Case Name: ALLSTATE INSURANCE COMPANY, Appellant, v. Osvaldo Lorenzo Acosta CONDE, et al., Appellees
Court: Florida District Court of Appeal
Jurisdiction: Florida
Decision Date: 1992-03-06
Citations: 595 So. 2d 1005
Docket Number: No. 90-894
Parties: ALLSTATE INSURANCE COMPANY, Appellant, v. Osvaldo Lorenzo Acosta CONDE, et al., Appellees.
Judges: COBB, COWART, PETERSON and GRIFFIN, JJ., concur.
Reporter: Southern Reporter, Second Series
Volume: 595
Pages: 1005–1013

Head Matter:
ALLSTATE INSURANCE COMPANY, Appellant, v. Osvaldo Lorenzo Acosta CONDE, et al., Appellees.
No. 90-894.
District Court of Appeal of Florida, Fifth District.
March 6, 1992.
Griffin, J., specially concurred and filed opinion in which Goshorn, C.J., and Cowart, J., concurred.
W. Sharp, J., concurred in part and dissented in part and filed opinion.
Diamantis, J., concurred in part and dissented in part and filed opinion in which Dauksch and W. Sharp, JJ., concurred.
Chris Ballentine of Fisher, Rushmer, Werrenrath, Keiner, Wack & Dickson, Orlando, for appellant.
Kathleen T. Murphy of Jugo & Murphy, Miami, for appellees.

Opinion:
HARRIS, Judge.
Allstate Insurance Company sued its insured, Osvaldo Lorenzo Acosta Conde, and the third parties injured by its insured, Clara Margarita Montero and her two children, Rolddy and Lourdes Aragon, for a declaration of its obligation under its policy. Allstate claimed that the acts of Conde which caused the injury were intentional and thus not covered by its policy. The trial court, in reliance on Vanguard Ins. Co. v. Townsend, 544 So.2d 1153 (Fla. 5th DCA 1989), held that the policy was not ambiguous and therefore was not subject to a declaratory action. Because we recede from Vanguard, we reverse.
It is necessary to consider the undisputed testimony of the two survivors of this most unfortunate tragedy — Margarita Montero and Lourdes Aragon.
After a ten day separation from his family, Osvaldo Conde knocked on Margarita Montero's bedroom window in the early hours of June 29th. Because Conde had been away, the children were sleeping in the bedroom with Ms. Montero. Lourdes accompanied Ms. Montero as she opened the front door to admit Conde into the home. He followed them back to the bedroom where Lourdes immediately returned to bed. Conde stood to the right of the room (next to the door) with Ms. Montero standing to the left. Conde pulled the gun and, after stating "I'm tired of everything" or "I have come to end it all," shot Ms. Montero through the chest. He then shot Lourdes in her side as she lay in bed and finally shot Rolddy through the head. He saw Ms. Montero leaving the bedroom and shot her, with his last bullet, through her back. When she still didn't fall, Conde hit her in the head with a bottle stating, "The children are already dead; why do you want to be alive?" Finally, he started "to press on [her] neck" as the police arrived.
Ms. Montero, on behalf of Lourdes and Rolddy, filed suit against Conde claiming alternatively, intentional wrongdoing (not covered by the policy) and negligent conduct. Because the complaint alleges facts that bring the action within the coverage of the policy and facts that exclude coverage, the insurer must defend its insured "at least until such time as the covered portions of the claim have been eliminated from the suit."
But in this case there are not some claims that are covered and some that are not; the asserted claims are mutually exclusive. Either the claim is covered or it is not. Therefore, the insurer must provide defense until the coverage issue is resolved. In a case such as this — alternative, mutually exclusive theories — the indemnity issue and the duty to defend issue are inextricable. The resolution of one necessarily resolves the other. An early resolution of this issue is essential. As this court held in State Farm Fire and Casualty Co. v. Nail, 516 So.2d 1022, 1023 (Fla. 5th DCA 1987):
Moreover, the argument that State Farm should extend defense under a reservation of rights, instead of resolving the coverage issue in a separate declaratory judgment action in advance, ignores the fact that providing a defense where there is no legal obligation to do so constitutes an irreparable injury in and of itself.
