Liberty Mut. Ins. Co., Inc. v. Ledford

• Decision Date: 18 April 1997
• Docket Number: No. 96-02668,96-02668
• Parties: 22 Fla. L. Weekly D982 LIBERTY MUTUAL INSURANCE COMPANY, INC., Appellant, v. William M. LEDFORD and Kathy L. Ledford, as parents and natural guardians of Talaya Shan Dale Smith, Appellees.
• Court: Florida District Court of Appeals

Page 1164

691 So.2d 1164

22 Fla. L. Weekly D982

LIBERTY MUTUAL INSURANCE COMPANY, INC., Appellant, v. William M. LEDFORD and Kathy L. Ledford, as parents and natural guardians of Talaya Shan Dale Smith, Appellees.

No. 96-02668.

District Court of Appeal of Florida,

Second District.

April 18, 1997.

Judith J. Flanders and Donald G. Jacobsen of Lane, Trohn, Clarke, Bertrand, Vreeland & Jacobsen, P.A., Lakeland, for Appellant.

Timothy O. Coyle and C. Kenneth Stuart, Jr., Lakeland, for Appellees.

LAZZARA, Judge.

Liberty Mutual Insurance Company, Inc. (Liberty Mutual) appeals a final declaratory judgment rendered in favor of the appellees, William and Kathy Ledford (the Ledfords), which determined that it had not obtained an informed, knowing rejection of uninsured motorist coverage from its insured and thus found the limits of such coverage to be equal to the bodily injury liability limits of Liberty Mutual's automobile insurance policy. We reverse and remand for a new trial because we find merit in Liberty Mutual's contention that the trial court erred in excluding from the jury's consideration relevant documentary evidence which tended to prove the critical material fact that Liberty Mutual had obtained from its insured a valid election of uninsured motorist coverage in an amount less than the bodily injury liability limits provided for in the policy. In view of this disposition, we need not reach Liberty Mutual's arguments regarding the propriety of the trial court's rulings excluding and admitting other evidence and denying a motion for mistrial. We do reject, however, its contentions that the trial court erred in denying a motion for partial summary judgment and a motion for directed verdict.

This appeal arises from a declaratory judgment action brought by the Ledfords in their capacities as the parents and natural guardians of their daughter, Talaya Smith, under the provisions of chapter 86, Florida Statutes (1993). Through this action they sought a determination of the amount of uninsured motorist (UM) coverage available under a business automobile insurance policy Liberty Mutual issued to its insured, H & F Groves, Inc. (H & F), covering the period of March 10, 1992, through March 10, 1993. The precipitating event for the Ledfords' lawsuit was a motor vehicle accident which occurred on April 17, 1992. On that day, Mr. Ledford, who was an employee of H & F, was driving one of H & F's vehicles. His daughter accompanied him as a passenger. An uninsured motorist struck the vehicle while being pursued by police officers of the city of Avon Park, Florida, causing Mr. Ledford's daughter to sustain serious personal injuries.

A dispute later arose between Liberty Mutual and the Ledfords over the amount of UM benefits available under H & F's policy, resulting in the Ledfords filing a declaratory judgment action to resolve this controversy. ¹ They claimed that the limits of UM coverage were equal to the policy's bodily injury liability limits of $750,000 because Liberty Mutual had never obtained a written or oral rejection from H & F limiting such coverage to a lower amount. ² Liberty Mutual asserted that it had in fact secured a proper written selection form from H & F limiting UM coverage to $20,000. After a trial on the merits, the jury returned a verdict finding that Liberty Mutual had not obtained "an informed knowing rejection of uninsured motorist coverage when it issued the policy to H & F Groves, Inc." Consequently, the trial court rendered a final judgment determining that by operation of law the UM coverage under Liberty Mutual's policy with H & F was equal to the bodily injury liability limits of $750,000. See, e.g., Adams v. Aetna Cas. & Sur. Co., 574 So.2d 1142, 1147 (Fla. 1st DCA) (holding that in the absence of an informed selection of lower UM limits by insured or an intentional rejection of such coverage by insured, UM coverage is tied to the limits of liability coverage), review dismissed, 581 So.2d 1307 (Fla.1991); Chmieloski v. National Union Fire Ins. Co., 563 So.2d 164, 166 (Fla. 2d DCA 1990) (interpreting Florida statutory law to require that the limits of UM coverage shall be not less than the limits of bodily injury liability insurance purchased by a named insured, unless the insured selects lower limits or rejects the coverage altogether).

