42
Fla. L. Weekly D192aop of Form
Fla. L. Weekly D192aop of Form
Estates
— Insurance — Estate’s settlement of negligence suit by entering into Coblentz
agreement in which plaintiff and estate agreed to entry of consent judgment,
with plaintiff agreeing not to execute on judgment against estate, and estate
assigning to plaintiff any rights it had against its insurer which had declined
to defend claim — Trial court erred in permitting insurer to intervene in
probate proceedings to challenge the personal representative’s authority to
settle negligence action by entering into Coblentz agreement — It was
error to allow insurer to intervene in non-adversarial probate proceedings
where insurer’s interest was not already at issue in proceedings — After
insurer refused to defend insured, and insured later settled suit by entering
into Coblentz agreement, insurer was precluded from relitigating issue
of insured’s liability in subsequent proceedings, so that insurer was
prohibited from raising any defenses on behalf of insured in probate court’s
proceedings that it could have raised had it chosen to defend insured in
negligence lawsuit — Trial court erred in entering summary judgment for
insurer in bad faith suit brought against insurer
— Insurance — Estate’s settlement of negligence suit by entering into Coblentz
agreement in which plaintiff and estate agreed to entry of consent judgment,
with plaintiff agreeing not to execute on judgment against estate, and estate
assigning to plaintiff any rights it had against its insurer which had declined
to defend claim — Trial court erred in permitting insurer to intervene in
probate proceedings to challenge the personal representative’s authority to
settle negligence action by entering into Coblentz agreement — It was
error to allow insurer to intervene in non-adversarial probate proceedings
where insurer’s interest was not already at issue in proceedings — After
insurer refused to defend insured, and insured later settled suit by entering
into Coblentz agreement, insurer was precluded from relitigating issue
of insured’s liability in subsequent proceedings, so that insurer was
prohibited from raising any defenses on behalf of insured in probate court’s
proceedings that it could have raised had it chosen to defend insured in
negligence lawsuit — Trial court erred in entering summary judgment for
insurer in bad faith suit brought against insurer
IN
RE: THE ESTATE OF JORGE LUIS ARROYO, JR.; DELIA REYES, an incapacitated person,
by and through MARTA REYES, her natural mother and court-appointed guardian,
and MARTA REYES, as court-appointed guardian of IGNACIO REYES, a minor, and
ISABELLA DE ARMAS, a minor, Appellants, vs. INFINITY INDEMNITY INSURANCE
COMPANY, a foreign corporation, et al., Appellees. 3rd District. Case Nos.
3D15-194 & 3D15-183. L.T. Case Nos. 13-19660 & 11-62. Opinion filed
January 18, 2017. Appeals from the Circuit Court for Miami-Dade County, Michael
A. Genden and Bronwyn C. Miller, Judges. Counsel: Ross & Girten, and Lauri
Waldman Ross and Theresa L. Girten; DeMahy, Labrador, Drake, and Pete L. DeMahy
and Frank L. Labrador, for appellants. White & Case LLP, and Raoul G.
Cantero and Christopher W. Swift-Perez; GrayRobinson, P.A., and Charles T.
Wells (Orlando), for appellee Infinity Indemnity Insurance Company.
RE: THE ESTATE OF JORGE LUIS ARROYO, JR.; DELIA REYES, an incapacitated person,
by and through MARTA REYES, her natural mother and court-appointed guardian,
and MARTA REYES, as court-appointed guardian of IGNACIO REYES, a minor, and
ISABELLA DE ARMAS, a minor, Appellants, vs. INFINITY INDEMNITY INSURANCE
COMPANY, a foreign corporation, et al., Appellees. 3rd District. Case Nos.
3D15-194 & 3D15-183. L.T. Case Nos. 13-19660 & 11-62. Opinion filed
January 18, 2017. Appeals from the Circuit Court for Miami-Dade County, Michael
A. Genden and Bronwyn C. Miller, Judges. Counsel: Ross & Girten, and Lauri
Waldman Ross and Theresa L. Girten; DeMahy, Labrador, Drake, and Pete L. DeMahy
and Frank L. Labrador, for appellants. White & Case LLP, and Raoul G.
Cantero and Christopher W. Swift-Perez; GrayRobinson, P.A., and Charles T.
Wells (Orlando), for appellee Infinity Indemnity Insurance Company.
(Before
ROTHENBERG, LAGOA, and SALTER, JJ.)
ROTHENBERG, LAGOA, and SALTER, JJ.)
(ROTHENBERG,
J.) Delia Reyes (“Reyes”) appeals: (1) the probate court’s order granting
Infinity Indemnity Insurance Company’s (“Infinity”) motion to intervene in the
probate proceedings in the Estate of Jorge Luis Arroyo, Jr. (“the Estate”); (2)
the probate court’s subsequent order finding that the personal representatives
of the Estate did not have the authority to settle Reyes’s lawsuit against the
Estate by entering into a Coblentz agreement1; and (3) the circuit court’s final
judgment incorporating its order granting summary judgment in favor of Infinity
on Reyes’s bad-faith claim against Infinity.
J.) Delia Reyes (“Reyes”) appeals: (1) the probate court’s order granting
Infinity Indemnity Insurance Company’s (“Infinity”) motion to intervene in the
probate proceedings in the Estate of Jorge Luis Arroyo, Jr. (“the Estate”); (2)
the probate court’s subsequent order finding that the personal representatives
of the Estate did not have the authority to settle Reyes’s lawsuit against the
Estate by entering into a Coblentz agreement1; and (3) the circuit court’s final
judgment incorporating its order granting summary judgment in favor of Infinity
on Reyes’s bad-faith claim against Infinity.
We
reverse the probate court’s orders granting Infinity’s motion to intervene and
its subsequent determination regarding the authority of the personal
representatives to settle Reyes’s lawsuit because Infinity’s alleged interest
was not at issue in the probate proceedings at the time Infinity moved to intervene.
We also conclude that even if intervention was properly granted, the probate
court erred by determining the authority of the personal representatives to
settle Reyes’s lawsuit because when Reyes filed the lawsuit against the Estate,
and the Estate tendered its defense to Infinity, its insurer, Infinity declined
to defend the claim. Thus, the defenses Infinity subsequently raised in the
probate court were barred and Infinity was prohibited from raising these
defenses as a matter of law. We similarly find that the circuit court erred by
considering and then granting Infinity’s motion for summary judgment based on
these barred defenses in the bad-faith lawsuit against Infinity. Accordingly,
we reverse all three orders on appeal.
reverse the probate court’s orders granting Infinity’s motion to intervene and
its subsequent determination regarding the authority of the personal
representatives to settle Reyes’s lawsuit because Infinity’s alleged interest
was not at issue in the probate proceedings at the time Infinity moved to intervene.
We also conclude that even if intervention was properly granted, the probate
court erred by determining the authority of the personal representatives to
settle Reyes’s lawsuit because when Reyes filed the lawsuit against the Estate,
and the Estate tendered its defense to Infinity, its insurer, Infinity declined
to defend the claim. Thus, the defenses Infinity subsequently raised in the
probate court were barred and Infinity was prohibited from raising these
defenses as a matter of law. We similarly find that the circuit court erred by
considering and then granting Infinity’s motion for summary judgment based on
these barred defenses in the bad-faith lawsuit against Infinity. Accordingly,
we reverse all three orders on appeal.
BACKGROUND
As
the result of a car accident on October 9, 2009, Jorge Luis Arroyo, Jr.
(“Arroyo”) died and Reyes suffered severe incapacitating injuries. Arroyo’s
parents petitioned the probate court to open the Estate and to act as the
Estate’s personal representatives, which the probate court granted in January
2011.
the result of a car accident on October 9, 2009, Jorge Luis Arroyo, Jr.
(“Arroyo”) died and Reyes suffered severe incapacitating injuries. Arroyo’s
parents petitioned the probate court to open the Estate and to act as the
Estate’s personal representatives, which the probate court granted in January
2011.
On
February 11, 2011, Reyes filed a personal injury negligence lawsuit (“the
negligence lawsuit”) in the circuit court against the Estate, but never filed a
written claim in the probate court. Although the Estate tendered the defense of
the negligence claim to Infinity, Infinity declined to defend the claim. In
January 2013, the Estate settled the negligence lawsuit by entering into a Coblentz
agreement with Reyes, in which Reyes and the Estate agreed to the entry of a
consent judgment, Reyes agreed not to execute the judgment against the Estate,
and the Estate assigned any rights it had against Infinity to Reyes. After
Reyes and the Estate entered into the Coblentz agreement and obtained
the consent judgment, Reyes sued Infinity in circuit court pursuant to the
assignment of rights provision in the Coblentz agreement, alleging in
part that Infinity had demonstrated bad faith by failing to defend the Estate
in the negligence lawsuit (“the bad-faith lawsuit”).2
February 11, 2011, Reyes filed a personal injury negligence lawsuit (“the
negligence lawsuit”) in the circuit court against the Estate, but never filed a
written claim in the probate court. Although the Estate tendered the defense of
the negligence claim to Infinity, Infinity declined to defend the claim. In
January 2013, the Estate settled the negligence lawsuit by entering into a Coblentz
agreement with Reyes, in which Reyes and the Estate agreed to the entry of a
consent judgment, Reyes agreed not to execute the judgment against the Estate,
and the Estate assigned any rights it had against Infinity to Reyes. After
Reyes and the Estate entered into the Coblentz agreement and obtained
the consent judgment, Reyes sued Infinity in circuit court pursuant to the
assignment of rights provision in the Coblentz agreement, alleging in
part that Infinity had demonstrated bad faith by failing to defend the Estate
in the negligence lawsuit (“the bad-faith lawsuit”).2
Infinity
attacked the bad-faith claim on two fronts. First, Infinity moved for entry of
summary judgment in the circuit court’s bad-faith lawsuit, arguing that,
because Reyes failed to file a statement of claim in the probate court
regarding the negligence lawsuit, she could no longer do so because the
negligence lawsuit was barred by the statute of limitations, § 733.702, Fla. Stat.
(2011), and the statute of repose, § 733.710, Fla. Stat. (2011), set forth in
the probate code. Accordingly, Infinity claimed that: (1) the Estate was immune
from Reyes’s negligence suit at the time the personal representatives of the
Estate settled the lawsuit; (2) the Coblentz agreement and the
subsequent consent judgment were therefore unenforceable against the Estate;
(3) the Estate was not exposed to an excess judgment because neither the Coblentz
agreement nor the consent judgment were enforceable against the Estate; and (4)
in order for Reyes to succeed in its bad-faith claim against Infinity, the
Estate would need to be exposed to an excess judgment. Thus, Infinity contended
that Reyes’s bad-faith claim against Infinity failed because Reyes, standing as
the assignee of the Estate, could not prove that the Estate was exposed to an
excess judgment.
attacked the bad-faith claim on two fronts. First, Infinity moved for entry of
summary judgment in the circuit court’s bad-faith lawsuit, arguing that,
because Reyes failed to file a statement of claim in the probate court
regarding the negligence lawsuit, she could no longer do so because the
negligence lawsuit was barred by the statute of limitations, § 733.702, Fla. Stat.
(2011), and the statute of repose, § 733.710, Fla. Stat. (2011), set forth in
the probate code. Accordingly, Infinity claimed that: (1) the Estate was immune
from Reyes’s negligence suit at the time the personal representatives of the
Estate settled the lawsuit; (2) the Coblentz agreement and the
subsequent consent judgment were therefore unenforceable against the Estate;
(3) the Estate was not exposed to an excess judgment because neither the Coblentz
agreement nor the consent judgment were enforceable against the Estate; and (4)
in order for Reyes to succeed in its bad-faith claim against Infinity, the
Estate would need to be exposed to an excess judgment. Thus, Infinity contended
that Reyes’s bad-faith claim against Infinity failed because Reyes, standing as
the assignee of the Estate, could not prove that the Estate was exposed to an
excess judgment.
Infinity’s
second front for attacking the bad-faith claim was waged in the probate court.
Infinity filed a motion for leave to intervene in the Estate proceedings
pursuant to Florida Rule of Civil Procedure 1.230 for the purpose of
determining whether the Estate’s personal representatives had the authority to
settle the negligence lawsuit in the circuit court by entering into the Coblentz
agreement. When Infinity moved to intervene, the Estate’s proceedings in
probate court were uncontested, with no adversarial motions pending before it
and minimal record activity. The probate court granted Infinity’s motion to
intervene after concluding that Infinity was an interested party regarding the Coblentz
agreement, but limited Infinity’s intervention to the issue of “the
applicability of Part VI of Florida Statute Chapter 733 to the Personal
Representative’s execution of the Settlement Agreement.” Infinity then filed a
motion to determine the personal representatives’ right to enter into the Coblentz
agreement (“motion to determine”), and Reyes was also permitted to intervene to
oppose this motion.
second front for attacking the bad-faith claim was waged in the probate court.
Infinity filed a motion for leave to intervene in the Estate proceedings
pursuant to Florida Rule of Civil Procedure 1.230 for the purpose of
determining whether the Estate’s personal representatives had the authority to
settle the negligence lawsuit in the circuit court by entering into the Coblentz
agreement. When Infinity moved to intervene, the Estate’s proceedings in
probate court were uncontested, with no adversarial motions pending before it
and minimal record activity. The probate court granted Infinity’s motion to
intervene after concluding that Infinity was an interested party regarding the Coblentz
agreement, but limited Infinity’s intervention to the issue of “the
applicability of Part VI of Florida Statute Chapter 733 to the Personal
Representative’s execution of the Settlement Agreement.” Infinity then filed a
motion to determine the personal representatives’ right to enter into the Coblentz
agreement (“motion to determine”), and Reyes was also permitted to intervene to
oppose this motion.
