Nationwide Mut. Fire Ins. Co. v. Kauffman

• Decision Date: 17 September 1986
• Docket Number: 85-378,Nos. 84-2540,s. 84-2540
• Citation: 495 So.2d 1184,11 Fla. L. Weekly 1991
• Parties: 11 Fla. L. Weekly 1991 NATIONWIDE MUTUAL FIRE INSURANCE COMPANY, Appellant, v. Frank W. KAUFFMAN, Appellee.
• Court: Florida District Court of Appeals

Page 1184

495 So.2d 1184

11 Fla. L. Weekly 1991

NATIONWIDE MUTUAL FIRE INSURANCE COMPANY, Appellant, v. Frank W. KAUFFMAN, Appellee.

Nos. 84-2540, 85-378.

District Court of Appeal of Florida Fourth District.

Sept. 17, 1986.

On Rehearing Oct. 31, 1986.

David F. Crow of Paxton, Crow and Bragg, P.A., West Palm Beach, for appellant.

Montgomery, Searcy & Denney and Edna L. Caruso of Edna L. Caruso, P.A., West Palm Beach, for appellee.

HERSEY, Chief Judge.

This appeal concerns the frequently encountered issue of whether there was an informed rejection of uninsured motorist coverage. To be more precise, the issue is whether the insureds (appellee's parents) made an informed selection of limits of uninsured motorist coverage lower than those of the bodily injury liability coverage contained in the insurance policy issued by appellant. Appeal by the insurer is predicated upon the premise that there was in fact an informed rejection and, in any event, the facts came within an exclusion from coverage contained in the policy despite findings to the contrary by the trial court.

In February 1979 F.J. Kauffman and his wife, Archa Mae Kauffman, having recently moved to Florida, met with their insurance agent, Ronald Gralin, to discuss automobile insurance. As a result of that meeting Nationwide Mutual Fire Insurance Company issued a policy in April of 1979 providing coverage of $100,000/$300,000 bodily injury liability and $10,000/$20,000 uninsured motorist insurance on a 1977 Ford Pinto automobile.

The Kauffmans' son, appellee Frank W. Kauffman, who resided in their household, was injured in an accident on January 5, 1983, while driving an automobile owned and insured by him.

On January 28, subsequent to his son's accident, F.J. Kauffman executed a form entitled Uninsured Motorist Coverage Rejection Statement which requested UMC limits of $100,000/$300,000 under his Nationwide policy.

In February Nationwide filed its complaint for declaratory relief. It alleged, inter alia, that Frank W. Kauffman had accepted a payment of $10,000, the limit of liability coverage available to the driver of the other automobile involved in the collision. It also alleged that demand had been made for arbitration by Frank W. Kauffman seeking $100,000 in uninsured motorist benefits under his father's policy. By way of defense against this claim Nationwide alleged that an informed selection of coverage in the amount of $10,000/$20,000 had been made, and that an exclusion in the policy language precluded recovery in any event.

Both lines of defense were rejected by the trial court, and a declaratory judgment was entered to the effect that uninsured motorist coverage was available to the extent of $100,000/$300,000 (the same limits as the bodily injury liability coverage), based upon the absence of proof of an informed rejection. The insurance company appeals.

The duty of an insurance company to make available uninsured motorist insurance with limits not less than the limits of bodily injury liability insurance purchased by the insured is based upon statute in Florida. Section 627.727, Florida Statutes (1985), requires that such insurance be made available unless rejected by any named insured.

