County Civil Court:  INSURANCE – landlord/tenant - summary judgment is reviewed de novo – insurance company was not entitled to subrogation from negligent third party tenant – substance of lease agreement did not clearly shift the risk of fire loss to the tenant – lease agreement did not expressly require tenant to obtain fire insurance – Final Summary Judgment affirmed.  Chubb Ins. Co. v. CDS Sitework and Trucking, Inc., Appeal No. 03-5041AP-88A (Fla. 6th Cir. App. Ct. Dec. 2, 2004). 













vs.                                                                                    Appeal No. 03-5041AP-88A







Opinion Filed___________________


Appeal from Final Summary Judgment

Pinellas County Court

Judge William B. Blackwood


Jason D. Barlow, Esquire

Attorney for Appellant


H. Vance Smith, Esquire

Attorney for Appellee






            THIS CAUSE came before the Court on appeal, filed by Chubb Insurance Company (Chubb), a/s/o The Fifth Season Apartments (Fifth Season), from the Final Summary Judgment, entered August 1, 2003, in favor of CDS Sitework and Trucking, Inc. (CDS).  Upon review of the briefs, the record and being otherwise fully advised, the Court affirms the trial court’s ruling as set forth below.

            The underlying facts are not in dispute.  CDS leased an apartment from Fifth Season.  During the lease period, a fire occurred in the apartment which resulted in fire and smoke damage.  Based on an investigation conducted by the fire department, it was determined that the fire was an accidental fire secondary to cooking.  Fifth Season filed a claim with their insurer, Chubb, which paid $14,441.71 to repair the damage.  Chubb, in turn, filed a complaint against CDS alleging negligence and breach of contract and sought to recover the sum of $14,441.71, together with interest, court costs, and attorney’s fees.  After the complaint was answered, both parties filed motions for summary judgment.  CDS’s motion argued that, as a tenant, it was deemed a co-insured and Florida law does not permit an insurance company to maintain a subrogation action against its own insured, citing to Continental Insurance Company v. Kennerson, 661 So.2d 325 (Fla. 1st DCA 1995).  Without reaching the negligence question, the trial court granted summary judgment in favor of CDS based on the conclusion set forth in Continental.

            The sole issue on appeal is whether the trial court erred in granting summary judgment in favor of CDS when the lease agreement provided that CDS was responsible for obtaining their own casualty and liability insurance and there was no express intent of the parties to shift the risk to Chubb.  In reviewing the trial court’s decision on whether to grant summary judgment, the standard of review to be applied by this Court is de novo.  See Volusia County v. Aberdeen at Ormond Beach, 760 So.2d 126, 130 (Fla. 2000).  Further, where the determination of issues in a lawsuit depend on the construction of a written instrument and the legal affect to be drawn therefrom, the question is essentially one of law only and determinable by entry of summary judgment.  See id. at 131.  Under the facts of this case, the Court finds that the trial court correctly determined that Chubb could not maintain a subrogation claim against CDS.

The general rule in Florida is that an insurer is entitled to subrogation to recover

from a third party who is legally liable for the actual loss sustained by the insurer.  See Dixie National Bank of Dade County v. Employers Commercial Union Ins. Co. of America, 463 So.2d 1147, 1151 (Fla. 1985).  However, the right to subrogation is not absolute but depends on the equities and facts of each case.  See id.  It is also well established that an insurance company cannot maintain a subrogation action against its own insured.  See Insurnace Company of North America v. E.L. Nezelek, Inc., 480 So.2d 1333, 1335 (Fla. 4th DCA 1985), rev. den., 491 So.2d 279 (Fla. 1986). 

As stated by both parties in their respective briefs, Continental sets forth the

standard used in Florida for addressing subrogation claims in landlord/tenant cases.  In Continental, the issue was whether, “when a landlord agrees to bear the expense of repairing fire damage and assumes responsibility for procuring fire insurance, while the tenant agrees to and does bear ‘its pro rata share of all costs of fire . . . insurance,’ the parties to the lease have allocated the risk of fire to the landlord’s insurer, here Continental.”  See Continental, 661 So.2d at 326.  The lease in Continental provided that the “damages shall be expressly repaired by and at the expense of Lessor” and that the “Lessor will, during the term of this lease, maintain fire and extended coverage insurance on the demised premises for the benefit and protection of the Lessor” with the Lessee paying its pro rata share of such costs.  Id. 

