43
Fla. L. Weekly D86a

Insurance
— Automobile liability — Nonjoinder of insurer in action against insured —
Third-party bad faith claim asserted against insurer in negligence action
against insured — Trial court departed from essential requirements of law in
abating plaintiff’s third-party bad faith claim to await resolution of
plaintiff’s underlying negligence action against insured rather than dismissing
third-party bad faith claim

GEICO GENERAL INSURANCE COMPANY,
Petitioner, v. KATHERINE MARTINEZ, Respondent. 3rd District. Case No.
3D17-1086. L.T. Case No. 09-92831. January 3, 2018. A Writ of Certiorari to the
Circuit Court for Miami-Dade County, Pedro P. Echarte, Jr., Judge. Counsel:
Young, Bill, Boles, Palmer & Duke, Michel A. Morgan, B. Richard Young, Adam
A. Duke and Cody S. Pflueger, for petitioner. Brodsky Fotiu-Wojtowicz and
Alaina Fotiu-Wojtowicz; Michael S. Olin, for respondent.

(Before SALTER, EMAS and LOGUE, JJ.)

(EMAS, J.)

INTRODUCTION

GEICO General Insurance Company, a
defendant below, petitions this court for a writ of certiorari, following the
trial court’s orders, which: 1) permitted plaintiff Katherine Martinez to add
GEICO as a party defendant to Martinez’s negligence claim against GEICO’s
insured, arising out of an automobile accident; 2) permitted Martinez to amend
her complaint to add a third-party bad-faith claim against GEICO; and 3)
abated, rather than dismissed, Martinez’s unaccrued and premature third-party
bad-faith claim against GEICO.

We grant the petition and quash the
orders under review because, under these circumstances and given our existing
precedent, abatement (rather than dismissal) of a third-party bad-faith claim
filed in contravention of the express requirements of the nonjoinder statute
(section 627.4136, Florida Statutes (2016)), constitutes a departure from the
essential requirements of the law, and results in irreparable harm that cannot
be remedied on appeal.

FACTS AND PROCEDURAL BACKGROUND

The facts material to this petition
do not appear to be in dispute:

On February 12, 2009, Katherine
Martinez sustained injury when the car she was riding in was struck by a car
being driven by Diana Guevara. Guevara was insured under a policy issued by
GEICO. That policy provided bodily injury coverage in the amount of $10,000 per
person and $20,000 per occurrence.

Martinez filed a one-count
negligence complaint against Guevara in 2009. In October 2016, Martinez filed a
motion to amend her complaint to add GEICO as a party defendant to the action
and to add a third-party bad-faith claim against GEICO. The trial court granted
the motion, and Martinez filed an amended complaint, adding GEICO as a party
defendant and pleading a count for third-party bad-faith against GEICO.

GEICO moved to dismiss the
third-party bad-faith count, and at the hearing on the motion to dismiss,
Martinez conceded that the bad-faith claim against GEICO was unaccrued and
premature because, pursuant to the nonjoinder statute, the bad-faith claim had
not yet accrued and would not accrue unless and until Martinez first obtained a
settlement or verdict against Guevara on the underlying negligence claim.

The trial court denied the motion to
dismiss, and instead, abated the action to await resolution of Martinez’s
underlying negligence action against Guevara. This petition followed.

ANALYSIS

The nonjoinder statute, section
627.4136, Florida Statutes (2016), provides in pertinent part:

(1) It
shall be a condition precedent to the accrual or maintenance of a cause of
action against a liability insurer by a person not an insured under the terms
of the liability insurance contract that such person shall first obtain a
settlement or verdict against a person who is an insured under the terms of
such policy for a cause of action which is covered by such policy.

(2) . . .
No person who is not an insured under the terms of a liability insurance policy
shall have any interest in such policy, either as a third-party beneficiary or
otherwise, prior to first obtaining a settlement or verdict against a person
who is an insured under the terms of such policy for a cause of action which is
covered by such policy.

Martinez concedes that her
third-party bad-faith claim against GEICO has not yet accrued, and concedes
that Martinez is not an insured under the terms of the liability insurance
contract between Guevara, the insured and GEICO, the insurer. Nevertheless,
Martinez argues that it was within the trial court’s discretion to abate,
rather than to dismiss, the premature bad-faith claim.

We are unpersuaded by Martinez’s
arguments and conclude that this case is controlled by our decision in Lantana
Insurance, Ltd. v. Thornton, 118 So. 3d 250 (Fla. 3d DCA 2013). We
accordingly grant the petition and quash the order denying the motion to
dismiss Martinez’s unaccrued third-party bad-faith claim against GEICO.1

In Lantana, plaintiffs sued
homeowner Thornton for negligence. Thornton was an insured under two
homeowner’s policies, one issued by Alfa Insurance and the other by Lantana
Insurance, Ltd. Lantana and Alfa each denied coverage to Thornton, and Alfa
brought a separate action seeking a declaratory judgment on the question of
coverage. When Lantana failed to bring its own declaratory action or join in
Alfa’s declaratory action, plaintiffs filed a third-party complaint against
Lantana in Alfa’s declaratory judgment action.

Lantana moved to dismiss plaintiffs’
third-party complaint, contending that section 627.4136 barred such third-party
claims absent the plaintiffs first securing a settlement or verdict against
Thornton. The trial court denied the motion to dismiss and instead abated the
third-party action.

