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Starr Indemnity & Liability Co. v. Helon S. Morris, Case No. 3D14-2733 (3rd DCA)

In Starr, the Third District granted a petition for certiorari review and quashed the trial court's denial of a motion to sever the plaintiff's claim against an insurer for breach of contract. Starr is the insurer for a sport fishing business that allows customers board its vessel and angle for various types of fish in the Florida Keys. The insurance policy covers claims by the business's customers for injuries suffered while aboard the vessel. The plaintiff was injured when he slipped and fell aboard the fishing company's vessel. The plaintiff brought suit against the fishing company and the vessel's captain for negligence, against Starr for breach of contract. The plaintiff's claim against Starr was not based on Starr's liability coverage of the fishing company, but instead based on the allegation that the plaintiff is an omnibus insured under Starr's policy's medical coverage clause.

Starr moved to dismiss based on Florida's nonjoinder statute, Fla. Stat. 627.4136, which provides that a liability insurer cannot be joined in the tort suit against its insured until a settlement or verdict is entered. The trial court denied Starr's motion finding that the nonjoinder statute to be inapplicable because the breach of contract action was based on the allegation that the plaintiff was an insured and had a direct action to recover. The Third District initially noted that a trial court's incorrect application of Florida's nonjoinder statute establishes the irreparable harm necessary for certiorari relief.

The court then ruled that the trial court's order departed from the essential requirements of the law. The court noted that the legislative intent behind the nonjoinder statute is to ensure that the availability of insurance has no influence on the jury's determination of the insured's liability and damages. Thus, "the trial court should either dismiss or sever related actions against a liability insurer to prevent prejudice." The Third District found that the plaintiff was correct that Fla. Stat. 627.4136 does not apply when a claimant alleges that he or she is an insured under the policy terms. The trial court therefore correctly denied Starr's motion to dismiss with prejudice. However, the court noted that the nonjoinder statute mandates that the direct action against Starr be severed to prevent jurors from discovering that an insurance company may be held responsible for some or all of the judgment in the negligence suit against the fishing company. As such, the Third District ruled that the trial court departed from the essential requirements of the law by refusing to sever the breach of contract claim against Starr from the negligence claim against the fishing company.


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