GAIL RUBIN KAPLAN, APPELLANT,
v.
PHOENIX OF HARTFORD INSURANCE COMPANY, APPELLEE
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An insurance company sought declaratory relief after its insured settled a claim with another tortfeasor without the insurer's written consent, allegedly breaching the uninsured motorist coverage clause. The court held that such a breach raises a rebuttable presumption of prejudice rather than automatic forfeiture, requiring fact-finding on actual prejudice before summary judgment is appropriate.
A breach of a consent clause in uninsured motorist coverage raises a rebuttable presumption of prejudice to the insurer rather than automatic forfeiture. The insured may defend by establishing lack of actual prejudice, but summary judgment is inappropriate when material factual issues remain regarding whether the insurer was in fact prejudiced by the unauthorized settlement.
“breach of a similar clause was construed to raise a presumption of prejudice to the insurer rather than an automatic forfeiture”
Establishes that unauthorized settlements trigger a rebuttable presumption, not automatic policy forfeiture
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Join FLexlaw to unlock all legal intelligenceGail Kaplan was a passenger in a car insured by Phoenix of Hartford when it was involved in a three-car accident. One other driver was insured, and on…
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The pleadings in the record on appeal allege that Gail Kaplan was a passenger in a car insured by Phoenix of Hartford when it was involved in an accident with two other cars. The driver of one of the other cars was insured, while the driver of the remaining car was not insured.
Kaplan settled her claim with the insured driver and then sought to recover on her claim against the uninsured motorist from Phoenix of Hartford under her host’s policy.
Phoenix of Hartford instituted the present action, seeking declaratory relief as to its rights and liabilities under the policy issued to Kaplan’s host.
Phoenix alleged that Kaplan’s settlement with the insured motorist without its knowledge and consent breached the following condition in the uninsured motorist coverage:
“EXCLUSIONS. This policy does not apply under Part IV: * * *
(b) to bodily injury to an insured with respect to which such insured, his legal representative or any person entitled to payment under this coverage shall, without written consent of the company, make any settlement with any person or organization who may be legally liable therefor;”
Kaplan, admitting the settlement with the insured tortfeasor, raised an affirmative defense which the parties have construed [and we do not disagree] as lack of prejudice to the insurer. The trial court then granted a final summary decree in favor of the insurer and this appeal follows.
In Bass v. Aetna Casualty & Surety Company of Hartford, Conn., Fla.App. 1967, 199 So.2d 790, breach of a similar clause was construed to raise a presumption of prejudice to the insurer rather than an automatic forfeiture. The court held that recovery under the policy should not be barred if the insured asserted lack of prejudice and was able to carry the burden of showing affirmatively that the breach did not in fact prejudice the insurer. See also McInnis v. State Farm Mutual Ins. Co., Fla.App.1968, 208 So.2d 481.
We do not feel that this type of consent clause should be construed so as to unduly complicate and discourage settlements where no prejudice in fact results to the insurer. See 7 Appleman, Insurance § 4331, pp. 211-12; Note, 32 Mo.L.Rev. 159, 163-4 (1967); Note, 40 N.C.L.Rev. 138 (1961).
*895At the time the summary final decree was entered, there remained an unresolved material issue of fact as to whether the insurer had in fact been prejudiced by Kaplan’s settlement with the insured tort-feasor. The rebuttable presumption of prejudice in favor of the insurer was not sufficient to resolve this issue conclusively on a motion for a summary final decree. See Greyhound Corporation v. Ford, Fla. App.1963, 157 So.2d 427; Locke v. Stuart, Fla.App.1959, 113 So.2d 402; and Leonetti v. Boone, Fla.1954, 74 So.2d 551.
We expressly refrain from venturing any opinion at this time as to what constitutes lack of prejudice to the insurer in this cause.
Accordingly, this matter is reversed and remanded for further proceedings consistent herewith.
It is so ordered.
Cases With Similar Vibessemantic neighbors from the corpus
Citator
Authorities Cited
- Leonetti v. Boone, 74 So. 2d 551 (Fla. 1954)
- Locke v. Stuart, 113 So. 2d 402 (Fla. 1st DCA 1959)
- The Greyhound Corp. v. Sudella Ford, 157 So. 2d 427 (Fla. 2d DCA 1963)
- Bass v. AETNA Cas. & Sur. Co. OF Hartford, 199 So. 2d 790 (Fla. 4th DCA 1967)
- McINNIS v. State Farm Mut. Auto. Ins. Co., 208 So. 2d 481 (Fla. 4th DCA 1968)