Intervest Construction of Jax, Inc. v. General Fidelity Insurance Company
133 So. 3d 494
| Fla. | 2014Background
- General Fidelity insured ICI Homes under a Commercial General Liability policy with a $1,000,000 Self-Insured Retention (SIR).
- Ferrin sued ICI for injuries from attic stairs installed by Custom Cutting; ICI sought indemnification from Custom Cutting under its subcontract.
- North Pointe paid $1,000,000 to settle ICI’s indemnification claim; ICI then paid $1,000,000 to Ferrin with ICI and General Fidelity each contributing $300,000 to complete the $1.6 million settlement, while reserving rights against each other.
- The SIR endorsement provides that the insured pays the Retained Limit and that the Retained Limit is reduced only by payments made by the insured; the policy also contains a transfer of rights clause granting subrogation to the insurer.
- The district court and Eleventh Circuit addressed whether indemnification funds from a third party can satisfy the SIR and whether the transfer of rights alters priority for reimbursement (made whole doctrine).
- The Florida Supreme Court was asked to resolve: (1) whether third-party indemnity payments can satisfy the SIR, and (2) whether the transfer of rights clause abrogates the made whole doctrine.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Can third-party indemnity payments satisfy the SIR? | ICI contends indemnity payments reduce the SIR. | General Fidelity argues only insured payments reduce the SIR. | Yes; indemnity payments from a third party may satisfy the SIR. |
| Does the transfer of rights clause abrogate the made whole doctrine? | Transfer of rights does not outrank the insured’s priority to be made whole. | Transfer of rights gives General Fidelity priority over ICI’s use of indemnity funds. | No; transfer of rights does not abrogate the made whole doctrine; insured has priority. |
Key Cases Cited
- Vons Cos. v. United States Fire Insurance Co., 92 Cal.Rptr.2d 599 (Cal.App.4th Dist. 2000) (SIR may be satisfied by other insurance payments under certain policy terms)
- Forecast Homes, Inc. v. Steadfast Insurance Co., 105 Cal.Rptr.3d 200 (Cal.App.4th Dist. 2010) (explicitly limits who can satisfy SIR; payments by others do not satisfy SIR)
- Bordeaux, Inc. v. Am. Safety Ins. Co., 186 P.3d 1189 (Wash. 2008) (made whole doctrine applies despite subrogation provision)
- Young v. Progressive Southeast. Ins. Co., 753 So.2d 80 (Fla. 2000) (self-insurance not insurance; distinctions with policy terms)
- Zinke-Smith, Inc. v. Florida Insurance Guaranty Ass'n, 304 So.2d 507 (Fla. 4th DCA 1974) (self-insurance not insurance under Florida statutes; policy analysis context)