Metropolitan Casualty Insurance Company, Petitioner, vs. Robert Tepper, et al., Respondents (2009)

Supreme Court of Florida





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No. SC07-2428


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METROPOLITAN CASUALTY INSURANCE COMPANY,


Petitioner,



vs.




ROBERT TEPPER, et al.,


Respondents.




[January 30, 2009]





WELLS, J.



Metropolitan Casualty Insurance seeks review of the decision of the Fifth District Court of Appeal in Metropolitan Casualty Insurance Co. v. Tepper, 969 So. 2d 403 (Fla. 5th DCA 2007), on the ground that it expressly and directly conflicts with a decision of the Second District Court of Appeal in Dominion of Canada v. State Farm Fire and Casualty Co., 754 So. 2d 852 (Fla. 2d DCA 2000), on a question of law. We have jurisdiction, see art. V, § 3(b)(3), Fla. Const., and we approve the Fifth District's decision in Metropolitan.

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This case involves interpretation of section 627.727, Florida Statutes (2004), and the timing of an underinsured motorist (UM) insurer's subrogation lawsuit.


The Fifth District described the facts underlying this case as follows:


On May 13, 2004, [Robert] Tepper was riding his bicycle when he was hit by a vehicle owned and operated by [Angel] Lucas. [Tepper] subsequently filed a two-count complaint against Lucas and [against Tepper's underinsured motorist insurer,] Metropolitan. In Count I, Tepper asserted a negligence claim against Lucas. In Count II, Tepper sought to recover uninsured/underinsured (UM) benefits from Metropolitan. The complaint alleged that Tepper had suffered serious and permanent injuries as the result of Lucas'[s] negligence. Lucas and Metropolitan each filed an answer and affirmative defenses.


Lucas'[s] insurance carrier tendered its policy limits of $25,000 to Tepper as full settlement of Tepper's claim against Lucas. [Tepper's insurer,] Metropolitan[,] did not grant Tepper permission to accept the settlement offer. Instead, Metropolitan paid Tepper $25,000 and preserved its subrogation rights against Lucas [as authorized by section 627.727(6), Florida Statutes]. . . . Tepper accepted the funds tendered by Metropolitan. Lucas subsequently filed a motion to dismiss the count of the complaint directed to Lucas. In her motion, Lucas argued that Tepper had "constructively or actually assigned his rights as against Lucas to Metropolitan and it is Metropolitan that has the right to sue Lucas and not [Tepper]."


Over Metropolitan's objection, the trial court granted Lucas'[s] motion to dismiss. In its order, the trial court stated that if Lucas was to be a part of the proceedings, "it would have to be based upon a third party action brought by Metropolitan." The trial court denied Metropolitan's subsequent motion for rehearing and this appeal ensued. Tepper has not participated in the appellate proceedings and apparently did not oppose Lucas'[s] motion to dismiss.


Metropolitan, 969 So. 2d at 404-05 (footnote omitted).



After the trial court granted Lucas's motion to dismiss Lucas from the case, Metropolitan appealed to the Fifth District. Id. Metropolitan argued that the trial







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court's order dismissing Lucas and stating that "if Lucas is to be a part of these proceedings based upon the present status of the case, it would have to be based upon a third party action brought by Metropolitan" was contradictory to the statutory language in section 627.727(6)(b), Florida Statutes (2004), which provides:


If an underinsured motorist insurer chooses to preserve its subrogation rights by refusing permission to settle, the underinsured motorist insurer must, within 30 days after receipt of the notice of the proposed settlement, pay to the injured party the amount of the written offer from the underinsured motorist's liability insurer. Thereafter, upon final resolution of the underinsured motorist claim, the underinsured motorist insurer is entitled to seek subrogation against the underinsured motorist and the liability insurer for the amounts paid to the injured party.


(Emphasis added.) Metropolitan argued that according to the emphasized language, its subrogation claim necessarily arises after the conclusion of Tepper's UM claim against Metropolitan, and thus the trial court was in error in concluding that any further participation by Lucas would be as a third-party defendant.