After
allowing Infinity to intervene, the probate court ruled on Infinity’s motion to
determine and entered an order finding that section 733.710 of the Florida
Statutes protects an estate from any claim filed more than two years after the
death of the decedent, and that Reyes failed to file a claim against the Estate
within two years of Arroyo’s death. Accordingly, the probate court concluded
that the personal representatives did not have the authority to enter into the Coblentz
agreement in the negligence lawsuit because at the time the personal
representatives entered into the Coblentz agreement, the Estate enjoyed
absolute immunity from Reyes’s claim, and thus, the consent judgment was
unenforceable against the Estate.3 Reyes has appealed this order and the
order granting Infinity’s motion to intervene.
allowing Infinity to intervene, the probate court ruled on Infinity’s motion to
determine and entered an order finding that section 733.710 of the Florida
Statutes protects an estate from any claim filed more than two years after the
death of the decedent, and that Reyes failed to file a claim against the Estate
within two years of Arroyo’s death. Accordingly, the probate court concluded
that the personal representatives did not have the authority to enter into the Coblentz
agreement in the negligence lawsuit because at the time the personal
representatives entered into the Coblentz agreement, the Estate enjoyed
absolute immunity from Reyes’s claim, and thus, the consent judgment was
unenforceable against the Estate.3 Reyes has appealed this order and the
order granting Infinity’s motion to intervene.
Meanwhile,
although the original circuit court judge denied Infinity’s motion for summary
judgment, a successor circuit court judge reconsidered Infinity’s motion and
entered a written order granting Infinity’s motion for summary judgment. The
successor circuit court judge concluded that “Reyes’s bad[-]faith claim against
Infinity was dependent upon the Estate being liable for the consent judgment in
excess of any policy limits,” and thus, “Reyes’s failure to timely file a claim
against Arroyo’s Estate relieved the Estate of any liability for the consent
judgment.” The circuit court’s order concluded that a bad-faith claim requires
the insured to be exposed to an excess judgment,4 and, because the consent judgment
could not be the source of an excess judgment against the Estate, Reyes’s
bad-faith claim against Infinity failed as a matter of law.
although the original circuit court judge denied Infinity’s motion for summary
judgment, a successor circuit court judge reconsidered Infinity’s motion and
entered a written order granting Infinity’s motion for summary judgment. The
successor circuit court judge concluded that “Reyes’s bad[-]faith claim against
Infinity was dependent upon the Estate being liable for the consent judgment in
excess of any policy limits,” and thus, “Reyes’s failure to timely file a claim
against Arroyo’s Estate relieved the Estate of any liability for the consent
judgment.” The circuit court’s order concluded that a bad-faith claim requires
the insured to be exposed to an excess judgment,4 and, because the consent judgment
could not be the source of an excess judgment against the Estate, Reyes’s
bad-faith claim against Infinity failed as a matter of law.
Reyes
and Infinity entered into a stipulation pending this appeal voluntarily
dismissing the breach of contract claim in the complaint without prejudice.
Thereafter, the circuit court entered a final judgment, and Reyes timely
appealed. We have consolidated the two appeals from the circuit court and
probate court orders.
and Infinity entered into a stipulation pending this appeal voluntarily
dismissing the breach of contract claim in the complaint without prejudice.
Thereafter, the circuit court entered a final judgment, and Reyes timely
appealed. We have consolidated the two appeals from the circuit court and
probate court orders.
ANALYSIS
1. The
Probate Court’s Orders
Probate Court’s Orders
Infinity
moved to intervene pursuant to Florida Rule of Civil Procedure 1.230. Rule
1.230, however, does not apply to the probate proceedings in this case because
Florida Probate Rule 5.010 precludes the application of the Florida Rules of
Civil Procedure unless provided for within the Florida Probate Rules. The only
Florida Probate Rule incorporating rule 1.230 is rule 5.025(d)(2), which states
that in an adversary probate proceeding, “[t]he Florida Rules of Civil
Procedure govern, except for rule 1.525.” There is no equivalent probate rule
that would allow the application of rule 1.230 in non-adversary probate
proceedings. It is, therefore, clear that in a non-adversary proceeding in
probate court, rule 1.230 does not govern, and because the Estate’s probate
proceedings were dormant and non-adversarial when Infinity moved to intervene,
Infinity could not rely on rule 1.230 to intervene in the probate proceedings.
Accordingly, it was reversible error for the probate court to grant Infinity’s
motion to intervene pursuant to rule 1.230. See Zayas-Hood v. Jusino,
44 So. 3d 626 (Fla. 1st DCA 2010) (reversing the probate court’s order
suspending a prior order and holding that Florida Rule of Civil Procedure 1.540
was not available in a non-adversary probate proceeding because it was not
provided for within the Florida Probate Rules).
moved to intervene pursuant to Florida Rule of Civil Procedure 1.230. Rule
1.230, however, does not apply to the probate proceedings in this case because
Florida Probate Rule 5.010 precludes the application of the Florida Rules of
Civil Procedure unless provided for within the Florida Probate Rules. The only
Florida Probate Rule incorporating rule 1.230 is rule 5.025(d)(2), which states
that in an adversary probate proceeding, “[t]he Florida Rules of Civil
Procedure govern, except for rule 1.525.” There is no equivalent probate rule
that would allow the application of rule 1.230 in non-adversary probate
proceedings. It is, therefore, clear that in a non-adversary proceeding in
probate court, rule 1.230 does not govern, and because the Estate’s probate
proceedings were dormant and non-adversarial when Infinity moved to intervene,
Infinity could not rely on rule 1.230 to intervene in the probate proceedings.
Accordingly, it was reversible error for the probate court to grant Infinity’s
motion to intervene pursuant to rule 1.230. See Zayas-Hood v. Jusino,
44 So. 3d 626 (Fla. 1st DCA 2010) (reversing the probate court’s order
suspending a prior order and holding that Florida Rule of Civil Procedure 1.540
was not available in a non-adversary probate proceeding because it was not
provided for within the Florida Probate Rules).
Were
it not for preservation and waiver issues, we would have reversed the probate
court’s order granting Infinity’s motion to intervene based on rule 5.010
alone.5 However, Reyes failed to properly
preserve this error for appeal. Reyes failed to raise this rule 5.010 argument
before the probate court and also failed to raise it in her initial brief.
Because Reyes failed to object to the applicability of rule 1.230 in the
probate proceedings, we have evaluated the probate court’s order granting
intervention by examining the law relating to rule 1.230 and find that even if
rule 1.230 applied, the probate court erred by granting Infinity’s motion to
intervene where Infinity’s interest was not already at issue in the
proceedings.
it not for preservation and waiver issues, we would have reversed the probate
court’s order granting Infinity’s motion to intervene based on rule 5.010
alone.5 However, Reyes failed to properly
preserve this error for appeal. Reyes failed to raise this rule 5.010 argument
before the probate court and also failed to raise it in her initial brief.
Because Reyes failed to object to the applicability of rule 1.230 in the
probate proceedings, we have evaluated the probate court’s order granting
intervention by examining the law relating to rule 1.230 and find that even if
rule 1.230 applied, the probate court erred by granting Infinity’s motion to
intervene where Infinity’s interest was not already at issue in the
proceedings.
Florida
Rule of Civil Procedure 1.230 grants courts broad discretion when considering
motions to intervene, and it provides as follows: “Anyone claiming an interest
in pending litigation may at any time be permitted to assert a right by
intervention, but the intervention shall be in subordination to, and in
recognition of, the propriety of the main proceeding, unless otherwise ordered
by the court in its discretion.” However, “the trial court’s discretion is not
unbounded.” Grimes v. Walton Cnty., 591 So. 2d 1091, 1093-94 (Fla. 1st
DCA 1992). Trial courts are required to consider whether the prospective
intervenor has an interest in the proceedings. Union Cent. Life Ins. Co. v.
Carlisle, 593 So. 2d 505, 507 (Fla. 1992). “In order for a party to
intervene, its interest must be in the matter in litigation, and of such a
direct and immediate character that the intervenor will either gain or lose by
the direct legal operation and effect of the judgment.” Omni Nat’l Bank v.
Georgia Banking Co., 951 So. 2d 1006, 1007 (Fla. 3d DCA 2007) (internal
quotation omitted).
Rule of Civil Procedure 1.230 grants courts broad discretion when considering
motions to intervene, and it provides as follows: “Anyone claiming an interest
in pending litigation may at any time be permitted to assert a right by
intervention, but the intervention shall be in subordination to, and in
recognition of, the propriety of the main proceeding, unless otherwise ordered
by the court in its discretion.” However, “the trial court’s discretion is not
unbounded.” Grimes v. Walton Cnty., 591 So. 2d 1091, 1093-94 (Fla. 1st
DCA 1992). Trial courts are required to consider whether the prospective
intervenor has an interest in the proceedings. Union Cent. Life Ins. Co. v.
Carlisle, 593 So. 2d 505, 507 (Fla. 1992). “In order for a party to
intervene, its interest must be in the matter in litigation, and of such a
direct and immediate character that the intervenor will either gain or lose by
the direct legal operation and effect of the judgment.” Omni Nat’l Bank v.
Georgia Banking Co., 951 So. 2d 1006, 1007 (Fla. 3d DCA 2007) (internal
quotation omitted).
Importantly,
a party’s asserted interest must already be at issue in the proceedings
when the party seeks to intervene. Carlisle, 593 So. 2d at 507 (holding
that “the interest must be that created by a claim to the demand in suit or
some part thereof . . . which is the subject of litigation”) (quoting Morgareidge
v. Howey, 78 So. 14, 15 (Fla. 1918); Y.H. v. F.L.H., 784 So. 2d 565,
568 (Fla. 1st DCA 2001)); 84 Lumber Co. v. Cooper, 656 So. 2d 1297, 1299
(Fla. 2d DCA 1994) (stating that “intervention under [rule 1.230] assumes an
interest in pending litigation which shall be in subordination to, and in
recognition of, the propriety of the main proceeding”) (internal quotation
omitted). Additionally, a contingent interest in the proceedings, as opposed to
a direct and immediate interest, will not justify a party’s intervention. Harbor
Specialty Ins. Co. v. Schwartz, 932 So. 2d 383, 387 (Fla. 2d DCA 2006); Grimes,
592 So. 2d at 1094 (holding that the trial court abused its discretion by
granting a motion to intervene where the intervenors “would not stand to gain
or lose by direct legal operation and effect of the judgment” in the action).
a party’s asserted interest must already be at issue in the proceedings
when the party seeks to intervene. Carlisle, 593 So. 2d at 507 (holding
that “the interest must be that created by a claim to the demand in suit or
some part thereof . . . which is the subject of litigation”) (quoting Morgareidge
v. Howey, 78 So. 14, 15 (Fla. 1918); Y.H. v. F.L.H., 784 So. 2d 565,
568 (Fla. 1st DCA 2001)); 84 Lumber Co. v. Cooper, 656 So. 2d 1297, 1299
(Fla. 2d DCA 1994) (stating that “intervention under [rule 1.230] assumes an
interest in pending litigation which shall be in subordination to, and in
recognition of, the propriety of the main proceeding”) (internal quotation
omitted). Additionally, a contingent interest in the proceedings, as opposed to
a direct and immediate interest, will not justify a party’s intervention. Harbor
Specialty Ins. Co. v. Schwartz, 932 So. 2d 383, 387 (Fla. 2d DCA 2006); Grimes,
592 So. 2d at 1094 (holding that the trial court abused its discretion by
granting a motion to intervene where the intervenors “would not stand to gain
or lose by direct legal operation and effect of the judgment” in the action).
In
the instant case, Infinity’s interest regarding the validity of the Coblentz
agreement was not already at issue before the probate court at the time
Infinity moved to intervene. Infinity alleged that it had an interest in the
probate proceedings because its rights in the bad-faith lawsuit would be
affected by the validity of the Coblentz agreement. However, as stated
above, when Infinity moved to intervene, there were no adversarial proceedings
in the probate court, the probate court was not considering the validity of the
Coblentz agreement, and there was no attempt to enforce the consent
judgment in the probate court — nor could there be based on the covenant in
the Coblentz agreement not to enforce the consent judgment against the
Estate. Thus, when Infinity moved to intervene for the purpose of attacking the
personal representatives’ authority to enter into the Coblentz
agreement, Infinity was injecting a new issue into the proceedings. This it
could not do. See Envtl. Confederation of S.W. Fla., Inc. v. IMC
Phosphates, Inc., 857 So. 2d 207, 211 (Fla. 1st DCA 2003) (finding that an
intervenor may not inject a new issue into the case and must accept the record
and pleadings as they exist in the litigation).
the instant case, Infinity’s interest regarding the validity of the Coblentz
agreement was not already at issue before the probate court at the time
Infinity moved to intervene. Infinity alleged that it had an interest in the
probate proceedings because its rights in the bad-faith lawsuit would be
affected by the validity of the Coblentz agreement. However, as stated
above, when Infinity moved to intervene, there were no adversarial proceedings
in the probate court, the probate court was not considering the validity of the
Coblentz agreement, and there was no attempt to enforce the consent
judgment in the probate court — nor could there be based on the covenant in
the Coblentz agreement not to enforce the consent judgment against the
Estate. Thus, when Infinity moved to intervene for the purpose of attacking the
personal representatives’ authority to enter into the Coblentz
agreement, Infinity was injecting a new issue into the proceedings. This it
could not do. See Envtl. Confederation of S.W. Fla., Inc. v. IMC
Phosphates, Inc., 857 So. 2d 207, 211 (Fla. 1st DCA 2003) (finding that an
intervenor may not inject a new issue into the case and must accept the record
and pleadings as they exist in the litigation).
