The Home Insurance Company v. Crawford & Company
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IN THE DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
JULY TERM 2004
THE HOME INSURANCE COMPANY, a
New Hampshire Corporation, as successor in
interest to THE HOME INDEMNITY
COMPANY,
Appellant,
v.
CRAWFORD & COMPANY, a Georgia
Corporation,
Appellee.
CASE NOS. 4D03-1028, 4D03-1673
& 4D03-2139
Opinion filed January 5, 2005
Consolidated appeals and cross-appeal from the
Circuit Court for the Seventeenth Judicial Circuit,
Broward County; Patti Englander Henning &
Leonard L. Stafford, Judges; L.T. Case No. 995410 CACE 03.
Pamela A. Chamberlin of Mitrani, Rynor,
Adamsky & Macaulay, P.A., Miami, for appellant.
G. Bart Billbrough of Billbrough & Marks, P.A.,
Coral Gables, for appellee.
BRYAN, BEN L., JR., Associate Judge.
This case results from asserted mishandling of
settlement opportunities in an underlying case in
which an injured person, James, sued Rinker.
Rinker was insured by Home Insurance Company,
which contracted with Crawford & Company to
service its insurance claims. After a substantial
verdict was entered against Rinker and Home,
Home sued Crawford for breach of contract,
fraud, and breach of fiduciary duty in connection
with its handling of the claim. The trial court
directed a verdict on the fraud and breach of
fiduciary duty counts, and the jury returned a
verdict in Home’s favor on the breach of contract
count. Home appeals the directed verdict on the
fraud and breach of fiduciary duty claims, and
Crawford appeals the denial of its motion for
directed verdict on the contract claim and the
award of prejudgment interest to Home. We
affirm as to all issues, except the award of
prejudgment interest.
Crawford contracted with Home to service
Home’s insurance claims. Its initial authority was
set at $250,000, meaning that it could settle claims
for up to $250,000 without having to seek approval
from Home. Home claimed that this authority
was later reduced to $99,000 by a letter in 1996 to
Crawford, who did not respond.
The accident that was the subject of the claim
occurred in December 1992 when a Rinker
cement truck collided with a vehicle in which
James was an occupant. From the outset,
Crawford evaluated the James claim as a case of
“clear liability.” In January 1996, James made a
detailed settlement offer of $950,000 that was
rejected, so he filed suit against Rinker. During
discovery, James produced an economist’s report
setting his future economic loss between $283,000
and $876,000. Prior to trial, Crawford increased
its reserve to $130,000. In July 1998, James
served a formal offer of judgment for $100,000.
The case was tried in September 1998. A verdict
of $743,537 was returned against Rinker on
October 1. Fees and costs of $165,463 were
awarded. On December 7, 1998, Crawford
provided the first report of any kind to Home on
the James case. After receiving this information,
Home settled the case for $743,537.
Home then sued Crawford and asserted claims
for breach of contract, fraudulent concealment,
and breach of fiduciary duty. The trial court
granted Home’s motion to amend the complaint to
claim punitive damages. The trial court directed a
verdict on Home’s claims for fraudulent
concealment and breach of fiduciary duty,
eliminating any claim for punitive damages.
The jury found for Home on the contract claim
in the full amount claimed for compensatory
damages of $243,537, which was the amount of
the James verdict less the $500,000 deductible
paid by Rinker.
behalf of the insurer. The duties of an insurance
adjuster vary and are defined by the terms of the
contract between the insurer and the adjuster.”
Id. (citations omitted). “[B]reach of this duty
subjects the adjuster to liability for the insurer’s
resulting loss and the insurer can seek indemnity
for liability accruing from the adjuster’s
negligence.” Id.
“When a[n] agent acts
negligently so as to cause its principal to become
liable to a third person, the principal may bring an
action against the agent either in tort or for breach
of contract.” GAB Bus. Servs., Inc. v. Syndicate
627, 809 F.2d 755, 759 (11th Cir. 1987); see also
Pegg v. Bertram, 176 So. 2d 918, 921 (Fla. 3d
DCA 1965).
The verdict was returned on January 31, 2003.
Home filed motions to tax attorneys’ fees, costs,
expenses, and interest. Crawford filed motions to
set aside the verdict and for a new trial. A final
judgment was signed on February 10, awarding
Home $243,537 and reserving jurisdiction to tax
costs, prejudgment interest, and fees. The court
later denied Crawford’s motion to set aside the
verdict and for a new trial. The next day, Home
filed its notice of appeal of the final judgment.
Crawford filed its notice of appeal several days
later.
In this case, the contract between the parties
imposes contractual duties upon Crawford. It did
not impose any fiduciary duties. The parties were
dealing at arm’s length.
Neither can be
c onsidered unsophisticated.
There was no
evidence that the failure to notify Home of the
verdict for sixty-six days was anything other than
negligent. A final judgment in the amount obtained
was not going to be concealed. The trial court did
not err in directing the verdicts that resulted in
elimination of the claim for punitive damages.
After the appeals were filed, the trial court
heard Home’s post verdict motions, and on April
14, 2003, granted prejudgment interest of $99,015.
Costs and post judgment interest were awarded
and attorneys’ fees denied.