By virtue of the existence of the duty, it is not enough to show that the insured rejected uninsured motorist coverage entirely or selected limits lower than the bodily injury liability limits of the policy for the insurance company to avoid liability. There must have been an "informed" rejection. Realin v. State Farm Fire & Casualty Co., 418 So.2d 431 (Fla. 3d DCA 1982). A rejection may be characterized as "informed" where the insured was advised by the insurer or otherwise knew that coverage was available with limits equal to those for bodily injury liability contained in the policy and either rejected uninsured motorist insurance entirely or selected lower limits of coverage. Kimbrell v. Great American Ins. Co., 420 So.2d 1086 (Fla.1982); Lane v. Waste Management, Inc., 432 So.2d 70 (Fla. 4th Whether there was an informed rejection in a particular case is a question of fact. Kimbrell, 420 So.2d at 1086. The burden of proof to show that there was a rejection and that it was an informed rejection rests with the insurer. General Accident Fire & Life Assurance Corp. v. MacKenzie, 410 So.2d 558 (Fla. 4th DCA), rev. denied, 419 So.2d 1197 (Fla.1982). However, no particular form of rejection is required nor is there a requirement that it be in writing. Travelers Ins. Co. v. Spencer, 397 So.2d 358 (Fla. 1st DCA 1981).

DCA), rev. denied, 441 So.2d 633 (Fla.1983). In the absence of substantial competent evidence of an informed rejection, the insured will be deemed to have uninsured motorist insurance with the same limits as the bodily injury liability coverage in the policy. First State Insurance Co. v. Stubbs, 418 So.2d 1114 (Fla. 4th DCA 1982), rev. denied, 426 So.2d 26, 29 (Fla.1983).

The signature of the insured on an application for insurance in which uninsured motorist coverage is rejected or which requests lower limits than the bodily injury liability limits is not, in and of itself, sufficient to prove an informed rejection. Nationwide Mutual Ins. Co. v. Jones, 414 So.2d 1169 (Fla. 5th DCA 1982). It is obviously evidence of a rejection but not probative of whether the rejection was "informed." Nor is evidence that the insurance agent made a general practice of informing clients of the availability of uninsured motorist insurance as provided by the statute, without more, sufficient to support a finding of an informed rejection. American Motorists Ins. Co. v. Weingarten, 355 So.2d 821 (Fla. 1st DCA 1978); Spencer, 397 So.2d at 361.

Conversely, where the application or rejection form itself contains a clear explanation of the insured's right to uninsured motorist coverage within the limits required by the statute, "an applicant may not contest his signed rejection of coverage by contending that he signed the rejection without reading it," General Ins. Co. of Florida v. Sutton, 396 So.2d 855, 856 (Fla. 3d DCA 1981), unless he was prevented from reading it. Alejano v. Hartford Accident and Indemnity Co., 378 So.2d 104 (Fla. 3d DCA 1979). Absent exigent circumstances the insured is deemed to be bound by his signature on an informing application or rejection form. Bankers Ins. Co. v. Vasquez, 483 So.2d 440 (Fla. 4th DCA 1985).

Although an insurer is required by statute to make uninsured motorist coverage available, the variations of the statute applicable to the cases so far discussed impose no duty on the insurer to enlighten the insured concerning the availability of coverage. "[A]n insurer has no duty to explain uninsured motorist coverage to an insurance applicant unless asked...." Realin, 418 So.2d at 432. Whether the insurer made an informing offer, therefore, is probative but not conclusive of the issue of whether there was an informed rejection. This is so because the insured may have become aware of his right to coverage from sources other than the insurer. American Fire & Indemnity Co. v. Spaulding, 442 So.2d 206 (Fla.1983). Speaking to this issue in an earlier case the supreme court held: "Similarly, the fact that the insurer maintains in its files evidence of an offer and a selection is relevant but not crucial to a finding that a knowing selection was made." Kimbrell, 420 So.2d at 1089. Some courts have interpreted this to mean that evidence of an offer and selection does not conclusively establish that an informed rejection/selection was made. With respect, we suggest that this is a misinterpretation. Absent some extraordinary circumstance, evidence of an offer that complies with the statute, together with an executed rejection or selection form, should be sufficient on the issue to carry the day for the insurer. Our understanding of the language in Kimbrell is that the insurer may be able to establish that there was an informed rejection/selection even in the absence of evidence in its files that it made an informing offer. In other words that document is not "crucial" or absolutely essential to such a finding.

In the present case the question, answered in the trial court adversely to the insurer, is whether there was an informed selection of limits of uninsured motorist insurance lower than the coverage for bodily injury...