Coleman v. Florida Ins. Guar. Ass'n, Inc.

• Decision Date: 07 January 1988
• Docket Number: No. 70075,70075
• Citation: 517 So.2d 686,13 Fla. L. Weekly 13
• Parties: 13 Fla. L. Weekly 13 Raymond COLEMAN, et al., Petitioners, v. FLORIDA INSURANCE GUARANTY ASSOCIATION, INC., Respondent.
• Court: Florida Supreme Court

Page 686

517 So.2d 686

13 Fla. L. Weekly 13

Raymond COLEMAN, et al., Petitioners, v. FLORIDA INSURANCE GUARANTY ASSOCIATION, INC., Respondent.

No. 70075.

Supreme Court of Florida.

Jan. 7, 1988.

William N. Graham of William N. Graham, P.A., Tampa, for petitioners.

Raymond T. Elligett, Jr. and Charles P. Schropp of Shackleford, Farrior, Stallings & Evans, P.A., Tampa, for respondent.

EHRLICH, Justice.

We have for review Florida Insurance Guaranty Association, Inc. v. Coleman, 501 So.2d 32 (Fla. 2d DCA 1986), in which the district court certified the following question as being of great public importance:

WHEN AN INSURED HAS PURCHASED UNINSURED MOTORIST COVERAGE BUT HAS NOT MADE AN INFORMED REJECTION OF UNINSURED MOTORIST COVERAGE LIMITS HIGHER THAN THOSE PURCHASED, MAY THE INSURED STACK A NUMBER OF UNINSURED MOTORIST COVERAGES EQUAL TO THE NUMBER OF CARS OWNED BY THE INSURED OR MAY HE ONLY STACK THE NUMBER OF UNINSURED MOTORIST COVERAGES FOR WHICH HE PAID A PREMIUM?

We have jurisdiction. Art. V, § 3(b)(4), Fla. Const. We hold that uninsured motorist coverage should be stacked on the basis of the number of coverages for which an insured paid a premium and we approve the decision of the district court below.

Sandra Coleman, the owner of a used car sales lot, purchased a garage insurance policy in the name of Sandra Coleman d/b/a Coleman Auto Sales. Mrs. Coleman and her husband were "Class I" insureds under the policy, i.e., the named insured and resident family members. On April 23, 1983, her husband, Raymond Coleman, was injured in an automobile accident. The insurers of two other cars involved in the accident paid him the limits of their coverages for a combined total of $75,000. The Coleman's then sought uninsured motorist coverage under the garage policy. Because the company that issued the garage policy to Mrs. Coleman is insolvent, the claim is directed against the respondent, Florida Insurance Guaranty Association (FIGA).

The dispute at trial concerned how much uninsured motorist coverage is available under the policy and on what basis the uninsured motorist coverage should be "stacked". ¹ The argument asserted by the petitioners in the present proceeding and in the proceedings below is that they are entitled to stack a number of uninsured motorist coverages equal to the number of cars owned by the insured on the day of the accident. The trial court determined that uninsured motorist coverage should be stacked on the basis of the number of motor vehicles for which liability coverage was extended. The trial court's order states that the policy clearly provided liability insurance for any car titled in the named insured and that, accordingly, the uninsured motorist coverage should be stacked according to the number of cars owned by the named insured on the date of the accident. The district court reversed the trial court, concluding that two UM premiums were paid and therefore only two uninsured motorist coverages should have been stacked in this case. 501 So.2d at 33.

In support of their argument, petitioners first state that there was no informed rejection of uninsured motorist coverage limits equal to the limits of the liability coverage. Relying on section 627.727, Florida Statutes (1981), petitioners contend the result of the lack of informed rejection is that uninsured motorist coverage was automatically extended on all vehicles on which liability coverage is purchased. The petitioners then conclude that because liability coverage was extended under the policy to all the motor vehicles in Mrs. Coleman's inventory, uninsured motorist coverage should be stacked according to the number of owned motor vehicles.

Petitioners appear to have confused the lack of informed rejection, which affects only the amount of uninsured motorist coverage, with the separate issue of when and on what basis uninsured motorist coverage is stacked. Section 627.727(2), Florida Statutes, provides that "[t]he limits of uninsured motorist coverage shall be not less than the limits of bodily injury liability insurance purchased by the named insured, or such lower limit complying with the company's rating plan as may be selected by the named insured." This section has been interpreted as requiring that a rejection of uninsured motorist coverage or a selection of lower limits of coverage be knowingly made by the insured. Kimbrell v. Great American Insurance Co., 420 So.2d 1086 (Fla.1982). If no informed selection of lower limits is made by the insured, the limits of uninsured motorist coverage are merely tied to the limits of liability insurance. See American Fire & Indemnity Co. v. Spaulding, 442 So.2d 206, 208 (Fla.1983). Mrs. Coleman's policy provided liability insurance in the amount of $25,000.00 and uninsured motorist coverage in the amount of $20,000.00 for covered autos. Because she had not made an informed selection of uninsured motorist coverage in an amount less than the liability coverage, the trial court entered a partial summary judgment correctly finding that Mrs. Coleman was entitled to uninsured motorist limits equal to the liability limit of $25,000.00. Contrary to petitioners' argument, however, section 627.727 does not provide that the lack of an informed rejection of uninsured motorist coverage equal to the limits of liability coverage results in the number of uninsured motorist coverages being equal to the number of cars covered by liability insurance.

Furthermore, it appears the petitioners, in making their argument, have misinterpreted their policy. Liability coverage, like uninsured motorist coverage, is expressly provided in the policy for "any auto." The Colemans would have had liability insurance covering them in any car they drove, not merely owned vehicles. We agree with the analysis of the district court below.

[T]he Colemans' argument cannot be accepted because it would lead to an irrational result. To conclude that the UM coverage to be stacked is coextensive with the liability coverage would require stacking UM coverage for every car which the Colemans could conceivably drive whether owned by them or not. Recognizing that irrationality, the Colemans argue that the number of coverages should be limited to the number of cars owned by them. But, their argument is inconsistent. While arguing to increase the number of UM coverages by tying UM coverage to the number of cars which could be covered under the liability section of the policy, the Colemans recognize that they must limit the almost infinite number of cars which that argument would actually produce in order to bring the total number of cars within a sensible range. Therefore, they argue that UM coverage should apply only to the number of cars owned by the Colemans. However, as we have said, the number of cars owned has no relationship to the extent of liability coverage under the terms of the policy.

501 So.2d at 34 (citations omitted). Accordingly, we reject the petitioners' argument that they are entitled to stack uninsured motorist coverage for every car they own based on the lack of an informed rejection of uninsured motorist coverage equal to liability limits.

We agree with the district court below that "the case law supports tying the number of UM coverages available to the number of premiums for which UM coverage was paid." 501 So.2d at 34. Uninsured motorist protection does not inure to a particular motor vehicle, but instead protects the named insured or insured members of his family against bodily injury inflicted by the negligence of any uninsured motorist under whatever conditions, locations, or circumstances any of such insureds happen to be in at the time. See Mullis v. State Farm Mutual Auto Insurance...