ARISTONICO INFANTE, ETC., ET AL., APPELLANTS,
v.
PREFERRED RISK MUTUAL INSURANCE COMPANY, APPELLEE
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Florida appellate court reversed an injunction against arbitration, holding that an insurer who denies uninsured motorist coverage cannot later rely on the insured's settlement with a tortfeasor as a basis to avoid that coverage. The court found that by denying coverage that actually existed, the insurer breached the contract and forfeited its right to enforce settlement restrictions.
An insurer that has refused to honor an uninsured motorist coverage claim prior to an insured's settlement with a tortfeasor cannot rely upon that settlement as a basis to deny coverage. Where an insurer denies coverage that actually exists, it breaches the contract and cannot enforce contractual provisions prohibiting settlement to relieve itself from liability.
[1] An insurer that denies coverage under uninsured motorist benefits prior to an insured's settlement with a tortfeasor cannot subsequently rely on that settlement to deny c…
[2] When an insurer breaches its contract by denying coverage that actually exists, it cannot enforce a policy provision prohibiting the insured from settling with a responsi…
Previewing 2 of 4 headnotes on this case. FLexlaw’s editorially structured points of law — every proposition, pinpointed — are reserved for members.
Join FLexlaw to unlock all legal intelligence“An automobile liability insurer, which has refused to honor a claim under uninsured motorist benefits prior to an insured's settlement with a tortfeasor, may not rely upon a settlement thereafter as a basis to deny coverage.”
Establishes the core holding that an insurer cannot deny coverage first and then use settlement restrictions to avoid liability.
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Join FLexlaw to unlock all legal intelligenceOn June 8, 1975, Aristonico Infante and his three children were injured in an automobile accident caused by Aracelia Rodriguez Alba, insured by Lumber…
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PER CURIAM.
Aristonico Infante, etc., et al., appellants and insureds, appeal a final judgment enjoining them from proceeding in arbitration against their insurer under the uninsured motorist provisions of their policies.
On June 8,1975 the appellants, Aristonico Infante and his three children, along with several other individuals, sustained personal injuries as a result of an automobile accident attributed to the negligence of Arace-lia Rodriguez Alba who was insured by Lumbermen’s Mutual Casualty Insurance Company. This policy had liability limits of $10,000/$20,000. The appellee, Preferred Risk Mutual Insurance Company, had issued to Infante multiple liability policies covering several automobiles. When it became obvious that the amount of damages sustained by all claimants would be in excess of the liability limits of the Lumbermen’s policy, the Infantes filed a claim with Preferred Risk under the uninsured motorist provisions1 of their policies which upon being “stacked” exceeded the liability limits provided by the Lumbermen’s. Preferred Risk refused to honor the claim on the ground that the policies could not be stacked for underinsured coverage. The In-fantes proceeded to negotiate with Lumbermen’s and subsequently executed a settlement and releases in favor of Lumbermen’s and its insured, Aracelia Rodriguez Alba. Thereafter, the Infantes made a demand upon Preferred Risk for arbitration under the uninsured motorist provisions of their policies. Upon learning of the above settlement agreement, Preferred Risk filed the instant suit seeking to enjoin arbitration. The trial court entered a judgment enjoining arbitration upon the following findings:
“1. That there has not been a denial of coverage under the Uninsured Motorist provisions of the policy.
2. That Defendant has not complied with the provisions of the policy and has entered into a settlement with and has executed releases in favor of a person who may be liable for the insured’s injuries in violation of the terms of the policy, including the insurance carrier’s right of subrogation.
3. That the Plaintiff did not join in and was not a part of the settlement negotiations with the third party which resulted in the releases.”
The Infantes appeal therefrom. We reverse.
An automobile liability insurer, which has refused to honor a claim under uninsured motorist benefits prior to an insured’s settlement with a tortfeasor, may not rely upon a settlement thereafter as a basis to deny coverage. In other words where an insurer has denied coverage which actually exists, the insurer has breached the contract and therefore cannot be allowed to rely upon a contractual provision prohibiting the insured from settlement of the claim with a responsible party in order to relieve itself from liability. See Stephens v. State Farm Mutual Automobile Insurance Co., 508 F. 2d 1363 (5th Cir. 1975).
