Western World Ins. Co., Inc. v. Travelers Indem. Co.
| Decision Date | 16 May 1978 |
| Docket Number | Nos. FF-434,FF-442,s. FF-434 |
| Citation | 358 So.2d 602 |
| Parties | WESTERN WORLD INSURANCE COMPANY, INC., a corporation, Appellant, v. The TRAVELERS INDEMNITY COMPANY, a corporation, Appellee. WESTERN WORLD INSURANCE COMPANY, INC., a corporation, Appellant, v. Jimmy Lee CLARK and Jesse Lee Moore, etc., Appellees. |
| Court | Florida District Court of Appeals |
Luke G. Galant of Dawson, Galant, Maddox, Sulik & Nichols, Jacksonville, for appellant.
M. Carroll Cayer, George Stelljes, Jr. of Marks, Gray, Conroy & Gibbs, Jacksonville, for appellees.
Western World, the general liability insurer of Clark and Moore Security Service, appeals judgments entered in favor of appellees indemnifying them for a judgment entered against them in the amount of $5,000 resulting from an action brought against them by Willie Howard Thomas, a party not involved in this appeal. Thomas sued Clark and Moore for assault and battery and appellee Travelers, Clark and Moore's surety on a $5,000 performance bond issued pursuant to Sections 493.08 and 493.09, Florida Statutes (1975). 1 The complaint was later amended to add Western World, which settled the claim against it with Thomas for $12,500 and obtained a release. The release provided that any further liability of Clark and Moore would be limited to the sum of $5,000, the maximum amount authorized under the security bond. After a non-jury trial, judgment was entered in favor of Thomas for $5,000. Travelers paid the judgment and the court subsequently directed that Travelers recover $5,000 from Clark and Moore. Travelers and Clark and Moore filed complaints against Western World for its failure to defend and for payment of the $5,000 paid by Travelers to Thomas. The court found that the policy issued by Western World obligated it to provide a defense to its insureds, Clark and Moore. It held Western World was liable to Clark and Moore for attorney's fees incurred by Clark and Moore after Western World withdrew from the original suit filed by Thomas. The court also found that had Clark and Moore paid the $5,000 judgment directly to Thomas, it would be entitled to recover from Western World the amount paid, and as a result of payment, Travelers was subrogated to the rights of Clark and Moore and entitled to recover $5,000 from Western World.
Western World argues it is against public policy to allow an assured's bonding company to recover from the same assured's general liability carrier because the law of suretyship allows the surety indemnification from its principal after the surety has paid the loss. We reject this argument.
The statutory bond issued by Travelers does not impose any duty upon the surety to defend its principal in the event suit is brought against the principal for breach of one of the conditions of the performance bond. The insurance policy issued by Western World, on the other hand, specifically commits the insurer to "pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury . . . caused by an occurrence . . . ." It was specifically required to defend Clark and Moore and to pay up to the maximum amount of coverage provided to its insureds, Clark and Moore, for injuries sustained by any person arising from certain named offenses committed in the course of the insureds' business. The distinctions between a general liability insurance policy and a statutory penal bond are obvious. "(T)he usual view, grounded in commercial practice, (is) that suretyship is not insurance." Pearlman v. Reliance Ins. Co., 371 U.S....
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