We,
therefore, find that under both Florida Probate Rule 5.010 and Florida Rule of
Civil Procedure 1.230, the probate court abused its discretion by granting
Infinity’s motion to intervene. We also recognize the rule that if “it was
error to allow intervention, it [will also be] error to allow the intervenors
to file their motion . . . and then grant the motion,” Grimes, 592 So.
2d at 1094-95. Thus, because it was error to allow Infinity to intervene, it
was also error to allow Infinity to file its motion to determine and to
subsequently adjudicate the motion.
therefore, find that under both Florida Probate Rule 5.010 and Florida Rule of
Civil Procedure 1.230, the probate court abused its discretion by granting
Infinity’s motion to intervene. We also recognize the rule that if “it was
error to allow intervention, it [will also be] error to allow the intervenors
to file their motion . . . and then grant the motion,” Grimes, 592 So.
2d at 1094-95. Thus, because it was error to allow Infinity to intervene, it
was also error to allow Infinity to file its motion to determine and to
subsequently adjudicate the motion.
However,
even if we had found that Infinity’s motion to intervene was properly before
the probate court, we would have concluded that the probate court erred by
allowing Infinity to raise defenses that it could have raised if it had
defended the Estate from Reyes’s negligence lawsuit prior to the entry of the Coblentz
agreement and the consent judgment. As will be discussed more fully in the next
section, when an insurer refuses to defend its insured from a lawsuit, and the
insured later settles the suit by entering into a Coblentz agreement,
the insurer is precluded from relitigating the issue of its insured’s liability
in subsequent proceedings. Gallagher v. Dupont, 918 So. 2d 342, 348
(Fla. 5th DCA 2005); Ahern v. Odyssey Re (London) Ltd., 788 So. 2d 369,
372 (Fla. 4th DCA 2001). Accordingly, Infinity was absolutely prohibited from
raising any defenses on behalf of its insured in the probate court’s
proceedings that it could have raised had it chosen to defend the Estate from
Reyes’s negligence lawsuit. Infinity’s arguments to the probate court regarding
the effect of the time-bars in the probate code on the validity of Reyes’s
lawsuit is a defense that should have properly been raised when Reyes’s lawsuit
against the Estate was still pending. Therefore, the probate court erred by
determining the authority of the personal representatives to enter into the Coblentz
agreement because its order was based upon defenses that Infinity was barred
from raising as a matter of law.6
even if we had found that Infinity’s motion to intervene was properly before
the probate court, we would have concluded that the probate court erred by
allowing Infinity to raise defenses that it could have raised if it had
defended the Estate from Reyes’s negligence lawsuit prior to the entry of the Coblentz
agreement and the consent judgment. As will be discussed more fully in the next
section, when an insurer refuses to defend its insured from a lawsuit, and the
insured later settles the suit by entering into a Coblentz agreement,
the insurer is precluded from relitigating the issue of its insured’s liability
in subsequent proceedings. Gallagher v. Dupont, 918 So. 2d 342, 348
(Fla. 5th DCA 2005); Ahern v. Odyssey Re (London) Ltd., 788 So. 2d 369,
372 (Fla. 4th DCA 2001). Accordingly, Infinity was absolutely prohibited from
raising any defenses on behalf of its insured in the probate court’s
proceedings that it could have raised had it chosen to defend the Estate from
Reyes’s negligence lawsuit. Infinity’s arguments to the probate court regarding
the effect of the time-bars in the probate code on the validity of Reyes’s
lawsuit is a defense that should have properly been raised when Reyes’s lawsuit
against the Estate was still pending. Therefore, the probate court erred by
determining the authority of the personal representatives to enter into the Coblentz
agreement because its order was based upon defenses that Infinity was barred
from raising as a matter of law.6
2. The
Circuit Court’s Order
Circuit Court’s Order
We
review the trial court’s order granting Infinity’s motion for summary judgment
in the bad-faith lawsuit de novo. Geico Gen. Ins. Co. v. Rodriguez, 155
So. 3d 1163, 1167 (Fla. 3d DCA 2014). “Summary judgment is proper if there is
no genuine issue of material fact and if the moving party is entitled to a
judgment as a matter of law.” Volusia Cnty. v. Aberdeen at Ormond Beach,
L.P., 760 So. 2d 126, 130 (Fla. 2000).
review the trial court’s order granting Infinity’s motion for summary judgment
in the bad-faith lawsuit de novo. Geico Gen. Ins. Co. v. Rodriguez, 155
So. 3d 1163, 1167 (Fla. 3d DCA 2014). “Summary judgment is proper if there is
no genuine issue of material fact and if the moving party is entitled to a
judgment as a matter of law.” Volusia Cnty. v. Aberdeen at Ormond Beach,
L.P., 760 So. 2d 126, 130 (Fla. 2000).
As
stated above, Reyes and the Estate entered into a consent judgment pursuant to
a Coblentz agreement. Reyes subsequently sought to enforce the consent
judgment against Infinity by filing a bad-faith action against Infinity.
Therefore, we analyze the order granting summary judgment to determine whether
the circuit court correctly applied the law pertaining to the enforcement of
consent judgments in the context of a Coblentz agreement.
stated above, Reyes and the Estate entered into a consent judgment pursuant to
a Coblentz agreement. Reyes subsequently sought to enforce the consent
judgment against Infinity by filing a bad-faith action against Infinity.
Therefore, we analyze the order granting summary judgment to determine whether
the circuit court correctly applied the law pertaining to the enforcement of
consent judgments in the context of a Coblentz agreement.
In
order to enforce a consent judgment entered pursuant to a Coblentz
agreement, the assignee must bring an action against the insurer and prove: (1)
insurance coverage, (2) the insurance company wrongfully refused to defend its
insured, and (3) the settlement was reasonable and made in good faith. Mid-Continent
Cas. Co. v. Royal Crane, LLC, 169 So. 3d 174, 180 (Fla. 4th DCA 2015); Gallagher,
918 So. 2d at 348; Indep. Fire Ins. Co. v. Paulekas, 633 So. 2d 1111,
1114 (Fla. 3d DCA 1994).
order to enforce a consent judgment entered pursuant to a Coblentz
agreement, the assignee must bring an action against the insurer and prove: (1)
insurance coverage, (2) the insurance company wrongfully refused to defend its
insured, and (3) the settlement was reasonable and made in good faith. Mid-Continent
Cas. Co. v. Royal Crane, LLC, 169 So. 3d 174, 180 (Fla. 4th DCA 2015); Gallagher,
918 So. 2d at 348; Indep. Fire Ins. Co. v. Paulekas, 633 So. 2d 1111,
1114 (Fla. 3d DCA 1994).
It
is axiomatic that a Coblentz agreement establishes the insured’s
liability. Mid-Continent Cas. Co., 169 So. 3d at 181-82 (“The notion is
that the settlement establishes the insured’s liability, but not the insurer’s
obligation of coverage.”). The subsequent entry of a consent judgment is
conclusive against the insurer as to all matters determined in the judgment. Gallagher,
918 So. 2d at 348. Thus, in the proceedings to enforce the consent judgment,
the insurer is not permitted to assert any defense that it could have raised in
the underlying lawsuit between the assignee and the insured. Indep. Fire
Ins. Co., 633 So. 2d at 1114 (“[The insurer] was not permitted to assert
all of the defenses which could have been asserted in the underlying cause of
action . . . .”); Gallagher, 918 So. 2d at 348 (holding that “the
insured’s liability has been established by the settlement, and the insurer may
not later relitigate the issue”).
is axiomatic that a Coblentz agreement establishes the insured’s
liability. Mid-Continent Cas. Co., 169 So. 3d at 181-82 (“The notion is
that the settlement establishes the insured’s liability, but not the insurer’s
obligation of coverage.”). The subsequent entry of a consent judgment is
conclusive against the insurer as to all matters determined in the judgment. Gallagher,
918 So. 2d at 348. Thus, in the proceedings to enforce the consent judgment,
the insurer is not permitted to assert any defense that it could have raised in
the underlying lawsuit between the assignee and the insured. Indep. Fire
Ins. Co., 633 So. 2d at 1114 (“[The insurer] was not permitted to assert
all of the defenses which could have been asserted in the underlying cause of
action . . . .”); Gallagher, 918 So. 2d at 348 (holding that “the
insured’s liability has been established by the settlement, and the insurer may
not later relitigate the issue”).
The
circuit court’s order granting summary judgment was premised, as was the
probate court’s order to determine, on Infinity’s argument that Reyes’s
negligence lawsuit against the Estate was time-barred pursuant to the probate
code. The circuit court’s analysis, like the probate court’s analysis, however,
overlooked the fact that the Coblentz agreement and the consent judgment
conclusively established that the Estate was liable, and that Infinity was
barred from raising any of the defenses that it could have raised had it chosen
to defend the Estate in the negligence lawsuit. Because Infinity could have
raised its arguments with regard to the probate code if it had defended the
Estate in the negligence lawsuit proceedings, Infinity is barred from
subsequently raising them as a defense in order to contest the validity of the
consent judgment in the probate court and in the circuit court bad-faith
lawsuit. We therefore find that the circuit court erred when it granted summary
judgment in favor of Infinity based on Infinity’s legally barred probate code
defenses.
circuit court’s order granting summary judgment was premised, as was the
probate court’s order to determine, on Infinity’s argument that Reyes’s
negligence lawsuit against the Estate was time-barred pursuant to the probate
code. The circuit court’s analysis, like the probate court’s analysis, however,
overlooked the fact that the Coblentz agreement and the consent judgment
conclusively established that the Estate was liable, and that Infinity was
barred from raising any of the defenses that it could have raised had it chosen
to defend the Estate in the negligence lawsuit. Because Infinity could have
raised its arguments with regard to the probate code if it had defended the
Estate in the negligence lawsuit proceedings, Infinity is barred from
subsequently raising them as a defense in order to contest the validity of the
consent judgment in the probate court and in the circuit court bad-faith
lawsuit. We therefore find that the circuit court erred when it granted summary
judgment in favor of Infinity based on Infinity’s legally barred probate code
defenses.
In
response to the abundant case law precluding insurers from raising defenses in
a subsequent proceeding, which it had the opportunity to raise, but failed to
raise in the prior proceeding because, after having received notice, the
insurer declined to defend the insured, the dissent seizes upon language in May
v. Illinois National Insurance Co., 771 So. 2d 1143 (Fla. 2000), to argue
that as to this particular defense, this well-developed body of law does
not apply. However, that is not what May holds.
response to the abundant case law precluding insurers from raising defenses in
a subsequent proceeding, which it had the opportunity to raise, but failed to
raise in the prior proceeding because, after having received notice, the
insurer declined to defend the insured, the dissent seizes upon language in May
v. Illinois National Insurance Co., 771 So. 2d 1143 (Fla. 2000), to argue
that as to this particular defense, this well-developed body of law does
not apply. However, that is not what May holds.
Although
the Florida Supreme Court in May held that section 733.702 “is a statute
of limitations that cannot be waived in a probate proceeding by failure to
object to a claim on timeliness grounds,” and section 733.710 “is a
jurisdictional statute of nonclaim that is not subject to waiver or extension
in a probate proceeding,” May, 771 So. 2d at 1145, the operative words
in both findings are “in a probate proceeding.” (emphasis added). As the
Court clearly explained in its footnote following these findings, its holding
was limited to actions brought in probate court against the estate:
the Florida Supreme Court in May held that section 733.702 “is a statute
of limitations that cannot be waived in a probate proceeding by failure to
object to a claim on timeliness grounds,” and section 733.710 “is a
jurisdictional statute of nonclaim that is not subject to waiver or extension
in a probate proceeding,” May, 771 So. 2d at 1145, the operative words
in both findings are “in a probate proceeding.” (emphasis added). As the
Court clearly explained in its footnote following these findings, its holding
was limited to actions brought in probate court against the estate:
As with section 733.702, we
determine that an estate may waive the time period set forth in section
733.710 in a separate action outside of the probate proceedings. However,
unlike section 733.702, a creditor that has obtained a judgment in a separate
action cannot recover against the estate unless the creditor has filed a
claim in the probate proceedings within two years of the decedent’s death. This
is so because the probate court lacks the authority to extend the time period
set forth in section 733.710.
determine that an estate may waive the time period set forth in section
733.710 in a separate action outside of the probate proceedings. However,
unlike section 733.702, a creditor that has obtained a judgment in a separate
action cannot recover against the estate unless the creditor has filed a
claim in the probate proceedings within two years of the decedent’s death. This
is so because the probate court lacks the authority to extend the time period
set forth in section 733.710.