Metropolitan contended that since Lucas could not be a third-party defendant, it had to follow that Lucas should continue to be a defendant in the action brought by Tepper so that the issues of liability and damages could be determined.


The Fifth District rejected Metropolitan's argument and held that the trial court had not abused its discretion. In reaching this conclusion, the Fifth District







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addressed the trial court's ruling that Metropolitan could bring a third-party action against Lucas. The Fifth District stated:


We do conclude, however, that the trial court erred in finding that Metropolitan could bring a third-party action against Lucas. The last sentence of section 627.727(6)(b) specifically provides that a UM insurer is entitled to seek subrogation against the alleged tortfeasor (and its liability insurer) "upon final resolution of the underinsured motorist claim." Based on this clear and unambiguous language, we conclude that Metropolitan may not file a third-party action against Lucas, but, instead, must wait to bring a separate action against Lucas after final resolution of Tepper's UM claim.[n.4]



[N.4] We recognize that our decision requiring a separate action does not promote judicial efficiency because, absent settlement, the trial court may well be required to have two trials. We also agree that our decision increases the likelihood of inconsistent judgments. However, where legislative language is clear and unambiguous, we are not free to disregard such language. See Macola v. Gov't Employees Ins. Co., 953 So. 2d 451, 457 (Fla. 2006); Wagner v. Orange County, 960 So. 2d 785, 789 (Fla. 5th DCA 2007).


Id. at 407. Thus, the Fifth District held: (1) that it was not error for the trial court to dismiss Lucas from the lawsuit where Tepper had apparently abandoned his claim against Lucas; and (2) Metropolitan could not bring a subrogation lawsuit against Lucas until after "final resolution of the uninsured motorist claim."


Metropolitan then petitioned this Court for review based on alleged express and direct conflict with the Second District's decision in Dominion of Canada. In Dominion of Canada, the Second District considered a case where Sally Ruth Johnson, the tortfeasor, drove her car into Albert and Lucille Mitchel. The







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tortfeasor's insurance carrier agreed to tender its $20,000 policy limits to the injured parties, the Mitchels, but the Mitchels' UM carrier opted instead to pay the Mitchels the $20,000 to preserve its subrogation rights under section 627.727.


The UM carrier, Dominion, later sought reimbursement of the $20,000 from the tortfeasor and her liability insurer. The tortfeasor and her liability insurer responded by arguing that the statute of limitations had run on Dominion's claim.


Dominion countered that the statute of limitations had not expired because it had not started to run until "final resolution" of the UM claim between Dominion and the injured parties. To support its argument, Dominion cited section




627.727(6)(b)'s statement that "[t]hereafter, upon final resolution of the underinsured motorist claim, the underinsured motorist insurer is entitled to seek subrogation against the underinsured motorist and the liability insurer for the amounts paid to the injured party." § 627.727(6)(b), Fla. Stat. (2004) (emphasis added). Dominion argued that because it was only "entitled" to bring a subrogation claim against the tortfeasor "upon final resolution of the underinsured motorist claim," the statute of limitations on that subrogation claim could not have begun to run until then.


The Second District rejected Dominion's argument. The Second District explained its interpretation of section 627.727(6)(b), stating:


In our view, the last sentence of subsection (6)(b) is a permissive provision, reflecting the legislature's intention that after an







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uninsured motorist insurer has paid its insured the amount of the proposed settlement, it is entitled to "seek subrogation." The sentence contemplates that the uninsured motorist insurer would do so after the claimant's uninsured motorist claim is finally resolved. But it does not impose the latter as a condition precedent to the former, nor employ language to the effect that no action for subrogation may be filed until then. Cf. § 766.104(1), Fla. Stat. (1997); §§ 766.106(2) and


(3), Fla. Stat. (1997); § 768.28(6)(a), Fla. Stat. (1997).