Auto-Owners Ins. Co. v. Anderson

• Decision Date: 23 March 2000
• Docket Number: No. SC95337.,SC95337.
• Citation: 756 So.2d 29
• Parties: AUTO-OWNERS INSURANCE COMPANY, Petitioner, v. Karen ANDERSON, Respondent.
• Court: Florida Supreme Court

756 So.2d 29

AUTO-OWNERS INSURANCE COMPANY, Petitioner, v. Karen ANDERSON, Respondent.

No. SC95337.

Supreme Court of Florida.

March 23, 2000.

Rehearing Denied May 9, 2000.

Charles P. Schropp and Amy S. Farrior of Schropp, Buell & Elligett, P.A., Tampa, Florida, for Appellant.

Thomas J. Farkash of Fine, Farkash & Parlapiano, P.A., Gainesville, Florida, for Appellee.

PARIENTE, J.

We have for review a question of Florida law certified by the United States Court of Appeals for the Eleventh Circuit in Anderson v. Auto-Owners Insurance Co., 172 F.3d 767, 770 (11th Cir.1999), which is determinative of a cause pending in that court and for which there appears to be no controlling precedent. We have jurisdiction. See art. V, § 3(b)(6), Fla. Const. We rephrase the compound certified question¹ as two separate questions:

I. BASED ON THE APPLICABLE INSURANCE POLICY LANGUAGE, SHOULD THE TRACTOR AND TRAILER EACH BE TREATED AS A SINGLE COVERED AUTOMOBILE?

II. IF THE TRACTOR AND TRAILER SHOULD EACH BE TREATED AS A SINGLE COVERED AUTOMOBILE, DOES THE APPLICABLE POLICY LANGUAGE UNAMBIGUOUSLY LIMIT COVERAGE TO A TOTAL OF $750,000, EVEN WHEN MULTIPLE INSURED VEHICLES ARE INVOLVED IN A SINGLE ACCIDENT?

See Anderson, 172 F.3d at 770. We answer the first rephrased certified question in the affirmative and the second rephrased certified question in the negative.

FACTUAL BACKGROUND AND PERTINENT POLICY PROVISIONS

The pertinent facts of the automobile accident that gave rise to the present case are set forth in the Eleventh Circuit's opinion:

On December 7, 1996, appellant Karen Anderson was a passenger in a Mazda Miata convertible automobile traveling southbound in the left lane of Interstate 75. A tractor-trailer rig, comprised of a 1987 [W]hite tractor and a 1986 Great Dane commercial trailer, was also traveling southbound in the left lane. The Miata pulled into the right lane in order to pass the tractor-trailer rig, but while passing, the rig moved into the right lane. To avoid a collision, the Miata swerved off the highway and overturned. Anderson sustained severe injuries.

Craig Bishop owned both the tractor and trailer, and insured both through Auto-Owner's Insurance Company (Auto-Owner's), under the same policy.

Id. at 768.

The policy under which Bishop insured the tractor and trailer defines automobile as "a four-wheel private passenger automobile, a truck or truck tractor or a commercial trailer unless another type of vehicle is described in the Declarations." The policy also provides the following liability coverage:

The attached Declarations describes the automobile we insure and shows the coverages for which you have paid a premium. We agree with you as follows with respect to each coverage for which a premium has been paid:

LIABILITY COVERAGE for Bodily Injury and Property Damage: We will pay damages for bodily injury and damage to tangible property for which you become legally responsible and which involve your automobile.

Additionally, the policy contains a clause which is found in a "Combined Limit of Liability Endorsement" (hereinafter referred to as the "limitation of liability clause"), and reads as follows:

When the coverage shown in the Declarations is "Combined Liability", we further agree that the Limit of Liability Coverage is replaced by the following:

The limit of liability stated in the Declarations is the most we will pay for all damages, including damages for expenses, care and loss of services and loss of use as a result of any one occurrence. Charging premiums under this policy for more than one automobile does not increase the limit of our liability as stated for each occurrence.

The Declarations, which are referenced in these provisions, separately list liability coverage for the "86 Great Dane Trailer" and the "87 White Tractor," the tractor and trailer involved in this accident. The Declarations separately list liability coverages for six other vehicles covered by the policy. The entry for each vehicle lists the "Combined Liability" coverage as "$750,000 EA OCC," which is an abbreviated way to indicate "$750,000 each occurrence."² Notably, a separate premium is listed not only for each separately listed vehicle but for each separately listed coverage included for each insured vehicle.