Id. at
n.12 (emphasis added). It is thus clear that the Estate in the instant case had
the authority to “waive the time period set forth in section 733.710 in a
separate action outside of the probate proceedings,” which was in the personal
injury lawsuit in the circuit court. However, any judgment obtained by the
plaintiff (Reyes) could not be levied against the Estate in the probate
proceedings because no claim had been filed in probate court during the
limitations period. Reyes, however, is not attempting to seek redress against
the Estate in the probate court. The Estate entered into a Coblentz
agreement with Reyes wherein the parties agreed to the entry of a consent
judgment, Reyes agreed not to execute the judgment against the Estate, and the
Estate assigned its rights to Reyes to pursue a bad-faith lawsuit against
Infinity for failing to defend the Estate in the negligence lawsuit.
n.12 (emphasis added). It is thus clear that the Estate in the instant case had
the authority to “waive the time period set forth in section 733.710 in a
separate action outside of the probate proceedings,” which was in the personal
injury lawsuit in the circuit court. However, any judgment obtained by the
plaintiff (Reyes) could not be levied against the Estate in the probate
proceedings because no claim had been filed in probate court during the
limitations period. Reyes, however, is not attempting to seek redress against
the Estate in the probate court. The Estate entered into a Coblentz
agreement with Reyes wherein the parties agreed to the entry of a consent
judgment, Reyes agreed not to execute the judgment against the Estate, and the
Estate assigned its rights to Reyes to pursue a bad-faith lawsuit against
Infinity for failing to defend the Estate in the negligence lawsuit.
Had
Infinity elected to defend the Estate, as it was asked, it could have objected
to the entry of the Coblentz agreement and the consent judgment, raised
the failure of Reyes to timely file his claim in probate court, asserted
defenses including the statutory limitations bar to recovery against the
Estate, and as counsel for the Estate simply have refused to the entry of both.
But, Infinity declined to defend the Estate, the Estate waived the time period
set forth in section 733.710 in the circuit court negligence lawsuit, and
assigned its rights to Reyes to pursue the Estate’s bad-faith claim against
Infinity in a totally separate circuit court action. While there are many
defenses which may be available to Infinity in the bad-faith lawsuit, including
its coverage defense, it is too late for Infinity to now appear in the
negligence lawsuit it declined to defend in order to raise defenses it could
have raised had it agreed to defend the Estate. And, as already addressed,
under both Florida Probate Rule 5.010 and Florida Rule of Civil Procedure
1.230, the probate court had no authority to allow Infinity to intervene for
the purpose of raising these defenses.
Infinity elected to defend the Estate, as it was asked, it could have objected
to the entry of the Coblentz agreement and the consent judgment, raised
the failure of Reyes to timely file his claim in probate court, asserted
defenses including the statutory limitations bar to recovery against the
Estate, and as counsel for the Estate simply have refused to the entry of both.
But, Infinity declined to defend the Estate, the Estate waived the time period
set forth in section 733.710 in the circuit court negligence lawsuit, and
assigned its rights to Reyes to pursue the Estate’s bad-faith claim against
Infinity in a totally separate circuit court action. While there are many
defenses which may be available to Infinity in the bad-faith lawsuit, including
its coverage defense, it is too late for Infinity to now appear in the
negligence lawsuit it declined to defend in order to raise defenses it could
have raised had it agreed to defend the Estate. And, as already addressed,
under both Florida Probate Rule 5.010 and Florida Rule of Civil Procedure
1.230, the probate court had no authority to allow Infinity to intervene for
the purpose of raising these defenses.
The
dissent also relies on Wald v. State Farm Mutual Automobile Insurance Co.,
2013 WL 9636854 (M.D. Fla. July 25, 2013). This Court is not bound by a
decision rendered by the United States District Court, and Wald is
distinguishable. Wald is distinguishable because it did not involve a Coblentz
agreement. It is also unpersuasive because the United States District Court
failed to consider footnote 12 in May.
dissent also relies on Wald v. State Farm Mutual Automobile Insurance Co.,
2013 WL 9636854 (M.D. Fla. July 25, 2013). This Court is not bound by a
decision rendered by the United States District Court, and Wald is
distinguishable. Wald is distinguishable because it did not involve a Coblentz
agreement. It is also unpersuasive because the United States District Court
failed to consider footnote 12 in May.
In
applying Florida law, the Fifth Circuit in Coblentz held that an insurer
that wrongfully declines to defend its insured is barred from challenging a
judgment entered against its insured absent a finding of fraud or collusion.
applying Florida law, the Fifth Circuit in Coblentz held that an insurer
that wrongfully declines to defend its insured is barred from challenging a
judgment entered against its insured absent a finding of fraud or collusion.
Where either an indemnitor or
liability insurer has notice of a proceeding against his indemnitee or insured,
and is afforded an opportunity to appear and defend, a judgment rendered
against the indemnitee or insured, in the absence of fraud or collusion, is
conclusive against the indemnitor or insurer as to all material matters
determined therein.
liability insurer has notice of a proceeding against his indemnitee or insured,
and is afforded an opportunity to appear and defend, a judgment rendered
against the indemnitee or insured, in the absence of fraud or collusion, is
conclusive against the indemnitor or insurer as to all material matters
determined therein.
Coblentz,
416 F.2d at 1062-63. In Coblentz, the insurance company argued that
since the judgment did not legally obligate its insured to pay anything, it
could not obligate the insurance company to pay anything. In rejecting the
insurer’s argument, the Coblentz court held that the insurer had been
afforded the opportunity to defend the action; however, it had repudiated its
obligation to defend, and thus the judgment obtained, if obtained without fraud
or collusion, was conclusive against the insurer. Id. at 1063.
416 F.2d at 1062-63. In Coblentz, the insurance company argued that
since the judgment did not legally obligate its insured to pay anything, it
could not obligate the insurance company to pay anything. In rejecting the
insurer’s argument, the Coblentz court held that the insurer had been
afforded the opportunity to defend the action; however, it had repudiated its
obligation to defend, and thus the judgment obtained, if obtained without fraud
or collusion, was conclusive against the insurer. Id. at 1063.
We
conclude that although the consent judgment in the instant case is not
enforceable against the Estate based on the express terms of the Coblentz
agreement and because Reyes did not file a claim against the Estate in the
probate court within the two-year limitations period, it is enforceable against
Infinity if coverage is established and there was no fraud or collusion. Our
conclusion is fully supported by not only footnote 12 in May, but also
by the Fourth District Court of Appeal’s decision in Pezzi v. Brown, 697
So. 2d 883 (Fla. 4th DCA 1997).
conclude that although the consent judgment in the instant case is not
enforceable against the Estate based on the express terms of the Coblentz
agreement and because Reyes did not file a claim against the Estate in the
probate court within the two-year limitations period, it is enforceable against
Infinity if coverage is established and there was no fraud or collusion. Our
conclusion is fully supported by not only footnote 12 in May, but also
by the Fourth District Court of Appeal’s decision in Pezzi v. Brown, 697
So. 2d 883 (Fla. 4th DCA 1997).
In Pezzi,
the Fourth District held that the plaintiff’s failure to comply with sections
733.702 and 733.710 did not place limitations on the plaintiff’s ability to
recover against the decedent’s insurer. Id. at 886. Specifically, the
Fourth District held that the jurisdictional limitation under section 733.710
“is specific to the decedent’s estate, the personal representative, and the
beneficiaries; the limitation does not extend to the decedent’s insurance
policy.” Id. at 885 (emphasis added).
the Fourth District held that the plaintiff’s failure to comply with sections
733.702 and 733.710 did not place limitations on the plaintiff’s ability to
recover against the decedent’s insurer. Id. at 886. Specifically, the
Fourth District held that the jurisdictional limitation under section 733.710
“is specific to the decedent’s estate, the personal representative, and the
beneficiaries; the limitation does not extend to the decedent’s insurance
policy.” Id. at 885 (emphasis added).
In
reaching this conclusion, the Fourth District was “guided by the principle that
statutes restricting access to the courts must be narrowly construed in a
manner favoring access.” Id. at 886 (citations omitted). Thus, the court
held that while:
reaching this conclusion, the Fourth District was “guided by the principle that
statutes restricting access to the courts must be narrowly construed in a
manner favoring access.” Id. at 886 (citations omitted). Thus, the court
held that while:
Section 733.10 represents a
decision by the legislature that 2 years from the date of death is the outside
limit to which a decedent’s estate in Florida should be exposed by claims on
the decedent’s assets . . . [t]here is no indication that section 733.10
represented a legislative decision to undermine the rights of plaintiffs to
recover under tortfeasors’ insurance policies.
decision by the legislature that 2 years from the date of death is the outside
limit to which a decedent’s estate in Florida should be exposed by claims on
the decedent’s assets . . . [t]here is no indication that section 733.10
represented a legislative decision to undermine the rights of plaintiffs to
recover under tortfeasors’ insurance policies.
Id. at
886 (quotations, citations, and emphasis omitted). In support of its
interpretation of sections 733.702 and 733.710, the court noted that the
purpose of these time limitations is “to promote ‘the public policy of
providing for the speedy settlement of estates’ in order that ‘the payment of
claims and the distribution to beneficiaries [not] be substantially delayed or
disrupted.’ ” Id. at 886 (quoting Spohr v. Berryman, 589 So. 2d
225, 228 (Fla. 1991)).
886 (quotations, citations, and emphasis omitted). In support of its
interpretation of sections 733.702 and 733.710, the court noted that the
purpose of these time limitations is “to promote ‘the public policy of
providing for the speedy settlement of estates’ in order that ‘the payment of
claims and the distribution to beneficiaries [not] be substantially delayed or
disrupted.’ ” Id. at 886 (quoting Spohr v. Berryman, 589 So. 2d
225, 228 (Fla. 1991)).
In
conclusion, the Fourth District in Pezzi held that, because the
plaintiff was not seeking recovery from the estate’s assets, the personal
representative individually, or the beneficiaries, “[n]either section 733.702
nor section 733.710 precludes plaintiffs from bringing this cause of action and
recovering to the extent that [the deceased tortfeasor] was covered by
liability insurance.” Pezzi, 697 So. 2d at 886.
conclusion, the Fourth District in Pezzi held that, because the
plaintiff was not seeking recovery from the estate’s assets, the personal
representative individually, or the beneficiaries, “[n]either section 733.702
nor section 733.710 precludes plaintiffs from bringing this cause of action and
recovering to the extent that [the deceased tortfeasor] was covered by
liability insurance.” Pezzi, 697 So. 2d at 886.
We
note that May, which was decided by the Florida Supreme Court well after
the Fourth District Court of Appeal decided Pezzi, did not overrule Pezzi,
and in fact, based upon footnote 12 in May, the Florida Supreme Court
apparently agreed with the Pezzi court.
note that May, which was decided by the Florida Supreme Court well after
the Fourth District Court of Appeal decided Pezzi, did not overrule Pezzi,
and in fact, based upon footnote 12 in May, the Florida Supreme Court
apparently agreed with the Pezzi court.
The
Estate’s interests are protected twice over in this case. The Coblentz
agreement protects the assets of the Estate by preventing Reyes from recovering
against the Estate even without the application of section 733.710. A separate
bad-faith lawsuit against Infinity poses no threat to the Estate, its
beneficiaries, or its creditors. If Reyes ever attempts to recover from the
Estate, then her claim will be barred not only by the Coblentz
agreement, but also by the effect of section 733.710.
Estate’s interests are protected twice over in this case. The Coblentz
agreement protects the assets of the Estate by preventing Reyes from recovering
against the Estate even without the application of section 733.710. A separate
bad-faith lawsuit against Infinity poses no threat to the Estate, its
beneficiaries, or its creditors. If Reyes ever attempts to recover from the
Estate, then her claim will be barred not only by the Coblentz
agreement, but also by the effect of section 733.710.
CONCLUSION
In
conclusion, we reverse the probate court’s order permitting Infinity to
intervene in the Estate’s probate proceedings because Infinity’s interest was
not at issue before the probate court prior to the filing of the motion to
intervene. Because the probate court erred by permitting Infinity to intervene,
we also reverse the probate court’s subsequent order on Infinity’s motion to
determine. We also reverse the probate court’s order on Infinity’s motion to determine
because it was based on defenses that Infinity was prohibited from raising as a
matter of law. Lastly, we reverse the circuit court’s order granting Infinity’s
motion for summary judgment and the subsequently entered final judgment in the
bad-faith lawsuit because they were also premised on defenses that Infinity
could have raised but failed to raise in the underlying litigation that led to
the Coblentz agreement.
conclusion, we reverse the probate court’s order permitting Infinity to
intervene in the Estate’s probate proceedings because Infinity’s interest was
not at issue before the probate court prior to the filing of the motion to
intervene. Because the probate court erred by permitting Infinity to intervene,
we also reverse the probate court’s subsequent order on Infinity’s motion to
determine. We also reverse the probate court’s order on Infinity’s motion to determine
because it was based on defenses that Infinity was prohibited from raising as a
matter of law. Lastly, we reverse the circuit court’s order granting Infinity’s
motion for summary judgment and the subsequently entered final judgment in the
bad-faith lawsuit because they were also premised on defenses that Infinity
could have raised but failed to raise in the underlying litigation that led to
the Coblentz agreement.
Reversed
and remanded. (LAGOA, J., concurs.)
and remanded. (LAGOA, J., concurs.)
__________________
SALTER,
J. (dissenting). I respectfully dissent. The circuit court orders regarding the
probate proceeding and the final judgment in the bad faith insurance lawsuit
were correct and must be affirmed. Well-settled statutory and decisional rules
governing claims bar dates, and those governing the rights and duties of
personal representatives in the administration of estates, are controlling.