Pursuant to Nail, Allstate filed this separate action for declaratory judgment asking that its obligations (rights, privileges, immunities) under its policy be determined under the facts of this case pursuant to Chapter 86. Allstate urged that coverage did not exist because (1) the shooting was intentional and (2) the victims were "insured persons" under its policy and thus excluded. The trial court entered summary judgment against Allstate holding that declaratory action is not available to determine the coverage issue based on the intentional act exclusion and further holding that the victims were not "insured persons" and were covered under the policy. We disagree with the trial court. In Vanguard we held that Chapter 86 can only be used to "settle the meaning of ambiguous language or clauses in an insurance policy." Vanguard, 544 So.2d at 1155. Other cases also hold this view, many before the amendment to the declaratory judgment act. This interpretation limits Chapter 86 to little more than a codification of the parol evidence rule. Chapter 86 should not be read so narrowly. One of the reasons for permitting parties to have their rights (and obligations) under contract determined is to avoid protracted and unnecessary litigation. Consider the purpose of the act:
86.101 Construction of law. — This chapter is declared to be substantive and remedial. Its purpose is to settle and to afford relief from insecurity and uncertainty with respect to rights, status, and other equitable or legal relations and is to be liberally administered and construed.
Allstate asks in its complaint that the court determine that no coverage existed because the shooting was intentional. This clearly invokes the court's jurisdiction under section 86.011(2) and not section 86.-021.
In effect Allstate is asking that the court, pursuant to section 86.011 determine "the existence or nonexistence" of a "fact [to wit: whether the shooting was intentional] upon which the existence or nonexistence of . immunity [lack of coverage] . does or may depend[.]" The legislature has given the court the authority to do so.
The court in Prudential Property and Cos. Ins. v. Castellano, 571 So.2d 598 (Fla. 2d DCA 1990) determined that declaratory action is an appropriate vehicle for determining this issue. If a declaratory judgment action is permitted then all parties know at an early date their rights and obligations under the policy and are able to deal appropriately with each other.
In International Surplus Lines Ins. Co. v. Markham, Norton & Co., P.A., 580 So.2d 251 (Fla. 2d DCA 1991) the court held that declaratory action was indeed appropriate for the determination of both the duty to defend and the duty to indemnify issue. Markham holds, however, that the duty to defend should first be determined from the facts pleaded in the complaint against the insured and that the duty to indemnify issue, if the duty to defend exists, should be deferred until liability of the insured is established.
But Markham did not involve a case in which the third party sued the insured on alternative, mutually exclusive theories. In Markham, the insured was sued because of breach of fiduciary duty and professional negligence. In its separate suit against its insured, the insurer contended there was no duty to defend or indemnify because (1) failure to disclose material information and (2) the allegations in the complaint fell within two exclusions of the policy. The Markham court held that the insured was entitled to a determination as to whether the allegations of the complaint fell within the policy exclusions and thus established no duty to defend. If there is a duty to defend (thus no exclusion) then the liability issue should be tried first because if no liability exists then the issue of failure to disclose material information becomes moot.
Markham, under its facts, is good law. But, in an alternative, mutually exclusive theory of liability case, the Markham procedure must be modified. Instead of looking merely at the allegations of the complaint to see if the duty to defend exists, since there are alternative, mutually exclusive theories, the court must, in the declaratory judgment action, determine the "fact" which will determine the duty to defend/indemnity issue. In this all or nothing type case, there is not a separate indemnity issue to be tried later.
It is only appropriate that the insurer be permitted to participate in the coverage issue in an alternative, mutually exclusive case. Otherwise, the insurer must sit back and provide an attorney to "defend" an insured by, in concert with the plaintiff, establishing that what might be the most deliberate shooting was, in fact, a negligent shooting. Even if not bound by the coverage verdict, it may nevertheless suffer the Nail "irreparable harm" by providing a defense when it had no legal obligation to do so.
It is, of course, essential that the injured party be made a party to the declaratory judgment action. If the declaratory judgment action determines that the insured's conduct was intentional, then there would no longer be a negligence action to defend. On the other hand, if the insured's conduct was found to be negligent, then the insurer would automatically be liable on the injured party's negligence action recovery.
