INTERNATIONAL SALES - RENTALS LEASING CO., A FLORIDA CORPORATION, AND SEABOARD PROPERTIES, INC., A FLORIDA CORPORATION, D/B/A OCEAN REEF CLUB, PETITIONERS,
v.
PEGGY ANN NEARHOOF, A MINOR, ET AL., RESPONDENTS
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The Florida Supreme Court held that uninsured motorist insurance benefits cannot be set off by a joint tortfeasor defendant against a judgment, but that an insurance carrier has subrogation rights to recover amounts it paid under uninsured motorist coverage from a settlement or judgment obtained by the insured from a joint tortfeasor.
A joint tortfeasor defendant cannot set off uninsured motorist insurance benefits against a judgment. However, an uninsured motorist carrier is entitled to subrogation rights to recover the amounts it paid the insured from any settlement or judgment obtained by the insured against a joint tortfeasor, after deducting the insured's reasonable attorney's fees and collection costs.
[1] A joint tortfeasor defendant is not entitled to a set-off equal to the amount of recovery an injured plaintiff receives from the carrier of their uninsured motorist cover…
[2] An uninsured motorist carrier's statutory subrogation rights extend to a recovery obtained by its insured from a joint tortfeasor.
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“Neither Section 768.041 nor Section 627.0851 authorizes such a set-off of insurance benefits received as result of carrying uninsured motorist coverage in favor of a joint tortfeasor.”
Establishes that statutory law does not permit joint tortfeasors to set off uninsured motorist insurance benefits against judgments.
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Join FLexlaw to unlock all legal intelligenceFollowing a three-car accident on May 14, 1968, the Nearhoofs settled their uninsured motorist claim with GEICO for $19,500 and signed a release and t…
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We consider here two petitions for writs of certiorari to review decision of the District Court of Appeal, Third District, in the consolidated cases of Nearhoof vs. International Sales-Rentals Leasing Company (Case No. 41,659) and Government Employees Insurance Company (GEICO) vs. Nearhoof (Case No. 41,654). See 251 So.2d 717.
Case No. 41,659 involves the question whether F.S. Section 768.041, F.S.A., gives a joint tortfeasor defendant a set-off equal to the amount of the recovery an injured *570plaintiff receives from the carrier of his uninsured motorist coverage.
Case No. 41,654 involves the question whether a carrier’s uninsured motorist subrogation rights provided by statute (Section 627.0851(4), F.S.1969) extend to a recovery obtained by its insured from a joint tortfeasor.
We answer the question in Case No. 41,659 in the negative and the question in Case No. 41,654 in the affirmative, as hereinafter explained.
Following a serious three-car accident on May 14, 1968, Respondents Nearhoof filed a suit against International Sales-Rentals Leasing Co., petitioner in Case No. 41,659, the owner of one of the vehicles in the collision. They also filed an uninsured motorist claim against their own carrier (Petitioner GEICO, Case No. 41,654) for injuries caused by the negligence of the uninsured driver of the third car. It was the Nearhoofs’ contention that their injuries were caused by the negligence of joint tortfeasors.
The uninsured motorist claim was settled for $19,500. The Nearhoofs signed a release and trust agreement containing the statement that:
“[W]e . . . agree to hold in trust for the benefit of the Company [GEI-CO] all rights, claims, and causes of action which [we] have or may have against the person or persons or organization legally responsible in whole or in part for the injuries and damages sustained by the injured arising from this accident.”
In reliance upon this agreement, GEICO intervened in the Nearhoofs’ action against International. The jury awarded the Nearhoofs $70,500; GEICO moved to recover approximately $19,500 from that judgment. The trial court denied GEI-CO’s motion, saying, “a carrier’s uninsured motorist subrogation rights do not extend to a recovery obtained from insured joint tortfeasors, such as the Defendants [International, et ah] in this case.” The trial court did, however, grant International a set-off of $19,500 against the $70,500 awarded the Nearhoofs.
The Nearhoofs appealed the set-off and GEICO appealed the denial of its subrogation motion. The District Court of Appeal consolidated the appeals; reversed the trial court’s granting of the set-off, and concluded that uninsured motorist coverage is equivalent to a separate contract such as hospitalization insurance so that recovery thereunder may not be set-off from a judgment against a tortfeasor. (This decision is being reviewed in No. 41,659.) The District Court affirmed, however, the trial court’s denial of GEICO’s subrogation request. (This portion of the DCA decision is being reviewed in No. 41,654.)