J. (dissenting). I respectfully dissent. The circuit court orders regarding the
probate proceeding and the final judgment in the bad faith insurance lawsuit
were correct and must be affirmed. Well-settled statutory and decisional rules
governing claims bar dates, and those governing the rights and duties of
personal representatives in the administration of estates, are controlling.
This
is not the first time that a claimant has been exposed to a harsh outcome in a
tragic case because of the failure to comply with the procedural requirements
of the Florida Probate Code and Florida Probate Rules. Those time and
procedural requirements must be upheld, however, because they were enacted by
the Florida Legislature for the protection of decedents’ estates, personal
representatives, creditors, obligors, and beneficiaries.
is not the first time that a claimant has been exposed to a harsh outcome in a
tragic case because of the failure to comply with the procedural requirements
of the Florida Probate Code and Florida Probate Rules. Those time and
procedural requirements must be upheld, however, because they were enacted by
the Florida Legislature for the protection of decedents’ estates, personal
representatives, creditors, obligors, and beneficiaries.
I. The
Statutes
Statutes
The
bad-faith insurance claim against Infinity Indemnity is founded on the claim of
Ms. Reyes7 against Infinity Indemnity’s insured,
the decedent, Jorge Arroyo. The insurer has properly conceded, and the
applicable statutes provide, that the claim against Mr. Arroyo’s estate could
be settled without filing a timely written claim in the probate court under a
narrow exception: “[t]o the limits of casualty insurance protection only, any
proceeding to establish liability that is protected by the casualty insurance.”
§ 733.702(4)(b), Fla. Stat. (2013).
bad-faith insurance claim against Infinity Indemnity is founded on the claim of
Ms. Reyes7 against Infinity Indemnity’s insured,
the decedent, Jorge Arroyo. The insurer has properly conceded, and the
applicable statutes provide, that the claim against Mr. Arroyo’s estate could
be settled without filing a timely written claim in the probate court under a
narrow exception: “[t]o the limits of casualty insurance protection only, any
proceeding to establish liability that is protected by the casualty insurance.”
§ 733.702(4)(b), Fla. Stat. (2013).
That
provision is eminently logical; a timely claim which seeks nothing from the
estate in excess of the coverage limits of an insurance policy covering the
decedent and the claim is in substance a claim against the policy, not a claim
against the decedent, the estate, or the personal representative. Because other
creditors of the estate having no recourse to the policy, and beneficiaries of
the estate, should not be adversely impacted by the net result, there is no
necessity to prohibit the claimant from prosecuting a proceeding to establish
the liability of the insurer “to the limits of casualty insurance protection.” Id.
provision is eminently logical; a timely claim which seeks nothing from the
estate in excess of the coverage limits of an insurance policy covering the
decedent and the claim is in substance a claim against the policy, not a claim
against the decedent, the estate, or the personal representative. Because other
creditors of the estate having no recourse to the policy, and beneficiaries of
the estate, should not be adversely impacted by the net result, there is no
necessity to prohibit the claimant from prosecuting a proceeding to establish
the liability of the insurer “to the limits of casualty insurance protection.” Id.
The
exception does not apply, however, to a claim against the deceased insured in
excess of the policy limits, because such a claim, if timely and allowed, might
diminish estate assets. Accordingly, a claim for more than policy proceeds must
be timely filed in the estate. Section II of this dissent addresses the Florida
and federal cases enforcing these statutory requirements.
exception does not apply, however, to a claim against the deceased insured in
excess of the policy limits, because such a claim, if timely and allowed, might
diminish estate assets. Accordingly, a claim for more than policy proceeds must
be timely filed in the estate. Section II of this dissent addresses the Florida
and federal cases enforcing these statutory requirements.
And
the narrow exception provided by section 733.702(4)(b) is followed by section
733.702(5), reiterating that nothing in section 733.702 “shall extend the
limitations period set forth in s. 733.710.” Section 733.710, in turn,
establishes an absolute two-year time limitation, measured from the death of
the decedent, for the filing or establishment of a claim against the decedent’s
estate or the personal representative. The statutory deadline is jurisdictional
and self-executing.
the narrow exception provided by section 733.702(4)(b) is followed by section
733.702(5), reiterating that nothing in section 733.702 “shall extend the
limitations period set forth in s. 733.710.” Section 733.710, in turn,
establishes an absolute two-year time limitation, measured from the death of
the decedent, for the filing or establishment of a claim against the decedent’s
estate or the personal representative. The statutory deadline is jurisdictional
and self-executing.
In
the present case, there is no dispute that the date of Mr. Arroyo’s death (and
Ms. Reyes’ catastrophic injuries) was October 9, 2009. The lawsuit by Ms. Reyes
against the deceased insured’s estate was filed in 2011, but no written claim
against his estate was ever filed. The consent settlement agreement and assignment
entered into by Ms. Reyes and the Arroyo estate pursuant to Coblentz v.
American Surety Co. of New York, 416 F.2d 1059 (5th Cir. 1969), were signed
in January 2013, and the consent final judgment in favor of Ms. Reyes and
against the estate was docketed in April 2013. These occurrences took place
over three years after Mr. Arroyo died and without preliminary notice to
interested persons or consideration by the probate court in the estate
proceedings. His estate attempted to accept liability for a claim which was, as
a matter of law, unenforceable against the estate.
the present case, there is no dispute that the date of Mr. Arroyo’s death (and
Ms. Reyes’ catastrophic injuries) was October 9, 2009. The lawsuit by Ms. Reyes
against the deceased insured’s estate was filed in 2011, but no written claim
against his estate was ever filed. The consent settlement agreement and assignment
entered into by Ms. Reyes and the Arroyo estate pursuant to Coblentz v.
American Surety Co. of New York, 416 F.2d 1059 (5th Cir. 1969), were signed
in January 2013, and the consent final judgment in favor of Ms. Reyes and
against the estate was docketed in April 2013. These occurrences took place
over three years after Mr. Arroyo died and without preliminary notice to
interested persons or consideration by the probate court in the estate
proceedings. His estate attempted to accept liability for a claim which was, as
a matter of law, unenforceable against the estate.
The
narrow exception of section 733.702(4)(b) is inapplicable in this case because
the estate’s liability for $30,000,000.00 vastly exceeded “the limits of
casualty insurance protection” under the policy (a face amount of $10,000.00,
if the estate or Ms. Reyes prevailed regarding coverage). Under the unambiguous
statutory provisions governing the filing of claims against a decedent and the
decedent’s estate for an amount exceeding “the limits of casualty insurance
protection,” the Coblentz agreement was untimely and barred.
narrow exception of section 733.702(4)(b) is inapplicable in this case because
the estate’s liability for $30,000,000.00 vastly exceeded “the limits of
casualty insurance protection” under the policy (a face amount of $10,000.00,
if the estate or Ms. Reyes prevailed regarding coverage). Under the unambiguous
statutory provisions governing the filing of claims against a decedent and the
decedent’s estate for an amount exceeding “the limits of casualty insurance
protection,” the Coblentz agreement was untimely and barred.
The
probate statutes governing timeliness are not the only restrictions applicable
to the present case. Section 733.706 specifies that “[c]laims on all judgments
against a decedent shall be filed in the same manner as other claims against
estates of decedents.” The consent final judgment in the present case was not
filed as a claim in the estate and was not brought to the attention of the
probate court until Infinity Indemnity did so in its motion to invalidate Ms.
Reyes’ claim against the estate.
probate statutes governing timeliness are not the only restrictions applicable
to the present case. Section 733.706 specifies that “[c]laims on all judgments
against a decedent shall be filed in the same manner as other claims against
estates of decedents.” The consent final judgment in the present case was not
filed as a claim in the estate and was not brought to the attention of the
probate court until Infinity Indemnity did so in its motion to invalidate Ms.
Reyes’ claim against the estate.
Finally,
an “interested person” under the Florida Probate Code is
an “interested person” under the Florida Probate Code is
any person who may reasonably
be expected to be affected by the outcome of the particular proceeding involved.
. . . The meaning, as it relates to particular persons, may vary from time to
time and must be determined according to the particular purpose of, and matter
involved in, any proceedings.
be expected to be affected by the outcome of the particular proceeding involved.
. . . The meaning, as it relates to particular persons, may vary from time to
time and must be determined according to the particular purpose of, and matter
involved in, any proceedings.
§
731.201(23), Fla. Stat. (2013). In the present case, the probate court
correctly determined that Infinity Indemnity was an interested person.
731.201(23), Fla. Stat. (2013). In the present case, the probate court
correctly determined that Infinity Indemnity was an interested person.
II.
Applicable Case Law
Applicable Case Law
Regarding
the exception for claims against an insured decedent, section 733.702(4)(b),
the Supreme Court of Florida has left no doubt that the exception does not
extend to extra-contractual bad faith claims above policy limits; an unfiled
claim by a plaintiff may be pursued “to establish liability of the decedent or
personal representative and recovering up to the limits of the applicable
insurance coverage.” Pezzi v. Brown, 697 So. 2d 883, 885 (Fla. 1997)
(emphasis added); see also Kent Insurance Co. v. Estate of Atwood,
481 So. 2d 1294, 1295 (Fla. 1st DCA 1986).
the exception for claims against an insured decedent, section 733.702(4)(b),
the Supreme Court of Florida has left no doubt that the exception does not
extend to extra-contractual bad faith claims above policy limits; an unfiled
claim by a plaintiff may be pursued “to establish liability of the decedent or
personal representative and recovering up to the limits of the applicable
insurance coverage.” Pezzi v. Brown, 697 So. 2d 883, 885 (Fla. 1997)
(emphasis added); see also Kent Insurance Co. v. Estate of Atwood,
481 So. 2d 1294, 1295 (Fla. 1st DCA 1986).
In May
v. Illinois National Insurance Co., 771 So. 2d 1143 (Fla. 2000), the
Supreme Court of Florida addressed the application of two of the probate
statutes, sections 733.702 and 733.710, in the context of a bad faith insurance
case.8 Mr. May was the administrator ad
litem — functionally equivalent to the personal representative for Mr.
Arroyo’s estate in the present case — for the estate of Mr. Bradley. Mr.
Bradley was the driver in a motor vehicle collision in which he died. His
insurer was Illinois National Insurance Company (INIC).
v. Illinois National Insurance Co., 771 So. 2d 1143 (Fla. 2000), the
Supreme Court of Florida addressed the application of two of the probate
statutes, sections 733.702 and 733.710, in the context of a bad faith insurance
case.8 Mr. May was the administrator ad
litem — functionally equivalent to the personal representative for Mr.
Arroyo’s estate in the present case — for the estate of Mr. Bradley. Mr.
Bradley was the driver in a motor vehicle collision in which he died. His
insurer was Illinois National Insurance Company (INIC).
Mr.
and Mrs. Prockup were in a vehicle involved in the collision with the vehicle
driven by Mr. Bradley. Mr. Prockup sustained non-fatal injuries in the
accident, but his wife died at the scene of the collision. Mr. Prockup,
individually and as personal representative for the estate of his wife, sued
the owner of the vehicle (Mr. Bradley’s niece) and Mr. May, as personal
representative of Mr. Bradley’s estate. Mr. Prockup requested that the Florida
probate court appoint Mr. May administrator ad litem of the Bradley estate, as
it became clear that no personal representative had been appointed and that
there was uncertainty regarding the existence of a will.
and Mrs. Prockup were in a vehicle involved in the collision with the vehicle
driven by Mr. Bradley. Mr. Prockup sustained non-fatal injuries in the
accident, but his wife died at the scene of the collision. Mr. Prockup,
individually and as personal representative for the estate of his wife, sued
the owner of the vehicle (Mr. Bradley’s niece) and Mr. May, as personal
representative of Mr. Bradley’s estate. Mr. Prockup requested that the Florida
probate court appoint Mr. May administrator ad litem of the Bradley estate, as
it became clear that no personal representative had been appointed and that
there was uncertainty regarding the existence of a will.
INIC
did not provide a defense and disputed coverage as to the Prockups’ lawsuit
against Mr. Bradley’s estate and Mr. May. Following a stipulation by the estate
and Mr. May to liability in that lawsuit, a trial on damages culminated in a
judgment against the vehicle owner and Mr. May (for the estate of Mr. Bradley)
for $1,106,522.70. Id. at 1145-46. Mr. Prockup later commenced a bad
faith action against INIC, which INIC removed to the U.S. District Court for
the Northern District of Florida.9 INIC asserted that the Bradley estate
had no liability to the Prockups because the Prockups had not filed timely
claims in the estate within the times specified in sections 733.702 and
733.710. “After considering the parties’ arguments, the federal district court
granted summary judgment in favor of INIC. In granting INIC’s motion, the trial
court determined that Mr. Prockup had failed to timely file a sufficient statement
of claim in the Bradley Estate proceedings in accordance with the Florida
Probate Code.” Id. at 1149.
did not provide a defense and disputed coverage as to the Prockups’ lawsuit
against Mr. Bradley’s estate and Mr. May. Following a stipulation by the estate
and Mr. May to liability in that lawsuit, a trial on damages culminated in a
judgment against the vehicle owner and Mr. May (for the estate of Mr. Bradley)
for $1,106,522.70. Id. at 1145-46. Mr. Prockup later commenced a bad
faith action against INIC, which INIC removed to the U.S. District Court for
the Northern District of Florida.9 INIC asserted that the Bradley estate
had no liability to the Prockups because the Prockups had not filed timely
claims in the estate within the times specified in sections 733.702 and
733.710. “After considering the parties’ arguments, the federal district court
granted summary judgment in favor of INIC. In granting INIC’s motion, the trial
court determined that Mr. Prockup had failed to timely file a sufficient statement
of claim in the Bradley Estate proceedings in accordance with the Florida
Probate Code.” Id. at 1149.
