UNITED STATES FIDELITY 

& GUARANTY COMPANY,

Appellant,

v.

ESSEX INSURANCE 

COMPANY and FEDERAL 

INSURANCE COMPANY,

Appellees.

IN THE DISTRICT COURT OF APPEAL

FIRST DISTRICT, STATE OF FLORIDA

NOT FINAL UNTIL TIME EXPIRES TO 

FILE MOTION FOR REHEARING AND 

DISPOSITION THEREOF IF FILED

CASE NO. 1D15-0808

_____________________________/

Opinion filed March 21, 2016.

An appeal from the Circuit Court for Duval County.

James L. Harrison, Judge. 

Mark D. Tinker of Banker, Lopez, Gassler, P.A., St. Petersburg, Scott W. 

McMickle and Elenore Klingler of McMickle, Kurey & Branch, LLP, Alpharetta, 

GA, for Appellant.

Meagan L. Logan of Marks Gray, P.A., Jacksonville, for Appellee Essex Insurance 

Company.

PER CURIAM.

Appellant, United States Fidelity & Guaranty Company (USF&G), appeals 

the trial court’s grant of summary judgment, requiring USF&G to give $600,000 it 
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received from Federal Insurance (Federal) to Essex Insurance Company (Essex). 

Because the record does not provide an adequate basis for equitable subrogation, 

we reverse the order granting summary judgment. 

This case arose out of an agreement between USF&G, Essex, and Federal to 

settle underlying litigation involving mutual insureds through a jointly-funded 

settlement. The agreement provided that the insurers could litigate among 

themselves if any of them wished to reallocate the settlement funds. USF&G and 

Essex were substituted as plaintiffs for the insured in an action against Federal, but 

USF&G and Essex maintained separate and independent claims against Federal. 

Before trial, USF&G settled its claim with Federal for $600,000. Essex and Federal 

proceeded to trial, where the trial court found in favor of Federal in the amount of 

$2 million, Federal’s contribution to the settlement proceeds. Essex entered into a 

post-judgment settlement with Federal, but has kept the terms of the settlement 

confidential. Subsequently, Essex asserted a claim against USF&G to recover the 

$600,000 settlement money USF&G received from Federal.

USF&G and Essex filed cross motions for summary judgment. The trial 

court granted summary judgment in favor of Essex, finding that Essex, as the 

excess carrier, should receive the settlement funds. 

In order to support recovery under a theory of equitable subrogation, Essex 

must establish: “(1) that it made the payment at issue to protect its own interests, 
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(2) the payment was non-voluntary, (3) it was not primarily liable for the debt paid, 

(4) it paid the entire debt, and (5) subrogation would not work any injustice to the 

rights of a third party.” Nova Info. Sys., Inc. v. Greenwich Ins. Co., 365 F. 3d 996, 

1005 (11th Cir. 2004) (quoting Dade Cty. Sch. Bd. v. Radio Station WQBA, 731 

So. 2d 638, 646 (Fla. 1999)). Essex cannot establish the fourth element as it did not 

pay the entire settlement in the underlying tort litigation.

In light of the independent nature of their respective claims against Federal,

the trial court erred in determining Essex was entitled to the settlement money 

USF&G received from Federal. Accordingly, we reverse the trial court’s order 

granting summary judgment. 

WETHERELL and WINOKUR, JJ., CONCUR; MAKAR, J., CONCURS WITH 

OPINION.
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MAKAR, J., concurring with opinion.

Three insurers collectively contributed $9 million to settle and pay claims 

arising from a motor vehicle accident, voluntarily entering an agreement stating 

that the insurers would be “subsequently litigating among themselves how the 

settlement amount should be paid and allocated among the policies under Florida 

law.” The subsequent litigation that resulted was done independently amongst the 

insurers, each against the other, none cooperating or coordinating with the others. 

Weighing the risks and costs of litigation, USF&G entered a settlement with and 

received $600,000 from Federal. The dispute between Essex and Federal went to 

trial, resulting in a $2 million judgment against Essex in Federal’s favor (later 

settled for an undisclosed amount). 

In this appeal, the issue is what legal right does Essex now have to the 

$600,000 of settlement funds that USF&G received from Federal, funds that 

USF&G sought and successfully obtained at its own expense through its 

independent litigation efforts against Federal? None, it appears. Contractual 

subrogation doesn’t apply because no contractual relationship exists between the 

parties (the trial court’s reference to the Essex policy notwithstanding); and neither 

equitable subrogation nor equitable contribution was established on this record to 

support Essex’s claimed entitlement to the settlement funds that USF&G procured 

for itself. In essence, the parties’ three-page agreement says the three insurers may 
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litigate “how the settlement amount” is to be allocated, but it leaves ambiguous by 

what legal yardstick that is to be measured. The record does not indicate whether 

this is a common or uncommon way for insurers to resolve disputes of this 

magnitude, and no party has pointed us to any statute or case that specifies the 

standards or manner by which such disputes are required to be resolved. Absent a 

definitive guidepost, the parties would have us resolve their dispute by applying 

general principles of equity. As such, I agree that the trial court should not have 

awarded to Essex the funds that USF&G obtained through its own independent 

efforts from Federal, such that the judgment against USF&G should be vacated and 

judgment entered in its favor.