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Carrousel Concessions, Inc. v. Florida Ins. Guaranty Asso.

Court of Appeal of Florida, Third District

February 19, 1986

No. 84-2354

Opinion

 [*514]  Carrousel Concessions, Inc., Dania Jai-Alai Palace, Inc., and Saturday Corporation [collectively Carrousel] appeal the final summary judgment granted in favor of Florida Insurance Guaranty Association [FIGA]. We reverse.

Carrousel was a defendant in a personal injury action brought in 1978. Carrousel had $500,000 primary liability insurance coverage with Consolidated Mutual Insurance Company [Consolidated] and excess insurance coverage under an umbrella policy with Public Service Mutual Insurance Company. During the course of the personal injury action, Consolidated became insolvent, and FIGA, in accordance with section 631.57, Florida Statutes [**2]  (1977), assumed Consolidated's duties and obligations. By statute, however, FIGA's liability obligation was capped at $300,000, 1  [*515]  thereby causing a $200,000 gap in coverage.

 One of the duties assumed by FIGA was the duty to defend the lawsuit. FIGA hired a firm to defend the lawsuit after counsel employed by Consolidated withdrew. Due to a conflict in interest, the second firm also withdrew. Carrousel's third defense counsel began discovery two weeks before trial. At the demand of Carrousel, defense counsel [**3]  moved for a continuance, but the motion was denied. (The trial subsequently was continued because of the court's own scheduling conflicts.)

Carrousel became dissatisfied with the way the attorneys hired by FIGA were preparing for trial. Carrousel alleged that "FIGA's counsel continued to neglect the defense of the case, making little or no effort to prepare for trial." Carrousel requested that its attorneys be permitted to assume the defense of the lawsuit. FIGA agreed to the substitution of counsel but refused to pay the costs and attorneys' fees for the defense.

The trial resulted in an adverse judgment of $775,000. Carrousel decided to appeal. FIGA refused to post an appeal bond, pay a pro rata share of such bond, or prosecute the appeal. Carrousel obtained a stay of the judgment by posting a supersedeas bond. While the appeal was pending, FIGA paid the plaintiff in the personal injury action the $300,000 liability limit.

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483 So. 2d 513 *; 1986 Fla. App. LEXIS 6353 **; 11 Fla. L. Weekly 489

CARROUSEL CONCESSIONS, INC., DANIA JAI-ALAI PALACE, INC., and SATURDAY CORPORATION, Appellants, v. FLORIDA INSURANCE GUARANTY ASSOCIATION and PUBLIC SERVICE MUTUAL INSURANCE COMPANY, Appellees

Prior History:  [**1]   An Appeal from the Circuit Court for Dade County, Joseph J. Gersten, Judge.

Disposition:  Reversed and remanded with directions.

CORE TERMS

lawsuit

Insurance Law, Types of Insurance, Reinsurance, Primary Insurer Insolvency, Liability & Performance Standards, Good Faith & Fair Dealing, Duty to Defend, Bad Faith & Extracontractual Liability, Refusals to Defend, Business & Corporate Compliance, Contracts Law, Types of Contracts, Guaranty Contracts, Contracts Law, Breach, General Overview, Remedies, Costs & Attorney Fees, Failure to Defend, Insurer Insolvency, Labor & Employment Law, Employer Liability, Third Party Insurers, Civil Procedure, Costs, Parties, Intervention, Intervention of Right, Summary Judgment, Motions for Summary Judgment, Burdens of Proof