Kelly v. Lodwick
2011 Fla. App. LEXIS 8083
| Fla. Dist. Ct. App. | 2011Background
- Plaintiffs, as assignees, sued insurance agents for negligence and breach of fiduciary duty for failing to obtain coverage for the school.
- The school’s casualty policy lapsed on March 1, 2004; a second insurer offered coverage if written confirmation was provided, which the agents failed to provide.
- The school became uninsured on March 1, 2004 at 12:01 a.m.; the second insurer later indicated it would cover if a negative-damages statement for the post-lapse period was provided, which the agents did not supply.
- A student was injured on March 1, 2004; the school was advised it had no coverage, triggering the underlying claim against the school and employee.
- On April 20, 2005, the underlying suit was filed; on January 8, 2009, a final judgment of $500,000 was entered against the school and the employee, who assigned all claims against the agents to the plaintiffs.
- The plaintiffs filed suit against the agents on February 9, 2009 to recover the final judgment amount; the circuit court dismissed as time-barred, holding accrual occurred on March 1, 2004.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| When did damages accrue for limitations purposes? | Damages accrued when plaintiffs filed the underlying suit or when damages were incurred. | Damages accrued on March 1, 2004 when the school learned it lacked coverage. | Damages accrued April 20, 2005 when defense costs began. |
| Did the four-year statute start at discovery of lack of coverage or at incurrence of damages? | Statute started at incurrence of damages (April 20, 2005 or later). | Statute started on March 1, 2004 at discovery of lack of coverage. | Accrual began when damages were incurred, not at discovery. |
| Does the underlying judgment date control accrual for purposes of the assignment? | Accrual tied to damages incurred, not exclusively to final judgment date. | Final judgment date anchors the accrual. | Accrual fixed when the school incurred defense damages, irrespective of final judgment date. |
| Can damages from lack of insurance suit be postponed by the mere possibility of later damages? | Possible later damages do not delay accrual if injuries occur later. | Immediate potential damages may delay accrual. | Mere possibility does not postpone accrual; actual damages incurred trigger accrual. |
| May alleged post-accident defense costs support a statute-of-limitations defense on a complaint against agents? | Amended complaint shows defense costs upon filing underlying claim. | No such costs appear on the face of the amended complaint. | On the face of the amended complaint, the defense costs incurred after April 20, 2005 support timely accrual. |
Key Cases Cited
- Kellermeyer v. Miller, 427 So.2d 343 (Fla. 1st DCA 1983) (damages time-dispositive for accrual)
- City of Miami v. Brooks, 70 So.2d 306 (Fla.1954) (accrual can occur at injury even if not all damages occur yet)
- Hale v. State Farm Fla. Ins. Co., 51 So.3d 1169 (Fla. 4th DCA 2010) (duty to defend exists based on underlying complaint)
- Edwards v. Landsman, 51 So.3d 1208 (Fla. 4th DCA 2011) (de novo review of dismissal; accept allegations as true)
- Zuckerman v. Ruden, Barnett, McCloskey, Smith, Schuster & Russell, P.A., 670 So.2d 1050 (Fla. 3d DCA 1996) (test for accrual is redressable harm, not mere knowledge)
- Aquatic Plant Mgmt., Inc. v. Paramount Eng'g, Inc., 977 So.2d 600 (Fla. 4th DCA 2007) (summary-judgment viability when limitations attached by discovery)
- Blumberg v. USAA Casualty Insurance Co., 790 So.2d 1061 (Fla.2001) (limits accrual where no underlying proceeding exists)
- City of Miami v. Brooks, 70 So.2d 306 (Fla.1954) (as above)