The
judgment was appealed to the U.S. Court of Appeals, which then certified to the
Supreme Court of Florida this question:
judgment was appealed to the U.S. Court of Appeals, which then certified to the
Supreme Court of Florida this question:
WHETHER SECTION 733.702 AND
SECTION 733.710 OF THE FLORIDA STATUTES CONSIDERED SEPARATELY AND/OR TOGETHER
OPERATE AS STATUTES OF NONCLAIM SO THAT IF NO STATUTORY EXCEPTION EXISTS,
CLAIMS NOT FORMALLY PRESENTED WITHIN THE DESIGNATED TIME PERIOD ARE NOT BINDING
ON THE ESTATE, OR DO THEY ACT AS STATUTES OF LIMITATIONS WHICH MUST BE PLEADED
AND PROVED AS AFFIRMATIVE DEFENSES IN ORDER TO AVOID WAIVER.
SECTION 733.710 OF THE FLORIDA STATUTES CONSIDERED SEPARATELY AND/OR TOGETHER
OPERATE AS STATUTES OF NONCLAIM SO THAT IF NO STATUTORY EXCEPTION EXISTS,
CLAIMS NOT FORMALLY PRESENTED WITHIN THE DESIGNATED TIME PERIOD ARE NOT BINDING
ON THE ESTATE, OR DO THEY ACT AS STATUTES OF LIMITATIONS WHICH MUST BE PLEADED
AND PROVED AS AFFIRMATIVE DEFENSES IN ORDER TO AVOID WAIVER.
Id. at
1145.
1145.
The
Supreme Court of Florida held that section 733.702 “is a statute of limitations
that cannot be waived in a probate proceeding by failure to object to a claim
on timeliness grounds,” while section 733.710 “is a jurisdictional statute of
nonclaim that is not subject to waiver or extension in a probate proceeding.” Id.10
Supreme Court of Florida held that section 733.702 “is a statute of limitations
that cannot be waived in a probate proceeding by failure to object to a claim
on timeliness grounds,” while section 733.710 “is a jurisdictional statute of
nonclaim that is not subject to waiver or extension in a probate proceeding.” Id.10
May
was carefully considered and applied in a more recent federal case in Florida, Wald
v. State Farm Mut. Auto. Ins. Co., 3:11-cv-1112-J-32TEM, 2013 WL 9636854
(M.D. Fla. July 25, 2013), aff’d, 556 F. App’x 933 (11th Cir. 2014). The
U.S. District Court granted the insurer’s motion for summary judgment,
concluding that “May‘s reasoning applies to plaintiffs in third-party
bad faith actions like Wald.” Id. at *7. In Wald, as in the
present case, the time-barred, extinguished claim of the plaintiff against the
deceased insured’s estate could not be resuscitated by a Coblentz
agreement and an assignment to a third-party, because the claim exceeded the
policy limits.
was carefully considered and applied in a more recent federal case in Florida, Wald
v. State Farm Mut. Auto. Ins. Co., 3:11-cv-1112-J-32TEM, 2013 WL 9636854
(M.D. Fla. July 25, 2013), aff’d, 556 F. App’x 933 (11th Cir. 2014). The
U.S. District Court granted the insurer’s motion for summary judgment,
concluding that “May‘s reasoning applies to plaintiffs in third-party
bad faith actions like Wald.” Id. at *7. In Wald, as in the
present case, the time-barred, extinguished claim of the plaintiff against the
deceased insured’s estate could not be resuscitated by a Coblentz
agreement and an assignment to a third-party, because the claim exceeded the
policy limits.
In
the case at hand, the trial court correctly applied the statutes, the May
and Wald decisions, and numerous other authorities in a seventeen-page,
carefully-reasoned opinion granting Infinity Indemnity’s motion for summary
judgment as to Ms. Reyes’ bad faith claim.
the case at hand, the trial court correctly applied the statutes, the May
and Wald decisions, and numerous other authorities in a seventeen-page,
carefully-reasoned opinion granting Infinity Indemnity’s motion for summary
judgment as to Ms. Reyes’ bad faith claim.
III.
The Majority’s Waiver Argument
The Majority’s Waiver Argument
A. Standard of Review
While
the majority is correct that the trial court’s order granting Infinity
Indemnity’s motion for summary judgment is reviewed de novo, it has ignored the
jurisdictional effect of the nonclaim statute, section 733.710, as
determined in May. That jurisdictional infirmity, as to which there is
no issue of material fact in this case, entitled Infinity Indemnity to summary
judgment as a matter of law under the case cited by the majority. Volusia
County v. Aberdeen at Ormond Beach, L.P., 760 So. 2d 126, 130 (Fla. 2000).
the majority is correct that the trial court’s order granting Infinity
Indemnity’s motion for summary judgment is reviewed de novo, it has ignored the
jurisdictional effect of the nonclaim statute, section 733.710, as
determined in May. That jurisdictional infirmity, as to which there is
no issue of material fact in this case, entitled Infinity Indemnity to summary
judgment as a matter of law under the case cited by the majority. Volusia
County v. Aberdeen at Ormond Beach, L.P., 760 So. 2d 126, 130 (Fla. 2000).
B. The Extent of the Insurer’s Alleged Waiver
The
majority maintains that Infinity Indemnity lost the right to raise not only
coverage issues under the policy, but also any defense under the nonclaim
statute and the Probate Code: “[W]hen an insurer refuses to defend its insured
from a lawsuit, and the insured later settles the suit by entering into a Coblentz
agreement, the insurer is precluded from relitigating the issue of its
insured’s liability in subsequent proceedings.”11 The cases cited for this
proposition, however, do not address a deceased insured’s estate’s purported
settlement of an untimely, preclusively barred claim against the estate.
majority maintains that Infinity Indemnity lost the right to raise not only
coverage issues under the policy, but also any defense under the nonclaim
statute and the Probate Code: “[W]hen an insurer refuses to defend its insured
from a lawsuit, and the insured later settles the suit by entering into a Coblentz
agreement, the insurer is precluded from relitigating the issue of its
insured’s liability in subsequent proceedings.”11 The cases cited for this
proposition, however, do not address a deceased insured’s estate’s purported
settlement of an untimely, preclusively barred claim against the estate.
In Gallagher
v. Dupont, 918 So. 2d 342 (Fla. 5th DCA 2005), a third-party claimant filed
a lawsuit against a state employee. When the employee died, the State refused to
continue the defense of the lawsuit on behalf of the employee’s estate. The
third-party claimant then entered into a Coblentz agreement with the
estate and obtained a consent judgment against the State. But although the
State (through its risk management fund) “lost the chance to litigate the
factual issues” relating to the underlying lawsuit, these issues involved
“duty, breach, and proximate causation,” not the question of whether the State
was under an obligation to provide a defense to a deceased state employee’s
estate. Id. at 348-49. For that reason and others, the appellate court
remanded the case to the trial court for further proceedings. Gallagher
does not preclude an insurer from defending itself on the grounds that the
estate of its insured is immune from suit.
v. Dupont, 918 So. 2d 342 (Fla. 5th DCA 2005), a third-party claimant filed
a lawsuit against a state employee. When the employee died, the State refused to
continue the defense of the lawsuit on behalf of the employee’s estate. The
third-party claimant then entered into a Coblentz agreement with the
estate and obtained a consent judgment against the State. But although the
State (through its risk management fund) “lost the chance to litigate the
factual issues” relating to the underlying lawsuit, these issues involved
“duty, breach, and proximate causation,” not the question of whether the State
was under an obligation to provide a defense to a deceased state employee’s
estate. Id. at 348-49. For that reason and others, the appellate court
remanded the case to the trial court for further proceedings. Gallagher
does not preclude an insurer from defending itself on the grounds that the
estate of its insured is immune from suit.
In Ahern
v. Odyssey Re (London) Ltd., 788 So. 2d 369 (Fla. 4th DCA 2001), the
insured was Medi-Trans, Inc., the insurer was Odyssey Re, and the third-party
claimant was the estate of a passenger who died in a collision while in a van
operated by Medi-Trans. Odyssey Re declined to defend Medi-Trans against claims
brought by the personal representative of the estate of the passenger.
Medi-Trans then entered into a Coblentz agreement with the personal
representative, a consent judgment, and an assignment of Medi-Trans’ rights
against Odyssey Re to the personal representative.
v. Odyssey Re (London) Ltd., 788 So. 2d 369 (Fla. 4th DCA 2001), the
insured was Medi-Trans, Inc., the insurer was Odyssey Re, and the third-party
claimant was the estate of a passenger who died in a collision while in a van
operated by Medi-Trans. Odyssey Re declined to defend Medi-Trans against claims
brought by the personal representative of the estate of the passenger.
Medi-Trans then entered into a Coblentz agreement with the personal
representative, a consent judgment, and an assignment of Medi-Trans’ rights
against Odyssey Re to the personal representative.
The
Fourth District held that in refusing to provide a defense to Medi-Trans,
“Odyssey lost its chance to litigate the factual issues surrounding duty,
breach and proximate causation which were pivotal to the ultimate resolution of
the legal principles involved in [the deceased passenger’s] claims.” Id.
at 373. The probate two-year nonclaim statute, section 733.710, is not an issue
relating to an insured’s duty, breach, or proximate causation vis-à-vis a
third-party claimant. Instead, it is a statutory bar precluding a third-party
claimant from pursuing such a claim at all, if untimely, against an estate.
In Ahern, the insured was a corporation, not an estate, and the effect
of the nonclaim statute was not at issue.
Fourth District held that in refusing to provide a defense to Medi-Trans,
“Odyssey lost its chance to litigate the factual issues surrounding duty,
breach and proximate causation which were pivotal to the ultimate resolution of
the legal principles involved in [the deceased passenger’s] claims.” Id.
at 373. The probate two-year nonclaim statute, section 733.710, is not an issue
relating to an insured’s duty, breach, or proximate causation vis-à-vis a
third-party claimant. Instead, it is a statutory bar precluding a third-party
claimant from pursuing such a claim at all, if untimely, against an estate.
In Ahern, the insured was a corporation, not an estate, and the effect
of the nonclaim statute was not at issue.
In
another case cited by the majority, Independent Fire Insurance Co. v.
Paulekas, 633 So. 2d 1111 (Fla. 3d DCA 1994), the insured survived the
accident for which he was alleged to have been responsible. The opinion did not
involve an insured’s estate or the Florida Probate Code, much less a
jurisdictionally time-barred claim.
another case cited by the majority, Independent Fire Insurance Co. v.
Paulekas, 633 So. 2d 1111 (Fla. 3d DCA 1994), the insured survived the
accident for which he was alleged to have been responsible. The opinion did not
involve an insured’s estate or the Florida Probate Code, much less a
jurisdictionally time-barred claim.
Finally,
the majority’s reliance on Mid-Continent Casualty Co. v. Royal Crane, LLC,
169 So. 3d 174 (Fla. 4th DCA 2015), is equally misplaced. The case reversed a
final judgment against an insurer following a Coblentz agreement and a
third-party assignee’s claim against the insurer for its refusal to defend.
More significantly, the case does not involve a claim against the estate of a
deceased insured or the effect of the nonclaim statute, section 733.710.
the majority’s reliance on Mid-Continent Casualty Co. v. Royal Crane, LLC,
169 So. 3d 174 (Fla. 4th DCA 2015), is equally misplaced. The case reversed a
final judgment against an insurer following a Coblentz agreement and a
third-party assignee’s claim against the insurer for its refusal to defend.
More significantly, the case does not involve a claim against the estate of a
deceased insured or the effect of the nonclaim statute, section 733.710.
Simply
stated, there is no Florida case, or decision by a federal court in Florida
applying Florida law, allowing an estate to consent to a judgment for an
alleged claim that was not filed in the estate within (a) the limitations
period of section 733.702, and (b) two years of the insured decedent’s death,
the claims bar period specified by section 733.710. As already noted, perhaps
repeatedly for emphasis, section 733.710 is a jurisdictional statute of
nonclaim. The majority’s attempt to supply jurisdiction contrary to a
controlling statute and controlling Florida case law cannot withstand careful
scrutiny.
stated, there is no Florida case, or decision by a federal court in Florida
applying Florida law, allowing an estate to consent to a judgment for an
alleged claim that was not filed in the estate within (a) the limitations
period of section 733.702, and (b) two years of the insured decedent’s death,
the claims bar period specified by section 733.710. As already noted, perhaps
repeatedly for emphasis, section 733.710 is a jurisdictional statute of
nonclaim. The majority’s attempt to supply jurisdiction contrary to a
controlling statute and controlling Florida case law cannot withstand careful
scrutiny.
IV.
The Insurer’s Motion in the Probate Case
The Insurer’s Motion in the Probate Case
Infinity
Indemnity separately and successfully moved the probate court to determine that
the personal representative of the estate had no authority to enter into the Coblentz
agreement with Ms. Reyes. The probate judge correctly agreed to hear the
insurer’s objection to the time-barred consent judgment, finding that “the
Estate had absolute immunity from Reyes’s claim because Reyes failed to file a
claim against the Estate in this matter and, therefore, said claim was
extinguished.” The probate court also correctly held that the consent judgment
against the estate was not valid or enforceable against the estate because it
“was not filed in the Estate, violating section 733.706, Florida Statutes.”
