State Farm Fire & Cas. Ins. Co. v. Wilson

• Decision Date: 21 May 2021
• Docket Number: Case No. 2D19-4046
• Citation: 330 So.3d 67
• Parties: STATE FARM FIRE AND CASUALTY INSURANCE COMPANY, Appellant, v. Tammy WILSON, Appellee.
• Court: Florida District Court of Appeals

330 So.3d 67

STATE FARM FIRE AND CASUALTY INSURANCE COMPANY, Appellant,

v.Tammy WILSON, Appellee.

Case No. 2D19-4046

District Court of Appeal of Florida, Second District.

Opinion filed May 21, 2021.

Anthony J. Russo and James Michael Shaw, Jr., of Butler Weihmuller Katz Craig LLP, Tampa; and Robert L. Kaleel of Kaleel & Kaleel, P.A., St. Petersburg, for Appellant.

Christopher J. Bolduc and Nicholas A. Athanason of Athanason & Bolduc, P.A., St. Petersburg, for Appellee.

LABRIT, Judge.

This case features a not-uncommon scenario in which the insureds (David Schnitz and Tammy Wilson) purchased non-stacking uninsured motorist (UM) coverage and paid a premium twenty percent lower than what they would have been charged for stacking coverage. After sustaining injuries in an accident with an uninsured motorist, Ms. Wilson sought the more expansive benefits provided by stacking coverage. The trial court erred as a matter of law by granting Ms. Wilson's request, so we reverse the final judgment and remand with instructions to enter judgment for State Farm.

Factual Background and Procedural History

The material facts are undisputed. Ms. Wilson lived with her boyfriend, Mr. Schnitz. State Farm issued an automobile insurance policy to Mr. Schnitz and Ms. Wilson. The policy provided bodily injury liability (BI) coverage with limits of $25,000 per person and provided UM coverage with limits equal to the BI coverage limits.

The policy was renewed, and the declarations page reflects that the renewal policy covered one vehicle, a Ford F-350 truck. In connection with the renewal, Mr. Schnitz signed a UM selection/rejection form in which he selected non-stacking UM coverage. The Office of Insurance Regulation (OIR) had approved this form and—pursuant to section 627.727(9), Florida Statutes (2016)¹ —State Farm's premium rates for non-stacking UM coverage reflect a reduction of at least twenty percent as compared to premium rates for stacking UM coverage. As the declarations page confirms, the renewal policy provided "Uninsured Motor Vehicle Coverage (Non-Stacking )" with coverage limits matching the $25,000 BI coverage limits.

The policy terms applicable to non-stacking UM coverage contain the following "Other Owned Vehicle" exclusion:

THERE IS NO COVERAGE:

....

2. FOR AN INSURED WHO SUSTAINS BODILY INJURY :

a. WHILE OCCUPYING A VEHICLE OWNED BY YOU OR ANY RESIDENT RELATIVE IF IT IS NOT YOUR CAR .

The policy defines "You" as the named insureds, who are Mr. Schnitz and Ms. Wilson. "Your car" means "the vehicle shown under 'YOUR CAR' on the declarations page," which is the Ford F-350 and no other vehicle.

Mr. Schnitz owned a motorcycle that was not insured under the State Farm policy. While Ms. Wilson and Mr. Schnitz were riding that motorcycle, they were in a crash with an automobile operated by an uninsured/underinsured driver. State Farm denied Ms. Wilson's claim for UM coverage, relying on the Other Owned Vehicle exclusion.

Ms. Wilson sued State Farm, seeking a declaration that the policy provided UM coverage for her injuries and demanding damages in the form of UM benefits. State Farm moved for summary judgment, arguing that (1) pursuant to section 627.727(9) and by virtue of Mr. Schnitz's execution of the OIR-approved selection/rejection form, State Farm was entitled to a conclusive presumption that its insureds had made an informed, knowing acceptance of the limitations of non-stacking UM coverage and (2) the Other Owned Vehicle exclusion in State Farm's Non-Stacking policy precluded coverage for Ms. Wilson's injuries.

The trial court acknowledged that (1) the selection/rejection form had been approved by OIR and signed by Mr. Schnitz and (2) the Other Owned Vehicle exclusion applied since Ms. Wilson was occupying a vehicle "that was owned by another named insured [but that] was not listed on the policy." The court also understood that "direct application of the policy and the statute to the undisputed facts of this case would preclude coverage." Nonetheless, the court denied State Farm's summary judgment motion, reasoning that State Farm was not entitled to the conclusive presumption afforded by section 627.727(9) because the "form did not adequately put Mr. Schnitz on notice of the limitation of coverage for all insureds." More specifically, the court determined "that the selection/rejection form is inconsistent with the policy and would lead the signor to believe that under these facts and circumstances, there would be coverage."

