Ernie Haire Ford v. Universal Underwriters Ins.

• Decision Date: 27 March 2008
• Docket Number: Case No. 6:07-cv-288-Orl-28DAB.,Case No. 6:07-cv-595-Orl-28DAB.
• Citation: 541 F.Supp.2d 1295
• Parties: ERNIE HAIRE FORD, INC., Plaintiff, v. UNIVERSAL UNDERWRITERS INSURANCE COMPANY, Defendant. Crown Auto Dealerships, Inc., Plaintiff, v. Universal Underwriters Insurance Company, Defendant.
• Court: U.S. District Court — Middle District of Florida

Page 1295

541 F.Supp.2d 1295

ERNIE HAIRE FORD, INC., Plaintiff, v. UNIVERSAL UNDERWRITERS INSURANCE COMPANY, Defendant.

Crown Auto Dealerships, Inc., Plaintiff, v. Universal Underwriters Insurance Company, Defendant.

Case No. 6:07-cv-288-Orl-28DAB.

Case No. 6:07-cv-595-Orl-28DAB.

United States District Court, M.D. Florida, Orlando Division.

March 27, 2008.

Mark A. Nation, The Nation Law Firm, Longwood, FL, for Plaintiffs.

Anthony W. Morris, McKenna, Long & Aldridge, LLP, Atlanta, GA, Darrin M. Phillips, Law Office of Darrin M. Phillips, Naples, FL, James Michael Shaw, Jr., John W. Weihmuller, Butler Pappas, LLP, Tampa, FL, for Defendant.

ORDER

JOHN ANTOON II, District Judge.

Plaintiffs Ernie Haire Ford, Inc. ("Ernie Haire") and Crown Auto Dealerships, Inc. ("Crown") bring the instant actions against their liability insurer, Defendant Universal Underwriters Insurance Company ("Universal"), seeking declaratory relief. Plaintiffs, who operate car dealerships, disagree with Universal regarding the amount of liability coverage available in connection with lawsuits that have been filed against them in other courts.

Each Plaintiff has filed a declaratory judgment action regarding the amount of coverage; they initially filed their suits in state court, but the cases were removed to this Court and have been consolidated. Currently pending are cross-motions for summary judgment (Docs. 29 & 45) and the responses thereto (Docs. 33 & 48). The Court heard oral argument on the motions (see Mins., Doc. 51) and now issues the following rulings thereon.

I. Background

The Plaintiffs have been sued in separate class-action lawsuits¹ for alleged violations of, inter alia, the Truth in Lending Act, 15 U.S.C. § 1601 et seq., arising from Plaintiffs' practices in connection with sales of hundreds of automobiles over periods of several years. The class period for the Ernie Haire class action runs from August 30, 1998 to August 1, 2003,² and the class period for the Crown class action runs from January 5, 2000 to July 5, 2003.

Each Plaintiff obtained insurance policies from Universal for several consecutive policy periods. The language of the policies issued to the two Plaintiffs — known as "Unicover policies" — is identical for the purposes of this case. Ernie Haire obtained five successive policies for five annual periods beginning April 1, 1998 and ending April 1, 2003. Crown also obtained five successive policies — the first two with policy periods of August 1, 1999 to August 1, 2000 and August 1, 2000 to April 1, 2001, respectively, and the others running for three consecutive annual periods from April 1, 2001 to April 1, 2004.

As Universal explains in its summary judgment motion, "[i]t is undisputed that the alleged pattern and practice of violations of truth-in-lending ("TILA") statutes in the Class Actions implicated the STEO ["Statute and Title E & O"] coverage afforded under Coverage Part 500 of the [Unicover policies], subject to all other applicable terms, conditions and exclusions." (Def.'s Mem. in Supp. of Cross-Mot. for Summ. J., Doc. 45, at 3-4). However, the parties dispute the limit of coverage for the TILA violations in the class actions; in Count I of their Complaints — the count at issue in the summary judgment motions now before the Court³ — Plaintiffs seek a declaration as to the amount of coverage available under Part 500 of the Unicover policies. Plaintiffs contend that they are entitled to $500,000 in "annual aggregate" limits for each policy period within their respective class periods, for a potential total of $2.5 million in available coverage, but Universal asserts that each Plaintiff is constrained to one "per suit" limit under one policy — a total of $500,000 for each class action.⁴

II. Discussion

A. Summary Judgment Standards

Summary judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). The moving party bears the burden of showing that no genuine issues of material fact remain. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). "Summary judgment is appropriate `in declaratory judgment actions seeking a declaration of coverage when the insurer's duty, if any, rests solely on the applicability of the insurance policy, the construction and effect of which is a matter of law.'" TIG Ins. Co. v. Smart Sch., 401 F.Supp.2d 1334, 1337 (S.D.Fla.2005) (quoting Northland Cas. Co. v. HBE Corp., 160 F.Supp.2d 1348, 1358 (M.D.Fla.2001)).

