Estate of Arroyo v. Infinity Indemnity Insurance Co.
2017 Fla. App. LEXIS 456
| Fla. Dist. Ct. App. | 2017Background
- In 2009 a car accident killed decedent Jorge Arroyo and severely injured Delia Reyes; Arroyo’s parents became personal representatives of his probate estate in Jan. 2011.
- Reyes sued the Estate in circuit court in Feb. 2011 for negligence but did not file a written claim in probate; the Estate tendered defense to its insurer Infinity, which declined to defend.
- In Jan. 2018 the Estate entered a Coblentz agreement with Reyes: consent judgment entered, Reyes agreed not to execute against the Estate, and the Estate assigned its rights against Infinity to Reyes.
- Reyes sued Infinity in circuit court for bad faith, alleging Infinity wrongfully refused to defend; Infinity moved for summary judgment asserting probate nonclaim/time-bar defenses (§§ 733.702, 733.710) and that the consent judgment could not expose the Estate to an excess judgment.
- Infinity also moved in probate to intervene and asked the probate court to determine whether the personal representatives had authority to enter the Coblentz agreement; the probate court granted intervention and invalidated the settlement as beyond the representatives’ authority due to the probate time bars.
- The appellate court reversed: it held Infinity’s asserted interest was not then at issue in the dormant probate proceeding (so intervention was improper), and even if intervention were allowed Infinity was barred from relitigating defenses it could have raised when it declined to defend; the circuit court’s summary judgment for Infinity on bad-faith was likewise erroneous.
Issues
| Issue | Plaintiff's Argument (Reyes) | Defendant's Argument (Infinity) | Held |
|---|---|---|---|
| Was Infinity entitled to intervene in the non-adversary probate proceedings? | Intervention was improper because Infinity’s interest was not then at issue and probate rules limit use of civil intervention rules. | Infinity claimed an interest affected by the Coblentz settlement and sought to protect its rights. | Reversed: intervention improper—probate rule framework and Rule 1.230 did not authorize injecting a new issue into dormant probate proceedings. |
| Could the probate court adjudicate whether personal representatives had authority to enter the Coblentz agreement? | The settlement and consent judgment were valid between parties and assigned insurer claims to Reyes. | The Estate lacked authority because Reyes failed to file a probate claim within statutory periods (§§ 733.702/733.710). | Reversed: probate court erred—decision relied on defenses Infinity was barred from raising after refusing to defend. |
| Could Infinity assert probate nonclaim/time-bar defenses in the bad-faith enforcement action after it declined to defend? | The insurer is precluded from relitigating insured’s liability after wrongfully declining defense; the Coblentz consent judgment conclusively establishes liability against the insurer if coverage and good faith are shown. | May and probate statutes mean untimely claims are jurisdictionally barred against an estate and preclude recovery above policy limits, so bad-faith fails. | Reversed: insurer barred from raising defenses it could have asserted in the underlying suit; consent judgment binding for enforcement against insurer (subject to coverage/good-faith elements). |
| Was summary judgment for Infinity on Reyes’s bad-faith claim proper? | Bad-faith claim survives because the consent judgment (from Coblentz) establishes insured’s liability and insurer cannot relitigate defenses it waived by refusing to defend. | Summary judgment appropriate because the consent judgment cannot expose the Estate to an excess judgment due to probate time bars, so no bad-faith claim. | Reversed: circuit court erred by granting summary judgment based on barred probate-code defenses. |
Key Cases Cited
- Coblentz v. American Surety Co. of New York, 416 F.2d 1059 (5th Cir. 1969) (Coblentz agreements bind insurer who had notice and refused to defend; judgment conclusive absent fraud/collusion)
- May v. Illinois Nat’l Ins. Co., 771 So.2d 1143 (Fla. 2000) (distinguishes probate nonclaim and limitation statutes; §§ 733.702 and 733.710 apply within probate proceedings)
- Pezzi v. Brown, 697 So.2d 883 (Fla. 4th DCA 1997) (probate nonclaim statute limits recovery from estate assets but does not bar recovery from decedent’s liability insurer)
- Gallagher v. Dupont, 918 So.2d 342 (Fla. 5th DCA 2005) (insurer that declines defense generally cannot relitigate insured’s liability later)
- Mid-Continent Cas. Co. v. Royal Crane, LLC, 169 So.3d 174 (Fla. 4th DCA 2015) (elements for enforcing consent judgment from Coblentz assignment: coverage, wrongful refusal to defend, reasonable good-faith settlement)
- Independent Fire Ins. Co. v. Paulekas, 633 So.2d 1111 (Fla. 3d DCA 1994) (insurer may be precluded from asserting defenses in enforcement action that it could have asserted in underlying action)
- Ahern v. Odyssey Re (London) Ltd., 788 So.2d 369 (Fla. 4th DCA 2001) (insurer who refused defense lost opportunity to litigate factual defenses; reasoning limited to non-probate insureds)
- Zayas-Hood v. Jusino, 44 So.3d 626 (Fla. 1st DCA 2010) (civil-rule relief unavailable in non-adversary probate proceedings absent probate rule adoption)
- Grimes v. Walton County, 591 So.2d 1091 (Fla. 1st DCA 1992) (trial court’s discretion to allow intervention is not unbounded)