Quirk v. Anthony, 89-01682

• Decision Date: 25 April 1990
• Docket Number: No. 89-01682,89-01682
• Citation: 563 So.2d 710
• Parties: 15 Fla. L. Weekly D1151 James H. QUIRK and Marie Quirk, husband and wife, Appellants, v. Lynda M. ANTHONY, Queen City Indemnity Company, Travelers Insurance Company, Southern American Insurance Company, and Key Agency, Inc., a Florida corporation, Appellees.
• Court: Florida District Court of Appeals

Page 710

563 So.2d 710

15 Fla. L. Weekly D1151

James H. QUIRK and Marie Quirk, husband and wife, Appellants, v. Lynda M. ANTHONY, Queen City Indemnity Company, Travelers Insurance Company, Southern American Insurance Company, and Key Agency, Inc., a Florida corporation, Appellees.

No. 89-01682.

District Court of Appeal of Florida Second District.

April 25, 1990.

Rehearing Denied July 6, 1990.

Robert Jackson McGill of Robert Jackson McGill, P.A., Venice, for appellants.

Raymond T. Elligett, Jr., and Brett J. Preston of Shackleford, Farrior, Stallings & Evans, P.A., Tampa, for appellee Travelers Ins. Co. Love Phipps of Corlett, Killian, Ober, Hardeman, McIntosh & Levi, P.A., Miami, for appellee Southern American Ins. Co.

Robert M. Daisley and Jennifer A. Phelan of Annis, Mitchell, Cockey, Edwards & Roehn, P.A., Tampa, for appellee Key Agency, Inc.

ALTENBERND, Judge.

The plaintiffs, Mr. and Mrs. Quirk, appeal final summary judgments which declare that they are not entitled to underinsured motorist coverage under two automobile insurance policies issued to Mr. Quirk's employer, West Coast Excavating. Additionally, they appeal a summary judgment which rules that the Quirks have no claim against Key Agency, Inc., an independent insurance agency which assisted West Coast in obtaining these policies. The trial court concluded that UM coverage had been validly rejected on both policies by the independent insurance agent as an insurance broker for West Coast.

Because there are issues of fact concerning the independent agent's status with Travelers Insurance Company, we reverse the summary judgment concerning the policy of primary insurance issued by Travelers. We affirm the summary judgment concerning the surplus lines umbrella policy issued by Southern American Insurance Company. The undisputed facts establish that Key acted as an insurance broker for that transaction. Since the summary judgment in favor of Key was dependent upon Travelers' summary judgment, we also reverse that judgment.

I. A BRIEF DESCRIPTION OF THE ACCIDENT

On December 24, 1984, Mr. Quirk was involved in a motor vehicle accident in Charlotte County, Florida. At the time of the collision, Mr. Quirk was a passenger in a truck which was owned by his employer, West Coast. The truck was driven by a fellow employee. The accident occurred when Lynda Anthony allegedly pulled her vehicle into the path of the truck at an intersection. Mr. Quirk sustained severe injuries.

At the time of the accident, Ms. Anthony had liability insurance with State Farm Automobile Insurance Company, which provided limits of $10,000 per person. The Quirks had a personal automobile insurance policy with Queen City Indemnity Company, which provided limits of $25,000 per person for UM coverage. These policies are not involved in this appeal.

West Coast had two commercial automobile insurance policies which are the focus of this appeal. Both policies had been obtained through Key. Travelers' policy was a primary policy, and Southern American's policy was an umbrella policy. Neither policy, as issued, provided any UM coverage.

II. THE TRAVELERS INSURANCE POLICY

West Coast first purchased insurance through Key in early 1982. ¹ The principal insurance agent at Key was Thomas Dignam. In February 1982, he obtained an automobile liability policy for West Coast through Iowa National Insurance Company. This insurance policy provided no UM coverage. For this policy, Mr. Dignam's file contains at least one rejection of UM coverage which was signed by a corporate officer of West Coast.

In late 1983, Iowa National experienced financial difficulties. On December 21, 1983, Key placed West Coast's coverage with Travelers. When this new coverage was obtained, it is undisputed that Key did not obtain a written rejection from anyone at West Coast. The agency did not sign any rejection form as authorized agent or broker for West Coast. Travelers did not demand a written rejection from anyone on behalf of West Coast before it issued a policy which provided no UM coverage. Although there is evidence from which one could infer that West Coast would not have purchased UM coverage on its excavating business had this issue been presented to it, its corporate officers deny that any decision to reject that coverage was made by them or even discussed with them by Mr. Dignam or anyone at Key.

