Fidelity & Cas. Co. of New York v. Fonseca

• Decision Date: 02 May 1978
• Docket Number: 77-1688,Nos. 77-619,s. 77-619
• Citation: 358 So.2d 569
• Parties: FIDELITY AND CASUALTY COMPANY OF NEW YORK, Appellant, v. Ana FONSECA, Appellee. Ada Fernandez ROJAS, Appellant, v. FIDELITY AND CASUALTY COMPANY OF NEW YORK, Appellee.
• Court: Florida District Court of Appeals

Page 569

358 So.2d 569

FIDELITY AND CASUALTY COMPANY OF NEW YORK, Appellant, v. Ana FONSECA, Appellee.

Ada Fernandez ROJAS, Appellant, v. FIDELITY AND CASUALTY COMPANY OF NEW YORK, Appellee.

Nos. 77-619, 77-1688.

District Court of Appeal of Florida,Third District.

May 2, 1978.

Rehearing Denied May 26, 1978.

Bradford, Williams, McKay, Kimbrell, Hamann & Jennings and R. Benjamin Reid, Miami, for Fidelity and Casualty Co.

Horton, Perse & Ginsberg, Ratiner & Glinn, Miami, for Fonseca & Rojas.

Before PEARSON, NATHAN and KEHOE, JJ.

NATHAN, Judge.

These consolidated appeals emanate from separate decisions by two trial courts, each interpreting the provisions of a single automobile insurance policy as they relate to a specific incident. We must decide whether, in light of the particular facts involved, the subject policy provides either personal injury protection (PIP), liability coverage, neither, or both to a wife, who resided with her husband, for an accident which occurred when she was driving the husband's automobile, which was not scheduled as insured under the policy. We hold that, on the facts before us, the plain, unambiguous language of the policy provides neither PIP nor liability coverage.

Ada Rojas, the wife, owned a 1966 Ford Fairlane which was the only described vehicle on the declaration sheet of the policy issued to her, as the named insured, by Fidelity and Casualty Company of New York (F&C). On the date in question, July 15, 1975, the Ford was out of service and being repaired so Mrs. Rojas borrowed her husband's car, a 1968 Oldsmobile Cutlass, which was not scheduled as insured by the subject policy and for which no coverage premiums were paid. While driving the Oldsmobile, Mrs. Rojas was involved in an accident in which both she and a passenger, Ana Fonseca, were injured.

Both Mrs. Rojas and Ana Fonseca sought benefits under the policy, the former under its PIP coverage and the latter under its liability provisions. F&C denied coverage, and each woman instituted separate suits.

In the action brought by Mrs. Rojas against F&C (Case number 77-1688 in this court), summary judgment was granted in favor of F&C, the trial court ruling that no PIP coverage was available for the incident sued upon. In the suit brought by Ana Fonseca against Mrs. Rojas, as tortfeasor (Case number 77-619 in this court), summary judgment was granted in favor of Ms. Fonseca, the trial court finding that, as a matter of law, the husband's car qualified as a temporary substitute automobile, and the liability provisions of the subject policy afforded coverage to both Ada Rojas, as named insured, and Ana Fonseca, as third party beneficiary of the insurance contract. The court further found that the "severability of interests" clause contained in the policy also required a holding that coverage existed.

During the course of proceedings below Mrs. Rojas and Ana Fonseca settled and stipulated to the entry of judgment against Mrs. Rojas, with execution to be solely against F&C should coverage be determined to exist. In these consolidated appeals, Mrs. Rojas is appellant in Case number 77-1688, and F&C is appellee; F&C is appellant in Case number 77-619, and the injured plaintiff, Ana Fonseca, is appellee.

Under Part I of the subject policy, which was in effect at all pertinent times, the following relevant liability coverage provisions were contained:

The company agreed to pay, on behalf of the insured, all sums which the insured became legally obligated to pay as damages because of bodily injury to any person "arising out of the ownership, maintenance, or use of the owned automobile or any non-owned automobile. . . ."

An "owned" automobile was defined as "a private passenger . . . automobile described in this policy for which a specific premium charge indicates that coverage is afforded, . . ."

A "non-owned" automobile meant one "not owned by or furnished for the regular use of either the named insured or any relative, other than a temporary substitute automobile."

A "temporary substitute automobile" was defined as any automobile "not owned by the named insured, while temporarily used with the permission of the owner as a substitute for the owned automobile . . . when withdrawn from normal use because of its breakdown, repair, servicing, loss or destruction."