In looking at the substance of the agreement to determine the intent of the parties, the First District Court of Appeal answered the issue in the affirmative and concluded that the landlord’s insurer, Continental, could not maintain a subrogation action against the negligent tenant.  See id. at 330.  The First District found its conclusion “in keeping with the ‘modern trend of authority [which] holds that the lessor’s insurer cannot obtain subrogation against the lessee in the absence of an express agreement or lease provision establishing the lessee’s liability.’”[1]  Id.   In citing the modern trend, the First District utilized the same approach taken by many jurisdictions; that is, the issue of subrogation is resolved on a flexible case-by-case basis, dependent on the intent and reasonable expectations of the parties ascertained from the lease as a whole.  See e.g. Union Mutual Fire Ins. Co. v. Joerg, 175 Vt. 196, 199 (Vt. 2003); Fire Ins. Exchange v. Hammond, 83 Cal.App.4th 313, 319-20 (2000).[2] 

The salient portions of the lease agreement between CDS and Chubb’s insured, Fifth Season, are contained in paragraphs 11, 13, and 15 and provide:

11.    REPAIR AND MAINTENANCE:  . . . Any damage to your apartment or the premises, except for normal wear, caused by you or your invitees will be corrected, repaired or replaced at your expense. 


13.   LIABILITY:  We will not be liable for any damage, loss, or injury to

persons or property occurring within your apartment or upon the premises, whether caused by us or someone else.  With respect to your family or invitees, you agree to protect, defend, save and hold us harmless and indemnify us from any liability.  WE STRONGLY RECOMMEND THAT YOU SECURE INSURANCE TO PROTECT YOURSELF AND YOUR PROPERTY.  


15.  FIRE AND CASUALTY:  If your apartment becomes unoccupiable because

of fire or other casualty or unforeseen event, we may, at our option, terminate this lease or repair the apartment within thirty days.  If we elect to repair, and if the damage is not due to the fault of you, your family, or invitee, the rent will abate during the time you cannot occupy the apartment.  Nothing may be used kept in or about your apartment which would in any way affect our fire and extended insurance coverage, be a violation of law, or otherwise be a hazard.


In reviewing the lease as a whole, the Court finds that, unlike the lease in

Continental, the Fifth Season lease does not clearly shift the risk of fire or the responsibility for procuring fire insurance to CDS.  The lease provides that CDS is responsible for repairing damage to the apartment that it may cause, recommends that CDS secure liability insurance to protect itself, and contains an indemnity clause in favor of Fifth Season.  However, these provisions coupled with the absence of an express requirement for the landlord, Fifth Season, to provide fire insurance is not the legal equivalent of an express agreement or lease provision establishing the liability of CDS in the event of fire.  Indeed, the language in paragraph 15. of the lease that specifically addresses damage caused by fire, i.e. “[n]othing may be used kept in or about your apartment which would in any way affect our fire and extended insurance coverage,” implies that Fifth Season had obtained fire insurance and assumed the risk of fire loss.  (e.a.).     

Therefore, because the lease does not clearly shift the risk of fire loss to the tenant, CDS, nor contain express terms requiring CDS to obtain fire insurance, the Court finds that CDS is an intended beneficiary under the insurance policy and cannot be sued by Chubb for causing the loss.  See Continental, 661 So.2d at 325.  This conclusion comports with the reasonable expectations of the parties and recognizes the commercial realities under which lessors insure leased premises and then pass on the premium cost to their tenants in rent.  See id. 




Therefore, it is,

            ORDERED AND ADJUDGED that the Final Summary Judgment is affirmed.

            DONE AND ORDERED in Chambers, at St. Petersburg, Pinellas County, Florida this ______ of November 2004.




                                                                                    JOHN A. SCHAEFER

                                                                                    Circuit Judge, Appellate Division




Copies furnished to:

Judge William B. Blackwood


Jason D. Barlow, Esquire

4062 Henderson Blvd.

Tampa, FL 33629


H. Vance Smith, Esquire

Post Office Box 2939

Tampa, FL  33601-2939

[1] As set forth in footnote 1 of the First District’s decision, this view is traced to Sutton v. Jondahl, 532 P.2d 478 (Okla. Ct. App. 1975), where the court held that a tenant should be deemed a landlord’s co-insured in the absence of a lease provision to the contrary.  


[2] The Court could find no Florida decisions citing to or analyzing Continental, and no such cases were cited by either party.