"Cross motions for summary judgment do not change the standard." Latin Am. Music Co. v. Archdiocese of San Juan of the Roman Catholic & Apostolic Church, 499 F.3d 32, 38 (1st Cir.2007). "`Cross motions for summary judgment are to be treated separately; the denial of one does not require the grant of another.'" Christian Heritage Acad. v. Okla. Secondary Sch. Activities Ass'n, 483 F.3d 1025, 1030 (10th Cir.2007) (quoting Buell Cabinet Co. v. Sudduth, 608 F.2d 431, 433 (10th Cir. 1979)). "Even where the parties file cross motions pursuant to Rule 56, summary judgment is inappropriate if disputes remain as to material facts." Id.; accord Monumental Paving & Excavating, Inc. v. Pa. Mfrs.' Ass'n Ins. Co., 176 F.3d 794, 797 (4th Cir.1999) ("When considering motions from both parties for summary judgment, the court applies the same standard of review and so may not resolve genuine issues of material fact. Instead, [the court must] consider and rule upon each party's motion separately and determine whether summary judgment is appropriate as to each under the Rule 56 standard.") (citations omitted).

B. Principles of Insurance Contract Interpretation

As noted by the parties, "[t]he interpretation of an insurance contract is a question of law." Kattoum v. N.H. Indem. Co., 968 So.2d 602, 604 (Fla. 2d DCA 2007). It is undisputed that Florida law governs the interpretation of the insurance policies at issue here. "Florida law provides that insurance contracts are construed in accordance with the plain language of the policies as bargained for by the parties." Auto-Owners Ins. Co. v. Anderson, 756 So.2d 29, 34 (Fla.2000). "The scope and extent of insurance coverage is determined by the language and terms of the policy." Bethel v. Sec. Nat'l Ins. Co., 949 So.2d 219, 222 (Fla. 3d DCA 2006).

"If the relevant policy language is susceptible to more than one reasonable interpretation, one providing coverage and the [other] limiting coverage, the insurance policy is considered ambiguous." Auto-Owners, 756 So.2d at 34. "Ambiguous policy provisions are interpreted liberally in favor of the insured and strictly against the drafter who prepared the policy. Likewise, ambiguous insurance policy exclusions are construed against the drafter and in favor of the insured. In fact, exclusionary clauses are construed even more strictly against the insurer than coverage clauses." Id. (citations omitted). "[I]n construing insurance policies, courts should read each policy as a whole, endeavoring to give every provision its full meaning and operative effect." Id.; see also § 627.419(1), Fla. Stat. ("Every insurance contract shall be construed according to the entirety of its terms and conditions ...."). "[A]ny apparent inconsistency should be reconciled if possible." Fla. Farm Bureau Ins. Co. v. Birge, 659 So.2d 310, 312 (Fla. 2d DCA 1994).

C. The Merits of the Summary Judgment Motions

1. Overview of the Parties' Positions

In its summary judgment motion, Universal asserts that each Plaintiff has STEO coverage only up to the "highest limit" of liability available under any one of the policies in effect during the class period. Universal argues that based on the policies' "Non-Stacking of Limits" provision and definition of "suit," each Plaintiff is confined to one $500,000 "per suit" limit.

Plaintiffs, on the other hand, contend in their summary judgment motion that they are entitled to an annual aggregate limit of $500,000 for each of the policy periods within the class periods of their respective class action lawsuits. Plaintiffs argue that Universal collected premiums for five consecutive policy periods for "occurrence" policies and that the underlying "claims" in the class actions "occurred and triggered coverage in separate and distinct policy periods." (Doc. 29 at 4). Plaintiffs further assert that the "Non-Stacking of Limits" provision — upon which Universal relies in attempting to confine the Plaintiffs to the limits of only one of the policies — has no application here because Plaintiffs are not attempting to "stack" limits, coverages, or policies. Plaintiffs have included the following graphical representation of their position with respect to each of their class periods, policy periods, and annual aggregate limits:

Ernie Haire:

NOTE: OPINION CONTAINING TABLE OR OTHER DATA THAT IS NOT VIEWABLE

(See Doc. 29 at 3).

Neither party has presented any case law that is squarely on point with regard to the issue of coverage under the circumstances of this case, nor has the Court's own research located a case precisely on point. In any event, analysis of the parties' arguments must begin with an overview of the relevant provisions of the Unicover policies.

2. The Unicover Policy

The Unicover Policy is a "a multiple coverage insurance policy." (Pls.' App. at Bates Stamp UUIC-00018). Its preamble explains that "each Coverage Part is made up of its provisions, plus those of the ... General Conditions[] and that portion of the declarations referring to the Coverage Part, including all endorsements made applicable to that Coverage Part." (id.)

The STEO portion of Coverage Part 500 of the Unicover Policy — the portion that provides coverage for the underlying TILA violations — reads as follows, where "WE" and "...