Dewberry v. Auto-Owners Ins. Co.

• Decision Date: 07 September 1978
• Docket Number: AUTO-OWNERS,No. 52461,52461
• Citation: 363 So.2d 1077
• Parties: William C. DEWBERRY, Jr., as Administrator of the Estate of Patrick Joseph Dewberry, Deceased, and as Administrator of the Estate of Thomas Michael Dewberry, Deceased, and William C. Dewberry, Jr., Individually, Appellants, v.INSURANCE COMPANY, Appellee.
• Court: Florida Supreme Court

Page 1077

363 So.2d 1077

William C. DEWBERRY, Jr., as Administrator of the Estate of Patrick Joseph Dewberry, Deceased, and as Administrator of the Estate of Thomas Michael Dewberry, Deceased, and William C. Dewberry, Jr., Individually, Appellants, v. AUTO-OWNERS INSURANCE COMPANY, Appellee.

No. 52461.

Supreme Court of Florida.

Sept. 7, 1978.

Rehearing Denied Nov. 28, 1978.

Fredrick G. Levin, of Levin, Warfield, Middlebrooks, Mabie, Rosenbloum & Magie, P. A., Pensacola, for appellants.

William H. Clark, Jr., of Clark, Partington, Hart & Hart, Pensacola, for appellee.

SUNDBERG, Justice.

We entertain this appeal from the Circuit Court for Escambia County, Florida, because the final judgment of that court passed initially and directly on the validity of Section 627.4132, Florida Statutes (Supp.1976). ¹ Jurisdiction vests in this Court pursuant to Article V, Section 3(b)(1), Florida Constitution.

The facts are not in dispute. On August 3, 1976, the appellant and named insured, William C. Dewberry, Jr., renewed his automobile insurance with the defendant/appellee. The policy included uninsured motorist coverage on two vehicles, each vehicle carrying uninsured motorist coverage in the amount of $100,000 for injury or death of one person, and $300,000 for each occurrence. In addition to this uninsured motorist coverage, the named insured purchased medical payments coverage on each vehicle in the amount of $2,000 and no-fault coverage (personal injury protection) of $5,000. Included as insureds for the aforementioned coverages were the named insured's two sons, Patrick Joseph Dewberry and Thomas Michael Dewberry, who were insureds because they were residents of the named insured's household.

On December 11, 1976, Patrick and Thomas Dewberry died as a result of injuries sustained when an automobile owned and operated by George Lowell was involved in a one-car accident. At the time of the accident, George Lowell was insured under a policy of automobile liability insurance issued by United States Fidelity and Guaranty Company providing for policy limits of $15,000 for injuries and death sustained by one person, and $30,000 for injuries and death sustained by all persons in a total accidental occurrence.

Following the accident, United States Fidelity & Guaranty Company tendered $15,000 for the death of Patrick and $15,000 for the death of Thomas, which represented the policy limits. The named insured then made a claim for payment of funeral bills and medical expenses for each deceased child from Auto-Owners Insurance Company under the medical payments and no-fault coverages, which Auto-Owners paid.

The insured then filed suit for declaratory judgment alleging that he had access to $200,000 uninsured motorist coverage for the death of each child, and alleging that the uninsured motorist coverage is excess over the liability coverage of the liability carrier of Lowell. The insured alleged that he was entitled to "stack" the coverages applicable to each of the two vehicles for the claim of each decedent.

Prior to October 1, 1976, uninsured motorist coverage would "stack," which means that the appellant would have $200,000 in uninsured motorist coverage for the death of each child ($100,000 uninsured motorist coverage times two vehicles). On October 1, 1976, Section 627.4132, Florida Statutes (Supp.1976), became law and it stated that uninsured motorist coverage will no longer stack for accidents occurring on or after October 1, 1976. Appellant argued the passage of Section 627.4132, Florida Statutes (Supp.1976), could not affect his insurance contract with appellee, which was entered into prior to October 1, 1976, without violating Article I, Section 10, Florida Constitution. After both parties moved for summary judgment, the trial court held adversely to appellant, finding that the statute did have retroactive effect, that the statute was constitutional, and consequently, that the insured may not stack the coverages applicable to the two uninsured motor vehicles. Finally, the appellant contended that Section 627.727, Florida Statutes (1975), required uninsured motorist coverage to be "excess over" any liability coverage that a third party has. The trial court again held adversely to appellant, finding that the $15,000 liability coverage of Lowell, tendered to the insured, operated to reduce the uninsured motorist coverage from $100,000 to $85,000.