We agree with and adopt the view of the District Court of Appeal in Case No. 41,659. However, insofar as concerns the recovery of the Nearhoofs of $70,500 from International Sales-Rentals Leasing Company, a joint tortfeasor in the Nearhoof accident, it is our view that Government Employees Insurance Company is entitled to be subro-gated as intervenor to the extent of the amounts it paid the Nearhoofs as their uninsured motorist’s carrier. We conclude subrogation in the $70,500 recovery was intended by Section 627.0851(4), F.S.1969, then in effect, reading as follows:
“(4) In the event of payment to any person under the coverage required by this section and subject to the terms and conditions of such coverage, the insurer making such payments shall, to the extent thereof, be entitled to the proceeds of any settlement or judgment resulting from the exercise of any rights of recovery of such person against any person or organization legally responsible for the bodily injury for which such payment is made, including the proceeds recoverable from the assets of the insolvent insurer.”
*571In Sellers v. United States Fidelity & Guaranty Co., Fla. 1966, 185 So.2d 689, we construed Section 627.0851(4), saying:
“. . . Provision is made in the last paragraph (number 4) of § 627.0851 for the insurer providing said coverage and making payment thereunder to the insured, to recover to the extent of such payment from the proceeds of any settlement or judgment which the insured obtains from any person or organization legally responsible for the bodily injury.” (Text 690.)
The decision of the District Court is in jurisdictional conflict with the language of the Sellers case quoted just above. The release executed by the Near-hoofs tracks the language of F.S. Section 627.0851(4), F.S.A., and should have been honored. From the proceeds of a settlement or judgment recovered from a tort-feasor less insured’s collection costs which may include reasonable attorney’s fees, court costs, and other legitimate collection expenses, if any, the uninsured motorist coverage carrier is entitled to be subrogat-ed up to the amount it paid its insured under the uninsured motorist policy. In other words reasonable attorney’s fees and other collection costs, if any, paid by the insured plaintiff should first be deducted from the recovery and retained by insured before subrogation of the carrier from the remainder. As we have said several times, beginning with the Sellers case, uninsured motorist protection for bodily injury caused by the negligence of uninsured motorists is statutorily prescribed and the pertinent statutory provisions control to the extent they prescribe the respective rights of the insurer and insured.
We agree with the portion of the District Court’s opinion which holds that International Sales-Rentals Leasing Company is not authorized by contract or statute to set-off against the $70,500 judgment obtained by the Nearhoofs, the amounts paid them by GEICO as uninsured motorist insurance. Neither Section 768.041 nor Section 627.0851 authorizes such a set-off of insurance benefits received as result of carrying uninsured motorist coverage in favor of a joint tortfeasor. We agree with the reasoning of the District Court that general principles of law relating to the collateral source rule- precludes allowance of such set-off.
Insofar as the decision of the District Court here reviewed conflicts with our opinion, it is quashed and the cause remanded for further proceedings in accordance herewith.
It is so ordered.
ROBERTS, C. J., and CARLTON, BOYD and DEKLE, TT., concur.
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John M. Purdy and his wife v. Gulf Breeze Enters., Inc., 403 So. 2d 1325 (Fla. 1981)…re entitled to recover the full amount of their damages from tortfeasors regardless of the amount of benefits they may have received from collateral sources such [*1328] as insurance proceeds. See International Sales-Rentals Leasing Co. v. Nearhoof, 263 So. 2d 569 (Fla.1972); Tuggle v. Government Employees Insurance Co., 207 So. 2d 674 (Fla.1968) (Barns, J., dissenting). This argument assumes that common law plaintiffs were allowed to keep the full amount of money they recovered in a lawsuit, which was not th…
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Respess v. Fairley Kave Carter, 585 So. 2d 987 (Fla. 5th DCA 1991)…lowed by the trial court in order to prevent a windfall from flowing to the plaintiffs — is that a joint tortfeasor is not entitled to setoff for amounts paid by a UM carrier to the injured party. International Sales-Rentals Leasing Co. v. Nearhoof, 263 So. 2d 569 (Fla.1972). In Nearhoof, the injured parties received $19,500 from their UM carrier in settlement for their claim against one of the two tortfeasor/drivers who was uninsured. Agreeing with the UM carrier to hold in trust the proceeds from any claim…
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Schwab v. The Town OF Davie, 492 So. 2d 708 (Fla. 4th DCA 1986)…ce of substantial assistance to the insured by the insurer asserting a right to subrogation, such fees and costs are appropriately deducted before the fund or claim is paid over to the insurer. See, e.g., Int’l Sales-Rentals Leasing Co. v. Nearhoof, 263 So. 2d 569 (Fla.1972); Gov’t Employees Ins. Co. v. Graff, 327 So. 2d 88 (Fla. 1st DCA 1976); Forsyth v. Southern Bell Telephone & Telegraph Co., 162 So. 2d 916 (Fla. 1st DCA 1964). But the record does not contain a ruling on appellants’ claim in this regard fr…
Previewing 3 of 20 citing cases — full citator treatment, depth of discussion, and citing context are member features.
Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Sellers v. United States Fid. & Guar. Co., 185 So. 2d 689 (Fla. 1966)
- Nearhoof v. Int'l Sales-Rentals Leasing Co., 251 So. 2d 717 (Fla. 3d DCA 1971)