The record on appeal contains little information concerning the renewal of Travelers' policy on December 21, 1984. It is clear that the policy was renewed and, thus, was in effect at the time of the accident. It is unclear what, if any, information Travelers provided to West Coast with its annual premium notice. § 627.727(1), Fla.Stat. (Supp.1984).

It is undisputed that Key is an independent insurance agency rather than a captive insurance agency. This means that the agency was not obligated to submit West Coast's request for insurance to any one carrier. It could send the application for insurance to any of the insurance carriers for which it was a licensed agent. See §§ 626.301(2), .331(2), .342, Fla.Stat. (1983). It could also send an application to other carriers for which it held no license. To submit an application to a carrier for whom it held no license, however, Key was required to forward the application through some agent who was licensed by that carrier.

In this case, the exact relationship between Key and Travelers is in doubt. Travelers did not submit affidavits or depositions, other than Mr. Dignam's deposition, to establish its relationship with Key. From the record, it appears probable, although not totally certain, that Key, through Mr. Dignam, was a licensed agency for Travelers. See § 626.094, Fla.Stat. (1983). Likewise, it appears probable that the relationship involved a nonexclusive oral or written agency contract. These are matters which we cannot resolve as a matter of law from this record.

The trial court granted a summary judgment concerning the Travelers insurance policy for two reasons. First, it determined that Mr. Quirk, as an employee and permissive user of the named insured, was merely a class II insured and had no standing to challenge technical defects in his employer's rejection of UM coverage on the commercial automobile policy. ² The trial court determined that the statutory requirements concerning a written rejection, which applied when the policy was issued in December 1983 and when it was renewed in December 1984, were technical requirements that the Quirks could not contest. Second, the trial court determined that the Quirks could contest whether the rejection was a knowing rejection. On this issue, the trial court determined that Mr. Dignam was an insurance broker for West Coast and that he had made a valid, knowing rejection on behalf of his client.

A. The Quirks Standing to Contest the Absence of a Written Rejection.

The relationship between the UM statute and the Florida Legislature is similar to that between a fragile beach and a hurricane, except the annual storm season in the legislature arrives a few months earlier. ³ As a result of the constantly changing contours of this heavily regulated area of insurance law, judges and attorneys need carefully to guard against the possibility of applying the wrong statute or relying upon outdated precedent. This case is a classic example of these problems.

In the 1970s, the UM statute required an insurance carrier to issue a motor vehicle policy containing UM coverage unless "any insured named in the policy shall reject the coverage." § 627.727(1), Fla.Stat. (1975-1979). The courts interpreted this statutory provision to require a "knowing" rejection. Kimbrell v. Great American Ins. Co., 420 So.2d 1086 (Fla.1982). A written document was not statutorily required to establish a knowing rejection, and the legal issue usually created a question of fact for jury determination. Kimbrell.

In the 1980s, the legislature amended the UM statute on several occasions to create an environment in which UM was still promoted by the state, but a valid rejection of the coverage could be obtained by a carrier without a great risk of litigation concerning the rejection. In 1982, the statute was amended to require that the insured reject the coverage "in writing." § 627.727(1), Fla.Stat. (Supp.1982) (corresponds to Ch. 82-243, § 544, Laws of Fla.). Effective October 1, 1984, the statute was further amended. After that date, rejections still required a written document, but the content of that document was dictated, in part, by the statute. The form of the rejection required approval from the Insurance Commissioner. The amended statute states: "If this form is signed by a named insured it shall be a conclusive presumption that there was an informed, knowing rejection of coverage...." § 627.727, Fla.Stat. (Supp.1984) (corresponds to Ch. 84-41, § 1(1), Laws of Fla.).

Prior to the amendments in 1982 and 1984, this court held that an employee had standing to question whether his employer had made a proper rejection of UM protection. Cullars v. Manatee County, 463 So.2d 484 (Fla. 2d DCA 1985) (date of policy issuance unknown, accident on May 22, 1981). In St. Paul Fire & Marine Insurance Co. v. Smith, 504 So.2d 14 (Fla. 2d DCA), review denied, 511 So.2d 299 (Fla.1987) (policy initially issued in 1978, accident on April 30, 1981), we held that an employee of the named insured could not complain of the insurer's failure to comply with the annual notice requirement, which was added to the statute in 1980. Following precedent from other districts, we held that the premium notice was a technical requirement rather than a basic requirement of insurance law relating to the existence of UM coverage. See also Federal Ins. Co. v. Norris, 543 So.2d 776 (Fla. 1st DCA 1989) (date of policy issuance and date of accident unknown). On the other hand, we held that a class II insured continued to have standing to object to the insurance carrier's...