Joynt v. Star Ins. Co.

Citation: 314 F. Supp. 3d 1233Docket: Case No: 6:16–cv–924–Orl–40KRS

Court: District Court, M.D. Florida; June 1, 2018; Federal District Court

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Plaintiff Erin Joynt was awarded $2,000,000 for damages due to negligence by Volusia County, which is protected by Florida's sovereign immunity caps limiting tort recovery to $200,000 per individual and $400,000 per accident. Joynt seeks to recover the excess amount from Star Insurance Company under an excess liability policy issued to Volusia County. The case involves cross motions for summary judgment regarding the interpretation of the insurance contract, with the court ultimately granting Star Insurance's motion and denying Joynt's. The incident occurred on July 31, 2011, when Joynt was severely injured by a Volusia County employee while vacationing. Following a jury trial, the original damage award of $2,600,000 was reduced to $2,000,000, of which Volusia County paid the maximum allowed under sovereign immunity. Joynt's attempt to claim excess damages from Star Insurance is based on the policy's coverage, which is contingent upon Volusia County's self-insured retention being met. The declaratory judgment action was initially filed in state court, naming both Volusia County and Star as defendants, but focused on Star Insurance.

Plaintiff seeks a judgment declaring several points regarding the insurance policy issued by Star Insurance. Key declarations include: 1) coverage for the automobile negligence of Volusia County employee Thomas Moderie, asserting both Moderie and Volusia County are "insureds" under the policy; 2) that under Fla. Stat. 768.28(5), Volusia County has exclusive authority to settle Erin Joynt's claim, and Star cannot invoke sovereign immunity to avoid indemnifying Volusia County; 3) the requirement of a claims bill exceeding the sovereign immunity cap is not a precondition for Star's obligation to indemnify up to $5,000,000; 4) Star's obligations have been activated by the jury's verdict and judgment; 5) any provision in Star's policy preventing Volusia County from settling Joynt's claim is void due to public policy and Fla. Stat. 768.28(5); 6) Erin Joynt is entitled to attorney's fees and costs from Star, along with any other appropriate relief. On May 27, 2016, Star removed the case to federal court claiming diversity jurisdiction and filed a Motion to Determine Fraudulent Joinder, alleging Volusia County was improperly joined to defeat diversity. Volusia County responded with a Motion to Dismiss, arguing no live case exists between the Plaintiff and the County. Subsequently, the Plaintiff moved to remand the case back to state court, citing lack of diversity jurisdiction. While these motions were pending, the Plaintiff sought a stay to pursue a claims bill from the Florida Legislature, which led the Court to stay proceedings until the end of the 2017 legislative session. After the session, the Court requested a status update on the claims bill, which revealed that a Senate Bill had advanced while a corresponding House Bill had failed.

A Florida House Representative voted against a claims bill, citing a pending federal declaratory judgment action that could clarify whether a claims bill is necessary for plaintiffs with an insurance policy not requiring state involvement. The representative emphasized the need for guidance on the claims process, which is viewed as overly complicated, and expressed hope that the upcoming decision would provide clarity for future legislative sessions.

Due to the pending action, the Florida Legislature did not pass the claims bill, leading to an agreement to lift a stay in the case. On May 23, 2018, the Court dismissed Volusia County from the action, ruling that there was no justiciable controversy between the Plaintiff and Volusia County, which was immune from further liability regarding the accident. The Court also stated it could not determine Volusia County's authority to settle the Plaintiff's claim, as the Complaint did not present facts demonstrating a need for a settlement agreement.

The central question remaining for the Plaintiff is whether the passage of a claims bill is a prerequisite for Star's obligation to pay excess damages. The standard for summary judgment requires that the movant demonstrate no genuine dispute over material facts and entitlement to judgment as a matter of law, with all evidence viewed favorably toward the non-moving party. A material fact affects the case outcome, and a genuine issue exists if the evidence could lead a rational trier of fact to favor the non-moving party, necessitating more than a mere scintilla of evidence for a finding in their favor.

In cross-motions for summary judgment, the denial of one motion does not necessitate the granting of another (Ernie Haire Ford, Inc. v. Universal Underwriters Ins. Co.). Summary judgment may be granted in declaratory judgment actions regarding insurance coverage when the insurer's duty is solely determined by the insurance policy's applicability and interpretation. The parties agree that the accident falls under the Policy's coverage but dispute the trigger for that coverage. The Plaintiff contends that Star's obligation to pay the Final Judgment against Volusia County was activated immediately after a lawful jury verdict and subsequent payment of self-insured retention by Volusia County. Conversely, Star argues that the Policy is not activated unless a claims bill is approved by the Florida Legislature, asserting that Volusia County is not legally required to pay amounts exceeding statutory caps due to sovereign immunity. Under Florida law, sovereign immunity protects the state and its subdivisions from lawsuits unless explicitly waived. The Florida Legislature allows for a limited waiver of sovereign immunity in tort cases with specific damage caps ($100,000 per person, $200,000 per incident). While victims can seek amounts beyond these caps through claims bills reported to the legislature, the state is not mandated to purchase insurance for these liabilities. Moreover, acquiring insurance does not constitute a waiver of sovereign immunity, as stated in the statute.

Sovereign immunity is waived only up to $200,000, with any additional waiver requiring legislative approval via a claims bill, regardless of the state’s excess liability insurance. This interpretation was upheld by the Florida Supreme Court in *Plancher v. University of Central Florida's Athletics Association, Inc.*, where a jury awarded $10 million for damages, but the Fifth District Court reduced this to $200,000 due to sovereign immunity. The Supreme Court affirmed that while UCFAA was entitled to sovereign immunity, the judgment need not be reduced; however, any amount above $200,000 must be pursued through the legislature.

The court clarified that insurance companies cannot be liable for amounts that the state, protected by sovereign immunity, is not liable for. Consequently, Star Insurance cannot be compelled to pay damages that Volusia County cannot pay. Although this ruling may seem to limit recovery for tort victims, prior to §768.28, there was no statutory right to recover for county negligence. The statute provides a limited waiver, allowing the plaintiff to recover $200,000 from Volusia County and potentially pursue the remainder through a claims bill. Upon passage, Star's obligation to indemnify Volusia County would activate.

The court’s conclusion denied the plaintiff's summary judgment motion and granted Star Insurance's, instructing the clerk to finalize the judgment in favor of the defendant. The court emphasized that the $200,000 per person and $300,000 per incident caps were established by the Florida legislature and apply to the insurance contracts reviewed under the statute in effect at contract execution. Sovereign immunity, rooted in the Eleventh Amendment, limits jurisdiction over lawsuits against the state and its subdivisions, which qualify for sovereign immunity as an arm of the state.