Adams v. Aetna Cas. & Sur. Co., s. 88-19
| Decision Date | 30 January 1991 |
| Docket Number | Nos. 88-19,88-1104,s. 88-19 |
| Court | Florida District Court of Appeals |
| Parties | 16 Fla. L. Weekly 373 L. Carl ADAMS, II, Appellant, v. AETNA CASUALTY & SURETY COMPANY, a foreign corporation; Standard Fire Insurance Company, a foreign corporation, Appellees. EARL BACON INSURANCE AGENCY, INC., a Florida corporation, Appellant, v. L. Carl ADAMS, II, Appellee. |
Ellen B. Gwynn and Thomas J. Guilday of Huey, Guilday, Kuersteiner & Tucker, P.A., Tallahassee, for L. Carl Adams, II, appellant, in No. 88-19, appellee, in No. 88-1104.
Patricia Guilday of Fuller, Johnson & Farrell, P.A., Tallahassee, for appellant Earl Bacon Ins. Agency, Inc., in No. 88-1104.
Dixon Ross McCloy, Jr., of Sale, Smoak, Harrison, Sale, McCloy & Thompson, Chartered, Panama City, for appellees Aetna Cas. & Sur. Co. and Standard Fire Ins. Co., in No. 88-19.
These cases come to this court from final judgments entered in a single jury trial, and the records have been consolidated for appeal purposes.
In case number 88-19, L. Carl Adams, II (Biff Adams), appeals a final judgment entered on a directed verdict for Aetna Casualty & Surety Company and Standard Fire Insurance Company (referred to collectively as Aetna). 1 The complaint alleges that Aetna had not obtained a knowing rejection of uninsured/underinsured motorists insurance coverage (UM/UIM) in limits less than the stated bodily injury liability coverage from the named insured, Biff's father Leon Carl Adams (Mr. Adams), and that Aetna did not give the named insured sufficient notice of the availability of such coverage as required by section 627.727, Florida Statutes (1982 Supp.). Adams seeks to recover UM/UIM benefits up to the amount of the policy's bodily injury liability limits. Because disputed material issues of fact concerning the sufficiency of Mr. Adams's rejection of UM/UIM limits remain for resolution by the jury, we reverse the directed verdict and remand for a new trial.
In case number 88-1104, the Earl Bacon Insurance Agency, Inc. (Bacon), appeals a final judgment entered on a jury verdict awarding damages to Biff Adams on his claim that Bacon, the insurance agency selling the two policies of insurance to Mr. Adams, was negligent in respect to the professional advice and handling it gave Mr. Adams regarding availability and rejection of UM/UIM coverage. The jury found both Bacon and Mr. Adams guilty of negligence and assessed 46 percent of the fault against Bacon under the comparative negligence doctrine. Finding no error in the trial court's submission of the negligence issues to the jury, and no error in the methodology used to determine the amount of Adams's damages, we affirm the judgment against Bacon.
On May 7, 1983, Biff Adams was struck by an automobile while walking along the shoulder of a road in Panama City and received severe permanent injuries. He filed suit against the operator and the owner of the automobile involved and settled the claims for $50,000, the full amount available under their liability insurance coverage. It is undisputed that this amount is significantly less than the total damages suffered by Adams.
Biff Adams is an insured under two policies of automobile insurance issued to his father through the Bacon agency. Aetna policy number 10482358, issued as of November 1, 1978, and renewed annually thereafter, insures two motor vehicles and sets forth limits of coverage at $100,000 for bodily injury liability insurance and $10,000/$20,000 for UM/UIM insurance. Standard Fire's policy number 13569177, issued May 1, 1981, and renewed annually thereafter, insures Biff Adams's automobile and sets forth limits of $100,000 for bodily injury liability coverage and $10,000/$20,000 for UM/UIM coverage.
In the suit against Aetna, Biff Adams asserts a claim for UM/UIM coverage equal to the limits of the liability coverage under each policy. He contends that Mr. Adams, as named insured, never made an informed and knowing rejection or selection of UM/UIM limits lower than the liability limits in each policy. He further alleges that neither when the policies were first issued nor at the time of notification of annual renewal and billing for the premium due did Aetna provide Mr. Adams a meaningful opportunity to reject UM/UIM coverage equal to the liability coverage and to obtain UM/UIM limits higher than the $10,000/$20,000 limits shown on the face of the policies. At the conclusion of the trial, the court directed a verdict in Aetna's favor, relying primarily on Marchesano v. Nationwide Property and Casualty Ins. Co., 506 So.2d 410 (Fla.1987). The court instructed the jury that "as a matter of law the court has found that Aetna mailed to Carl Adams [the named insured] and that Carl Adams received the brochures marked into evidence as Defendant's exhibits 4 and 5" prior to May 1, 1983. The brochures referred to are copies of notices of available UM/UIM coverage that Aetna contends it sent to Mr. Adams in April 1983 with the premium notices. 2 The court ruled that Mr. Adams did not request higher UM/UIM benefits after receiving three notices and thus waived his right to any increased coverage.
