Purdy v. Gulf Breeze Enterprises, Inc.

• Decision Date: 30 July 1981
• Docket Number: No. 58325,58325
• Citation: 403 So.2d 1325
• Parties: John M. PURDY and his wife, Appellants, v. GULF BREEZE ENTERPRISES, INC., et al., Appellees.
• Court: Florida Supreme Court

Page 1325

403 So.2d 1325

John M. PURDY and his wife, Appellants, v. GULF BREEZE ENTERPRISES, INC., et al., Appellees.

No. 58325.

Supreme Court of Florida.

July 30, 1981.

Rehearing Denied Oct. 19, 1981.

Dennis J. Plews, Law Offices of Robert H. Schultz, Bradenton, for appellants.

Andrew D. Owens, Jr., of Dickinson, O'Riorden, Gibbons, Quale, Shields & Carlton, Sarasota, for appellees.

BOYD, Justice.

This is an appeal from a judgment rendered by the circuit court in Manatee County awarding the appellants $7,937.20 for damages incurred as a result of an automobile accident. Because the trial judge upheld the constitutionality of sections 627.736(3) ¹ and 627.7372, ² Florida Statutes (1977), we have jurisdiction pursuant to article V, section 3(b)(1) of the Florida Constitution (1972).

On November 27, 1977 the appellants were driving on their side of the road when they were struck head-on by a car owned by Gulf Breeze Enterprises, Inc. and driven by Dana Blackwell. Ms. Blackwell was attempting to pass a slower vehicle on a curved portion of the road. Mr. Purdy sustained various physical injuries and the car, owned by Mrs. Purdy, was totally destroyed. Mr. Purdy received $4,102.20 in personal injury protection (PIP) payments from his own insurance company. The appellants then filed suit against Ms. Blackwell, her parents since she was a minor, and Gulf Breeze Enterprises, Inc. for the damages they incurred as a result of Ms. Blackwell's negligence. During the course of the trial a dispute arose as to the admissibility of evidence relating to Mr. Purdy's receiving PIP benefits from his insurer. Both sides agreed to postpone arguments concerning the constitutionality of the collateral source statute, section 627.7372, Florida Statutes (1977), and the effect it would have on the amount of damages awarded until after the trial was over. At the end of the trial the jury awarded Mr. Purdy $11,318.00 as compensation for his injuries and Mrs. Purdy $500.00 as compensation for the loss of her car. At a post trial hearing the trial judge upheld the constitutionality of sections 627.736(3) and 627.7372, Florida Statutes (1977). The judge calculated that the amount awarded to Mr. Purdy by the jury should be reduced by the amount Mr. Purdy received in PIP benefits less the amount of premiums he paid to obtain that coverage for that year. In accordance with this calculation, the final judgment was entered on December 10, 1979 awarding Mr. Purdy $7,437.20. The Purdys timely filed a notice of appeal four days later.

Appellants contend the statutes violate the right to access to courts provision of the Florida Constitution. Art. I, § 21, Fla.Const. They rely on our previous holding

that where a right of access to the courts for redress for a particular injury has been provided by statutory law predating the adoption of the Declaration of Rights of the Constitution of the State of Florida, or where such right has become a part of the common law of the State pursuant to Fla.Stat. § 2.01, F.S.A., the Legislature is without power to abolish such a right without providing a reasonable alternative to protect the rights of the people of the State to redress for injuries, unless the Legislature can show an overpowering public necessity for the abolishment of such right, and no alternative method of meeting such public necessity can be shown.

Kluger v. White, 281 So.2d 1, 4 (Fla.1973). This holding does not apply to these statutes since they do not abolish any previous right of access to courts.

Basically, sections 627.736(3) and 627.7372 reduce the amount of damages injured plaintiffs can recover from tortfeasors by the amount of benefits they have received from collateral sources. Appellants argue these statutes therefore abolish the common law collateral source rule that injured plaintiffs are entitled to recover the full amount of their damages from tortfeasors regardless of the amount of benefits they may have received from collateral sources such as insurance proceeds. See International Sales-Rentals Leasing Co. v. Nearhoof, 263 So.2d 569 (Fla.1972); Tuggle v. Government Employees Insurance Co., 207 So.2d 674 (Fla.1968) (Barns, J., dissenting). This argument assumes that common law plaintiffs were allowed to keep the full amount of money they recovered in a lawsuit, which was not the case. Their right of full recovery was subject to their insurer's right of subrogation. That is, as a matter of equity it was the insurers who were entitled to bring suit against tortfeasors for reimbursement of any payments made to an insured. See generally Atlantic Coast Line Ry. v. Campbell, 104 Fla. 274, 139 So. 886 (1932); Cappucio, Subrogation in Florida, 21 U.Miami L.Rev. 240, 247-49 (1966).

