
• Court: Florida District Court of Appeals

788 So.2d 992

STATE FARM FIRE AND CASUALTY COMPANY, Appellant/Cross-Appellee, v. Charles B. HIGGINS, and Cheryl L. Ingalls, f/k/a Cheryl L. Steele, Appellees/Cross-Appellants, and Maureen Bradley, f/k/a Maureen Higgins, Appellee.

No. 4D99-2989.

District Court of Appeal of Florida, Fourth District.

January 3, 2001.

Elizabeth K. Russo of Russo Parrish Appellate Firm, Miami, and Sachs, Sax & Klein, P.A., Boca Raton, for Appellant/Cross-Appellee.

John P. Wiederhold of Wiederhold, Moses & Rubin, P.A., West Palm Beach, for Appellee/Cross-Appellant-Charles B. Higgins.

Theodore A. Deckert of Law Office of Theodore A. Deckert, P.A., and Joseph K. Still, Jr., P.A., West Palm Beach, for Appellee/Cross-Appellant-Cheryl L. Ingalls, f/k/a Cheryl L. Steele.

EN BANC

GROSS, J.

The main issues in this case concern the viability of a declaratory judgment action on the issue of insurance coverage when the underlying negligence lawsuit remains pending. We hold in this case that a declaratory judgment is proper to determine the existence of insurance coverage, a ruling that is consistent with the modern trend according broad scope to the Declaratory Judgments Act, Chapter 86, Florida Statutes (2000).

On July 2, 1995, Cheryl Ingalls filed a complaint against Charles Higgins, seeking damages for the intentional torts of assault and battery. Having been a legal secretary for almost twenty years, Ingalls typed the complaint. She worked for the lawyer who filed the lawsuit on her behalf.

The assault and battery complaint alleged that Higgins had "willfully, intentionally, and with malice" committed the torts "in an effort to hurt and cripple" Ingalls. Typical of the specific factual allegations was the following:

Without warning, provocation, or reason, [Higgins] grabbed [Ingalls's] wrist and threw her against the stairs in the home. As [Ingalls] came up from the stairs he grabbed her wrist again and threw her across the room where she struck a couch and fell on the floor.

At the time Ingalls's lawsuit was filed, Higgins and his ex-wife Maureen Bradley owned several properties covered by State Farm homeowners policies. All the policies provided coverage for bodily injuries "caused by an occurrence." The policies defined an "occurrence" as "an accident, including exposure to conditions, which results in: a. bodily injury; or b. property damage; during the policy period."

An exclusion in each policy provided that there was no coverage for bodily injury "which is either expected or intended by an insured" or for bodily injury "to any person ... which is the result of willful and malicious acts of an insured[.]"

On January 29, 1997, Ingalls served an amended complaint adding a negligence claim against Higgins's former wife, Maureen Bradley. The amended complaint alleged that during an altercation, Higgins "violently threatened, touched and injured" Ingalls.

In response to the amended complaint, State Farm provided a defense under a reservation of rights and filed a declaratory judgment action naming Higgins, Bradley, and Ingalls as defendants. The action sought a determination of fact issues pertaining to coverage and a declaratory decree as to whether State Farm owed a duty to defend and indemnify Higgins under the policies.

The two actions were consolidated and Ingalls reached a settlement with Maureen Bradley.

Ingalls then filed her second amended complaint against Higgins, which alleged only a cause of action for negligence. The pleading eliminated all the specific description of an intentional tort contained in the earlier complaints. It alleged simply that

HIGGINS came upon the [property] while... INGALLS and BRADLEY were there. At that time, the Defendant, HIGGINS, began to argue with BRADLEY. In the course of this altercation, Defendant, HIGGINS, negligently injured Plaintiff, INGALLS.

In response to this last amendment, State Farm amended its complaint for declaratory relief.

The declaratory relief action proceeded to jury trial. The jury made the factual findings that Higgins intended or expected to cause the injuries for which Ingalls was seeking damages and that Higgins "willfully and maliciously" caused those injuries.

In response to Higgins's and Ingalls's post-trial motions, the trial judge granted a new trial finding that certain "inflammatory remarks" by State Farm's lawyer concerning Ingalls's settlement with Bradley were "fatally prejudicial" to the defendants' case. State Farm appealed the order granting a new trial and Higgins and Ingalls cross-appealed on numerous points.

I

Both Ingalls and Higgins argue that the trial court should have granted their motions for directed verdict on the issue of State Farm's duty to defend the action against Higgins, its insured. We agree.

