• Fifth District Court of Appeal Reverses Volusia County Circuit Court’s Order Dismissing with Prejudice Common Law Indemnity and Common Law Subrogation Claims
  • August 10, 2015
  • Law Firm: Conroy Simberg - Hollywood Office
  • The Fifth District Court of Appeal issued an opinion on July 31, 2015 in a case argued by our firm, Florida Peninsula Insurance Company v. Ken Mullen Plumbing, Inc. et al., Case No. 5D14-3480, in which it considered whether the trial court had erred in dismissing with prejudice Florida Peninsula Insurance Company’s (FPIC) third-party claims for equitable subrogation, common law indemnity and negligence arising out of a property damage claim filed with FPIC. After FPIC’s insureds sued the carrier for breach of contract for water damage in their home, FPIC filed the third-party claim against Ken Mullen Plumbing, which had performed plumbing services at the home. The trial court dismissed all of FPIC’s claims for prematurity and failure to state a cause of action and, on appeal, the Fifth District reversed.

    As to the common law indemnity claim, the Court declined to require a party to plead some type of heightened “special relationship” between the parties in order to state a claim. Instead, the Court held that a common law indemnity claim merely requires that a party plead (1) that it is wholly without fault; (2) that the other party from whom it is seeking indemnity is at fault; and (3) that it is only liable to the injured party because of some vicarious, constructive, derivative, or technical liability for the wrongful acts of the party from whom it is seeking indemnity. Additional facts establishing the nature and extent of a “special relationship” are not required to be alleged in a common law indemnity claim. Therefore, if the law provides that a party without fault may be held liable to the plaintiff for damages caused by another’s fault, as is often the case in first party property and third party liability claims, the party without fault may sue the party who allegedly caused the injury or damage in a third party action, irrespective of whether the party without fault is vicariously liable for the third party defendant’s tortious conduct.

    As to the equitable subrogation claim, there has been a split of authority among the District Courts of Appeal regarding whether a party can state that claim before the conclusion of the underlying litigation by settlement or judgment before the claim has been paid. In this case, the Fifth District Court of Appeal sided with the Second and Fourth Districts, which hold that a party can maintain an equitable subrogation claim before payment has been made. In contrast, the Third District (Miami-Dade and Monroe Counties) holds that an equitable subrogation claim cannot be brought until the underlying debt has been paid. The First District has not yet ruled on this issue.