Most often, as in Clemmons v. American States Ins. Co., 412 So.2d 906 (Fla. 5th DCA 1982), Rev. denied, 419 So.2d 1196 (Fla.1982), once the' undisputed facts are established the duty to defend/coverage issue becomes one of law to be decided by the judge. If factual disputes relevant to such issue continue to exist, however, then the court should determine such "facts" as are necessary to determine the issue in the declaratory judgment action. If all parties are joined, then the decision is binding and the problem encountered in Insurance Co. of North America v. Whatley, 558 So.2d 120 (Fla. 5th DCA 1990) will be avoided.
We also find that declaratory action is appropriate to determine whether the victims were "insured person[s]" under the policy definition "you, and if a resident of your household: (a) any relative; and (b) any dependant person in your care" and that the court erred in entering its summary judgment finding that, as a matter of law, the victims were not "insured persons."
We therefore reverse the summary judgment but certify the following question:
MAY THE INSURER PURSUE A DECLARATORY ACTION IN ORDER TO HAVE DECLARED ITS OBLIGATION UNDER AN UNAMBIGUOUS POLICY EVEN IF THE COURT MUST DETERMINE THE EXISTENCE OR NONEXISTENCE OF A FACT IN ORDER TO DETERMINE THE INSURER'S RESPONSIBILITY?
REVERSED and REMANDED.
COBB, COWART, PETERSON and GRIFFIN, JJ., concur.
GRIFFIN, J., concurs specially with opinion in which GOSHORN, C.J., and CO-WART, J., concur.
W. SHARP, J., concurs in part and dissents in part with opinion.
DIAMANTIS, J., concurs in part and dissents in part with opinion in which DAUKSCH and W. SHARP, JJ., concur.
. Although the trial court granted Conde's motion to strike the Notice of Filing of Depositions "to the extent that the depositions filed with said notice shall not be used in support of Allstate Insurance Company's objection to Motion for Summary Judgment" said depositions are nevertheless a part of the record. Further, because of the basis of the trial court's ruling (strict reliance on Vanguard from which we now recede), the case-specific facts were irrelevant to the trial court. They are relevant to the appeal only to show that there is a legitimate issue that Conde's conduct falls within a policy exclusion.
. Although there had been no formal ceremony, Conde and Montero lived as husband and wife and the children of Ms. Montero considered Conde as their father.
. C.A. Fielland, Inc. v. Fidelity & Casualty Co. of New York, 297 So.2d 122, 127 (Fla. 2d DCA 1974), Cert. denied, 309 So.2d 6 (Fla.1975). Conde "purchased" not only an indemnity contract but also a contract to defend him from all claims — even fraudulent — covered by the policy. So long as the negligence count remains against him, the insurer must defend him. If, however, the cause of action against Conde is limited to the uninsured intentional act, he is entitled to neither indemnity nor defense.
. In Columbia Cas. Co. v. Zimmerman, 62 So.2d 338 (Fla. 1952), the court, limiting its consideration to what is now section 86.021 (the power to construe deeds, wills, contracts) denied the use of a declaration action to determine purely factual matters. The majority in Zimmerman, perhaps because of the pleadings, did not consider the more expansive provisions of what is now section 86.011 which specifically authorizes the court to determine if a fact exists (intentional shooting) which would establish the existence of an "immunity, power, privilege or right" (lack of coverage). If the legislature did not contemplate some fact finding in declaratory actions, it is curious why section 86.071 provides that "a determination of an issue of fact" may be submitted to a jury. Because of the general statements in Zimmerman, however, we certify the question to the supreme court.
. Both dissents urge that the Markham procedure be employed in this case — that is, first determine if there is a duty to defend and, if so, stay the duty to indemnify issue until the resolution of the negligence action. Neither dissent explains how you can determine the duty to defend without also, at the same time, determining the duty to indemnify. If there is no duty to indemnify in a case such as this, there can be no duty to defend; if there is no duty to defend, there is no argument that indemnification must follow. THERE IS NOTHING TO DEFER. In Markham the court held that if the declaratory judgment action proved that the exclusions of the policy applied, then there would be no duty to defend but, in Markham, there were non-exclusion defenses to indemnity. These defenses, which would have no impact on the duty to defend, would properly be deferred until after liability was determined.
. The plaintiffs are, of course, essential parties if they are to be bound by the coverage decision.