## Facts

- A tow truck owned by 27th Avenue Gulf Service Center, while towing a disabled vehicle, collided with a van driven by Winston Smellie and owned by Enid Smellie.
- The Smellie van then struck a third vehicle driven by Wilfred Gibson, who was undisputedly free from fault.
- Gibson sued Gulf and Winston Smellie for personal injuries; Gulf asserted a third-party claim against Enid Smellie seeking to shift or share liability.
- Gulf carried $300,000 in liability coverage; Enid Smellie’s van carried $10,000 in liability coverage.
- Before trial, Gibson and Gulf entered into a disclosed “high–low” agreement setting a minimum payment of $100,000 and a maximum of $300,000, tied to the jury’s verdict.
- The high–low agreement was admitted into evidence at trial.
- Counsel for the Smellies and their insurer repeatedly argued to the jury that the agreement was a “secret deal” and improper.
- The jury awarded Gibson $600,000 against Gulf and found no liability as to Winston and Enid Smellie.
- Because of the high–low ceiling and coverage, Gibson’s recovery from Gulf was capped at $300,000, leaving part of the verdict effectively uncollectible.
- Gibson and Gulf appealed.

## Issues

1. Whether a high–low settlement agreement between a plaintiff and one defendant is valid and permissible in Florida multi-defendant tort litigation.
2. Whether admission and jury discussion of the high–low agreement rendered the proceedings improper or required appellate relief.
3. Whether the high–low agreement unfairly prejudiced the non-settling defendants so as to affect the verdict.

## Decision

- The Third District Court of Appeal upheld the use of the high–low agreement.
- The court rejected the argument that the agreement was improper or invalid as a matter of Florida law.
- The court did not grant relief based solely on the existence of the high–low arrangement or claims that it prejudiced the non-settling defendants.

## Legal Principles

- High–low settlement agreements that set a floor and ceiling on recovery tied to the verdict are permissible under Florida law.
- A disclosed high–low agreement does not, by itself, constitute an improper collusive arrangement or invalidate trial proceedings in a multi-defendant case.
- High–low agreements are treated as distinct from arrangements condemned as Mary Carter agreements because the settling defendant’s exposure is fixed within a negotiated range rather than linked to shifting liability allocations among other defendants.

## Conclusion

The court upheld a disclosed high–low agreement as a lawful settlement device and declined to disturb the outcome on the theory that the agreement alone rendered the trial unfair or prejudiced non-settling defendants.


27th Ave. Gulf Serv. Ctr. v. Smellie, 510 So. 2d 996 (Fla. 3d DCA 1987)