Crawford cros s appeals the denial of its motion
for directed verdict on the contract count and for
a new trial. There was ample evidence, in
addition to the reporting requirement dispute, of
negligence on which the jury could have concluded
that Crawford breached the contract. Crawford
also argues that there is no evidence of
proximately caused damage. It maintains that the
damage claimed by Home is an amorphous lost
opportunity. The Home employee responsible for
the file after the claim was reported testified that
her routine practice was to settle cases with clear
liability, damages claimed of approximately
$1,000,000, and a $100,000 offer of judgment.
Crawford moved for rehearing of these orders.
On April 23, 2003, the court entered an amended
final judgment awarding the original verdict plus
$4,315.13 for costs and prejudgment interest of
$99,015.
On April 28, the court denied
Crawford’s motion for rehearing. Crawford filed
its notice of appeal of the amended final judgment.
This court consolidated all three appeals.
Home asserts the trial court erred in granting the
directed verdict on the claims for fraud and breach
of fiduciary duty. In Florida, an independent
insurance adjuster owes a duty to the insurance
company arising out of the contract between the
company and the adjuster. King v. Nat’l Sec.
Fire & Cas. Co., 656 So. 2d 1338, 1339 (Fla. 4th
DCA 1995). “An insurance adjuster acts on
Did Home have to prove it would have settled or
is the lost opportunity to decide sufficient? In
hindsight the case obviously should have been
-2-
settled. However, there were many cooks in the
kitchen -- Crawford, Rinker, and the defense
attorneys, who offered neither the amount
authorized nor Crawford’s evaluation.
order awarding interest. On April 23, the trial
court signed an amended final judgment including
prejudgment interest. Crawford appealed this
judgment.
Home was the absent party. The damage
amount is not speculative, but is a mathematical
calculation. The purpose of compensation for a
breach of contract is to place the injured party in
the position it would have been had the breach not
occurred. There was sufficient evidence for the
jury to determine liability and damages. The court
did not err in denying the motions for directed
verdict and new trial.
Crawford argues that Home waived its
prejudgment interest claim when it filed its notice
of appeal without moving to rehear the final
judgment.
In McGurn v. Scott, 596 So. 2d 1042, 1044 (Fla.
1992), the Florida Supreme Court ruled that it is
improper for a trial judge to render an order that,
in all respects, appears to be a final money
judgment, but which leaves the determination of
prejudgment interest for future adjudication.
However, if a trial court improperly renders su c h
a judgment, the order will be deemed to have
become a final judgment requiring review by
immediate appeal. Id. at 1045. The trial court
then lacks jurisdiction to take further action and
the parties will be deemed to have waived any
matter reserved for future adjudication except for
attorneys’ fees and costs. Id. In McGurn,
because it was a case of first impression, the
district court was directed to remand the case
under Florida Rule of Appellate Procedure
9.600(b). Id.
Crawford also asserts error in denying its motion
in limine and objections to the testimony of
Home’s insurance expert. Whether a tendered
expert possesses adequate qualifications is a
question of fact decided by the trial court. See
Carrier v. Ramsey, 714 So. 2d 657, 659 (Fla. 5th
DCA 1998). “Such a decision is peculiarly within
the discretion of the trial court, and the trial court’s
ruling will not be reversed absent a clear showing
of error.” Id. It was up to the jury to evaluate the
witness’s credibility and accept or reject his
opinion.
Based upon testimony as to his
qualifications and materials reviewed, the trial
court did not abuse its discretion in permitting the
testimony.
In Emerald Coast Communications, Inc. v.
Carter, 780 So. 2d 968 (Fla. 1st DCA 2001), the
first district expounded on McGurn. In that case,
the trial judge improperly reserved ruling on
prejudgment interest in a nonjury trial. The
defendants filed a motion for rehearing. It was
denied and they appealed. The plaintiff/appellee
moved to remand for the limited purpose of
assessing prejudgment interest. The first district
discussed the problem of a judgment debtor
immediately filing a notice of appeal to cut off
prejudgment interest, but denied remand because
the plaintiff had not filed a motion for rehearing to
correct the error within the time allowed under
Florida Rule of Civil Procedure 1.530(b). 780 So.
2d at 970.
Finally, Crawford asserts that the trial judge
erred in granting Home prejudgment interest.
Timing is important to the resolution of this issue.
The jury rendered the verdict for Home on
January 30, 2003. On February 4, Home filed its
motion for prejudgment interest. On February 7,
Crawford filed its motions for new trial, etc. On
February 10, prior to a hearing on the motions, the
court entered its final judgment on the verdict,
ordered execution, and reserved to determine
interest. On March 10, the trial court denied
Crawford’s motions. On March 11, Home filed its
notice of appeal of the final judgment of February
10. On April 4, Crawford filed its notice of
appeal. On April 14, the trial court entered its
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In this case, Home was the party filing the
notice of appeal. Home did not move to relinquish
jurisdiction to permit the trial court to award
prejudgment interest. As a result of Home’s own
action, the trial court had no jurisdiction to award
prejudgment interest. Home waived the claim.
The final judgment is affirmed except for the
award of prejudgment interest. The case is
remanded for the entry of a final judgment that
does not include prejudgment interest.
STONE and WARNER, JJ., concur.
NOT FINAL UNTIL DISPOSITION OF ANY
TIMELY FILED MOTION FOR REHEARING.
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