Ruderman v. Washington Nat'l Ins. Corp.

• Decision Date: 17 February 2012
• Docket Number: No. 10–14714.,10–14714.
• Citation: 671 F.3d 1208
• Parties: Sydelle RUDERMAN, by and through her Attorney-in-fact, Bonnie SCHWARTZ, Sylvia Powers, by and through her Attorney-in-fact, Les Powers, individually and on behalf of all others similarly situated, et al., Plaintiffs–Appellees, v. WASHINGTON NATIONAL INSURANCE CORPORATION, Successor in Interest to Pioneer Life Insurance Company, Defendant–Appellant.
• Court: U.S. Court of Appeals — Eleventh Circuit

671 F.3d 1208

Sydelle RUDERMAN, by and through her Attorney-in-fact, Bonnie SCHWARTZ, Sylvia Powers, by and through her Attorney-in-fact, Les Powers, individually and on behalf of all others similarly situated, et al., Plaintiffs–Appellees,

v.WASHINGTON NATIONAL INSURANCE CORPORATION, Successor in Interest to Pioneer Life Insurance Company, Defendant–Appellant.

No. 10–14714.

United States Court of Appeals, Eleventh Circuit.

Feb. 17, 2012.

Neil Rose, Bernstein, Chackman, Liss & Rose, Hollywood, FL, Steven Michael Dunn, Steven M. Dunn, PA, Bay Harbor Island, FL, Mark S. Fistos, Steven R. Jaffe, Farmer, Jaffe, Weissing, Edwards, Fistos & Lehman, PL, Fort Lauderdale, FL, Richard Jason Lantinberg, The Wilner Firm, P.A., Jacksonville, FL, Lee A. Weiss, Browne, Woods, George, LLP, New York City, for Plaintiffs–Appellees.

Daniel J. Koleos, Koleos Rosenberg, PA, Fort Lauderdale, FL, Jeffrey J. Amato, Adam J. Kaiser, Paula C. Ro, Dewey & LeBoeuf, LLP, New York City, for Defendant–Appellant.

Appeal from the United States District Court for the Southern District of Florida.Before EDMONDSON, MARTIN and SUHRHEINRICH,^* Circuit Judges.PER CURIAM:

This case involves a dispute between Plaintiff–Appellees Sydelle Ruderman, Sylvia Powers, and other class members (“the insureds”) and Pioneer Life Insurance Company, which is succeeded in this action by Defendant–Appellant Washington National Insurance Corporation (“Washington National”). The controversy is over the proper interpretation of certain similar insurance contracts under Florida law. Washington National appeals the District Court's grant of summary judgment for the insureds.

The District Court concluded that the policies in question were ambiguous and that, under Florida law, they were then to be construed against Washington National. We agree that the policies are ambiguous, but we conclude that Florida law is unsettled on the proper way to resolve the ambiguity. To establish the proper approach to take under Florida law in interpreting the ambiguity, we need some help; so we certify a question to the Supreme Court of Florida.

Background

The insureds each purchased a Limited Benefit Home Health Care Coverage Policy (“Policy”) from Pioneer Life Insurance Company providing reimbursement for certain Home Health Care expenses.¹ For purposes of this appeal, the body of each Policy contains identical language but attached to each Policy is a Certificate Schedule (“Certificate”) that sets forth the exact coverage amounts specific to each of the insureds and provides a level of differentiation between each Policy. The Policy provides for reimbursement through a maximum daily benefit called the “Home Health Care Daily Benefit” (“Daily Benefit”). The provision of the Daily Benefit is limited by a “Per Occurrence Maximum Benefit” (“Per Occurrence Cap”) for each illness, and a “Lifetime Maximum Benefit” (“Lifetime Cap”) for all injuries and sicknesses over the life of the Policy.

In addition to the Daily Benefit, the Per Occurrence Cap, and the Lifetime Cap, the Policy also provides for an “Automatic Daily Benefit Increase” which is defined this way: “AUTOMATIC DAILY BENEFIT INCREASE: On each policy anniversary, we will increase the Home Health Care Daily Benefit payable under the policy by the Automatic Benefit Increase Percentage shown on the schedule page.” On the Certificate, the words “Home Health Care Daily Benefit,” “Lifetime Maximum Benefit Amount,” and “Per Occurrence Maximum Benefit” are each listed on a separate line—in chart form—next to a corresponding monetary value. Directly below these lines is an identically formatted line with the words “Automatic Benefit Increase Percentage” and—where the other lines have a monetary value—the words “Benefits increase by 8% each year.”²

This controversy focuses on the application of the Policy's “Automatic Benefit Increase Percentage” (“Automatic Increase”) provision. The language from the body of the Policy and the language from the Certificate create a potential ambiguity in the Policy about whether the Automatic Increase applies only to the Daily Benefit or whether it also applies to the Lifetime Cap and Per Occurrence Cap in addition to the Daily Benefit. The Plaintiffs represent a class of insureds who have not yet been denied any coverage, but who are seeking to establish the correct amount of their Lifetime Cap and Per Occurrence Cap under the Policy. The District Court concluded that an ambiguity exists in the Policy and granted Summary Judgment for the insureds based on the court's understanding that policy ambiguities should be construed against Washington National as drafter of the Policy.

Discussion

Under the Florida law of insurance contracts “[i]f the relevant policy language is susceptible to more than one reasonable interpretation, one providing coverage and the [sic] another limiting coverage, the insurance policy is considered ambiguous.” Auto–Owners Ins. Co. v. Anderson, 756 So.2d 29, 34 (Fla.2000). In searching for meaning in an insurance contract under Florida law “courts should read each policy as a whole, endeavoring to give every provision its full meaning and operative effect.” Id.

We agree with the District Court's conclusion that the Policy is ambiguous about whether the Lifetime Cap and Per Occurrence Cap increase each year or whether only the Daily Benefit increases each year. The way the “Benefits” section of the Policy and the Certificate are drafted, it is reasonable to read the Certificate language “Benefits increase by 8% each year” as applying solely to the Daily Benefit; but it is also reasonable to read the Certificate language to mean that all the amounts listed within the Policy's “Benefits” section—including the “Per Occurrence Maximum Benefit” and the “Lifetime Maximum Benefit”—increase annually. Under Florida law, because “the relevant policy language is susceptible to more than one reasonable interpretation, one providing coverage and the [sic] another limiting coverage, the insurance policy is considered ambiguous.” Id.

For us, the correct approach under Florida law in resolving the ambiguity in the Policy is unclear. The chief case out of the Florida Supreme Court on the interpretation of an ambiguity in insurance contracts seems to be Auto–Owners Ins. Co. v. Anderson, 756 So.2d 29 (Fla.2000). Anderson was a response to a question certified from this Court and has been repeatedly cited by state and federal courts for the principle that “[a]mbiguous policy provisions are interpreted liberally in favor of the insured and strictly against the drafter who prepared the policy.” Id. at 34.

While Anderson seems to support the District Court's entry of Summary Judgment against Washington National, another principle of Florida law supports looking to extrinsic evidence to resolve the ambiguity before construing any remaining ambiguity against the drafter of the policy. In Excelsior Ins. Co. v. Pomona Park Bar & Package Store, 369 So.2d 938 (Fla.1979), the Florida Supreme Court—many years before Anderson—qualified the longstanding rule of construing an ambiguity against the drafter, stating that “[o]nly when a genuine inconsistency, uncertainty, or ambiguity in meaning remains after resort to the ordinary rules of construction...