The term "named insured" was defined as "the individual named in item 1 of the declarations and also . . . his spouse, if a resident of the same household."

Finally, under Part I, the following severability of interests clause was included:

"The insurance afforded under Part I (Liability) applies separately to each insured against whom claim is made or suit is brought, but the inclusion herein of more than one insured shall not operate to increase the limits of the company's liability."

The availability of PIP coverage depended upon whether or not liability coverage was afforded under the policy. ¹ Therefore our decision on F&C's appeal of the summary judgment in favor of Fonseca will be dispositive of Rojas' appeal of the summary judgment in favor of the insurance company.

There is no question but that no premiums were paid to F&C to cover the Cutlass, so it is clear that the husband's automobile was not an "owned" vehicle under the terms of the policy. Therefore, since the only way liability coverage could be found to exist would be to conclude that the husband's car was a "non-owned" vehicle used as a temporary substitute, the crucial issue in these appeals becomes whether or not the husband's car was a "non-owned" vehicle under the provisions of the liability sections of the subject policy.

F&C argues that the unambiguous language of the policy precludes such a finding, and that the case which controls the disposition of the instant appeals is Boyd v. United States Fidelity and Guaranty Company, 256 So.2d 1 (Fla.1972). Rojas and Fonseca assert that the husband's car qualifies as a temporary substitute and that the case which should control our decision herein is Shelby Mutual Insurance Company v. Schuitema, 183 So.2d 571 (Fla. 4th DCA 1966); affirmed, 193 So.2d 435 (Fla.1967). They argue that Boyd did not deal with the applicability of a severability of interests clause and therefore should not be dispositive here, while Schuitema, which did deal with such a clause, should determine the result in the cases at bar.

We find Boyd almost directly on point, but deem an examination of both cases necessary in order that we may lay to rest any remaining misconceptions as to the applicability of a severability of interests clause to language such as that specifically at issue herein, that is, to policy provisions dealing with a single class of "named insureds" as opposed to provisions applicable to two different classes of "insureds." ²

In Boyd, a husband was driving his wife's car at the time of the accident sued upon. When recovery was sought from the husband's insurer, the crucial issue (as in the cases sub judice, except that the parties were reversed; here we would substitute wife for husband and husband for wife) was whether the wife's car was a "non-owned" automobile under the liability provisions of the husband's insurance policy. The husband's insurer denied coverage on the basis of contractual language virtually identical to that in the policy herein under consideration.

The Boyd Court found that, since the wife was a "named insured" under the proviso in the husband's policy which defined a "named insured" as a spouse who resided in the same household, the wife's car could not be a "non-owned" vehicle. Therefore no liability was found and the husband's insurer was not obligated to pay. The court acknowledged the incongruity of the fact that the husband would be covered in almost any car in the world which he drove with the owner's permission except that of his wife, but found the clear language of the contract controlling, recognizing that the rationale of the exclusion was to prevent an individual from paying a single premium to secure coverage on other vehicles which he had the opportunity to use frequently, particularly in situations where members of a single household may have "two or more automobiles actually or potentially used interchangeably, but with only one particular automobile insured." 256 So.2d 1 at 5, citing 13 Couch on Insurance 2d, Section 45:1052 (1965). (Emphasis supplied.) See also Annot., 86 A.L.R.2d 937 (1962).

In Schuitema, a customer (Schuitema) of an auto dealer (Wilson) was permissibly occupying a vehicle for which liability coverage had been purchased by Wilson, the named insured, when an accident occurred, injuring one of Wilson's employees. The employee sued Schuitema, who requested Wilson's insurer to defend him as an additional insured under the policy issued to Wilson. The company denied coverage and refused to defend. After settling with the employee, Schuitema brought suit against Wilson's insurer.

At issue was the effect of a severability of interests clause upon a provision of Wilson's policy which denied liability coverage to an employee of "the insured." Both Wilson and Schuitema were "insureds" under the policy, but Wilson was also a "named insured." The question to be answered was: When there is more than one "insured," and claim is made against one of them, which one is the insured against whose employee the exclusion applies?

After noting that this was a situation in which the parties intended to furnish coverage to persons other than the named insured, the Schuitema Court held that the effect of the severability of interests clause in that situation was "to make it certain that, when a claim is asserted against one who is an insured under the policy, then that person becomes 'the insured' for the purpose of determining the insuror's (sic) obligation with respect to that claim. The exclusion as to employees of the insured is thus . . . confined to the employees of the employer against whom the...