Canal Ins. Co. v. Reed, s. 94-1854
| Decision Date | 27 March 1996 |
| Docket Number | 94-1881,Nos. 94-1854,s. 94-1854 |
| Citation | 680 So.2d 486 |
| Parties | 21 Fla. L. Weekly D748 CANAL INSURANCE COMPANY, Petitioner, v. Richard Dewey REED, Respondent. CANAL INSURANCE COMPANY, Appellant, v. Michael YORK, Appellee. |
| Court | Florida District Court of Appeals |
George J. Dramis of Lawrence & Landis, P.A., Orlando, for petitioner/appellant.
Steven D. Turnage, Gainesville, for respondent/appellee.
This court previously consolidated these cases and determined that a third-party declaratory judgment issued by a trial court in an insurance coverage dispute was not a final order and could not be reviewed until a judgment had been entered in the underlying action. Canal Ins. Co. v. Reed, 653 So.2d 1085 (Fla. 1st DCA 1995). The Florida Supreme Court recently reviewed that decision and held that such a third-party declaratory judgment should be treated as a final order for purposes of appeal. Canal Ins. Co. v. Reed, 666 So.2d 888 (Fla.1996). Accordingly, these cases are now before us on remand for consideration on the merits. Having received no request for further briefing by any of the parties, we have considered the arguments previously presented and, for the reasons discussed below, we reverse and remand for further proceedings.
In July 1988, York sued Reed in Union County, Florida, alleging that he suffered injuries on July 2, 1987, as a result of negligence in the operation of a truck owned by appellee, Richard D. Reed. Reed filed a third-party complaint for liability coverage against Canal Insurance Company (Canal), which had issued him a motor vehicle liability insurance policy in October 1986. Reed also filed a third-party complaint against Hodges Insurance Agency alleging misrepresentation in the issuance of the insurance policy. Canal, by counterclaim, brought a declaratory judgment action to determine whether its policy covered Reed for the injuries sustained by York. Canal relied on an employee exclusion contained in the insurance policy which, Canal argued, precluded coverage for York's injuries. 1
Canal's declaratory judgment action was tried first and in two parts, with a jury trial to determine York's employment status at the time of the accident and a non-jury proceeding concerning the enforceability of the employee exclusion. Although a jury determined that York was an employee of Reed acting in the course and scope of his employment at the time of the accident, the circuit court ordered Canal to provide coverage for the accident. The court specifically found that the employee exclusion contained in the Canal policy was invalid because Reed was required to comply with the financial responsibility requirements of chapter 324, Florida Statutes (1985). See Makris v. State Farm Mutual Automobile Ins. Co., 267 So.2d 105 (Fla. 3d DCA 1972) (). Based on the information before us, however, Reed was not required to comply with Florida's Financial Responsibility Law.
On November 27, 1985, Reed was convicted of driving under the influence of alcohol (DUI) in Milledgeville, Georgia. At the time, Reed, a former Minnesota resident, apparently lived in Milledgeville. Prior to living in Milledgeville, Reed lived in Ellis, Texas, and Forest City, Iowa. In February 1986, after Reed had moved to Lake Butler, Florida, the Minnesota Department of Public Safety advised him that his Minnesota driver's license had been suspended for thirty days beginning January 21, 1986, because of his Georgia DUI conviction. Reed then surrendered his license to a Florida driver's license office and it was returned to Minnesota. Reed completed a driving improvement course in Florida, and on February 20, 1986, Florida issued Reed a driver's license.
In October 1986, Reed contacted the Hodges Insurance Agency to secure insurance coverage. On his insurance application, Reed indicated that his Minnesota automobile liability policy with Northland Insurance Company had not been renewed because he had moved to Florida. Reed also informed the insurance agent of his DUI conviction. On October 23, 1986, Canal issued the subject policy. Reed's premium of $16,692 included a surcharge because of his DUI conviction, but did not include a surcharge for filing the policy with any public agency because neither Reed, nor anyone else, requested a filing.
This court has explained when the provisions of the Financial Responsibility Law apply:
[A]n automobile liability insurer and its insured may agree upon the terms and conditions of the contract between themselves, including such exclusions from coverage as they may agree to, and in doing so not be in conflict with the public policy of this State as embodied in the Financial Responsibility Law until such time as the latter statutory scheme becomes applicable by its own terms. The futuristic attribute of the Financial Responsibility Law was fashioned by the legislature, and it is not the function of the judiciary to recast its provisions.... If appellee's defense to the exclusionary clause rests upon the Financial Responsibility Law, it has the burden of alleging and proving that appellant's policy was issued in response to the mandate of Chapter 324 and, therefore, that the exclusionary clause is in derogation of such public policy.
Safeco Ins. Co. of Am. v. Hawkeye-Security Ins. Co., 218 So.2d 759, 760-61 (Fla. 1st DCA 1969) (emphasis added). Thus, in this case, Reed had the burden to show that the employee exclusion contained in the insurance policy issued by Canal violated public policy because that policy was issued in accordance with the requirements of chapter 324, the Financial Responsibility Law.
The pertinent provision of the Financial Responsibility Law, cited by the trial court, addresses the suspension or revocation of a driver's license following a DUI conviction:
Upon the suspension or revocation of a license pursuant to the provisions of s. 322.26 or s. 322.27, the department [Department of Highway Safety and Motor Vehicles (DHSMV) ] shall suspend the registration for all motor vehicles registered in the name of such person, either individually or jointly with another, except that it shall not suspend such registration, unless otherwise required by law, if such person has previously given or shall immediately give, and thereafter maintain, proof of financial responsibility with respect to all motor vehicles registered by such person, in accordance with this chapter.
§ 324.072(1), Fla.Stat. (1985). The definitions section of chapter 324 defines "license" as "[a]ny license, temporary instruction permit, or temporary license issued under the laws of this state pertaining to the licensing of persons to operate motor vehicles." § 324.021(6), Fla.Stat. (1985) (emphasis added). Similarly, "registration" is defined as "[r]egistration certificate or certificates and registration plates issued under the laws of this state pertaining to the registration of motor vehicles." § 324.021(11), Fla.Stat. (1985) (emphasis added). The evidence indicates that at the time of Reed's Georgia DUI conviction in...
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...was issued under the Florida Financial Responsibility laws. See Fla. Stat. § 324.011, et seq.; see also Canal Ins. Co. v. Reed, 680 So. 2d 486, 488 (Fla. 1st Dist. Ct. App. 1996) (noting that insured under automobile insurance policy has burden to show that employee exclusion in insurance p......