If the insurer sits on its hands after notice of the litigation against its insured, it will probably be bound by the judgment, assuming there was no collusion or fraud. Columbia; Cunningham v. Austin Ford, Inc., 189 So.2d 661 (Fla. 3d DCA 1966), cert. discharged, 198 So.2d 829 (Fla. 1967); Westinghouse Electric Corporation v. J.C. Penney Company, 166 So.2d 211 (Fla. 1st DCA 1964); American Fire Casualty Co. v. Blaine, 183 So.2d 605 (Fla. 3d DCA 1966); Restatement of Judgments § 57; 31 Fla.Jur.2d Insurance § 841; 7C Appleman, Insurance Law Practice, § 4685.01, (Berdal ed. 1979). If the insurer defends the insured, or if it provides independent defense counsel because of the conflict, it may be bound by the issues determined in the suit, even if it obtains a non-waiver agreement or gives timely notice of its intent to reserve its rights to dispute coverage.
These cases unequivocally support our affirmance of Home's right to prove liability for noncovered acts. Because of their factual settings, however, they uniformly do not discuss the problem of proving allocation, a problem arising only after the insurer has established that an unallocated verdict represents in part liability for noncovered acts. Thus, in American Fire Cas. Co. v. Blaine, 183 So.2d 605 (Fla.Ct.App. 1966), the pleadings in the main case, which charged negligence and assault and battery by the insured, were amended before trial to delete assault and battery. As the court pointed out, the carrier could not litigate the issue of intentional tort while defending the insured on a negligence charge, the damages for which would be covered.
The existence of the obligation to defend arises and must be determined by the claims alleged by the pleadings in the suit, and not upon the insuror's evaluation of ultimate liability vel non. St. Paul Fire and Marine Ins. Co. v. Hodor, Fla.Ct.App. 1967, 200 So.2d 205; Burton v. State Farm Mutual Auto Insurance Co., 5 Cir. 1964, 335 F.2d 317; Ketona Chemical Corp. v. Globe Indemnity Company, 5 Cir. 1968, 404 F.2d 181. Based upon the pleadings in the state court suit, it is clear that American Surety was obligated to undertake Carbone's defense. Where either an indemnitor or liability insuror has notice of a proceeding against his indemnitee or insured, and is afforded an opportunity to appear and defend, a judgment rendered against the indemnitee or insured, in the absence of fraud or collusion, is conclusive against the indemnitor or insuror as to all material matters determined therein. American Fire and Casualty Co. v. Blaine, Fla.App. 1966, 183 So.2d 605; Westinghouse Electric Corp. v. J.C. Penney Company, Inc., Fla.App. 1964, 166 So.2d 211; Wright v. Fidelity and Casualty Co. of New York, Fla.App. 1962, 139 So.2d 913; Columbia Casualty Co. v. Hare, 1934, 116 Fla. 29, 156 So. 370. Because American Surety refused to handle his defense, Carbone was left to his own resources. It was certainly in his best interest to consent to the entry of a judgment that could be satisfied only from public liability insurance policies covering him at the time of the incident rather than from his own personal assets.
Further support for the appellant's contention is found in a recent decision of a Florida appellate court holding that a finding of negligence in a suit between an injured party and the insured is not binding in garnishment proceedings against the insurer since the question of whether the insured was guilty of assault and battery, as opposed to negligence, is not an issue which can properly be litigated in the case-in-chief. American Fire and Casualty Co. v. Blaine, Fla.Ct.App. 1966, 183 So.2d 605. The factual situation in Blaine was nearly identical to that in the instant case, the only relevant difference being that in Blaine the insurance company defended under a reservation of right rather than withdrawing from the case. The suit by the injured party against the insured resulted in recovery for the plaintiff under a negligence count.
The insurers, had they appealed from the negligence findings, would have been acting adversely to their insureds' interest. If the negligence issues had been set aside in an appellate review the original defendants would have been 'stuck' with conviction of offenses clearly excluded from coverage. Under the circumstances we think the insurers are not bound by the negligence findings in Cause No. 66 — 3. Support for our conclusion is found in American Surety Co. of New York v. Coblentz, 381 F.2d 185 (5th Cir., 1967); American Fire and Cas. Co. v. Blaine, 183 So.2d 605 (Fla.App., 3rd Dist., 1966); Farm Bureau Mut. Automobile Ins. Co. v. Hammer, 177 F.2d 793 (4th Cir., 1949). Both policies were Texas Standard Homeowners policies.