In the cause of action against the Earl Bacon Insurance Agency, Biff Adams contends that the personnel in Bacon's office placing the insurance for Mr. Adams failed to advise, inform, and handle the placement of the UM/UIM coverage in accordance with the standard of professional care normally expected of a reasonably prudent insurance agent, resulting in inadequate UM/UIM coverage. At trial, Biff Adams and Bacon stipulated that Adams's injuries caused damages exceeding $115,000, but did not fix the dollar amount of Adams's total damages. The jury returned a verdict finding both Mr. Adams and Bacon guilty of negligence and assessed comparative fault against each of them. Pursuant to the stipulation and the jury verdict, the trial court entered judgment against Bacon for $115,000, calculated by first determining that Adams should have had $300,000 UM coverage available by stacking the amounts of liability coverage in the two policies, 3 subtracting the $50,000 settlement recovered from the tortfeasor, and then multiplying the difference of $250,000 by the 46 percent negligence assessed against Bacon by the jury.
We first address the directed verdict for Aetna. Bacon is an insurance agency authorized to sell Aetna insurance policies. Bacon prepared the applications for the policies for Mr. Adams, and both policies were issued with lower limits of $10,000/20,000 UM/UIM coverage in accordance with these applications. On the record in this case, we consider Bacon to be the agent of Aetna rather than Mr. Adams concerning Aetna's statutory obligation to obtain a proper rejection of statutorily-required UM/UIM coverage, and Aetna will be treated as bound by Bacon's knowledge and conduct in that regard. See Quirk v. Anthony, 563 So.2d 710 (Fla. 2d DCA 1990).
The record contains evidence tending to establish, with some dispute, the circumstances under which Mr. Adams obtained the initial issuance and delivery of the two liability insurance policies and the nature and sufficiency of Aetna's notices (brochures) dealing with the availability and rejection of UM/UIM coverage that Aetna contends were enclosed with the renewal premiums. The evidence, drawing inferences most favorably for Biff Adams, is sufficient to support findings of the following ultimate facts by a jury: Mr. Adams never knowingly rejected UM/UIM coverage in limits less than those required by statute, and never personally executed a valid written form or document indicating such rejection; UM/UIM insurance coverage was not discussed with Mr. Adams in 1978 when the Aetna policy was issued, or in 1981 when the Standard policy was issued, or at any other time thereafter; no UM/UIM rejection form was signed by Adams when the applications were filled out and signed; three weeks after applying for the policy in 1978, a blank UM form was sent to Mr. Adams, who signed and returned it without rejecting UM/UIM coverage or selecting any particular limits; there was no explanation of UM/UIM coverage with this form; and, in 1981 the application for the Standard policy and the accompanying UM/UIM form was prepared by personnel in Bacon's office who placed Mr. Adams's signature thereon without discussing the matter with Mr. Adams.
There is also considerable dispute in the evidence regarding whether Aetna actually sent out the notices or brochures describing available UM/UIM coverage with the renewal premiums in April 1983. Biff Adams argues that Mr. Adams was not properly informed and never made a knowing rejection of UM/UIM limits less than the bodily injury liability limit provided in the policy, and never signed a UM/UIM form indicating either rejection or selection of lower limits that would permit Aetna to issue the original policies with the reduced UM/UIM coverage.
The provisions in section 627.727, Florida Statutes (1982 Supp.), governed the renewal of the policies in November 1982 and May 1983, the last renewal dates for each policy immediately preceding the date of the accidental injuries to Adams. Aetna's statutory duty to provide UM/UIM coverage with limits equal to the policy's bodily injury liability coverage limits, unless negated by the named insured's written rejection of such coverage, is found in the following provisions of section 627.727:
(1) No motor vehicle liability insurance policy shall be delivered or issued for delivery in this state with respect to any motor vehicle registered or principally garaged in this state unless uninsured motor vehicle coverage is provided therein or supplemental thereto for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles because of bodily injury,...
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