Case Name: NATIONAL MUTUAL INSURANCE COMPANY OF THE DISTRICT OF COLUMBIA, Appellant, v. Nick DOTSCHAY, Appellee
Court: Florida District Court of Appeal
Jurisdiction: Florida
Decision Date: 1961-11-09
Citations: 134 So. 2d 248
Docket Number: Nos. 61-58, 61-59
Parties: NATIONAL MUTUAL INSURANCE COMPANY OF THE DISTRICT OF COLUMBIA, Appellant, v. Nick DOTSCHAY, Appellee.
Judges: Before PEARSON, TILLMAN, C. J., and HORTON and HENDRY, JJ.
Reporter: Southern Reporter, Second Series
Volume: 134
Pages: 248–254

Head Matter:
NATIONAL MUTUAL INSURANCE COMPANY OF THE DISTRICT OF COLUMBIA, Appellant, v. Nick DOTSCHAY, Appellee.
Nos. 61-58, 61-59.
District Court of Appeal of Florida. Third District.
Nov. 9, 1961.
Rehearing Denied Nov. 27,1961.
Fowler, White, Gillen, Humkey & Tren-am and Henry Burnett, Miami, for appellant.
Ehrich & Zuckerman, Miami, for appel-lee.
Before PEARSON, TILLMAN, C. J., and HORTON and HENDRY, JJ.

Opinion:
HENDRY, Judge.
The appellant, an insurance carrier, was the defendant in the lower court, and the appellee, Nick Dotschay, was the plaintiff below. In 1951, a personal injury action was filed against the appellee which was defended by the appellant under its liability policy issued to the appellee. The case ended with a jury verdict and judgment against the appellee for $75,000 which was $50,000 in excess of the coverage of the policy. No appeal was taken from the judgment and the appellant paid the $25,000 which was the policy coverage.
In 1955, the appellee filed suit in the Circuit Court in and for Dade County which suit was transferred to the United States District Court for the -Southern District of Florida. The complaint alleged that the appellant was liable to him for the excess amount of the judgment above the policy limits on the grounds that the appellant defended the aforesaid action in bad faith and was negligent in failing to settle the claim. There being no Florida case found on the subject, the United States District Court held that no recovery could be had until actual payment by the plaintiff to the judgment creditor of the excess amount or any part thereof. This ruling by the United States District Court followed what is generally considered to be the minority view in this country.
Upon appeal the United States Court of Appeals reversed the judgment on grounds not material to this appeal, without deciding whether payment to the judgment creditor was necessary /before the insured could recover from the insurer for the excess amount owed to him as a result of the had faith and negligence of the insurance carrier. Dotschay et al. v. National Mutual Insurance Co. of District of Columbia, 5 Cir. 1957, 246 F.2d 221.
After the case was remanded to the federal district court, the complaint was then treated as one for declaratory decree. The court entered its declaratory decree declaring the rights of the parties in part as follows :
"That the plaintiff Nick Dotschay, individually, shall have a cause of action in the event that he pay all or any part of the judgment owed by him
While the appellant now complains that the above decree subjects it to a separate lawsuit as each part payment is made, no appeal was taken from such final decree. Thereafter, the appellant paid the judgment creditor $300 and brought suit in the Civil Court of Record against the appellee for the sum so paid together with his attorneys' fees. The case was tried without a jury and the court found the insurance carrier guilty of bad faith and assessed damages in the sum of $300 plus attorneys' fees. The judgment was appealed and affirmed by this court without opinion. National Mutual Insurance Co. of District of Columbia v. Nick Dotschay, Fla.App. 1960, 118 So.2d 680.
On May 3 and July 20 of 1960, Nick Dotschay paid the judgment creditor the sums of $4,500 and $300 respectively, and soon after filed suits in the Civil Court of Record for these amounts. The insurance carrier answered and interposed as one of its defenses that the appellee split his cause of action by reason of the prior Civil Court of Record judgment. The court summarily adjudicated the question of liability and found for the plaintiff in the amounts paid with an additional amount for attorneys' fees. The insurance carrier has appealed from the final judgments in both causes and for purposes of this appeal the causes have been consolidated.