Section 627.727(1), Florida Statutes (1991), which was in effect on the commencement date of H & F's policy, governs the disposition of this appeal. See Quirk v. Anthony 563 So.2d 710, 713 (Fla. 2d DCA 1990), approved, 583 So.2d 1026 (Fla.1991). It provides in part that "[n]o motor vehicle liability insurance policy which provides bodily injury liability coverage shall be delivered or issued for delivery in this state ... unless uninsured motorist coverage is provided therein or supplemental thereto...." This section further provides, however, that "the coverage required under this section is not applicable when, or to the extent that, an insured named in the policy makes a written rejection of the coverage on behalf of all insureds." In order for an insured to reject UM coverage or to select such coverage in an amount less than bodily injury liability limits, this section mandates that the insured do so on an approved form. It states, in that regard, as follows:

The rejection or selection of lower limits shall be made on a form approved by the Insurance Commissioner. The form shall fully advise the applicant of the nature of the coverage and shall state that the coverage is equal to bodily injury liability limits unless lower limits are requested or the coverage is rejected. The heading of the form shall be in 12-point bold type and shall state: "You are electing not to purchase certain valuable coverage which protects you and your family or you are purchasing uninsured motorist limits less than your bodily injury liability limits when you sign this form. Please read carefully." If this form is signed by a named insured, it will be conclusively presumed that there was an informed, knowing rejection of coverage or election of lower limits on behalf of all insureds.

(Emphasis added.)

The legislature added this just-quoted language to section 627.727(1) by an amendment enacted in 1984. See ch. 84-41, § 1, at 95, Laws of Fla. Its purpose for enacting the amendment was to ease the burden placed on insurance companies by the case law of Florida in proving that an insured knowingly rejected higher limits of UM coverage by requiring a "paper trail" as conclusively presumptive evidence of that fact. See Auger v. State Farm Mut. Auto. Ins. Co., 516 So.2d 1024, 1025 (Fla. 2d DCA 1987). As interpreted, the conclusive presumption created by the amendment is such that it "cannot be rebutted by testimony that the person signing the rejection form did not read it." White v. Allstate Ins. Co., 530 So.2d 967, 969 (Fla. 1st DCA 1988), review denied, 539 So.2d 476 (Fla.1989); see also Ehrhardt, Florida Evidence, § 301.1, at 68 (1996 ed.) (describing a statutorily created conclusive presumption recognized under section 90.301 of Florida's Evidence Code to be of such a nature that "the opposing party may not dispute the existence of the presumed fact if the underlying facts are present"). ³ To survive constitutional scrutiny, however, the presumption cannot be used "to prevent the pleading and introduction of evidence of extraordinary circumstances such as forgery, fraud, or trickery in obtaining the signature[.]" White, 530 So.2d at 969; accord Johnson v. Stanley White Ins., 684 So.2d 248, 250 (Fla. 2d DCA 1996); Rodriguez v. American United Ins. Co., 570 So.2d 365, 366 (Fla. 3d DCA 1990). ⁴

Against this backdrop, we turn to Liberty Mutual's complaint regarding the trial court's erroneous exclusion of relevant documentary evidence. At the conclusion of jury selection, the Ledfords, based on comments made by Liberty Mutual's counsel to the prospective jurors during voir dire, moved the trial court to prohibit Liberty Mutual from introducing into evidence a particular defense exhibit. This exhibit consisted of a form which...