This right of subrogation was statutorily recognized by the Florida Automobile Reparations Reform Act, sections 627.730-627.741, Florida Statutes (1971), when it was first enacted. Section 627.736(3) was previously a provision concerning an insurer's right to reimbursement of any payments made to an insured who subsequently recovered against a tortfeasor. § 627.736(3), Fla.Stat. (1975). ³ Its main purpose was to prevent injured plaintiffs from receiving double recovery. Cf. Aetna Casualty & Surety Co. v. Bortz, 271 So.2d 108 (Fla.1972) (this was the purpose behind the Workmen's Compensation Subrogation Law, § 440.39(3), Fla.Stat. (1971), after which § 627.736(3), Fla.Stat. (1975) was patterned). This provision entitled the injured plaintiff to an equitable distribution of the costs of litigation which resulted in a lot of litigation. See, e. g., American Fire & Casualty Co. v. Oller, 313 So.2d 67 (Fla. 4th DCA 1975); White v. Reserve Insurance Co., 299 So.2d 661 (Fla. 1st DCA 1974), cert. denied 308 So.2d 103 (Fla.1975); Reyes v. Banks, 292 So.2d 39 (Fla. 4th DCA 1974). One district court judge suggested the legislature revisit the statute because it encouraged litigation. State Farm Mutual Automobile Insurance Co. v. Mance, 292 So.2d 52 (Fla. 3d DCA 1974) (Barkdull, J., concurring). We held that paragraphs (a) and (b) were repugnant to each other. Williams v. Gateway Insurance Co., 331 So.2d 301 (Fla.1976).

In 1976 the legislature revamped this subsection to take care of these problems by passing the current provision. Ch. 76-266, § 4, Laws of Fla. Now insurers are no longer entitled to reimbursement of any personal injury payments made to injured persons. To prevent the injured persons from receiving double recovery, the legislature has provided that any PIP benefits they have received from their insurers will be set off from the amount they are entitled to recover from the tortfeasors. Although this provision primarily benefits the tortfeasor, it is in keeping with the "no-fault" concept of the Florida Automobile Reparations Reform Act. The benefits obtained by the tortfeasors will enure to their insurance carriers. Supposedly these benefits will eventually be shared by all carriers without the need of litigation. Lee and Polk, Insurance, 31 U.Miami L.Rev. 1061, 1071-73 (1977). This should result in lower premiums.

In 1977 the legislature extended this concept to all other insurers providing non-PIP benefits by requiring the court to "admit into evidence the total amount of all collateral sources which have been paid to the claimant prior to the commencement of the trial. The court shall also admit into evidence any amount paid by the claimant to secure such collateral sources." § 627.7372(1), Fla.Stat. (1977). At the post-trial hearing the appellants' attorney argued that this last sentence included all the premiums an injured plaintiff paid in his life for every type of disability insurance. The trial judge rejected this argument and held that only those costs necessary for obtaining the PIP insurance for the year of the accident could be considered. This holding fails to take into account that some policies are issued for a period of time, such as semi-annually, other than yearly. We believe the statute refers to the costs incurred by claimants to secure the actual policies from which they received benefits for whatever period of time the policy is in effect.

From this analysis we conclude that sections 627.736(3) and 627.7372, Florida Statutes (1977), do not deprive persons injured in automobile accidents of their right of access to the courts. These sections merely prevent injured plaintiffs from recovering monies which, equitably speaking, belong to their insurers. Furthermore, there is nothing in the law which prevents injured persons from waiving their rights to receive insurance benefits and suing the tortfeasor for the full amount of their damages. Section 627.7372 sets off only those benefits which actually have been paid. Section 627.736(3) sets off benefits which are "paid or payable," which we interpret to include only those benefits a person is entitled to under his or her contract after he or she files a claim. Thus the right of access to the courts is left completely unimpaired.

We disagree with appellants' claim that these statutes are unconstitutional in that they violate the equal protection clause, article I, section 2, Florida Constitution, or are procedural and not substantive, article V, section 2(a), Florida Constitution. These statutes do make a distinction between plaintiffs who are injured in automobile accidents and plaintiffs who are injured in other types of accidents. The statutes do not apply to the latter category. But since plaintiffs who are injured in other types of accidents are not assured of receiving double recovery, we do not see how plaintiffs who are injured in automobile accidents are discriminated against. We find that classification bears a reasonable relation to the legislative goal of reducing suits among automobile insurance carriers and therefore does not violate the equal protection clause of the constitution. See Lasky v. State Farm Insurance Co., 296 So.2d 9 (Fla.1974).

Appellant...