Court Opinion

ID: 2826676
Source: CourtListenerOpinion
Date Created: 2015-08-12 15:06:02.990507+00
Date Added: 2024-06-11T11:31:22.755563
License: Public Domain

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
                              FOURTH DISTRICT

  HOMEOWNERS PROPERTY & CASUALTY INSURANCE COMPANY,
                        INC.,
                      Petitioner,

                                      v.

MARGARET HURCHALLA; JAMES HURCHALLA; LAKE POINT I LLC, a
  Florida Limited Liability Company; LAKE POINT PHASE II, LLC, a
     Florida Limited Liability Company; SOUTH FLORIDA WATER
MANAGEMENT DISTRICT, a Public Corporation of the State of Florida;
 and MARTIN COUNTY, a Political Subdivision of the State of Florida,
                               Respondents.

                               No. 4D15-481

                             [August 12, 2015]

   Petition for writ of certiorari to the Circuit Court for the Nineteenth
Judicial Circuit, Martin County; Lawrence M. Mirman, Judge; L.T. Case
No. 432014CA000054CAAXMX.

    Shannon P. McKenna and Hinda Klein of Conroy Simberg, Hollywood,
for petitioner.

   Virginia P. Sherlock of Littman, Sherlock & Heims, P.A., Stuart, for
respondents Margaret and James Hurchalla.

PER CURIAM.

   Petitioner, Homeowners Property & Casualty Insurance Company, Inc.
(the insurer), seeks certiorari review of a circuit court order that stayed its
declaratory judgment action on insurance coverage pending resolution of
an underlying tort action filed against the insured. We grant the petition
because the trial court abused its discretion and departed from the
essential requirements of law in staying the coverage action.

   Respondents Lake Point Phase I, LLC and Lake Point Phase II, LLC
(collectively, Lake Point) sued Margaret Hurchalla (Margaret), the South
Florida Water Management District (SFWMD) and Martin County, seeking
injunctive relief and damages.      Lake Point claimed that Margaret
intentionally made false statements that caused the other defendants to
void contracts they had with Lake Point. Lake Point sought injunctive
relief and economic damages against Margaret.

    The insurer provided a defense under a reservation of rights but later
withdrew its defense. It then filed a complaint for declaratory judgment,
alleging that, based on the homeowner’s insurance policy, it is not required
to defend or indemnify Margaret in the tort action. The insurer argued
that the intentional acts alleged in the tort action are excluded from
coverage and that Lake Point has not claimed bodily injury or property
damage caused by an “occurrence” that triggers coverage under the
homeowner’s policy. Margaret has asserted affirmative defenses of waiver,
estoppel, laches, and breach of good faith and fair dealing.

   After the denial of its motion for summary judgment, the insurer
noticed Margaret for deposition. In response, she moved for protective
order and to abate the declaratory judgment action pending resolution of
the underlying tort action. She argued that litigation of the disputed
issues on insurance coverage may prejudice her defense of the tort action.
Lake Point is a party in both cases, and she claimed that discovery may
force her to disclose defense strategy.

   The insurer opposed abatement or stay of the coverage action, arguing
that the two actions were mutually exclusive and that expeditious
resolution of the coverage action would promote settlement of the tort case.
After hearing argument, the trial court granted the motion to abate the
coverage action and stayed discovery. The insurer now seeks certiorari
review of this order.

   Certiorari lies to review orders granting motions for stay or abatement,
as courts have recognized that “there is no adequate remedy for the delay
caused by abatement after final judgment.” Britamco Underwriters, Inc. v.
Cent. Jersey Invs., Inc., 632 So. 2d 138, 139 (Fla. 4th DCA 1994). This
satisfies the irreparable harm element of certiorari, which is a
jurisdictional prerequisite for certiorari. Bared & Co. v. McGuire, 670 So.
2d 153 (Fla. 4th DCA 1996). The issue remaining is whether the circuit
court departed from the essential requirements of law.

