VanBibber v. Hartford Accident & Indemnity Insurance Co.

VanBibber appealed the trial court’s dismissal of an insurance company as a party defendant. The first district certified the appeal as passing on a question of great public importance or as having a great effect on the administration of justice throughout the state. We have jurisdiction pursuant to article V, section 3(b)(5) of the state constitution.

The issue in this case is the constitutionality of section 627.7262, Florida Statutes (Supp.1982). A second issue, if the statute is found constitutional, is whether the statute is applicable to causes of action accruing prior to the effective date of the statute. We hold that the statute is constitutional, but that it has no application to a cause of action predicated on events which occurred prior to the effective date of the statute.

VanBibber, claiming an injury, sued Pub-lix Super Markets and its insurance carrier, Hartford, for a claimed tort that occurred on June 25, 1982. Relying on section 627.-7262, the trial judge dismissed Hartford from the case, holding the statute both constitutional and applicable to the instant case. On appeal the district court certified the cause to this Court as requiring immediate resolution.

Section 627.7262 reads as follows:

Nonjoinder of insurers.—

(1) It shall be a condition precedent to the accrual or maintenance of a cause of action against a liability insurer by a person not an insured under the terms of the liability insurance contract that such person shall first obtain a judgment against a person who is an insured under the terms of such policy for a cause of action which is covered by such policy.

(2) No person who is not an insured under the terms of a liability insurance policy shall have any interest in such policy, either as a third-party beneficiary or otherwise, prior to first obtaining a judgment against a person who is an insured under the terms of such policy for a cause of action which is covered by such policy.

(3) Insurers are affirmatively granted the substantive right to insert in liability insurance policies contractual provisions that preclude persons who are not designated as insureds in such policies from bringing suit against such insurers prior to first obtaining a judgment against one who is an insured under such policy for a cause of action which is covered by such policy. The contractual provisions authorized in this subsection shall be fully enforceable.

(Footnote omitted.)

It is readily apparent that, by enacting this statute, the legislature sought to modify the third-party beneficiary concept adopted by this Court in Shingleton v. Bussey, 223 So.2d 713 (Fla.1969), to provide that an injured party has no beneficial interest in a liability policy until that person has first obtained a judgment against an insured. The statute transfers the accrual of a beneficial interest from the date of occurrence until the time an action brought on a tort has matured to a judgment. The statute is quite clear that no cause of action against an insurance company shall accrue until a judgment against an insured is obtained. Moreover, the statute authorizes insurance companies to insert nonjoinder provisions in their insurance policies. The significance of this last provision is found in the language of Shingleton where this Court said:

This requirement of the procedural rules raises the presumption that unless the Legislature in the exercise of its police power regulation of insurance, affirmatively gives insurers the substantive right to insert “no joinder” clauses in liability policies there is no basis in law for insurers to assume they have such contractual right as a special privilege not granted other citizens to contract immunity with their insureds from being sued as joint defendants by strangers.

Id. at 718-19.

In Markert v. Johnston, 367 So.2d 1003 (Fla.1978), we considered section 627.7262, Florida Statutes (1977), which prohibited the joinder of a motor vehicle liability insurer in an action to determine the insured’s liability. We found the statute to be procedural and held it unconstitutional for invading this Court’s exclusive rulemak-ing authority. Thus, if the successor statute under consideration is likewise procedural, and not substantive, it would have to fail on the grounds enunciated in Markert.

We perceive substantial differences between the two statutes. The present statute requires, as a condition precedent to having a third-party interest in an insur-anee policy, the vesting of that interest by judgment; the prior statute did not. The present statute specifically authorizes a contractual provision prohibiting direct third-party suits; the prior one did not. Because of the differences between the statutes, Markert does not control.

The regulation and supervision of insurance is a field in which the legislature has historically been deeply involved. See chs. 624-632, Fla.Stat. While this Court may determine public policy in the absence of a legislative pronouncement, such a policy decision must yield to a valid, contrary legislative pronouncement. In Shingleton we found that public policy authorized an action against an insurance company by a third-party beneficiary prior to judgment. The legislature has now determined otherwise. Our public policy reason for allowing the simultaneous joinder of liability carrier espoused in Shingleton, therefore, can no longer prevail. Finding that the statute is substantive and that it operates in an area of legitimate legislative concern precludes our finding it unconstitutional. If a statute can be construed to be constitutional it should be. Falco v. State, 407 So.2d 203 (Fla.1981). We hold that section 627.7262, Florida Statutes (Supp.1982), is constitutional.

Until the enactment of this statute our pronouncements in Shingleton and Markert authorized, simultaneously, a suit in tort against a tortfeasor and a claim against that tortfeasor’s insurance company. The legislature did not make this statute retroactive so we need not concern ourselves with whether this was permissible. We have held today that the statute is substantive. In the absence of clear legislative intent to make them retroactive, substantive statutes are prospective only. Seddon v. Harpster, 403 So.2d 409 (Fla.1981). Because the incident in this cause occurred prior to the effective date of section 627.-7262, October 1, 1982, Shingleton and Markert control this suit.

The order of the trial judge is affirmed to the extent of holding the statute constitutional, but is reversed in holding it applicable to the present suit. The cause is remanded for further proceedings consistent herewith.

It is so ordered.

ALDERMAN, C.J., and OVERTON and EHRLICH, JJ., concur.

SHAW, J., concurs in part and dissents in part with an opinion, in which ADKINS, J., concurs.

BOYD, J., dissents with an opinion.

. The pertinent portion of the trial judge’s order is:

The Court holds that Section 627.7262, Florida Statutes (Supp.1982), is applicable to this civil action and that plaintiff has failed to satisfy the condition precedent to bringing this action against Hartford Casualty Insurance Corporation by not first obtaining a judgment against Publix Super Markets, Inc.

The Court holds that Section 627.7262, Florida Statutes (Supp.1982), is constitutional on its face and as applied to the facts and the parties here.

The Court holds that Hartford Casualty Insurance Corporation should be dismissed as a party to this civil action until such time as plaintiff has obtained a judgment against Publix Super Markets, Inc. and thereby satisfied the statutory condition precedent.

. The language in Shingleton signalled such enactment to be a proper legislative prerogative.