It is clear that a liability insurer's obligation to defend a claim made against its insured must be determined solely from the allegations in the complaint. See State Farm Fire & Cas. Co. v. CTC Dev. Corp., 720 So.2d 1072, 1077 n. 3 (Fla.1998)

; Nat'l Union Fire Ins. Co. v. Lenox Liquors, Inc., 358 So.2d 533, 536 (Fla.1977); Baron Oil Co. v. Nationwide Mut. Fire Ins. Co., 470 So.2d 810, 812 (Fla. 1st DCA 1985). The duty to defend arises when the complaint alleges facts that fairly and potentially bring the suit within policy coverage. See McCreary v. Fla. Residential Prop. & Cas. Joint Underwriting Ass'n, 758 So.2d 692, 695 (Fla. 4th DCA 1999). An amended complaint supersedes an earlier pleading where it "does not express an intention to save any portion of the original pleading." Baron Oil, 470 So.2d at 815. When an amended complaint supersedes an earlier one, the allegations of the amended complaint control the duty to defend. See id.; C.A. Fielland, Inc. v. Fid. & Cas. Co. of N.Y., 297 So.2d 122, 127 (Fla. 2d DCA 1974).

The actual facts of the situation are not pertinent; "the trial court is restricted to the allegations of the complaint, regardless of what the defendant and others say actually happened." Marr Invs., Inc. v. Greco, 621 So.2d 447, 449 (Fla. 4th DCA 1993) (citation omitted). Thus, the duty to defend is broader than the duty to indemnify, in the sense that the insurer must defend even if the facts alleged are actually untrue or the legal theories unsound. See West Am. Ins. Co. v. Silverman, 378 So.2d 28, 30 (Fla. 4th DCA 1979)

; Grissom v. Commercial Union Ins. Co., 610 So.2d 1299, 1306-07 (Fla. 1st DCA 1992). "Once the insurer's duty to defend arises, it continues throughout the case unless it is made to appear by the pleadings that the claims giving rise to coverage have been eliminated from the suit." Baron Oil, 470 So.2d at 815.

Ingalls's second amended complaint alleged a cause of action for negligence. If one looks only to the four corners of the pleading, as the law requires, the cause of action fairly and potentially falls within the coverage of the policy. The trial court erred in failing to grant a directed verdict on the issue of State Farm's duty to defend.

II

Both Higgins and Ingalls argue that the declaratory judgment action was not a proper vehicle to decide whether Higgins's conduct was excluded from coverage under the policy. As authority, both briefs cite to Columbia Casualty Co. v. Zimmerman, 62 So.2d 338 (Fla.1952), and Smith v. Milwaukee Insurance Co., 197 So.2d 548 (Fla. 4th DCA 1967). Both parties quote this court's opinion in Smith, where we noted "the use of declaratory proceedings is not available where the object of the proceedings is to try disputed questions of fact as a determinative issue rather than to seek a construction of definite stated rights, status, or other relations." 197 So.2d at 550 (citing Columbia Cas., 62 So.2d 338).

The availability of a declaratory judgment to try disputed questions of fact is one of the most difficult areas of Florida law. To arrive at the proper resolution of this issue, as well as the related issue discussed in Point III, requires a court to step back and view the evolution of the declaratory judgment remedy through Florida legal history.

The seminal case on this issue is the 1952 decision of Columbia Casualty. In that case, Mary Yates drove a car owned by Martin and Erma Wiltse and collided with a bus, causing injury to the bus driver and ten passengers. Columbia Cas., 62 So.2d at 338. Several of the injured parties sued Yates and Martin Wiltse. See id. Yates and her insurance company made demand on Columbia Casualty Company, Wiltse's insurer, to defend the suits. See id. Columbia Casualty declined to defend Yates, because her conduct fell under an exclusion in the policy. As the supreme court explained:

The policy provide[d], in effect, that if the automobile covered by the policy is being driven by someone without the knowledge and consent of the insured, the insurance company is not liable to the insured and is not required to defend under the policy. This provision is plain and unambiguous.

62 So.2d at 339.

Yates and her insurer filed a declaratory judgment action to determine Columbia Casualty's obligation to defend the pending and potential future suits against Yates. See id. The trial court granted a motion to dismiss the suit for failure to state a cause of action under the declaratory judgment statute. See id. The supreme court affirmed the dismissal. It considered the pivotal issue to be "whether or not Mary Yates was driving the automobile with the knowledge and consent of the owners, or either of them" so as to fall outside the exclusion in the policy. Id. The supreme court observed that the exclusion in the insurance policy was "plain and unambiguous" and that the validity or construction of the policy was not at issue. Id. The court characterized the question of whether the automobile was being driven with the knowledge and consent of the insured as "a question of fact to be determined as any other question of fact," requiring "no construction of the insurance policy in order to determine the meaning thereof." Id.

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