   Courts often have used the terms “stay” and “abate” interchangeably,
but they are not the same. The granting of a stay of one action in favor of
another is reviewed for an abuse of discretion, but the propriety of
abatement can be determined as a matter of law. “While abatement
requires complete identity of parties and causes of action . . . a stay should
require substantial similarity of parties and actions.” Sauder v. Rayman,
800 So. 2d 355, 358 (Fla. 4th DCA 2001) (citing REWJB Gas Invs. v. Land

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O’Sun Realty, Ltd., 645 So. 2d 1055, 1056 (Fla. 4th DCA 1994)).

    The circuit court’s order in this case is properly characterized as having
entered a stay, rather than abatement, as the two actions do not have the
same parties and causes of action. In the declaratory judgment action,
the insurer is the plaintiff, and is not a party in the tort action. As well,
James Hurchalla is a party defendant in the declaratory judgment action
but not a party in the tort action. Also, the trial court did not terminate
the declaratory judgment action. Instead, it effectively postponed it. See
Pecora v. Signature Gardens, Ltd., 25 So. 3d 599, n.1 (Fla. 4th DCA 2009)
(citing Century Sur. Co. v. de Moraes, 998 So. 2d 662, 663 n.1 (Fla. 4th
DCA 2009) (“Abatement has been utilized to terminate one of two actions
pending simultaneously which involve the same parties and the same
issues. A stay, by contrast, essentially postpones one proceeding until a
contingency occurs.”)). Thus, the standard of review is whether the circuit
court abused its discretion resulting in a departure from the essential
requirements of law in staying the declaratory judgment action.

   In Higgins v. State Farm Fire and Cas. Co., 894 So. 2d 5 (Fla. 2004), the
Florida Supreme Court identified factors a court should consider in
determining whether to stay a coverage action pending resolution of an
underlying tort action. This Court restated these factors in Century Surety
Co. v. de Moraes, 998 So. 2d 662 (Fla. 4th DCA 2009), as follows:

      (1) whether the two actions are mutually exclusive;

      (2)     whether proceeding to a decision on the indemnity issue
              will promote settlement and avoid the problem of
              collusive actions between the claimant and the insured
              in order to create coverage where there is none; and

      (3) whether the insured has resources independent of
      insurance, so that it would be immaterial to the claimant
      whether the insured’s conduct was covered or not covered by
      the indemnity insurance.

Id. at 665.

   The circuit court did not address any of these factors. We agree with
the insurer that the factors weigh against a stay. First, the two actions
are mutually exclusive. All of Lake Point’s claims against Margaret are
outside of the scope of the policy. The disputed facts in the coverage
action, relating to coverage by estoppel, are separate and distinct from the
issues in the tort case. As for the second factor, a determination of

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whether the insurer has a duty to defend Margaret and indemnify her from
Lake Point’s claims likely will promote settlement of the tort claim. A
decision on coverage also will avoid the potential for collusion between
Margaret and Lake Point to create coverage where none exists.1 The
insurer explains that Lake Point could attempt to re-plead its tortious
interference claim to omit the allegations of intentional, knowing acts by
Margaret causing harm, damage or injury, so as to give rise to potential
insurance coverage.

    We also agree with the insurer that Margaret has not shown how
discovery in the coverage action could prejudice her defense in the tort
action. The insurer has agreed that it will not seek attorney-client
privileged communications. Any other prejudice can be avoided by
allowing Margaret to raise objections to any specific discovery that would
reveal her defense strategy.

   For these reasons, we conclude that the circuit court departed from the
essential requirements of law in staying the coverage action pending
resolution of the underlying tort action. We grant the petition and quash
the order.

    Petition granted; order quashed.

CIKLIN, C.J., MAY and DAMOORGIAN, JJ., concur.

                               *           *       *

    Not final until disposition of timely filed motion for rehearing.

1 On the third factor, the insurer concedes that nothing in the record indicates
whether Margaret has sufficient resources to pay any potential judgment in the
tort action.

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