Appellant contends that the lower court erred in entering the judgments in that the appellee should have been deemed to have split his cause of action by reason of his suit and recovery of the first $300 judgment. In other words, there was only one cause of action for the entire amount owed to the appellee, and when the appellee recovered a part of the excess amount he lost his right to the remainder. This argument is based on what we find to be the majority view in this country as to recovery of excess amounts from an insurance carrier for bad faith in settling actions. Under this view, it is not necessary that any portion of the excess judgment be paid for the insured to have a cause of action against the insurer. Wessing v. American Indemnity Co. of Galveston, Texas, D.C.W.D.Mo.1955, 127 F.Supp. 775. Accordingly, an insured would have to sue for the entire amount or else be susceptible to the affirmative defense that he split his cause of action when such defense is set up upon a subsequent suit by the insured for the remainder of the excess judgment.
The lower court herein in finding for the appellee, held that the question of whether the minority view adopted by the United States District Court or the majority view propounded by the appellant was the correct law of this state, was not an open question but that such question is now res judicata by reason of the United States District Court's decree.
There can be no doubt that such a decree is as binding as any final judgment for res judicata purposes. 9 Fla.Jur., Declaratory Actions, § 56. That section reads as follows:
"The court's declaration in declaratory judgment proceedings has the force and effect of a final decree, judgment, or order. Where any declaratory decree, judgment or order is given or made by way of anticipation with respect to any act not yet done or any event which has not yet happened, the decree, judgment or order has the same binding effect with respect to that future act or event, and the rights and liabilities arising therefrom, as if that act had already been done or that event had already happened before the decree, judgment or order was made. The court's declaration is therefore res judi-cata of the matters at issue as between the parties and their privies."
We agree with the lower court and the appellee that the question of whether there was one or more causes of action under these circumstances has already been decided by the federal court. The lower court in its order said in part as follows:
"If there is to be any reliance upon prior judgments and decrees then recognition must be given to the last District Court order from which no appeal was taken, declaring plaintiff's rights in the matter, in which he was there limited to recover these monies or any part paid by him on the judgment outstanding against him. Some may take issue with the District Court holding hut defendant did not and the parties became bound by it and it is now res judicata Defendants cannot now be heard to ask for a different rule as between the parties in the case."
See Restatement of the Law, Judgments § 48 (p. 191), § 67 (p. 286).
For an issue to be res judicata it is not necessary that the prior judgment be right. Bennett v. Commissioner of Internal Revenue, 5 Cir.1940, 113 F.2d 837, 130 A.L.R. 369; Ballard v. First National Bank of Birmingham, 5 Cir.1958, 259 F.2d 681. The court in the Ballard case stated at pages 683-684:
" 'The doctrine of res judicata does not depend upon whether or not the prior judgment was right. It rests upon the finality of judgments as a matter of public policy, to the end that controversies once decided shall remain in repose.'
♦ #
" 'It is a fundamental principle of jurisprudence that material facts or questions which were in issue in a former action, and were there admitted or judicially determined, are conclusively settled by a judgment rendered therein, and that such facts or questions become res judicata and may not again be litigated in a subsequent action between the same parties or their privies, regardless of the form the issue may take in the subsequent action > tt
See Matthews v. Wolvin, 5 Cir.1959, 266 F.2d 722 (applying Florida law).
Accordingly, the orderly administration of the law does not allow parties to a cause to litigate any issue which has already been litigated, or which should have been litigated, between the parties in an.earlier action. In the instant case, the appellant could, by timely appeal, have taken measures to correct the application of law by the federal district court, which it now seeks to do by advocating the principle that there was a cause of action without any payment to the judgment creditor by the appellee. The appellant could have and should have taken an appeal from the declaratory decree if it thought it was wronged or would be wronged in the future by the appellee coming in piecemeal to collect the excess judgment as he pays it. Failing to have done so, it is now estopped under the doctrine of res judicata from circumventing and attacking a judgment of a court of competent jurisdiction in a previous suit between the same parties where that judgment was never reversed. Hay v. Salisbury, 92 Fla. 446, 109 So. 617; Wolfson v. Ruben, Fla.1951, 52 So.2d 344.
We hold that the appellee has not split his cause of action in that the federal declaratory decree is the law of this particular case. That decree held that there is only a cause of action when a part of the excess judgment is paid and such cause of action is only for the amount paid. To avoid any conflict in the future, it should be noted that this opinion is not to be deemed to be an acceptance of the minority view as expressed in the federal decree. Rather, we feel that the better view is the majority view as contended by the appellant. However, the law of this state is deeply committed to the doctrine of res judicata, and on that basis we affirm the judgments appealed.
Affirmed.
PEARSON, TILLMAN, C. J., concurs.
HORTON, J., dissents.