Chapman v. Dillon

• Citation: 415 So.2d 12
• Decision Date: 18 March 1982
• Docket Number: No. 61013,61013
• Parties: Frederick W. CHAPMAN and Liberty Mutual Insurance Company, Appellants, v. Dennis P. DILLON, Jr., etc., Dennis P. Dillon, and Aurelia M. Dillon, etc.
• Court: United States State Supreme Court of Florida

Page 12

415 So.2d 12

Frederick W. CHAPMAN and Liberty Mutual Insurance Company, Appellants, v. Dennis P. DILLON, Jr., etc., Dennis P. Dillon, and Aurelia M. Dillon, etc.

No. 61013.

Supreme Court of Florida.

March 18, 1982.

Rehearing Denied July 7, 1982.

John M. McNatt, Jr., Jack W. Shaw, Jr. and J. Stephen O'Hara, Jr. of Mathews, Osborne, McNatt, Gobelman & Cobb, Jacksonville; and Janet R. DeLaura and Jon E. Johnson of Smalbein, Eubank, Johnson, Rosier & Bussey, Rockledge, for appellants.

Sammy Cacciatore and James A. Sisserson of Nance, Cacciatore & Sisserson, Melbourne, for appellees.

Frederick B. Karl, General Counsel, Florida Association of Insurance Agents and Richard C. McFarlain of McFarlain, Bobo, Sternstein, Wiley & Cassedy, Tallahassee, for Florida Association of Insurance Agents, amicus curiae.

Delbridge L. Gibbs of Marks, Gray, Conroy & Gibbs, Jacksonville, for The National Association of Independent Insurers, The American Insurance Association, The Alliance of American Insurers, The Florida Association of Domestic Insurance Companies, The Florida Insurance Council, Inc., State Farm Mutual Automobile Insurance Company and Continental Casualty Company, amici curiae.

Jim Smith, Atty. Gen., and Thomas R. Tedcastle, Asst. Atty. Gen., and Daniel Y. Sumner, Counsel for Bill Gunter, Commissioner of Insurance, Tallahassee, for The State of Florida, amicus curiae.

Larry Klein, West Palm Beach, for The Academy of Florida Trial Lawyers, amicus curiae.

BOYD, Justice.

This case is before us to review a decision of the district court of appeal that declared invalid certain provisions of the Florida Automobile Reparations Reform Act (the "no fault" insurance law), sections 627.730-627.741, Florida Statutes (1979). Dillon v. Chapman, 404 So.2d 354 (Fla. 5th DCA 1981). Pursuant to article V, section 3(b)(1) of the Florida Constitution, we have jurisdiction.

Dennis Dillon, a minor, and his parents, sued Frederick Chapman and Liberty Mutual Insurance Company for damages, including pain and suffering, incurred in an automobile collision allegedly caused by Chapman's negligence. Dillon suffered severe but nonpermanent injuries and had medical expenses exceeding $1,000. The defendants moved for dismissal or a judgment in their favor, asserting that the complaint failed to state a cause of action because the facts alleged did not meet the "tort threshold" under section 627.737. Plaintiffs responded with the contention that section 627.737 is unconstitutional as a denial of access to courts, due process, and equal protection. The trial court issued an order holding for the defendants and finding the statute constitutional.

On appeal, the district court found sections 627.736(1), ¹ 627.737, ² and 627.739 ³ of the no-fault statute unconstitutional. The court reasoned that legislative changes since the time of Lasky v. State Farm Insurance Co., 296 So.2d 9 (Fla.1974), and Kluger v. White, 281 So.2d 1 (Fla.1973), had rendered the statute invalid. Since the legislative changes complained of are reasonable attempts by the legislature to correct some of the practical problems which the no-fault law had posed, we find that principles and reasoning in Lasky v. State Farm Insurance Co. are still applicable. We therefore conclude that the "no fault" insurance law as codified in the 1979 statutes is constitutional. As did the district court, we shall address each of the constitutional issues separately.

DENIAL OF ACCESS TO THE COURTS

Dillon was not allowed to maintain his suit for pain and suffering because he did not meet the threshold requirements of section 627.737(2), Florida Statutes (1979), insofar as his injuries were not permanent. He argues that these requirements deprive him of his right of access to the courts under article I, section 21, Florida Constitution. The district court recognized that in Lasky we held that the denial of the right to recover such damages did not violate this constitutional provision because the legislature had established a reasonable alternative. The court concluded, however, that subsequent changes in sections 637.736, 627.737, and 627.739 rendered the alternative no longer reasonable.