Indemnity separately and successfully moved the probate court to determine that
the personal representative of the estate had no authority to enter into the Coblentz
agreement with Ms. Reyes. The probate judge correctly agreed to hear the
insurer’s objection to the time-barred consent judgment, finding that “the
Estate had absolute immunity from Reyes’s claim because Reyes failed to file a
claim against the Estate in this matter and, therefore, said claim was
extinguished.” The probate court also correctly held that the consent judgment
against the estate was not valid or enforceable against the estate because it
“was not filed in the Estate, violating section 733.706, Florida Statutes.”
Ms.
Reyes argues, and the majority apparently agrees, that the probate framework
has no application here because Infinity Indemnity denied coverage and thereby
waived its rights to object to Ms. Reyes’ claim against the estate of Mr.
Arroyo. Ms. Reyes has also persuaded the majority that the probate court abused
its discretion when it allowed the insurer to file a motion in the probate
proceedings so late in the process, and by “injecting a new issue into the
proceedings,” based on a “contingent interest in the proceedings, as opposed to
a direct and immediate interest.”12 This latter assessment erroneously
applies case law applicable to intervention in non-probate civil cases under
Florida Rule of Civil Procedure 1.230.
Reyes argues, and the majority apparently agrees, that the probate framework
has no application here because Infinity Indemnity denied coverage and thereby
waived its rights to object to Ms. Reyes’ claim against the estate of Mr.
Arroyo. Ms. Reyes has also persuaded the majority that the probate court abused
its discretion when it allowed the insurer to file a motion in the probate
proceedings so late in the process, and by “injecting a new issue into the
proceedings,” based on a “contingent interest in the proceedings, as opposed to
a direct and immediate interest.”12 This latter assessment erroneously
applies case law applicable to intervention in non-probate civil cases under
Florida Rule of Civil Procedure 1.230.
Rule
1.230, “Interventions,” does not apply to a probate proceeding in the same way
it applies in a civil case outside the probate division. First, Florida Probate
Rule 5.010 specifies that “[t]he Florida Rules of Civil Procedure apply only as
provided herein.” One such incorporation of the Florida Rules of Civil
Procedure relates to adversary proceedings, as detailed in Florida Probate Rule
5.025. See Fla. Prob. R. 5.025(d)(2). Another group of civil rules (not
including Rule 1.230), regarding discovery and subpoenas, is specifically
incorporated by Florida Probate Rule 5.080(a).
1.230, “Interventions,” does not apply to a probate proceeding in the same way
it applies in a civil case outside the probate division. First, Florida Probate
Rule 5.010 specifies that “[t]he Florida Rules of Civil Procedure apply only as
provided herein.” One such incorporation of the Florida Rules of Civil
Procedure relates to adversary proceedings, as detailed in Florida Probate Rule
5.025. See Fla. Prob. R. 5.025(d)(2). Another group of civil rules (not
including Rule 1.230), regarding discovery and subpoenas, is specifically
incorporated by Florida Probate Rule 5.080(a).
Second,
joinder and notice in an estate proceeding are quite different than in a
non-probate adversarial civil case. The overarching objective of the Florida
Probate Code, chapters 731-735, Florida Statutes (2013), is the orderly
administration of the assets and liabilities of an estate, such that creditors
of the decedent, claims and other property of the decedent, and beneficiaries
of the decedent are accorded their rights under Florida law, whether in
intestacy or pursuant to a valid last will and testament.
joinder and notice in an estate proceeding are quite different than in a
non-probate adversarial civil case. The overarching objective of the Florida
Probate Code, chapters 731-735, Florida Statutes (2013), is the orderly
administration of the assets and liabilities of an estate, such that creditors
of the decedent, claims and other property of the decedent, and beneficiaries
of the decedent are accorded their rights under Florida law, whether in
intestacy or pursuant to a valid last will and testament.
In
furtherance of that objective, the Florida Probate Code obligates the personal
representative to provide notices to several categories of interested parties,
such as creditors, obligors of the decedent, and prospective beneficiaries.
This is accomplished through actual notice and via publication. See, e.g.,
§§ 733.212, 733.2121, Fla. Stat. (2013). Interested persons who have not
received notice via these provisions, but become aware of the estate
proceedings, may request and obtain notice of further proceedings, and copies
of pleadings, by filing a written request and serving a copy on the attorney
for the personal representative. Fla. Prob. R. 5.060.
furtherance of that objective, the Florida Probate Code obligates the personal
representative to provide notices to several categories of interested parties,
such as creditors, obligors of the decedent, and prospective beneficiaries.
This is accomplished through actual notice and via publication. See, e.g.,
§§ 733.212, 733.2121, Fla. Stat. (2013). Interested persons who have not
received notice via these provisions, but become aware of the estate
proceedings, may request and obtain notice of further proceedings, and copies
of pleadings, by filing a written request and serving a copy on the attorney
for the personal representative. Fla. Prob. R. 5.060.
The
Infinity Indemnity policy at issue in the present case was an asset of Mr.
Arroyo’s estate. The estate was still open and subject to further
administration at the time Infinity Indemnity filed its motion for
determination of the personal representatives’ right to enter into the 2013
settlement agreement. Under section 731.201(23), quoted in pertinent part in
section I of this dissent, Infinity Indemnity was an “interested person”
entitled to be heard by the probate court with respect to an alleged claim
above policy limits. The majority incorrectly implies that the parties’
references to Rule 1.230 and the term “intervention” somehow deprived Infinity
Indemnity of standing to be heard.
Infinity Indemnity policy at issue in the present case was an asset of Mr.
Arroyo’s estate. The estate was still open and subject to further
administration at the time Infinity Indemnity filed its motion for
determination of the personal representatives’ right to enter into the 2013
settlement agreement. Under section 731.201(23), quoted in pertinent part in
section I of this dissent, Infinity Indemnity was an “interested person”
entitled to be heard by the probate court with respect to an alleged claim
above policy limits. The majority incorrectly implies that the parties’
references to Rule 1.230 and the term “intervention” somehow deprived Infinity
Indemnity of standing to be heard.
But
in the present case, whether through inadvertence or design, Infinity Indemnity
was not designated as an interested party by the personal representatives (Mr.
Arroyo’s parents) following the filing of their petition for administration in
January 2011. The estate was the owner of the Infinity Indemnity policy and
successor to the insured, but any rights or obligations under that policy were
not listed in the petition or related filings.13 The petition alleged that the nature
and approximate value of the assets in the estate are “unknown at this time and
consist of a wrongful death action arising from the automobile accident in
which decedent died.”14
in the present case, whether through inadvertence or design, Infinity Indemnity
was not designated as an interested party by the personal representatives (Mr.
Arroyo’s parents) following the filing of their petition for administration in
January 2011. The estate was the owner of the Infinity Indemnity policy and
successor to the insured, but any rights or obligations under that policy were
not listed in the petition or related filings.13 The petition alleged that the nature
and approximate value of the assets in the estate are “unknown at this time and
consist of a wrongful death action arising from the automobile accident in
which decedent died.”14
Nor
did counsel for Ms. Reyes file a claim in the estate or, so far as the record
reflects, notify Indemnity Insurance that Ms. Reyes was filing a civil case
against the estate outside the probate proceeding without authorization from
the probate court.15 Further, the personal
representatives did not comply with Florida Probate Rule 5.065(a) by filing “a
notice when a civil action has been instituted by or against the personal
representative.”
did counsel for Ms. Reyes file a claim in the estate or, so far as the record
reflects, notify Indemnity Insurance that Ms. Reyes was filing a civil case
against the estate outside the probate proceeding without authorization from
the probate court.15 Further, the personal
representatives did not comply with Florida Probate Rule 5.065(a) by filing “a
notice when a civil action has been instituted by or against the personal
representative.”
Ms.
Reyes’ original lawsuit against the personal representatives was filed in the
civil division five days after the petition for administration of the Arroyo
estate was filed in the probate division, in 2011. Infinity Indemnity was not
sued by Ms. Reyes based on the Arroyo estate’s purportedly-assigned claim until
June 2013, over two years later. Ms. Reyes’ argument that Infinity Indemnity
filed its motion too late in the probate proceedings ignores the fact that
nothing was done in the probate proceeding from April 2011 through June 2013 to
advise Infinity Indemnity of a claim by the estate or its assignee against
Infinity Indemnity.
Reyes’ original lawsuit against the personal representatives was filed in the
civil division five days after the petition for administration of the Arroyo
estate was filed in the probate division, in 2011. Infinity Indemnity was not
sued by Ms. Reyes based on the Arroyo estate’s purportedly-assigned claim until
June 2013, over two years later. Ms. Reyes’ argument that Infinity Indemnity
filed its motion too late in the probate proceedings ignores the fact that
nothing was done in the probate proceeding from April 2011 through June 2013 to
advise Infinity Indemnity of a claim by the estate or its assignee against
Infinity Indemnity.
Ms.
Reyes argues, nonetheless, that Ms. Reyes had no obligation to notify the
probate court or interested parties in the estate proceeding, because others
had no interest in the Infinity Indemnity insurance policy, and because Ms.
Reyes was waiving any right to execute against the estate — in the Coblentz
agreement — in return for the estate’s assignment to Ms. Reyes of its rights
against Infinity Indemnity. This argument fails, because it completely ignores
the transparency and timing required by the Florida Probate Code. Other
creditors, beneficiaries, and interested persons, not to mention the probate
court itself, should be given an opportunity to understand the terms of an
arrangement whereby the personal representatives propose to allow the entry of
an untimely $30,000,000.00 claim against the estate and the assignment of the
estate’s claim against an insurer to that single claimant.
Reyes argues, nonetheless, that Ms. Reyes had no obligation to notify the
probate court or interested parties in the estate proceeding, because others
had no interest in the Infinity Indemnity insurance policy, and because Ms.
Reyes was waiving any right to execute against the estate — in the Coblentz
agreement — in return for the estate’s assignment to Ms. Reyes of its rights
against Infinity Indemnity. This argument fails, because it completely ignores
the transparency and timing required by the Florida Probate Code. Other
creditors, beneficiaries, and interested persons, not to mention the probate
court itself, should be given an opportunity to understand the terms of an
arrangement whereby the personal representatives propose to allow the entry of
an untimely $30,000,000.00 claim against the estate and the assignment of the
estate’s claim against an insurer to that single claimant.
The
majority argues that these requirements can be dispensed with because there
were no other creditors of the estate who might have made claims against the
estate and its insurance policy. Even if that is true in the present case, that
rationale is not a sound basis for ignoring the statutes and rules that control
probate administration.
majority argues that these requirements can be dispensed with because there
were no other creditors of the estate who might have made claims against the
estate and its insurance policy. Even if that is true in the present case, that
rationale is not a sound basis for ignoring the statutes and rules that control
probate administration.
The
point of this recitation of facts and overview of probate proceedings is that
“intervention” requiring affirmative acts by Infinity Indemnity is a departure
from the norm contemplated by the Florida Probate Code and Florida Probate
Rules. In probate proceedings, the estate and personal representative
ordinarily are the initiators notifying known “interested persons” of
everything from the opening of the estate to the appointment of the personal
representative, to lawsuits against the estate, and to proposed settlements (among
other developments affecting administration). In an ordinary estate case, it is
not even necessary for an obviously-interested party like Infinity Indemnity to
file a motion to intervene if the personal representative and claimants have
complied with their obligations.
point of this recitation of facts and overview of probate proceedings is that
“intervention” requiring affirmative acts by Infinity Indemnity is a departure
from the norm contemplated by the Florida Probate Code and Florida Probate
Rules. In probate proceedings, the estate and personal representative
ordinarily are the initiators notifying known “interested persons” of
everything from the opening of the estate to the appointment of the personal
representative, to lawsuits against the estate, and to proposed settlements (among
other developments affecting administration). In an ordinary estate case, it is
not even necessary for an obviously-interested party like Infinity Indemnity to
file a motion to intervene if the personal representative and claimants have
complied with their obligations.
And
even if we were to assess the probate court’s order recognizing Infinity
Indemnity’s right to object to the 2013 settlement under the standards
applicable to Rule 1.230 in a general civil case, our standard of review would
be for an abuse of discretion, Barnhill v. Fla. Microsoft Anti-Trust Litig.,
905 So. 2d 195 (Fla. 3d DCA 2005), liberally construed in favor of permitting a
person claiming an interest in the proceeding to protect that person’s rights, Grimes
v. Walton County, 591 So. 2d 1091, 1094 (Fla. 1st DCA 1992). As detailed
above, any delay in filing the motion and objections in the present case was
not attributable to Infinity Indemnity, but rather (a) to the failure of the
personal representatives to list the Infinity Indemnity policy as an asset of
the estate and Ms. Reyes’ lawsuit as a potential liability of the estate, and
(b) Ms. Reyes’ failure to file a notice of her claim in the estate.
even if we were to assess the probate court’s order recognizing Infinity
Indemnity’s right to object to the 2013 settlement under the standards
applicable to Rule 1.230 in a general civil case, our standard of review would
be for an abuse of discretion, Barnhill v. Fla. Microsoft Anti-Trust Litig.,
905 So. 2d 195 (Fla. 3d DCA 2005), liberally construed in favor of permitting a
person claiming an interest in the proceeding to protect that person’s rights, Grimes
v. Walton County, 591 So. 2d 1091, 1094 (Fla. 1st DCA 1992). As detailed
above, any delay in filing the motion and objections in the present case was
not attributable to Infinity Indemnity, but rather (a) to the failure of the
personal representatives to list the Infinity Indemnity policy as an asset of
the estate and Ms. Reyes’ lawsuit as a potential liability of the estate, and
(b) Ms. Reyes’ failure to file a notice of her claim in the estate.