There is no question in the case at bar that the Infantes were entitled to uninsured motorist coverage. See Tucker v. Government Employees Insurance Co., 238 So. 2d 238 (Fla.1974); Government Employ ees Insurance Co. v. Farmer, 330 So. 2d 236 (Fla. 1st DCA 1976); State Farm Mutual Automobile Ins. Co. v. White, 330 So. 2d 858 (Fla. 2d DCA 1976).
Having in essence denied uninsured motorist coverage, it cannot rely upon the In-fantes’ settlement with Lumbermen’s to avoid coverage. Cf. Government Employees Insurance Co. v. Whitaker, 218 So. 2d 198 (Fla. 1st DCA 1969); Reserve Insurance Company v. Pollock, 270 So. 2d 469 (Fla. 3d DCA 1972); and Liberty Mutual Insurance Company v. Flitman, 234 So. 2d 390 (Fla. 3d DCA 1970).
Accordingly, the judgment enjoining arbitration is reversed.
Reversed.
. which includes underinsured motorist protection
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Cited By (13 total)
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First Am. Title Ins. Co. v. Nat'l Union Fire Ins. Co. of Pittsburgh, 695 So. 2d 475 (Fla. 3d DCA 1997)…d.2d 481 (1988); Shook v. Allstate Ins. Co., 498 So. 2d 498 (Fla. 4th DCA 1986), rev. denied, 508 So. 2d 13 (Fla.1987); Steil v. Florida Physicians’ Ins. Reciprocal, 448 So. 2d 589 (Fla. 2d DCA 1984); Infante, Etc. v. Preferred Risk Mutual Ins. Co., 364 So. 2d 874 (Fla. 3d DCA 1978); and Pollock v. Reserve Ins. Co., 258 So. 2d 328 (Fla. 3d DCA 1972), the appellants contend that they were relieved of their obligation of cooperation under the policy provisions when National initially denied coverage for the thr…
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Gallagher v. Dupont, 918 So. 2d 342 (Fla. 5th DCA 2005)…he contract and therefore cannot be allowed to rely upon a contractual provision prohibiting the insured from settlement of the [*348] claim with a responsible party in order to relieve itself from liability. Infante v. Preferred Risk Mut. Ins. Co., 364 So. 2d 874, 875 (Fla. 3d DCA 1978) (stating that “[a]n automobile liability insurer, which has refused to honor a claim under uninsured motorist benefits prior to an insured’s settlement with a tortfeasor, may not rely upon a settlement thereafter as a basis t…
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Wegener v. Int'l Bankers Ins. Co., 494 So. 2d 259 (Fla. 3d DCA 1986)…. Co., 46 Fla. 283, 35 So. 228 (1903); Tillis v. Liverpool & London & Globe Ins. Co., 46 Fla. 268, 35 So. 171 (1903); Paz v. Allstate Insurance Co., 478 So. 2d 849 (Fla. 3d DCA 1985); Aristonico Infante v. Preferred [*260] Risk Mutual Insurance Co., 364 So. 2d 874 (Fla. 3d DCA 1978); Cunningham v. Austin Ford, Inc., 189 So. 2d 661 (Fla. 3d DCA 1966), cert. dismissed, 198 So. 2d 829 (Fla.1967); American Fidelity Fire Insurance Co. v. Johnson, 177 So. 2d 679 (Fla. 1st DCA 1965), cert. denied, 183 So. 2d 835 (Fl…
Previewing 3 of 13 citing cases — full citator treatment, depth of discussion, and citing context are member features.
Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Gov't Emps. Ins. Co. v. Farmer, 330 So. 2d 236 (Fla. 1st DCA 1976)
- State Farm Mut. Auto. Ins. Co. v. Newton F. White, 330 So. 2d 858 (Fla. 2d DCA 1976)
- Reserve Ins. Co. v. Pollock, 270 So. 2d 469 (Fla. 3d DCA 1972)
- Gov't Emps. Ins. Co. v. Whitaker, 218 So. 2d 198 (Fla. 1st DCA 1969)
- Liberty Mut. Ins. Co. v. Flitman, 234 So. 2d 390 (Fla. 3d DCA 1970)
- Stephens v. State Farm Mut. Auto. Ins. Co., 508 F.2d 1363 (5th Cir. 1975)
- Kaplan v. Sturm, 234 So. 2d 390 (Fla. 4th DCA 1970)