Lantana filed a petition for writ of
certiorari, and this court concluded that because plaintiffs “have not obtained
a settlement with or verdict against Thornton . . . [t]hey therefore have no
beneficial interest in Thornton’s policy with Lantana and no cause of action
against Lantana has accrued.” Id. at 251. We granted the petition and
quashed the order denying the motion to dismiss and abating the action, holding
that “the irreparable harm in such cases arises from the fact that an insurer
is being forced to litigate an action brought by a third-party plaintiff which
would be barred if, in fact, the requirements of section 627.4136 have not been
met.” Id. (quoting S. Owners Ins. Co. v. Mathieu, 67 So. 3d 1156,
1158 (Fla. 2d DCA 2011)).

In Starr Indemnity &
Liability Co. v. Morris, 155 So. 3d 429 (Fla. 3d DCA 2015), we cited
approvingly to Lantana and reaffirmed that “[t]he law is well
established that a trial court’s incorrect application of Florida’s nonjoinder
statute establishes the irreparable harm necessary for certiorari relief.” Id.
at 431.2

Martinez also asserts that the trial
court’s abatement, rather than dismissal, of an unaccrued and premature
third-party bad-faith claim is supported by this court’s decision in State
Farm Florida Insurance Co. v. Seville Place Condominium Association, Inc.,
74 So. 3d 105 (Fla. 3d DCA 2011). However, Seville Place involved a
first-party claim, rather than a third-party claim, and therefore did not
implicate section 627.4136 (the nonjoinder statute), which:

– creates
a condition precedent before a cause of action against GEICO has even accrued
or can be maintained by Martinez; and

– requires
Martinez, as a condition precedent to accrual or maintenance of her action
against GEICO, to first obtain a settlement or verdict against Guevara, the
insured, for a cause of action that is covered by the policy between Guevara
and GEICO.

By its terms, the nonjoinder
statute, and its mandatory condition precedent, is inapplicable to first-party
bad-faith claims; it is instead limited to cases, such as this, which involve a
third party (such as Martinez, who is not an insured under the policy) seeking
to join an insurer in the underlying action before Martinez “first obtain[s] a
settlement or verdict against a person [such as Guevara] who is an insured
under the terms of the policy. . . .” Therefore, Seville Place is
inapposite and Martinez’s reliance upon it is misplaced.3 Unlike first-party claims, premature
and unaccrued third-party claims must be evaluated in light of the legislative
mandate established by the plain language of the nonjoinder statute. That
legislative mandate precludes Martinez from maintaining any cause of action
against GEICO — indeed, precludes even the accrual of such a cause of action
— until Martinez satisfies the compulsory condition precedent of obtaining a
settlement or verdict against Guevara. This mandate would be rendered
effectively meaningless by simply abating, rather than dismissing, Martinez’s
concededly unaccrued and premature third-party bad-faith claim against GEICO.
In fact, under subsection (2) of 627.4136, Martinez is declared to have no
interest in the GEICO insurance policy until the condition precedent has been
met, and therefore does not have standing at this time to file or maintain the
third-party bad-faith claim against GEICO.

CONCLUSION

We grant the petition because, under
these circumstances, abatement (rather than dismissal) of a third-party
bad-faith claim filed in contravention of the express requirements of the
nonjoinder statute (section 627.4136, Florida Statutes (2016)) constitutes a
departure from the essential requirements of law, and results in irreparable
harm that cannot be remedied on appeal. We quash the trial court’s order
denying GEICO’s motion to dismiss the premature third-party bad-faith claim and
remand with instructions to enter an order dismissing that claim without
prejudice.

__________________

1Because we grant the petition on
this basis, we do not reach GEICO’s additional argument: that the trial court’s
order abating (rather than dismissing) the premature third-party bad-faith
action constitutes irreparable harm because it precluded GEICO from exercising
its statutory right of removal of the bad-faith action to federal court under
the diversity jurisdiction provisions of 28 U.S.C. § 1446(b). This court has
not addressed the merits of this issue, and there exists some disagreement
among the districts that have. See GEICO Gen. Ins. Co. v. Harvey,
109 So. 3d 236 (Fla. 4th DCA 2013) (holding that insurer’s loss of the
statutory right of removal to federal court constituted material injury for
which certiorari review is appropriate); Safeco Ins. Co. of Ill. v. Rader,
132 So. 3d 941 (Fla. 1st DCA 2014) (denying certiorari petition and noting that
any harm flowing from loss of statutory right of removal is not irreparable, as
it can be remedied on appeal from the final judgment).

2In Starr, the plaintiff filed
a negligence action against a fishing boat owner and its captain, and also
filed a breach of contract action against the insurer for the boat owner. The
insurer filed a motion to dismiss relying upon the nonjoinder statute, but the
trial court denied dismissal and instead severed the claim against the insurer.
We held that the trial court’s decision to sever, rather than dismiss, was not
a departure from the essential requirements of law, because plaintiff’s breach
of contract claim against the boat owner’s insurance company alleged that
plaintiff was an “omnibus insured” under the insurance policy, and thus fell
out of the proscription of the nonjoinder statute: if plaintiff’s alleged
status as an “omnibus insured” were proven, he would no longer be “a person not
an insured under the terms of the liability insurance contract.” § 627.4136,
Fla. Stat. (2016) (emphasis added).

3In like fashion, Martinez’s reliance
on Citizens Property Insurance Corp. v. San Perdido Association, Inc.,
104 So. 3d 344 (Fla. 2012) is inapplicable. San Perdido was a
first-party rather than a third-party action, and did not involve application
of the nonjoinder statute.

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