Bastian v. United Servs. Auto. Ass'n

• Decision Date: 10 December 2015
• Docket Number: Case No. 3:13-cv-1454-J-32MCR
• Citation: 150 F.Supp.3d 1284
• Parties: Chantal Bastian, Sandra Adda, Robert Beltrami, William Laker, Oliver Sutton, on behalf of themselves and all others similarly situated, Plaintiffs, v. United Services Automobile Association, USAA Casualty Insurance Company, Garrison Property and Casualty Insurance Company, and USAA General Indemnity Company, Defendants.
• Court: U.S. District Court — Middle District of Florida

150 F.Supp.3d 1284

Chantal Bastian, Sandra Adda, Robert Beltrami, William Laker, Oliver Sutton, on behalf of themselves and all others similarly situated, Plaintiffs,

v.United Services Automobile Association, USAA Casualty Insurance Company, Garrison Property and Casualty Insurance Company, and USAA General Indemnity Company, Defendants.

Case No. 3:13-cv-1454-J-32MCR

United States District Court, M.D. Florida, Jacksonville Division .

Signed December 10, 2015

Christopher B. Hall, Hall & Lampros, Atlanta, GA, Tracy Lynne Markham, Avolio & Hanlon, PC, St. Augustine, FL, for Plaintiffs.

Andrew Abramovich, Kristen M. Van Der Linde, Boyd & Jenerette, PA, Jacksonville, FL, Benjamin C. Jensen, Stephen E. Goldman, Wystan M. Ackerman, Robinson & Cole, LLP, Hartford, CT, for Defendants.

AMENDED ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT¹

TIMOTHY J. CORRIGAN, United States District Judge

In a case of first impression, five policyholders contend that four insurance companies do not fully compensate their Florida auto insurance policyholders when their vehicles are totaled because the insurers reimburse only the amount of sales tax actually incurred in buying replacement vehicles rather than the full amount of sales tax that would be incurred if policyholders bought vehicles comparable to their covered vehicles. The insurance companies had moved to dismiss on the grounds that neither Florida law nor the policies require them to pay more than the sales tax actually incurred. The Court denied the motion without prejudice, concluding that the issue would be best decided on a full record after discovery.

The parties have now completed focused discovery. The insurance companies move for summary judgment on essentially the same grounds, but this time with added historical information on the development of the relevant Florida statute and on their own claims adjustment practices. Plaintiffs, too, have marshaled evidence of the insurance companies' practices and those of other insurers that the plaintiffs argue support summary judgment in their favor. These cross motions have been fully briefed. (Docs. 47, 65, S-68, 75, 88, 89.) On May 18, 2015, the Court held a hearing, the record of which is incorporated herein. (Docs. 78, 86.)

I. BACKGROUND

This case began as a proposed class action brought by one named plaintiff, Chantal Bastian, on her own behalf and on behalf of the Florida policyholders of Garrison Property and Casualty Insurance Company, United Services Automobile Association, USAA Casualty Insurance Company, and USAA General Indemnity Company (collectively, “USAA”). (Doc. 2.) Bastian herself was insured only by Garrison, though USAA has not moved on her potential lack of standing. (Doc. 9 at 3 n.1; Doc. 47 at 3 n.2.) Instead, during summary judgment briefing, the parties agreed that Bastian would amend her complaint to add four named plaintiffs—Sandra Adda, Robert Beltrami, William Laker, and Oliver Sutton—who were insured by the remaining three insurance companies, with the understanding that any ruling in USAA's favor would apply to all the named plaintiffs. (Doc. 59 at 2.) The Court granted leave to amend and adopted the same understanding. (Doc. 66.)

The underlying facts with respect to each named plaintiff are not substantially in dispute. The parties largely agree that each plaintiff was insured by one of the defendants, suffered a total loss on the covered vehicle, made a claim, and received payment on the claim that did not include the full sales tax on a vehicle of comparable value to the covered vehicle. The parties agree that the challenge to USAA's treatment of sales tax is a legal issue for the Court. The facts set forth below are therefore undisputed unless otherwise noted.

Bastian's experience is the most well-developed in the record and is said to be emblematic of the experiences of the remaining named plaintiffs and of the class. Bastian took out a six-month auto insurance policy with Garrison to cover her 2005 Acura TL from February 28, 2013 to August 28, 2013. (Doc. 47-1.) On May 26, 2013, she reported to Garrison that a tree fell on the vehicle. (Doc. 52, ¶ 2.) Five days later, on May 31, 2013, Garrison sent Bastian a letter confirming that the vehicle had been determined to be a “total loss” and breaking down as follows the payments Garrison would make under her policy:

Vehicle's actual cash value:	$10,459.00
Sales tax:	$0.00
Partial or Prior Payments:	$0.00
Title Fee:	$75.75
License Plate Fee:	$9.50
Comprehensive Deductible:	$(1,000.00)
Net Total:	$9,544.25

(Id. , ¶ 3; Doc. 52-1 at 4.) After this breakdown, the letter included the statement:

Important Information from the state of FL

As a reminder, if you replaced your totaled vehicle for the total loss above, you're entitled to reimbursement for the sales tax amount you incurred. However, we'll compare the sales tax amount in our settlement with the sales tax for the replacement vehicle and pay you whichever is less. We will also reimburse you up to $2.50 for any branch processing fees you paid for a replacement vehicle title.

