National Merchandise Co., Inc. v. United Service Auto. Ass'n

Decision Date17 June 1981
Docket NumberN-S,No. UU-32,UU-32
Citation400 So.2d 526
PartiesNATIONAL MERCHANDISE CO., INC., d/b/a Pic-ave Drugs, and Maryland Casualty Company, Appellants, v. UNITED SERVICE AUTOMOBILE ASSOCIATION and Jerome C. Cohan and Lyndia CohanBoyd, etc., et al., Appellees.
CourtFlorida District Court of Appeals

James C. Rinaman, Jr., of Marks, Gray, Conroy & Gibbs, Noah H. Jenerette, Jr., of Boyd, Jenerette, Lemis & Staas, Jacksonville, for appellants.

John I. Todd, Jr., Lane Thomas Burnett, John F. Fannin, Christopher W. Gardner, Richard W. Kreidler, and William R. Swain, Jacksonville, for appellees.


The appellants, National Merchandise Co., Inc. (Pic-N-Save Drug Stores) and Maryland Casualty Co., seek reversal of a summary judgment granted to appellee, United Services Automobile Association (U.S.A.A.). We are asked to review U.S.A.A.'s plain language, simplified insurance policy, providing coverage for bodily injury incurred due to an "auto accident." The alleged "auto accident" involves a four-year old child who ingested drugs while seated in the insured's car and later expired. The trial judge granted summary judgment based upon his determination that the death of the child did not result from an auto accident and was, therefore, not within the coverage of the policy. Our review of the record and the applicable law leads us to a contrary conclusion. We therefore reverse.

A brief review of the facts as disclosed by the pleadings, exhibits and depositions is essential to the disposition of this appeal. During 1978, Paul Cohen worked for Pic-N-Save as a pharmaceutical supervisor in Jacksonville. One of his duties was to transfer drugs from one retail outlet to another. For this purpose, he used his station wagon, but Pic-N-Save reimbursed him for car insurance, gas, and repairs. Cohen indicated in a deposition that it was not unusual for him to leave drugs in his car overnight or over a weekend, although this procedure was apparently unknown to Cohen's supervisor. Cohen spent a lot of time on the road, since he supervised and delivered drugs to eight different stores in North Florida and South Georgia.

On Wednesday, June 14, 1978, Cohen picked up some drugs from one of the Jacksonville stores. The drugs remained in his car Wednesday, Thursday and Friday. During working hours on Friday, June 16, he decided to stop by his home to estimate how much cement he would need to put up a wall in his back yard. At home he found his nephew, David, age four, and his niece, age two. Since they wanted to go for a ride with him, he took them to the hardware store. He was in the store for about ten minutes, while the two children waited in the car. Some drugs remained in a bag on the front floorboard on the passenger side of the car. When he returned, he found the drugs had been moved. Fearing that the children had done something with the drugs, he questioned them as to whether or not they had touched the drugs. They apparently assured him that they had not touched the drugs.

Cohen then drove home, dropped off the children and the cement, and returned to his job duties. He returned home at 5:30 p. m. and found his nephew lying on the couch, having convulsions. He realized that young David had apparently taken some of the drugs while in the car earlier. A rescue squad was called. David was taken to the hospital, where he died.

A wrongful death claim was subsequently filed by David's parents alleging that David died as a result of taking a prescription drug while a passenger in defendant Paul Cohen's car. David's parents sued Paul Cohen, Pic-N-Save, and Pic-N-Save's insurance carrier (Maryland Casualty Co.). Pic-N-Save filed a number of third-party claims. One of the claims was against U.S.A.A., the appellee, as the insurer of Paul Cohen's car. U.S.A.A. moved for summary judgment, stating that because of the wording of its policy it could not be held liable. The trial judge granted U.S.A.A.'s motion.

U.S.A.A.'s potential liability is based upon the interpretation of a clause in the appellee's policy known as "The Easy Reading Auto Policy." The policy is ten pages long with nine pages of special endorsements and provisions relevant to Florida coverage. The ten-page standard policy is in large, neatly-spaced type. Various sections are clearly set off from each other, and each section is titled in distinct, bold block letters. Each subsection has titles with slightly smaller bold black lettering. Various key words and phrases are in small bold type and defined elsewhere in the policy.

"Part A Liability Coverage" on page one states: "We will pay damages for bodily injury or property damage for which any covered person becomes legally responsible because of an auto accident " (emphasis supplied). Unfortunately, the term "auto accident" is not defined in the policy nor by law. The appellees claimed that young David's death was not due to an "auto accident." Their contention, with which the trial judge agreed, is that although the accident occurred in the auto, the auto was merely the situs and not causally related to the accident. Before discussing that issue, we offer the following comments on the "Easy Reading Auto Policy" and its relationship to this case.

