POST HOUSES, INC., A FOREIGN CORPORATION AUTHORIZED TO DO BUSINESS IN THE STATE OF FLORIDA, APPELLANT/CROSS-APPELLEE,
v.
FIREMAN'S FUND INSURANCE COMPANY, A FOREIGN CORPORATION AUTHORIZED TO DO BUSINESS IN THE STATE OF FLORIDA, APPELLEE/CROSS-APPELLANT
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Post Houses, Inc. appealed a summary judgment requiring it to indemnify Fireman's Fund Insurance Company for a $75,000 settlement paid to an injured customer, while Fireman's Fund cross-appealed the denial of attorney fees. The court affirmed both the indemnity judgment and the denial of attorney fees, holding that an indemnitee's voluntary settlement after proper notice to the indemnitor is binding on the indemnitor.
Post Houses must indemnify Fireman's Fund for the settlement amount plus prejudgment interest because Post Houses had notice and a reasonable opportunity to investigate and defend the claim but failed to do so. However, Fireman's Fund is not entitled to recover attorney fees incurred in establishing the right to indemnification, as such fees are distinguishable from defense costs incurred in defending the underlying claim.
[1] A voluntary payment does not negate the right to indemnity when the payer is confronted with an obligation that cannot be legally resisted and has a reasonable opportunit…
[2] An indemnitor who has notice of a claim against its indemnitee and an opportunity to defend is bound by a settlement entered into by the indemnitee, absent fraud or collu…
Previewing 2 of 5 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“the fact of voluntary payment does not negative the right to indemnity, since a person confronted with an obligation that he cannot legally resist is not obligated to wait to be sued and to lose a reasonable opportunity for compromise”
Establishes that Fireman's Fund's voluntary settlement does not defeat its indemnity rights against Post Houses
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Join FLexlaw to unlock all legal intelligencePost Houses subleased a restaurant area in a Tallahassee bus terminal and agreed to indemnify the sublessor for injuries occurring there. When Annie M…
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SHIVERS, Judge.
In these consolidated appeals, Post Houses, Inc., appeals summary judgment granting Fireman’s Fund Insurance Company (Fireman’s Fund) indemnity against appellant for a settlement the insurance company made. Fireman’s Fund appeals the denial of attorney fees incurred by it in establishing the right of indemnity. We affirm both.
Post Houses, Inc., subleased a restaurant area in the Tallahassee Greyhound Bus Terminal. In the sublease agreement, Post Houses agreed to indemnify the sublessor for damages arising out of injuries occurring in the restaurant area. The sublessor was insured by Fireman’s Fund.
After Annie Mae Kirkland slipped and fell in the restaurant area of the bus terminal, Fireman’s Fund wrote Post Houses, advising them of the incident and stating that should a claim be made, that Fireman’s Fund would look to Post Houses for indemnity. Ms. Kirkland's attorney demanded that Fireman’s Fund compensate Ms. Kirkland for her fall. Fireman’s Fund received no response from Post Houses. Over seven months after its letter notifying Post Houses, Fireman’s Fund settled with Ms. Kirkland for $75,000. Post Houses refused to reimburse Fireman’s Fund which then instituted this action for indemnity.
We note initially that the fact of voluntary payment does not negative the right to indemnity, since a person confronted with an obligation that he cannot legally resist is not obligated to wait to be sued and to lose a reasonable opportunity for compromise. 41 Am.Jur.2d, Indemnity, § 33, p. 723. We conclude Post Houses had notice and a reasonable opportunity to investigate and defend this claim but failed to do so.
In MacArthur v. Gaines, 286 So. 2d 608, 610 (Fla. 3d DCA 1973), that court held:
It is well established that where an in-demnitor has notice of suit against his indemnitee, and is afforded an opportunity to appear and defend, a judgment therein rendered against the indemnitee, if without fraud or collusion, is conclusive against the indemnitor as to all material questions therein determined.
