ALLSTATE INSURANCE
v.
STANLEY
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A Florida statute requiring a judgment against an insured before a third party can sue the insurer is substantive law and applies in federal diversity actions.
Defendants sought a declaratory judgment that their insurance policies covered claims against their insureds. Allstate moved to dismiss, arguing a Flo…
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MERRYDAY, District Judge.
The defendants counterclaim for a declaratory judgment that certain Allstate Insurance Company (“Allstate”) policies provide coverage for the defendants’ claims of emotional distress in underlying state court actions by the defendants against several of Allstate’s insureds (Doc. 3). Allstate moves to dismiss the counterclaim and argues that section 627.4136(1), Florida Statutes, bars the counterclaim (Doc. II).
1
The defendants oppose the motion and argue that section 627.4136(1) is procedural and thus inapplicable in a federal action founded on diversity jurisdiction (Doc. 14).
McMahan v. Toto,
256 F. 3d 1120, 1131 (11th Cir.2001), describes the inquiry undertaken by federal courts to determine whether state or federal law governs in a diversity action:
As a federal court exercising diversity ■jurisdiction, we engage in a two-step inquiry-In the first step, we determine whether the matter at hand is procedural or substantive for
Erie R.R. Co. v. Tompkins
purposes. If the matter is procedural then federal law will apply; but if the matter is substantive, then we will apply the law of the forum state.
No federal court has opined whether section 627.4136(1), Florida Statutes, is substantive or procedural. However, the Florida Supreme Court has declared section 627.4136(1) substantive in
VanBibber v. Hartford Accident and Indem. Ins. Co.,
439 So. 2d 880, 882-83 (Fla.1983) (holding that section 627.4136, which embodies the legislature’s intent “to modify the third-party beneficiary concept adopted by this Court in
Shingleton v. Bussey
[citation omitted] to provide that an injured party has no beneficial interest in a liability policy until that person has first obtained a judgment against an insured,” is “substantive.”). The fact that section 627.4136(l)’s enactment eliminated a right of action formerly held by injured parties further reinforces section 627.4136(l)’s substantive nature.
See All Underwriters v. Weisberg,
222 F. 3d 1309, 1312 (11th Cir.2000). Accordingly, the Court must apply section 627.4136(1) in this action.
*1344
Pursuant to section 627.4186(1), the defendants cannot sue Allstate for a declaratory judgment until the defendants have obtained a settlement or judgment in the underlying state court actions against Allstate’s insureds.
See, e.g., Hett v. Madison Mut. Ins. Co., Inc.,
621 So. 2d 764, 766 (Fla. 2d DCA 1993);
Tomlinson v. State Farm Fire & Cas. Co.,
579 So. 2d 211, 212 (Fla. 2d DCA 1991)(section 627.4136(1) “applies to declaratory judgment actions against insurers”);
Gregg v. Metropolitan Prop. and Liab. Ins. Co.,
595 F.Supp. 529, 531 (S.D.Fla.1984). Accordingly, Allstate’s motion to dismiss (Doc. 11) is GRANTED, and the defendants’ counterclaim (Doc. 3) is DISMISSED.
Cases With Similar Vibessemantic neighbors from the corpus
Citator
Authorities Cited
- Ara Williams VanBIBBER v. Hartford Accident & Indem. Ins. Co., 439 So. 2d 880 (Fla. 1983)
- McMAHAN v. Toto, 256 F.3d 1120 (11th Cir. 2001)
- ALL Underwriters v. Weisberg, 222 F.3d 1309 (11th Cir. 2000)
- Hett v. Madison Mut. Ins. Co., Inc., 621 So. 2d 764 (Fla. 2d DCA 1993)
- Tomlinson v. State Farm Fire & Cas. Co. & State Farm Mut. Auto. Ins. Co., 579 So. 2d 211 (Fla. 2d DCA 1991)
- Gregg v. Metro. Prop. & Liab. Ins., 595 F. Supp. 529 (S.D. Fla. 1984)