Over one hundred years ago, Chief Justice Doe of the New Hampshire Supreme Court in DeLancey v. Insurance Co., 52 N.H. 581 (1873), complained about complex wording and fine print in insurance policies. He wrote (Id. at 587-588):

... they would not be understood by men in general, even if (the policies were) subjected to a careful and laborious study: by men in general, they were sure not to be studied at all. The study of them was rendered particularly unattractive, by a profuse intermixture of discourses on subjects in which the premium payer would have no interest. The compound, if read by him, would, unless he were an extraordinary man, be an inexplicable riddle, a mere flood of darkness and confusion. Some of the most material stipulations were concealed in a mass of rubbish on the back side of the policy and the following page * * * where scarcely any one would think of looking for information so important.

* * * As if it were feared that notwithstanding these discouraging circumstances, some extremely eccentric person might attempt to examine and understand the meaning of the involved and intricate net in which he was to be entangled, it was printed in such small type, and in lines so long and crowded, that the perusal of it was made physically difficult, painful, and injurious.

Chief Justice Doe stated that he felt such a policy was little more than a fraud. Id. at 588. More recently, the New Hampshire Supreme Court stated:

Although insurers had over one hundred years to hone their policies into forms that would not ferry the unwary reader on a trip through Wonderland, they regrettably have not seen fit to do so. Insurance policies today often fully merit the criticism that Chief Justice Doe levelled at their predecessors.

Storms v. U. S. Fidelity and Guaranty Co., 118 N.H. 427, 388 A.2d 578, 579-580 (1978). Florida and other jurisdictions have also made it clear that an insurer has a duty to make its policy provisions and words plain, clear, and prominent to the layman, in a form which he can understand, especially in regard to coverage provisions. Hartnett v. Southern Insurance Company, 181 So.2d 524 (Fla.1965); Read v. Western Farm Bureau, Mutual Insurance Co., 90 N.M. 369, 563 P.2d 1162, 1167 (Ct.App.1977); Allstate Insurance Co. v. Reeves, 66 Cal.App.3d 464, 136 Cal.Rptr. 159, 162 (1977).

We note with approval that U.S.A.A. has apparently taken the words of the New Hampshire jurists to heart and made a creditable effort to provide the public with a policy that can be read, with perhaps a better degree of understanding, by the average policyholder. 1 However, brevity and clarity are not necessarily synonymous, as we have learned in attempting to arrive at a decision in this case.

U.S.A.A. argues that a common-sense reading of its "plain language" policy, which provides coverage for "auto accidents," does not cover situations such as occurred in this case. On the other hand, the appellants advocate the view that the term "auto accident" in the simplified insurance policy is ambiguous. When the terms used are ambiguous, we are required to construe the policy against U.S.A.A., because it drafted the policy. Excelsior Insurance Co. v. Pomona Park Bar & Package Store, 369 So.2d 938, 942 (Fla.1979); Travelers Insurance Co. v. Smith, 328 So.2d 870, 872 (Fla. 3rd DCA 1976). Insurance policies are contracts, and it is well-established that contracts are construed against the drafter in the face of any ambiguities. Planck v. Traders Diversified, Inc., 387 So.2d 440, 441 (Fla. 4th DCA 1980); Hurt v. Leatherby Insurance Co., 380 So.2d 432, 434 (Fla.1980). "This rule is especially true when the drafter stands in a position of trust, or greater professional or business knowledge...." Planck, supra, at 442. If the insurer wishes to condition its contractual liability upon the insured's conformance with certain conduct, it must do so in clear, unambiguous language. Holz Rubber Co. Inc. v. American Star Insurance Co., 14 Cal.3d 45, 120 Cal.Rptr. 415, 423, 533 P.2d 1055, 1063 (1975).

Although the words "auto" and "accident" have definite or generally accepted meanings, these two words simply do not convey a meaning so clear and precise, for liability insurance coverage purposes, that one can determine whether a given accident, under many easily imagined circumstances, would or would not be covered. In this sense, the terms are "ambiguous," hence the need for construction or interpretation. Roberson v. United Services Automobile Association, 330 So.2d 745 (Fla. 1st DCA 1975); Southside Motor Co. v. Transamerica Ins. Co., 380 So.2d 470 (Fla. 1st DCA 1980); Ellenwood v. Southern United Life Ins. Co., 373 So.2d 392 (Fla. 1st DCA 1979).

The insurer cannot,...

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