Renewing the arguments he made in the trial court, appellant posits that (1) Section 627.4132, Florida Statutes (Supp.1976), is unconstitutional because the statute abridges the right of two private parties to contract freely, (2) the statute violates Article I, Section 10, Florida Constitution, because it impairs the obligation of an insurance contract entered into prior to the effective date of the statute, and (3) the trial court erred in holding that Section 627.727(1), Florida Statutes (1975), requires the insured to set off the amount recoverable from the third-party tort-feasor's insurance carrier against the total amount of uninsured motorist coverage available to him. In view of our disposition of appellant's second argument, it is unnecessary for us to pass upon the facial constitutionality of Section 627.4132, Florida Statutes (Supp.1976), and we decline to do so. Singletary v. State, 322 So.2d 551 (Fla.1975); Peoples v. State, 287 So.2d 63 (Fla.1973); Williston Highlands Development Corp. v. Hogue, 277 So.2d 260 (Fla.1973); Walsingham v. State, 250 So.2d 857 (Fla.1971); Mounier v. State, 178 So.2d 714 (Fla.1965).

With regard to appellant's contention that the insurance contract was impaired in contravention of Article I, Section 10, Florida Constitution, we agree. Appellant renewed his uninsured motorist coverage in August, 1976. On that date, uninsured motorist coverage would stack. The Governor signed Chapter 76-266 (Section 627.4132) into law on June 27, 1976, to apply to all claims arising out of accidents on or after October 1, 1976. In the instant case, the accident occurred on December 11, 1976. While it is true that a law is presumed to operate prospectively in the absence of clear legislative expression to the contrary, Walker & LaBerge, Inc. v. Halligan, 344 So.2d 239 (Fla.1977), it is equally clear that the legislature intended a retroactive application of this statute by its pronouncement that the act shall take effect on October 1, 1976. ² As of that date whether the insured had entered previously into an insurance contract for uninsured motorist coverage or not, stacking was no longer permitted. Thus, the effect upon appellant of the statute's passage was to reduce his uninsured motorist coverage from $200,000 to $100,000 albeit he paid premiums for the increased coverage. It is axiomatic that subsequent legislation which diminishes the value of a contract is repugnant to our Constitution. As this Court stated in Pinellas County v. Banks, 154 Fla. 582, 19 So.2d 1, at 3 (1944):

Any conduct on the part of the legislature that detracts in any way from the value of the contract is inhibited by the Constitution. State of Louisiana v. City of New Orleans, 102 U.S. 203, 26 L.Ed. 132; Edwards v. Kearzey, 96 U.S. 595, 24 L.Ed. 793.

See also Yamaha Parts Distributors, Inc. v. Ehrman, 316 So.2d 557 (Fla.1975); Rorick v. Board of Commissioners of Everglades Drainage District, 57 F.2d 1048 (1932); Moore v. Branch, 5 F.Supp. 1011 (1934). Accordingly, appellant's constitutional right guaranteed by Article I, Section 10, Florida Constitution, has been infringed.

Appellee contends that in view of the fact that the insured renewed his insurance policy after the Governor had signed Chapter 76-266 into law, he was on notice that stacking would not be permitted after October 1, 1976. Consequently, appellee concludes that appellant's policy was not altered retroactively without notice to him at the time the contract was made. As support for this proposition, appellee relies upon Nationwide Mutual Insurance Co. v. Bryar, 349 So.2d 1221 (Fla. 2d DCA 1977), wherein on facts similar to the instant case, the District Court of Appeal, Second District, found this argument persuasive. We are not so persuaded. The citizens of this State cannot be charged reasonably with notice of the consequences of impending legislation before the effective date of that legislation, ³ for it is generally accepted that a statute speaks from the time it goes into effect. In re Raimondi, 126 F.Supp. 390 (D.C.Cal.1954); Combs v. Cook, 238 Ind. 392, 151 N.E.2d 144 (1958); Gianforte v. Crucible Steel Co. of America, 25 N.J.Super. 183, 95 A.2d 632 (1953); County School Board of Fairfax County v. Town of Herndon, 194 Va. 810, 75 S.E.2d 474 (1953). Today we reaffirm this general rule and find that appellant was placed on notice of the effectiveness of Section 627.4132, Florida Statutes (Supp.1976), only as of October 1, 1976.

Appellant's other point on appeal requires this Court to construe the meaning of certain language found in Section 627.727(1), Florida Statutes (1975). That statute reads in pertinent part that uninsured motorist coverage

shall be excess over but shall not duplicate the benefits available to an insured under any workmen's compensation law, disability benefits law, or any similar law; under any automobile liability or automobile medical expense coverages; or from the owner or operator of the uninsured motor vehicle or any other person or organization jointly or severally liable together with such owner or operator for the accident.

It is appellant's position that the words "excess over" should be interpreted literally to mean "added to" and not "set off." Because we must assume that the legislature knew what it was doing when it used the words "excess over," appellant posits that appellee is not empowered to set off the $15,000 liability coverage of Lowell from appellant's uninsured motorist coverage. Thus, if appellant "stacks" his uninsured motorist coverage in ...