Florida Ins. Guaranty Ass'n v. Johnson

• Decision Date: 24 December 1980
• Docket Number: No. 80-11,80-11
• Citation: 392 So.2d 1348
• Parties: FLORIDA INSURANCE GUARANTY ASSOCIATION, Appellant, v. Minnie Powell JOHNSON, formerly known as Minnie Powell, Appellee.
• Court: Florida District Court of Appeals

Page 1348

392 So.2d 1348

FLORIDA INSURANCE GUARANTY ASSOCIATION, Appellant, v. Minnie Powell JOHNSON, formerly known as Minnie Powell, Appellee.

No. 80-11.

District Court of Appeal of Florida, Fifth District.

Dec. 24, 1980.

Rehearing Denied Feb. 3, 1981.

Ira Wm. McCollum, Jr., of Pitts, Eubanks & Ross, P. A., Orlando, for appellant.

James R. Lavigne, Winter Park, for appellee.

COWART, Judge.

This is an insurance case involving "stacking" of uninsured or underinsured motorist coverage.

On March 23, 1977, Marvin Albert Fehring was operating his vehicle when it collided with a vehicle owned by Carrie D. Fudge and operated with her permission by Minnie Powell Johnson. Johnson, whose damages could be in excess of $50,000, was not a resident of the household of Fudge nor a member of her family. Everyone had insurance. Fehring had liability with Allstate with $10,000 coverage. Fudge's policy with Reserve Insurance Company (for whom appellant Florida Insurance Guaranty Association has been substituted) covered the period from June 6, 1976, to June 6, 1977, and provided uninsured motorist limits of $15,000 per person plus medical benefits on both the vehicle involved in this collision and on another vehicle owned by Fudge. Johnson's own insurance with General Accident covered one vehicle for the period from February 1, 1977, through February 1, 1978, and provided uninsured motorist limits of $10,000 and personal injury protection and medical benefits. Allstate tendered Johnson $10,000. General paid Johnson $5,000 PIP benefits and $1,000 medical benefits. Reserve paid Johnson $1,000 medical benefits.

On these undisputed facts the trial court held that Johnson was entitled to Reserve's coverage of $15,000 on Fudge's vehicle Johnson was operating and upon this Johnson was entitled to add or "stack" Reserve's coverage of $15,000 on Fudge's vehicle which was not involved in this collision; upon this $30,000 of coverage Johnson was held entitled to "stack" the $10,000 of uninsured motorist coverage from her own insurer General for a total uninsured motorist coverage of $40,000. The trial court also ruled that General, by providing $10,000 or 1/4th of the $40,000 uninsured motorist coverage, was entitled to setoff $2,500 or 1/4th of the $10,000 liability coverage provided by Allstate plus the $5,000 PIP and the $1,000 medical paid by General, for a total of $8,500, against its $10,000 of uninsured motorist coverage, leaving General with a net uninsured motorist coverage exposure of $1,500. General accepted this decision, settled with Johnson and did not appeal. Reserve appeals and argues that Johnson is entitled to Reserve's $15,000 of coverage on the vehicle she was operating, but not to the coverage on Fudge's second vehicle, and that the anti-stacking statute prohibits Johnson, whose own vehicle was not involved in this collision, from recovering from her own insurer General and, consequently, the combined paid coverage of Allstate's $10,000 of liability, General's $5,000 PIP and $1,000 medical and Reserve's $1,000 medical, totaling $17,000, should be offset against Reserve's $15,000 of uninsured coverage, leaving no sum available to Johnson from Reserve for which appellant should be responsible.

In cases involving the stacking of uninsured motorist coverage two statutes are involved: The uninsured motorist statute, Section 627.727, Florida Statutes, which requires uninsured motorist coverage to be offered with automobile liability insurance, and Section 627.4132, Florida Statutes, ¹ commonly called the anti-stacking statute, which generally attempts to limit an insured to coverage on the vehicle involved in the accident and to prohibit various other insurance coverages from being added to or stacked upon that coverage. ²

The first question is whether Johnson can recover from Reserve both the $15,000 uninsured motorist coverage on the vehicle she was operating and the $15,000 similar coverage on Fudge's vehicle which was not involved in this accident.