The two changes the district court was most concerned about were the lowering of the personal injury protection (PIP) benefits and the raising of the permissible PIP "deductible." When we decided Lasky, section 627.736(1) provided for recovery of 100% of medical expenses and 100% or 80% of lost income depending on whether the benefits were to be included in gross income for federal income tax purposes. Chapter 77-468, section 33, Laws of Florida, amended that section reducing the benefits to 80% of medical expenses and 80% or 60% of lost income. Other provisions in the no-fault act when Lasky was decided required PIP coverage of $5,000, section 627.736(1), Florida Statutes (1971), with a maximum deductible of $1,000. § 627.739, Fla.Stat. (1971). In 1976 the legislature raised the maximum deductible to $2,000. Ch. 76-266, § 6, Laws of Fla. In 1977 it raised the maximum deductible to $4,000. Ch. 77-468, § 37, Laws of Fla. In 1979 the legislature raised the PIP coverage from $5,000 to $10,000, ch. 78-374, § 3, Laws of Fla., and the maximum deductible from $4,000 to $8,000. Ch. 78-374, § 6, Laws of Fla.

The district court concluded that these changes meant that there was no longer a reasonable alternative for redress of injuries suffered in automobile accidents and said:

Injured parties no longer receive full compensation for their expenses or lost income. Increased deductibles result in decreased PIP coverage and diminish the likelihood that an injured party will promptly recover his major out-of-pocket expenses arising from the accident. Injured parties are now able and are being forced to resort to the courts to recover that portion of their damages not payable by insurance carriers by reason of the no-fault act--remaining uncovered expenses, lost income and deductibles. One of the most strident arguments in favor of no-fault type insurance legislation has been that the multitude of suits unnecessarily crowds the courts with injured persons' lawsuits. This legislation does not reduce the number of lawsuits, then, but merely reduces the amount to be sued for. Of course, we cannot ignore the very practical consideration that some lawsuits will not be filed because they are not "worth it" but that is certainly not the way our society views redress for injured persons; the constitution and our very makeup requires every person to be redressed for wrongs against him.

404 So.2d at 357.

We do not agree with the district court's conclusions about the statute. Lowering PIP benefits and increasing the amount of permitted optional deductibles will not necessarily result in reduced compensation and increased litigation. Many motorists of this state are covered by some other type of insurance or benefit program that would help pay for their medical expenses and lost income if they were injured in an automobile accident. The benefits from these collateral sources are often more than sufficient to pay for the expenses not included in the PIP coverage. Thus motorists entitled to these collateral benefits would receive full compensation without needing to file a suit.

Furthermore we do not find anything in Lasky to indicate that that decision was predicated upon a motorist's being insured for the full amount of his medical expenses and lost income. Instead the crux in Lasky was that all owners of motor vehicles were required to purchase insurance which would assure injured parties recovery of their major and salient economic losses.

Thus, the owner of a motor vehicle is required to maintain security (either by insurance or otherwise) for payment of the no-fault benefits, and has no tort immunity if he fails to meet this requirement. This provides a reasonable alternative to the traditional action in tort. In exchange for his previous right to damages for pain and suffering (in the limited class of cases where recovery of these elements of damage is barred by § 627.737), with recovery limited to those situations where he he can prove that the other party was at fault, the injured party is assured of recovery of his major and salient economic losses from his own insurer.

Lasky v. State Farm Insurance Co., 296 So.2d at 13-14 (emphasis in original). Hence it was the fact that injured parties were assured prompt recovery of their major and salient economic losses, not all of their economic losses, which this Court found dispositive in Lasky.

The changes made by the legislature since then have not fundamentally changed this essential characteristic of the no-fault law. Although the percentage of recovery of medical expenses has been reduced to 80% and the percentage of recovery of lost income has been reduced to 60% or 80%, the absolute limits of PIP coverage have been increased from $5,000 to $10,000. Regardless of the actual amount of recovery, an injured person will receive prompt payment for his major and salient economic losses even where he himself is at fault. Thus the provisions of section 627.737 still provide a reasonable alternative to the traditional action in tort and therefore do not violate the right of access to courts guaranteed by article I, section 21 of the Florida Constitution.

DUE PROCESS OF LAW

The district court found that sections 627.736(1), 627.737(1), and 627.739(1), Florida Statutes (1979), unconstitutionally denied due process in that they did not bear a reasonable relationship to permissible legislative objectives. The district court explained:

The changes to sections 627.736, 627.737 and 627.739 noted above cause the 1979 no-fault act to no longer be reasonably related to several of the permissible legislative objectives noted in Lasky : (1) injured parties are able to initiate suits for expenses not payable by an insurer thereby obviating the objective of lessening court con...