Chase v. Horace Mann Ins. Co.

• Decision Date: 19 February 2015
• Docket Number: No. SC13–2013.,SC13–2013.
• Citation: 158 So.3d 514
• Court: Florida Supreme Court
• Parties: Allison CHASE, etc., Petitioner, v. HORACE MANN INSURANCE COMPANY, Respondent.

158 So.3d 514

Allison CHASE, etc., Petitioner

v.HORACE MANN INSURANCE COMPANY, Respondent.

No. SC13–2013.

Supreme Court of Florida.

Feb. 19, 2015.

William A. Bald, Benjamin Edward Richard, and Stephen John Pajcic of Pajcic & Pajcic, P.A., Jacksonville, FL, for Petitioner.

Julius F. Parker, III and Kathy J. Maus of Butler Pappas Weihmuller Katz Craig LLP, Tallahassee, FL, for Respondent.

Opinion

QUINCE, J.

Allison Chase seeks review of the decision of the First District Court of Appeal in Horace Mann Insurance Co. v. Chase, 121 So.3d 1191 (Fla. 1st DCA 2013), on the ground that it expressly and directly conflicts with the Second District's decision in Creighton v. State Farm Mutual Auto. Insurance Co., 696 So.2d 1305 (Fla. 2d DCA 1997), on the issue of whether removing the sole named insured from an auto insurance policy, and listing a separate individual as the named insured on that policy for the first time, creates a new policy for purposes of section 627.727, Florida Statutes (2008). We have jurisdiction. See art. V, § 3(b)(3), Fla. Const.

For the reasons stated below, we quash the decision of the First District, approve the decision of the Second District in Creighton, and find that when Allison Chase became the named insured on her auto insurance policy, Horace Mann was required to advise her of her right to uninsured motorist (UM) benefits equal to her liability limits and to obtain a written waiver of those benefits before reducing them under section 627.727, Florida Statutes (2008).

STATEMENT OF THE CASE & FACTS

The pertinent facts of this case are not in dispute:

In 2001, Richard Chase obtained policy number 09–65434800 from Defendant Horace Mann. The insured vehicle was a 1992 Chevrolet Geo and the policy provided bodily injury liability limits of $100,000/$300,000. Richard Chase, who was the only named insured and the titled owner of the insured vehicle, signed a form in which he selected reduced uninsured motorist limits of $25,000/$50,000. His daughter, Allison Chase, was listed as a “driver” but was not a named insured on the policy and thus had no right to select reduced uninsured motorist limits.

Policy number 09–65434800 remained in effect with Richard Chase as the sole named insured until January 27, 2004. At that time, Horace Mann removed Richard Chase as the sole named insured on the policy, made Allison Chase the sole named insured, and changed the insured vehicle to a 1997 Ford Escort ST that had been acquired by Allison three days earlier on January 24, 2004 and was titled in only her name. At the same time, Horace Mann issued a new policy, Policy Number 09–69095420, with Richard Chase as the sole named insured, insuring a 2004 Jeep that was owned by Richard.

Horace Mann's issuance of a new policy to a person (Richard Chase) who was already the named insured on an existing policy, while revising the existing policy to completely change the named insured, as well as the insured vehicle, meant that Richard Chase, who had already selected lower uninsured motorist limits for the policy, was presented with another written rejection form while Allison Chase, who had never previously had the opportunity or right to select lower UM limits, was not provided the opportunity to reject the coverage or select lower limits. Horace Mann's corporate representative, Theresa Beshears, testified that Horace Mann could have continued Richard Chase's existing policy and issued a new policy to Allison Chase. Ms. Beshears testified that if a new policy had been issued to Allison Chase, Ms. Chase would have had to sign a rejection form in order to select lower limits.

In August of 2005, approximately 18 months after Horace Mann issued the policy to Allison Chase, Allison moved out of her father's house and Richard Chase was removed as a listed driver on the policy. On February 10, 2007, the insured vehicle was changed from the 1997 Ford Escort to a 2004 Jeep Wrangler. On June 15, 2007, Allison Chase moved back in with her father and added Richard L. Chase as a listed driver on her policy, number 09–65434800. The crash that killed Richard Chase and injured Allison Chase occurred exactly one month later on July 15, 2007. At no time did Allison Chase reject uninsured/underinsured motorist coverage in writing or select lower limits.

Order on Cross Motions for Partial Summary Judgment Concerning Entitlement to, and Amount of, UM Insurance Coverage, Entitlement to Attorney's Fees and Costs, and Lifting Discovery Stay at 2–3, Chase v. Horace Mann Ins. Co., No. 16–2008–CA–006534–XXXX–MA (Fla. 4th Cir.Ct. Sept. 28, 2010). Allison Chase asserted that she, individually and as personal representative of her father's estate, was entitled to UM coverage in the amount equal to the policy's bodily injury limits because she never selected lower UM coverage in writing as required by section 627.727, Florida Statutes (2008). Id.