PROCEDURAL BACKGROUND

Pursuant to its contractual duty to defend Bishop, Auto-Owners entered into settlement negotiations with Anderson, but these negotiations reached an impasse when the parties disagreed as to the interpretation of portions of the insurance policy language. See Anderson, 172 F.3d at 768. Anderson thereafter filed suit,³ seeking a declaratory judgment that would award her the policy limit of both insured vehicles. See id.

The federal district court reviewed the policy language and concluded that the issue before it presented a question of first impression in Florida. See id. at 768. In particular:

The district court granted Anderson's motion for summary judgment, determining that although the rig was responsible for causing one accident, the rig was essentially two "automobiles," the tractor and the trailer. Thus, the policy limit of $750,000 was available to Anderson for each of the insured automobiles. The district court found that it was reasonable to interpret the above-cited policy language to mean that when two separate vehicles are involved in one single accident, two occurrences exist. The district court further found that if Auto-Owners intended to treat the two separately covered vehicles as a single-covered vehicle when operated in tandem, it could have drafted the policy to achieve that result. Therefore, the district court awarded Anderson $1,500,000 for her injuries.

Id. at 768-69.

On appeal to the Eleventh Circuit, Auto-Owners argued that the district court erred by interpreting the insurance policy provisions as ambiguous, and it relied on a number of non-binding state court opinions that hold where two or more related automobiles, insured through the same company, are involved in a single accident the insured party is not entitled to recover the policy limit of each automobile involved, but can only recover the policy limit of one automobile, or the policy limit of one accident.

Id. at 769. Anderson countered that the insurance policy did not contain the "very specific limiting provisions" contained in each of the out-of-state cases on which Auto-Owners relied. See Anderson, 172 F.3d at 770. Because the Eleventh Circuit deemed the issue presented by this case to be "an unsettled question of Florida law," it certified the question to this Court. See id.

BASED ON THE POLICY LANGUAGE, SHOULD THE TRACTOR AND TRAILER EACH BE TREATED AS A SINGLE COVERED AUTOMOBILE?

The first rephrased certified question requires us to determine whether the policy treats the two separately covered vehicles as a single covered automobile when the two vehicles operate in tandem. As to this question, we find that the policy language is clear and unambiguous and thus must be construed in accordance with "the plain language of the polic[y] as bargained for by the parties." Prudential Property & Cas. Ins. Co. v. Swindal, 622 So.2d 467, 470 (Fla.1993). As noted above, the Auto-Owners' policy provides that an automobile is "a four-wheel private passenger automobile, a truck or truck tractor or a commercial trailer, unless another type of vehicle is described in the Declarations." Under this policy definition, the tractor and the trailer are each individually considered an "automobile." Further, separate premiums were charged and paid for the tractor and the trailer, each vehicle is listed separately in the declarations, and each vehicle has a separate limit of liability of "$750,000 EA OCC" as set forth in the declarations.

Although the tractor and the trailer each clearly meet the policy's definition of "automobile" when they operate individually, the two vehicles were connected to one another and operating as a tractor-trailer rig at the time of the accident. The plain language of the policy, however, contains no indication whatsoever that a tractor-trailer rig should be treated as a single automobile. Clearly, if Auto-Owners had intended to treat the two separately covered vehicles as a single covered automobile when operated in tandem, it could have drafted the policy to achieve that result. By failing to do so, Auto-Owners cannot now take the position that the tractor-trailer rig should be treated as one automobile. See State Farm Fire & Cas. Co. v. CTC Dev. Corp., 720 So.2d 1072, 1076 (Fla.1998) (explaining that when an insurer fails to define a policy term, the insurer cannot then take the position that coverage should be construed narrowly). As the federal district court found, "Had the Defendant wanted [to] treat two separately covered vehicles, used in tandem to cause a single harm, as a single covered vehicle, it could have drafted a policy provision clearly commanding that result." Anderson v. Auto-Owners Ins. Co., No. 96-247-Civ-OC-10A (M.D.Fla. Sept. 30, 1997); see also Anderson, 172 F.3d at 768-69. Accordingly, we find that the tractor and trailer should each be treated as a single covered automobile, and therefore we answer the first rephrased certified question in the affirmative.

WHETHER THE APPLICABLE POLICY LANGUAGE UNAMBIGUOUSLY LIMITS COVERAGE TO A TOTAL OF $750,000 EVEN WHEN MULTIPLE COVERED VEHICLES ARE INVOLVED IN A SINGLE ACCIDENT

Based upon our conclusion that the tractor and trailer should each be considered as a covered automobile, we must next consider the second rephrased certified question. In answering this question, we are guided by several basic principles of insurance contract interpretation. As acknowledged by both the federal district court and the Eleventh Circuit, Florida law provides that insurance contracts are construed in accordance with the plain language of the policies as bargained for by the parties. See Swindal, 622 So.2d at 470. If the...