The
probate court did not abuse its discretion in permitting Infinity Indemnity to
claim “interested party” status in the still-open probate administration of Mr.
Arroyo’s estate. That court properly exercised its jurisdiction in determining
that the estate had no authority to enter into the settlement agreement with
Ms. Reyes, and that at the time the estate did so, the estate had “absolute
immunity” from Ms. Reyes’ claim.
probate court did not abuse its discretion in permitting Infinity Indemnity to
claim “interested party” status in the still-open probate administration of Mr.
Arroyo’s estate. That court properly exercised its jurisdiction in determining
that the estate had no authority to enter into the settlement agreement with
Ms. Reyes, and that at the time the estate did so, the estate had “absolute
immunity” from Ms. Reyes’ claim.
V. Conclusion
The
trial judge in the civil division did not err in entering judgment against Ms.
Reyes in the bad faith case. Ms. Reyes’ original personal injury lawsuit against
the Arroyo estate, her Coblentz agreement with the personal
representative of that estate, the entry of the consent judgment in the
lawsuit, and the estate’s purported assignment to Ms. Reyes of the estate’s
rights of action against Infinity Indemnity were effected without compliance
with the Florida Probate Code and Florida Probate Rules. As a result, those
steps collectively created an invalid foundation upon which to base a bad faith
action against Infinity Indemnity.
trial judge in the civil division did not err in entering judgment against Ms.
Reyes in the bad faith case. Ms. Reyes’ original personal injury lawsuit against
the Arroyo estate, her Coblentz agreement with the personal
representative of that estate, the entry of the consent judgment in the
lawsuit, and the estate’s purported assignment to Ms. Reyes of the estate’s
rights of action against Infinity Indemnity were effected without compliance
with the Florida Probate Code and Florida Probate Rules. As a result, those
steps collectively created an invalid foundation upon which to base a bad faith
action against Infinity Indemnity.
Similarly,
the probate court did not abuse its discretion in granting Infinity Indemnity’s
motion for a determination regarding the estate’s purported settlement. The
court recognized that Infinity Indemnity was significantly affected by the
personal representatives’ missteps and Ms. Reyes’ circumvention of the probate
court in orchestrating the bad faith lawsuit. The probate court correctly held
that Ms. Reyes failed to file a timely claim against the Arroyo estate and that
the personal representative had no authority to enter into the Coblentz
agreement and to allow the entry of the consent judgment.
the probate court did not abuse its discretion in granting Infinity Indemnity’s
motion for a determination regarding the estate’s purported settlement. The
court recognized that Infinity Indemnity was significantly affected by the
personal representatives’ missteps and Ms. Reyes’ circumvention of the probate
court in orchestrating the bad faith lawsuit. The probate court correctly held
that Ms. Reyes failed to file a timely claim against the Arroyo estate and that
the personal representative had no authority to enter into the Coblentz
agreement and to allow the entry of the consent judgment.
For
these reasons, I respectfully dissent.
these reasons, I respectfully dissent.
__________________
1See Coblentz
v. Am. Surety Co. of New York, 416 F.2d 1059 (5th Cir. 1969).
v. Am. Surety Co. of New York, 416 F.2d 1059 (5th Cir. 1969).
2Reyes
also sued Insurance USA & Associates, Inc. and Nicole Marie Antini, but
those claims were later voluntarily dismissed without prejudice and are not at
issue in this appeal.
also sued Insurance USA & Associates, Inc. and Nicole Marie Antini, but
those claims were later voluntarily dismissed without prejudice and are not at
issue in this appeal.
3The
probate court’s conclusion that the consent judgment was unenforceable against
the Estate was redundant because the clear terms of the Coblentz
agreement had already rendered the consent judgment unenforceable against the
Estate.
probate court’s conclusion that the consent judgment was unenforceable against
the Estate was redundant because the clear terms of the Coblentz
agreement had already rendered the consent judgment unenforceable against the
Estate.
4Although
we need not address this issue in reaching our decision, we note that there are
many types of bad-faith causes of action that do not require the insured to be
exposed to an excess judgment at the time a bad-faith claim is filed. See
Perera v. U.S. Fid. & Guar. Co., 35 So. 3d 893, 899-901 (Fla. 2010).
we need not address this issue in reaching our decision, we note that there are
many types of bad-faith causes of action that do not require the insured to be
exposed to an excess judgment at the time a bad-faith claim is filed. See
Perera v. U.S. Fid. & Guar. Co., 35 So. 3d 893, 899-901 (Fla. 2010).
5The
dissent argues that, while a rule 1.230 motion to intervene is not typical in
probate court, Infinity only filed the motion because Reyes’s counsel and the
personal representatives failed to comply with the proper probate procedures by
failing to designate Infinity as an interested party and by failing to notify
Infinity (as an interested party) of Reyes’s negligence lawsuit and the Coblentz
agreement. Thus, the dissent opines that Infinity would not have needed to file
a motion to intervene to contest the bad-faith litigation had the proper
procedures been complied with because Infinity would have already known about
the negligence suit and settlement.
dissent argues that, while a rule 1.230 motion to intervene is not typical in
probate court, Infinity only filed the motion because Reyes’s counsel and the
personal representatives failed to comply with the proper probate procedures by
failing to designate Infinity as an interested party and by failing to notify
Infinity (as an interested party) of Reyes’s negligence lawsuit and the Coblentz
agreement. Thus, the dissent opines that Infinity would not have needed to file
a motion to intervene to contest the bad-faith litigation had the proper
procedures been complied with because Infinity would have already known about
the negligence suit and settlement.
First,
we note that there is no exception in rule 5.010 that would allow Infinity to
use the Florida Rules of Civil Procedure based upon the personal
representatives’ failure to comply with the proper procedures. Thus, the
dissent’s argument is legally irrelevant. Second, contrary to the dissent’s
suggestion, there is no indication in the record that Infinity was surprised by
Reyes’s negligence lawsuit. In fact, Infinity concedes in its answer brief that
it received notice of Reyes’s negligence lawsuit because it admits that the
Estate tendered the defense of the negligence lawsuit to Infinity, and Infinity
refused to provide a defense prior to the execution of the Coblentz
agreement. If Infinity was concerned about its exposure to a subsequent
bad-faith suit, it should have defended the Estate. “While an insurance company
is within its rights in a thorough investigation to determine whether the
accident in question comes within coverage of its policy, the company acts at
its peril in refusing to defend its insured and will be held responsible for
the consequences.” Gallagher v. Dupont, 918 So. 2d 342, 347 (Fla. 5th
DCA 2005).
we note that there is no exception in rule 5.010 that would allow Infinity to
use the Florida Rules of Civil Procedure based upon the personal
representatives’ failure to comply with the proper procedures. Thus, the
dissent’s argument is legally irrelevant. Second, contrary to the dissent’s
suggestion, there is no indication in the record that Infinity was surprised by
Reyes’s negligence lawsuit. In fact, Infinity concedes in its answer brief that
it received notice of Reyes’s negligence lawsuit because it admits that the
Estate tendered the defense of the negligence lawsuit to Infinity, and Infinity
refused to provide a defense prior to the execution of the Coblentz
agreement. If Infinity was concerned about its exposure to a subsequent
bad-faith suit, it should have defended the Estate. “While an insurance company
is within its rights in a thorough investigation to determine whether the
accident in question comes within coverage of its policy, the company acts at
its peril in refusing to defend its insured and will be held responsible for
the consequences.” Gallagher v. Dupont, 918 So. 2d 342, 347 (Fla. 5th
DCA 2005).
6Although
we have reversed the probate court’s order granting Infinity’s motion to
intervene on procedural and waiver grounds, we briefly respond to an issue
raised in the dissent that was not raised by the probate court or any of the
parties. The dissent suggests that section 733.708, Florida Statutes (2011),
governs a personal representative’s authority to enter into a settlement
agreement. Thus, the dissent argues that pursuant to section 733.708, a
personal representative is required to obtain approval from the probate court
prior to settling a claim. We disagree. The dissent misapprehends the purpose
and effect of section 733.708, which provides that a personal representative
may avoid personal liability when compromising a claim against the estate if
the personal representative obtains a court order approving the compromise. “The
failure to secure such an order does not preclude a compromise however, the
personal representative remains subject to the possibility of liability.” Sec.
Ins. Co. v. Estate of Stillson, 397 So. 2d 1206, 1207 (Fla. 1st DCA 1981)
(emphasis added). Thus, in addition to the fact that this argument was not
raised by the parties either below or on appeal, this argument is unavailing on
the merits.
we have reversed the probate court’s order granting Infinity’s motion to
intervene on procedural and waiver grounds, we briefly respond to an issue
raised in the dissent that was not raised by the probate court or any of the
parties. The dissent suggests that section 733.708, Florida Statutes (2011),
governs a personal representative’s authority to enter into a settlement
agreement. Thus, the dissent argues that pursuant to section 733.708, a
personal representative is required to obtain approval from the probate court
prior to settling a claim. We disagree. The dissent misapprehends the purpose
and effect of section 733.708, which provides that a personal representative
may avoid personal liability when compromising a claim against the estate if
the personal representative obtains a court order approving the compromise. “The
failure to secure such an order does not preclude a compromise however, the
personal representative remains subject to the possibility of liability.” Sec.
Ins. Co. v. Estate of Stillson, 397 So. 2d 1206, 1207 (Fla. 1st DCA 1981)
(emphasis added). Thus, in addition to the fact that this argument was not
raised by the parties either below or on appeal, this argument is unavailing on
the merits.
7Delia
Reyes sustained traumatic and incapacitating injuries in the vehicle collision
that is at the center of the case. In the litigation involved in this appeal,
she is represented as the plaintiff by her mother (Marta Reyes) as guardian,
and by a court-appointed guardian for her two children. We refer to the
plaintiffs in the cases below and the appellants in this appeal collectively as
“Ms. Reyes.”
Reyes sustained traumatic and incapacitating injuries in the vehicle collision
that is at the center of the case. In the litigation involved in this appeal,
she is represented as the plaintiff by her mother (Marta Reyes) as guardian,
and by a court-appointed guardian for her two children. We refer to the
plaintiffs in the cases below and the appellants in this appeal collectively as
“Ms. Reyes.”
8The
opinion in May arose from a federal case. The United States Court of
Appeals for the Eleventh Circuit certified the controlling issues of Florida
law (the proper application of sections 733.702 and 733.710) to the Supreme
Court of Florida.
opinion in May arose from a federal case. The United States Court of
Appeals for the Eleventh Circuit certified the controlling issues of Florida
law (the proper application of sections 733.702 and 733.710) to the Supreme
Court of Florida.
9Before
removing the case to federal court, INIC paid the policy limits plus interest
into the registry of the state circuit court.
removing the case to federal court, INIC paid the policy limits plus interest
into the registry of the state circuit court.
10In
May, the Court held that the third-party bad faith claimant had filed a
sufficient claim for purposes of section 733.703 by filing pleadings regarding
the wrongful death action against the estate in the probate case within two
years of the insured’s death. No such timely pleadings were filed by Ms. Reyes
in the estate of Mr. Arroyo in the present case.
May, the Court held that the third-party bad faith claimant had filed a
sufficient claim for purposes of section 733.703 by filing pleadings regarding
the wrongful death action against the estate in the probate case within two
years of the insured’s death. No such timely pleadings were filed by Ms. Reyes
in the estate of Mr. Arroyo in the present case.
11Majority
op. at 12; accord Majority op. at 14.
op. at 12; accord Majority op. at 14.
12Majority
op. at 10-11.
op. at 10-11.
13An
insurance policy that is an asset of the estate, as here, should be included in
the inventory or list of reported assets. In re Bernard’s Estate, 183
So. 2d 715 (Fla. 1st DCA 1966).
insurance policy that is an asset of the estate, as here, should be included in
the inventory or list of reported assets. In re Bernard’s Estate, 183
So. 2d 715 (Fla. 1st DCA 1966).
14The
estate initially asserted claims against Ms. Reyes as a passenger based on her
alleged interference with Mr. Arroyo’s driving. The petition and pleadings
filed before Infinity Indemnity’s motion never made reference to a claim by
Ms. Reyes against the decedent, the decedent’s insurance policy, or Infinity
Indemnity.
estate initially asserted claims against Ms. Reyes as a passenger based on her
alleged interference with Mr. Arroyo’s driving. The petition and pleadings
filed before Infinity Indemnity’s motion never made reference to a claim by
Ms. Reyes against the decedent, the decedent’s insurance policy, or Infinity
Indemnity.
15Counsel
for Ms. Reyes knew, based on correspondence in October and December 2009, that
Infinity Indemnity had disclosed prior coverage under a policy allegedly
cancelled before the date of the accident, and had denied coverage as of the
date of the accident due to the alleged nonpayment of premiums.
for Ms. Reyes knew, based on correspondence in October and December 2009, that
Infinity Indemnity had disclosed prior coverage under a policy allegedly
cancelled before the date of the accident, and had denied coverage as of the
date of the accident due to the alleged nonpayment of premiums.
* *
*
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