State Farm moved for reconsideration, relying upon section 627.727(9) and Larusso v. Garner, 888 So. 2d 712 (Fla. 4th DCA 2004), to argue that the trial court was not empowered to scrutinize the text of the OIR-approved form "for the purpose of invalidating policy language that the court deems inadequately explained in the form." The trial court denied State Farm's motion, stating that applying Larusso would cause "the statute's conclusive presumption of coverage limitations to be an unconstitutional denial of access to the courts." The court then entered a "Partial Final Judgment" declaring that Ms. Wilson was entitled to UM coverage. Because that judgment wasn't an appealable final order,² the parties stipulated to entry of a final judgment in Ms. Wilson's favor and against State Farm for the policy limits to obtain immediate review of the coverage determination. This appeal ensued.

Analysis

The trial court's ruling on State Farm's motion for summary judgment and its construction of the statute and insurance policy are reviewed de novo. State Farm Auto. Ins. Co. v. Lyde, 267 So. 3d 453, 458 (Fla. 2d DCA 2018). Our primary task in statutory construction is to give the statutory text its plain and obvious meaning; we lack "power to construe an unambiguous statute in a way which would extend, modify, or limit, its express terms or its reasonable and obvious implications. To do so would be an abrogation of legislative power." Holly v. Auld, 450 So. 2d 217, 219 (Fla. 1984).

In reviewing the insurance policy, we begin with the principle that an insurance contract is construed "in accordance with its plain language as bargained for by the parties." Lyde, 267 So. 3d at 458 (citing Auto-Owners Ins. Co. v. Anderson, 756 So. 2d 29, 34 (Fla. 2000) ); see also Gen. Star Indem. Co. v. W. Fla. Vill. Inn, Inc., 874 So. 2d 26, 29 (Fla. 2d DCA 2004) (stating that insurance policies "should receive a construction that is reasonable, practical, sensible, and just"). Exclusion provisions may be construed more strictly than coverage provisions and interpreted in favor of the insured, but this principle only applies if a genuine ambiguity remains after resort to the ordinary rules of construction; it does not empower us to "rewrite contracts, add meaning that is not present, or otherwise reach results contrary to the intentions of the parties." Deni Assocs. of Fla. v. State Farm Fire & Cas. Ins. Co., 711 So. 2d 1135, 1138 (Fla. 1998) (quoting State Farm Mut. Auto. Ins. Co. v. Pridgen, 498 So. 2d 1245, 1248 (Fla. 1986) ). Ambiguity exists only where policy text is susceptible of more than one reasonable interpretation. Id. Likewise, "ambiguity does not exist merely because an insurance contract is complex and requires analysis to interpret it." Gen. Star Indem. Co., 874 So. 2d at 30 (citations omitted). Lastly, we are not empowered to rewrite an insurance policy to relieve one party from the apparent hardship of an improvident bargain, Green v. Life & Health of Am., 704 So. 2d 1386, 1391 (Fla. 1998), and insurance policies "will not be construed to reach an absurd result." Deni Assocs. of Fla., 711 So. 2d at 1140.

The UM Statutory Framework

To understand why the judgment is erroneous as a matter of law, it is helpful to understand the UM statutory framework pertinent to insureds' decisions to purchase UM coverage (or not) and whether to accept limitations on such coverage. By statutory mandate, UM coverage is required in any automobile insurance policy which provides BI coverage. See § 627.727(1). Until the mid-1980s, mandatory UM coverage was an "all or nothing" proposition—an insured either accepted the coverage or rejected it outright—and an insurer that could not establish a "knowing rejection" of UM coverage (historically, a fact question) was obligated to provide such coverage regardless of whether the insured had actually purchased it. See, e.g., Nationwide Mut. Fire Ins. Co. v. Kauffman, 495 So. 2d 1184, 1187 (Fla. 4th DCA 1986).

In 1982, the legislature amended the UM statute by requiring insureds to reject UM coverage in writing; in 1984, the legislature further amended the statute by creating a conclusive presumption that an insured knowingly rejected UM coverage if the insured signed a form approved by the Insurance Commissioner.³ As we explained decades ago, these amendments represented the legislature's attempt "to avoid litigation over a 'knowing' rejection by placing far greater emphasis and importance upon the written rejection as a self-proving document." Quirk v. Anthony, 563 So. 2d 710, 714 (Fla. 2d DCA 1990).

In 1987, the legislature again amended the UM statute and authorized insurers to offer limited UM coverage, known as non-stacking coverage, for a reduced premium. Ch. 87-213, § 1, Laws of Fla. (corresponds to section 627.727(9) ); see also Gov't Emps. Ins. Co. v. Douglas, 654 So. 2d 118, 122 (Fla. 1995) (Overton, J., dissenting) ("[ Section 627.727(9) ] was written solely to allow non-stacked [UM] coverage."); see generally Am. S. Home Ins. Co. v. Lentini, 286 So. 3d 157, 161–63 (Fla. 2019) (Muñiz, J., concurring in part) (explaining procedures for limiting UM coverage under section 627.727(9) ). The 1987 amendment enumerated several authorized limitations on UM coverage, including subsection (9)(d) which authorizes non-stacking UM policies to exclude coverage for a named insured who is injured while occupying any vehicle owned by a named insured unless UM coverage was purchased for that vehicle.

The 1987 ame...