Trial Court Order

On September 28, 2010, the trial court issued its order. Id. at 4. In the order, the trial court recalled that at the hearing on the motions for summary judgment, “Horace Mann relied principally on State Farm [Mutual] Auto [mobile] Insurance Co. v. Shaw, 967 So.2d 1011 (Fla. 1st DCA 2007), and [Allison Chase] relied principally on Creighton v. State Farm Automobile Insurance Co., 696 So.2d 1305 (Fla. 2d DCA 1997).” Id. Relying on its recitation of the “undisputed material facts,” the trial court determined that Shaw was not dispositive and “[did] not establish Horace Mann's motion for summary judgment.” Id. After determining that Creighton “controls the insurance coverage question[,]” the trial court granted Allison Chase's Motion for Partial Summary Judgment on Entitlement to, and Amount of, UM coverage. Id. Among other relief, the court ruled that both Allison Chase and her deceased father's estate were entitled to $100,000 of insurance coverage under Allison Chase's policy. Id.

First District's Decision

On appeal to the First District Court of Appeal, Horace Mann argued that Richard Chase's waiver was binding on Richard Chase's estate, as well as Allison Chase, both individually and as personal representative of Richard Chase's estate. Horace Mann Ins., 121 So.3d at 1192.

The district court determined that “[b]ecause no policy limits were changed, the policy was renewed, extended, changed, superseded, or replaced, and [Richard] Chase's waiver of higher UM coverage bound [Allison] Chase individually and as personal representative of [Richard] Chase's estate.” Id. at 1194 (citing Shaw, 967 So.2d at 1015 ; Atlanta Cas. Co. v. Evans, 668 So.2d 287, 289 (Fla. 1st DCA 1996) ). Relying on its previous decision in Travelers Commercial Insurance Co. v. Harrington, 86 So.3d 1274, 1277 (Fla. 1st DCA 2012) (holding that under § 627.727(9), unlike subsection (1), the waiver must be personally made by the insured who claims UM benefits), quashed, 154 So.3d 1106, 39 Fla. L. Weekly S647, 2014 WL 5365846 (Fla. Oct. 23, 2014), the district court also determined that the UM stacking waiver applied to Richard Chase individually and to Allison Chase as personal representative of Richard Chase's estate, but not to Allison Chase individually because she did not sign the UM stacking waiver as an insured. Id. Thus, the district court reversed all of the trial court findings, except that it affirmed the trial court's finding that Allison Chase, individually, was entitled to stacked coverage. Id.

ANALYSIS

The issue in this case stems from a trial court's order granting partial summary judgment to the insured, Allison Chase, individually and as personal representative of her deceased father's estate, and denying the insurer, Horace Mann's motion for summary judgment following Chase's claim for UM benefits resulting from an auto accident. The relevant facts in this case are undisputed. Therefore, this Court reviews the legal issues presented de novo. Kirton v. Fields, 997 So.2d 349, 352 (Fla.2008).

The primary issue and point of conflict in this case is whether the Horace Mann policy became a new policy when Allison Chase became the sole named insured on the policy. Although Horace Mann responds to Allison Chase's statement of the issue, arguing that the changing of the named insured constitutes a change to the existing policy, which does not automatically require Horace Mann to allow Allison Chase the right to make certain waivers, it states a derivative conflict issue to be resolved by this Court. The derivative issue is whether Richard Chase, Allison Chase individually, and Allison Chase as personal representative of Richard Chase's estate are bound by Richard Chase's UM waivers under the insurance policy that Allison Chase was the named insured on at the time of the accident. We address each issue in turn below.

New Policy

The policy in question is a new policy for purposes of section 627.727(9), Florida Statutes (2008), because the only named insured on the policy has not previously been a named insured on the policy, and therefore has not had the opportunity to make any of the express waivers required by law.

Generally, UM benefits under an automobile insurance policy are equal to the policy's liability limits. § 627.727(1), Fla. Stat. (2008). Section 627.727(1) dictates that UM coverage can only be reduced to an amount lower than the bodily injury liability coverage where a named insuredrejects the higher coverage in writing on behalf of all insureds under the policy. Id. Regarding an insurance company's duty to offer higher UM coverage after lower UM coverage has been requested in writing, the statute dictates:

When an insured ... has initially selected limits of uninsured motorist coverage lower than her or his bodily injury liability limits, higher limits of uninsured motorist coverage need not be provided in or supplemental to any other policy which renews, extends, changes, supersedes, or replaces an existing policy with the same bodily injury liability limits unless an insured requests higher uninsured motorist coverage

...