AMERICAN CASUALTY COMPANY OF READING, PENNSYLVANIA, APPELLANT,
v.
JULES P. BLOCH, INDIVIDUALLY, AND CO-PARTNER OF JULES BLOCH & SONS, A PARTNERSHIP, AND ESTHER BLOCH, HIS WIFE, ET AL., APPELLEES
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American Casualty Company appealed a summary judgment ruling in favor of Esther Bloch, who sought protection under Florida's constitutional exemption for wives' property. The court reversed, holding that Esther's indemnity agreement was not a promise to pay her husband's debt but rather a separate contract to indemnify the surety against third-party losses.
Esther Bloch's obligation was an indemnity contract, not a promise to pay her husband's debt. The agreement obligated her to indemnify American Casualty Company against losses resulting from the partnership's default to third parties, not from the husband's failure to pay obligations owed to the surety itself. Therefore, the constitutional exemption did not apply.
“Her agreement was to indemnify the American Casualty Company against loss sustained as a result of the partnership defaulting in its obligations to other parties. Therefore, her undertaking was not a promise to pay the debt of her husband.”
Establishes the critical distinction that the indemnity agreement protected the surety against third-party losses, not the husband's personal debts.
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The appellant, American Casualty Company of Reading, Pennsylvania, became surety for Jules Bloch & Sons, a partnership, on certain Payment and Performance bonds relating to construction undertaken by the latter. The partnership and the members thereof and Esther Bloch, the wife of Jules Bloch one of the partners, entered into an agreement indemnifying American Casualty Company. Losses were occasioned due to defaults of the partnership under construction contracts through failure to pay certain obligations to subcontractors and others.
Appellant sued Esther Bloch and the others obligated on the indemnity agreement and moved for summary judgment with a supporting affidavit establishing its loss. The defendant Esther Bloch also moved for summary judgment, admitting participation in the indemnity agreement but contending exemption under the Florida constitution, Article XI, section 1, F.S.A., with a supporting affidavit in which she contended her participation in the agreement was a promise to pay the debt of her husband, and that it had not been executed with the formality required to make it effective. The trial court denied the plaintiffs’ motion, and granted summary judgment in favor of the defendant Esther Bloch. In so holding the trial judge was in error, and we reverse.
Esther Bloch’s obligation was not one to indemnify the American Casualty Company for loss it might sustain on such bonds because of a failure of her husband to pay an obligation owed to the plaintiff or even for failure of the partnership to pay a debt owed to the American Casualty Company. Her agreement was to indemnify the American Casualty Company against loss sustained as a result of the partnership defaulting in its obligations to other parties. Therefore, her undertaking was not a promise to pay the debt of her husband. See United States v. American National Bank of Jacksonville, 5 Cir.1958, 255 *581F.2d 504, 508. The appellant has directed our attention to the essential distinction between an indemnity contract and a contract of guaranty which is that “the promisor in an indemnity contract undertakes to protect the promisee against loss or damage through a liability on the part of latter to a third person, while the undertaking of a guarantor or surety is to protect the promisee against loss or damage through the failure of a third person to carry out his obligation to the promisee.” Royal Indemnity Co. v. Knott, 101 Fla. 1495, 136 So. 474, opinion on rehearing at 479; State ex rel. Travelers’ Indemnity Co. v. Knott, 114 Fla. 820, 153 So. 304, 307, 155 So. 115.
For the reasons stated the judgment appealed from is reversed, and the cause is remanded for further proceedings not inconsistent herewith.
Reversed and remanded.
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Kochan v. Am. Fire & Cas. Co., 200 So. 2d 213 (Fla. 2d DCA 1967)…g that an indemnity agreement running to a third party insurer is not subject to the constitutional provision protecting a wife’s separate property from liability for her husband’s debts. American Casualty Co. of Reading, Pa. v. Block, Fla.App.1965, 176 So. 2d 579. The facts in Block are essentially the same as those in the instant case, the only difference being that in Block the husband was a member of a partnership rather than a sole proprietor as here. Iris’ assertion that the [*217] decision in Block was…
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Key Custom Homes, Inc. v. Mid-Continent Cas. Co., 450 F. Supp. 2d 1311 (M.D. Fla. 2006)…he insured from losses or damages arising from the insured’s liability to a third party. See Southeast Farms, Inc. v. Auto-Owners Ins. Co., 714 So.2d 509, 512, n. 4 (Fla.App. 5th Dist.Ct.1998); American Cas. Co. of Reading, Pa. v. Bloch, 176 So.2d 579 (Fla.App.3d Dist.Ct. 1965). General liability insurance “is for tort liability for physical damages to others and not for contractual liability of the insured for economic loss.” Harris Specialty Chemicals, Inc. v. U.S. Fire Ins. Co., Case No.…
Authorities Cited
- Royal Indem. Co. v. Knott, 136 So. 474 (Fla. 1931)
- United States v. Am. Nat'l Bank OF Jacksonville & Title & Tr. Co. of Fla., 255 F.2d 504 (5th Cir. 1958)