EVANSTON INSURANCE COMPANY
v.
HYMAN, SONNY GLASBRENNER, INC.
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Evanston Insurance Company, an excess liability insurer, appeals a trial court order approving a settlement agreement between a chapter 727 assignee, a general contractor, and the primary liability insurer without Evanston's participation. The court affirmed, holding that because the trial court did not decide the critical issue of whether its findings have binding effect on the non-party excess insurer, the appellate court could not reach the merits of Evanston's arguments.
The court affirmed because the trial court did not decide the fundamental issue of whether its findings have any binding effect on Evanston, a non-party to the settlement. The court held that it cannot address Evanston's due process and evidentiary challenges without the trial court first deciding whether the order binds the excess insurer or precludes it from taking contrary coverage positions in other proceedings.
[1] A trial court's order approving a settlement agreement is generally not binding on a non-party to that agreement.
[2] A party seeking appellate review of a trial court's order must have presented the issues to the trial court for its determination.
Previewing 2 of 6 headnotes on this case. FLexlaw’s editorially structured points of law — every proposition, pinpointed — are reserved for members.
Join FLexlaw to unlock all legal intelligence“the fundamental issue underlying Evanston's arguments—and the fundamental question Evanston asks us to decide—is whether the trial court's findings have any binding effect on Evanston and any excess coverage it might owe to satisfy the remainder of C&G's claim.”
Identifies the central threshold question that the trial court failed to address, preventing appellate review of Evanston's substantive arguments.
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Join FLexlaw to unlock all legal intelligenceA subcontractor on a bridge construction project became insolvent and commenced a chapter 727 liquidation proceeding in July 2021. The general contrac…
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LABRIT, Judge.
Evanston Insurance Company seeks review of an order approving a settlement to which it was not a party. Because Evanston's arguments would require us to decide a critical issue that the trial court did not, we affirm.
Evanston issued a commercial excess liability policy to a subcontractor that worked on a bridge construction project in 2018. The subcontractor later became insolvent and in July 2021, it commenced a proceeding in circuit court under chapter 727, Florida Statutes (2021). Such proceedings are an alternative to bankruptcy, and they allow a debtor to assign its assets to a third-party assignee, who then liquidates the debtor's assets to satisfy claims of its creditors. See Hillsborough County v. Lanier, 898 So. 2d 141, 143 (Fla. 2d DCA 2005). In September 2021, the general contractor for the bridge construction project, Cone & Graham, Inc. (C&G), filed a proof of claim in the chapter 727 proceeding. C&G amended its proof of claim the following month, and its amended proof of claim alleged that the subcontractor's negligent work caused more than $2.8 million in property damage. No objections to C&G's initial or amended proof of claim were filed within the time provided by section 727.113(1). In November 2021, the assignee filed his final report attesting that he had administered the subcontractor's assets, which totaled $8,642.26. Then, on December 17, 2021, the trial court entered an order approving the assignee's final report, discharging the assignee, and directing the clerk to close the case.
A few days later, however, the assignee and C&G filed a joint stipulation with the trial court. They stipulated to allowing C&G's claim in full because there were no objections to it, and they agreed that C&G could pursue its claim to the extent of any insurance proceeds that might be available. The trial court approved the joint stipulation by order entered December 28, 2021. The order allowed C&G's amended proof of claim in full and authorized C&G to pursue coverage for its claim from the subcontractor's primary and excess insurers. In the meantime, the assignee, C&G, and the subcontractor's primary liability insurer Everest Denali Insurance Company (EDIC) agreed to a partial resolution of C&G's claim. They executed a settlement agreement under which EDIC agreed to pay C&G its $1 million per occurrence limit in exchange for a release and other terms. The settling parties then filed a joint motion with the trial court asking it to approve the settlement under section 727.109(7).1 But Evanston, as the excess insurer above EDIC, objected to the settlement and the settling parties' request for court approval. The settling parties later amended the settlement agreement and their motion, and Evanston again objected. The trial court then held a hearing that the settling parties and Evanston all attended. After the hearing, the trial court entered an order overruling Evanston's objection and approving the settlement among the assignee, C&G, and EDIC.
Evanston appeals the trial court's order2 and takes issue with multiple findings in it. In particular, the order finds that the property damage C&G alleged in its amended proof of claim was caused by one
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- Fla. Emergency Physicians-Kang & Assocs., M.D., P.A. v. Parker, 800 So. 2d 631 (Fla. 5th DCA 2001)
- Maynard v. The Fla. Bd. OF Educ., 998 So. 2d 1201 (Fla. 2d DCA 2009)
- Morse v. Morse, 709 So. 2d 644 (Fla. 2d DCA 1998)
- Hillsborough Cnty. v. Lou Ann Lanier, CPA, 898 So. 2d 141 (Fla. 2d DCA 2005)
- Video Super Stores OF Am., Inc. v. Mastriana, 575 So. 2d 326 (Fla. 4th DCA 1991)
- Francel v. Douma, 122 So. 3d 969 (Fla. 2d DCA 2013)