While the anti-stacking statute purports to apply to all claims arising out of accidents occurring on or after its effective date on October 1, 1976, and this accident occurred after that date, nevertheless, the statute does not apply to the issue of stacking the multiple vehicle coverages under Fudge's policy with Reserve because that policy was renewed on June 6, 1976, before the effective date of the statute, and to apply the statute would unconstitutionally impair this insurance contract. Dewberry v. Auto-Owners Insurance Co., 363 So.2d 1077 (Fla.1978); Hausler v. State Farm Mutual Automobile Insurance Co., 374 So.2d 1037 (Fla. 2nd DCA 1979); Bunch v. Hartford Accident and Indemnity Co., 370 So.2d 455 (Fla. 4th DCA 1979).

The term "stacking" is used to refer to two different instances of the adding together of insurance coverage. The original or traditional use of the term "stacking" refers to the combining together of the coverages on a number of vehicles which are covered under one policy and in this sense, "stacking" has been permitted by case law in Florida for a number of years where not prevented by an applicable statute. In this use of the term "stacking," and only in this sense, the status of the claimant as a named insured has become significant as shown by the following case law development:

In Mullis v. State Farm Mutual Automobile Insurance Co., 252 So.2d 229, 232 (Fla.1971), the Florida Supreme Court held that the coverage of an uninsured motorist policy was determined by the uninsured motorist statute and any policy exclusions not in the statute were invalid. The court then held that under this statute there are two classes of insureds: Class I, being the named insured and relatives resident in his household, ³ who had full protection, and Class II, being others occupying the insured vehicle with the owner's permission, who had a qualified protection.

Tucker v. Government Employees Insurance Co., 288 So.2d 238 (Fla.1973) extended Mullis and held that a Class I insured under uninsured motorist endorsements with stated per person per accident limits attached to a policy covering two vehicles, with separate premiums charged for each, could aggregate or "stack" the limits for each vehicle and recover the total and policy provisions to the contrary were invalid. Another example of this stacking principle operating in favor of a Class I insured is Florida Farm Bureau Casualty Co. v. Andrews, 369 So.2d 346 (Fla. 4th DCA 1978), cert. denied 381 So.2d 764, 766 (Fla.1980).

However, other cases have drawn a distinction based on the status of the claimant as being or not being a named insured and have held that the owner's coverages on a number of vehicles under one policy could not be stacked for the benefit of a Class II insured. In Travelers Insurance Co. v. Pac, 337 So.2d 397 (Fla. 2nd DCA 1976), Pac was injured while operating a vehicle insured under a fleet policy issued to his employer. The policy contained uninsured motorist coverage of $10,000 on 14 separate vehicles. Pac attempted to stack these coverages to compensate for his injuries. The court refused to approve the stacking because Pac was a Class II insured under Mullis.

The Tucker opinion cites Mullis and we think the net effect of the language quoted above is that stacking is mandated only for those insureds in the first category outlined in Mullis. Stacking is derived from the presumption that when the named insured purchases uninsured motorist coverage on more than one automobile, he intends to buy extra protection for himself and his family, regardless of whether his injury occurs in any one of his insured vehicles or elsewhere. But there is no reason to apply this result to a guest or employee injured in an insured vehicle. That person has no relationship with any other insured vehicle and the coverage on the others should not inure to his benefit. Pac, supra at 398.

The reasoning of Pac has been followed in later cases. See Liberty Mutual Insurance Co. v. Searle, 379 So.2d 131 (Fla. 4th DCA 1979); Hartford Accident and Indemnity Co. v. Richendollar, 368 So.2d 603 (Fla. 2d DCA 1979).

Therefore, Johnson was properly included as a Class II insured under Reserve's coverage of Fudge's vehicle involved in the accident as she was operating it with Fudge's permission; however, Johnson is not covered under Fudge's additional coverage on Fudge's second vehicle because (1) Johnson was not a...