(Doc. 52-1 at 4.)

Garrison enclosed with the letter a market valuation report setting out how it reached its determination of the actual cash value of the vehicle. (Id. at 6-23.) The report also includes a calculation that the 6% sales tax on a comparable vehicle would be $627.54, but, consistent with the statement above, Garrison did not include any sales tax in its initial settlement. (Id. at 6.) Instead, Garrison paid off the outstanding loan on the vehicle from the settlement and directly paid Bastian the remaining $2,529.30. (Doc. 52, ¶ 5; Doc. 52-2 at 2.) Bastian apparently later purchased a replacement vehicle for $2,000 and submitted a canceled check to the Florida Department of Revenue for $120 as proof of the sales tax she paid. (Doc. 52-3.) Garrison eventually reimbursed her that amount. (Doc. 52-4.) Bastian claims that, under her policy, Garrison should have paid her upfront the full $627.54 sales tax estimated for a $10,459 vehicle, which was the totaled vehicle's actual cash value as defined by the policy, and not reimbursed her for only the $120 in sales tax she actually paid to buy a less expensive replacement.

Adda, Beltrami, Laker, and Sutton allegedly had similar experiences in 2013 and 2014 with USAA Casualty Insurance Company, United Services Automobile Association, USAA General Indemnity Company, and Garrison, respectively. (Doc. 67, ¶¶ 61-80.) The plaintiffs allege that every Florida USAA policyholder whose vehicle has been declared a total loss in the past five years has similarly been denied the full sales tax to which they are entitled under their policies. (See id. , ¶¶ 36-37, 58-60, 104, 109, 114, 123-28, 133-34.) The plaintiffs therefore bring a three-count complaint against USAA for damages due to breach of contract, for declaratory judgment, and for attorney's fees pursuant to section 627.428 of the Florida Statutes. (Id. , ¶¶ 117-45.)

II. STANDARD OF REVIEW

Summary judgment is proper “when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.”

Josendis v. Wall to Wall Residence Repairs, Inc. , 662 F.3d 1292, 1314 (11th Cir.2011) ; Fed. R. Civ. P. 56(a), (c). The inquiry is “whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.” Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 251–52, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). “When the only question a court must decide is a question of law, summary judgment may be granted.” Saregama India Ltd. v. Mosley , 635 F.3d 1284, 1290 (11th Cir.2011). Contract and statutory interpretation are both questions of law appropriately decided on summary judgment. Id. ; Rectory Park, L.C. v. City of Delray Beach , 208 F.Supp.2d 1320, 1329 (S.D.Fla.2002).

III. ANALYSIS

Plaintiffs root their position on the payment of sales tax in the language of USAA's standard Florida auto insurance policy, contending that nothing in the Florida Insurance Code dictates handling sales tax any differently than the policy. USAA, on the other hand, argues first that the Florida Insurance Code permits its treatment of sales tax and only then turns to its standard Florida policy, which it reads, both alone and with the statute, to allow the payment of sales tax only in the amount actually incurred. Because the insurance policy comprises the agreement between the insured and the insurer and determines the scope and extent of coverage, the Court determines to start with the language of the policy. See Eddy v. Cont'l Cas. Co. , 784 F.Supp.2d 1331, 1336 (M.D.Fla.2011).

A. The Policy

The auto insurance policies were written on USAA policy Form 5100FL (“the Policy”).² (Doc. 47-1.) Part D of the Policy sets forth the relevant coverage provided for physical damage:³

We will pay for loss ... to your covered auto , including its equipment, and personal property contained in your covered auto , minus any applicable deductible shown on the Declarations.

(Id. at 32.) “Loss,” like the other emboldened terms, is predefined in the Policy:

“Loss ” means direct and accidental damage to the operational safety, function, or appearance of, or theft of, your covered auto or personal property contained in your covered auto. Loss includes a total loss, but does not include any damage other than the cost to repair or replace. Loss does not include any loss of use, or diminution in value that would remain after repair or replacement of the damaged or stolen property.

(Id. at 31.) Part D also includes a “LIMIT OF LIABILITY ” for physical damage, which in the case of a “[t]otal loss to your covered auto ,” is “the actual cash value of the vehicle, inclusive of any custom equipment .” (Id. at 33.) A total loss is declared when, “in [USAA's] judgment,...