Here, the indemnitor, Post Houses, was on notice of the claim well in advance of the settlement. The rule espoused in MacArthur applies in settlement situations as well. Atlantic Coast Development Corporation v. Napoleon Steel Contractors, Inc., 385 So. 2d 676 (Fla. 3d DCA 1980). Post Houses is, thus, required to indemnify Fireman’s Fund for the amount of the settlement and is entitled to prejudgment interest on the amount of the indemnification.
The trial court correctly denied Fireman’s Fund’s request for attorney fees in establishing its right of indemnity.
This case fits the general rule that although attorney fees incurred in defense of claim indemnified against are part of the damages and are allowable, attorney fees incurred in establishing the right to indemnification are not allowed. See American and Foreign Insurance Co. v. Avis Rent-A-Car System, Inc., 401 So. 2d 855 (Fla. 1st DCA 1981). We note, however, conflict with the decision in Brown v. Financial Indemnity Company, 366 So. 2d 1273 (Fla. 4th DCA), cert. denied, 378 So. 2d 342 (Fla.1979), and certify the conflict pursuant to Fla.R.App.P. 9.030(a)(2)(A)(iv).
AFFIRMED.
SMITH and WIGGINTON, JJ., concur.
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Auto-Owners Ins. Co. v. ST. Paul Fire & Marine Ins. Co. & Ray E. Ulmer, Jr., 547 So. 2d 148 (Fla. 2d DCA 1989)…ons for rehearing, Florida’s final stand on the issue of vicarious liability is irrelevant to the indemnity action at hand. Since Auto-Owners is entitled to recover for any reasonable settlement it made, Post Houses, Inc. v. Fireman’s Fund Ins. Co., 469 So. 2d 863 (Fla. 1st DCA), review denied, 478 So. 2d 54 (1985), a factual issue central to Auto-Owners’ right to indemnity is whether its settlement was reasonable. The settlement’s reasonableness will be determined in part by the possibility of exposure in li…
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Cont'l Cas. Co. v. Godur, 476 So. 2d 242 (Fla. 3d DCA 1985)…ce of any claim of fraud or collusion — it is established Florida law that she is conclusively bound by the terms of the subsequent settlement agreement to reimburse Continental for the amounts expended. Post Houses, Inc. v. Fireman’s Fund Ins. Co., 469 So. 2d 863 (Fla. 1st DCA 1985); Atlantic Coast Development Corp. v. Napoleon Steel Contractors, Inc., 385 So. 2d 676, 681 (Fla. 3d DCA 1980). For these reasons, the judgment is reversed and the cause remanded for entry of judgment for Continental against Godu…
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Bagley v. The W. Cas. & Sur. Co., 505 So. 2d 678 (Fla. 1st DCA 1987)…ortunity to defend under the cited legal test. Since disputed facts remain open for resolution at trial, summary judgment was improper. Holl v. Talcott, 191 So. 2d 40 (Fla.1966). Appellee relies on Post Houses, Inc. v. Fireman’s Fund Insurance Co., 469 So. 2d 863 (Fla. 1st DCA), rev. denied, 478 So. 2d 54 (Fla.1985), in which the court held that where an indemnitor has notice of a suit against his indemnitee and is afforded an opportunity to appear and defend, a judgment against the indemnitee is conclusive…
Previewing 3 of 10 citing cases — full citator treatment, depth of discussion, and citing context are member features.
Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Atl. Coast Dev. Corp. v. Napoleon Steel Contractors, Inc., 385 So. 2d 676 (Fla. 3d DCA 1980)
- Am. & Foreign Ins. Co. v. AVIS Rent-A-Car Sys., Inc., 401 So. 2d 855 (Fla. 1st DCA 1981)
- MacARTHUR v. Gaines, 286 So. 2d 608 (Fla. 3d DCA 1973)
- Brown v. Fin. Indem. Co., 366 So. 2d 1273 (Fla. 4th DCA 1979)