Rabatie v. U.S. Sec. Ins. Co.

• Decision Date: 25 July 1989
• Docket Number: 88-2503,Nos. 88-2229,s. 88-2229
• Parties: 14 Fla. L. Weekly 1753, 16 Fla. L. Weekly D1752 Martin RABATIE, Appellant, v. U.S. SECURITY INSURANCE COMPANY, Appellee.
• Court: Florida District Court of Appeals

Page 1327

581 So.2d 1327

14 Fla. L. Weekly 1753, 16 Fla. L. Weekly D1752

Martin RABATIE, Appellant, v. U.S. SECURITY INSURANCE COMPANY, Appellee.

Nos. 88-2229, 88-2503.

District Court of Appeal of Florida,

Third District.

July 25, 1989.

On Rehearing En Banc Oct. 16, 1990.

On Motion for Rehearing

July 2, 1991.

Freedman & Neufeld and Michael J. Eisler, for appellant.

Magill & Lewis and R. Fred Lewis, Miami, Nuzzo & Gonzalez, for appellee.

Before HUBBART, NESBITT and LEVY, JJ.

PER CURIAM.

This is an appeal by the plaintiff/insured Martin Rabatie from (1) an adverse final summary judgment entered in favor of the defendant/insurer U.S. Security Insurance First, we conclude that the trial court correctly entered final summary judgment for the defendant/insurer in this action as the automobile the plaintiff/insured was driving at the time of the subject accident was not a "covered auto" under the insurance policy involved in this case. We reach this result because the plaintiff/insured failed to notify the defendant/insurer that the former had acquired ownership of this automobile within thirty days after becoming the owner of same, as required by the subject insurance policy; the fact that the subject accident occurred and a claim based thereon was filed within the thirty-day period does not, as urged, change this result because there can be no coverage of an after-acquired vehicle under the policy without notification to the defendant/insurer prior to the accident upon which the claim is filed. Garrote v. Liberty Mut. Ins. Co., 496 F.2d 1168 (5th Cir.1974); Reliance Ins. Co. v. D'Amico, 528 So.2d 533 (Fla. 2d DCA 1988); Johnson v. Travelers Indem. Co., 438 So.2d 1045 (Fla. 1st DCA 1983); Lowe v. State Farm Mut. Auto. Ins. Co., 420 So.2d 318 (Fla. 5th DCA 1982).

Co. in an automobile insurance coverage action filed below, and (2) an order awarding attorney's fees for the defendant/insurer in this action. We affirm in part and reverse in part.

Second, we conclude that the trial court erred in entering an attorney's fee award in favor of the defendant/insurer under Section 768.79(1)(a), Florida Statutes (1987). We reach this result because the above statute does not provide for an attorney's fee award in the event the defendant, as here, prevails in the underlying action. The subject statute authorizes an attorney's fee award for the defendant only in the event "the judgment obtained by the plaintiff is at least 25 percent less than [an] offer [of judgment]" made by the defendant pretrial, and refused by the plaintiff, Sec. 768.79(1)(a), Fla.Stat. (1987); clearly, then, there must be a judgment for the plaintiff of a particular type, as defined in the statute, in order to award attorney's fees to the defendant. In the instant case, however, there was no "judgment obtained by the plaintiff" of any type; to the contrary, the judgment below was entered in favor of the defendant. This being so, the prevailing defendant herein was not entitled to an attorney's fees award under the statute.

The final summary judgment under review is therefore affirmed; the attorney's fee order under review is reversed.

Affirmed in part; reversed in part.

Before SCHWARTZ, C.J., and BARKDULL, HUBBART, NESBITT, BASKIN, FERGUSON, JORGENSON, COPE, LEVY, GERSTEN and GODERICH, JJ.

ON REHEARING EN BANC

COPE, Judge.

We are called on to construe an automobile insurance policy which provides coverage for any additional vehicle the insured acquires during the policy term, so long as the insured notifies the insurance company within thirty days of acquisition. In the present case the newly acquired vehicle was in an accident several days after acquisition, and prior to the insured's notifying the insurer that he had acquired the additional vehicle. The principal question is whether the insurance policy provided immediate coverage subject to a condition subsequent (in which case there is coverage) or whether the notification requirement is a condition precedent to coverage (in which case there is no coverage). We conclude that there was immediate coverage subject to a condition subsequent, and reverse the final judgments in favor of the insurer.

Appellant Martin Rabatie, plaintiff below, owned an automobile which was insured by appellee U.S. Security Insurance Company. While that insurance was in force, Rabatie acquired ownership of an additional vehicle, a pickup truck. Four days later, the pickup truck was struck by another vehicle. Rabatie requested insurance benefits from U.S. Security under a portion of the automobile insurance policy relating to newly acquired vehicles. U.S. Security denied coverage, arguing (1) that The policy provision at issue here is a modern or "plain language" version of what has traditionally been known as an "automatic insurance" clause. Such a clause is one which provides interim coverage for a newly acquired vehicle, subject to the requirement that the insurer be notified of the acquisition within a time certain. See generally M. Rhodes & R. Anderson, 12 Couch on Insurance 2d Sec. 45:182--45:185 (1981). The policy provides:

coverage for the accident was precluded because Rabatie had not notified U.S. Security of the acquisition of the pickup truck prior to the accident, and (2) that Rabatie's eventual notification to the insurer did not meet policy requirements. The trial court ruled in favor of the insurer and also granted attorney's fees pursuant to the offer of judgment statute, paragraph 768.79(1)(a), Florida Statutes (1987). A panel of this court affirmed denial of insurance coverage, but reversed on the attorney's fee issue. The case was then reheard en banc.

"Your covered auto" means:

(a) Any vehicle shown in the Declarations.

(b) Any of the following vehicles of which you acquire ownership during the policy period, provided that you ask us in writing to insure it within thirty days after you become the owner:

(1) a private passenger auto.

(2) If not used in any business or occupation, a pick-up, sedan delivery or panel truck. If the vehicle replaces one shown in the Declarations, you have to ask us in writing to insure it within thirty days only if you wish Damage to Your Auto Coverage to apply to the replacing vehicle.

(c) Any trailer you own.

(d) Any auto or trailer you do not own while used as a temporary substitute for any other vehicle described in this definition which is out of normal use because of its breakdown, repair, servicing, loss or destruction.

(Emphasis added).

The initial question is whether the policy required notification to the insurer prior to coverage becoming effective. If so, that would be dispositive of the case, since Rabatie did not advise the insurer about the newly acquired pickup prior to the accident.

We begin with the axiom that insurance policies must be construed against the insurance company, and in favor of the insured and insurance coverage. E.g., Shelby Mut. Ins. Co. v. Manchester, 376 So.2d 266, 268 (Fla. 3d DCA 1979) (where terms of insurance policy are capable of two constructions, construction permitting recovery is to be given effect), cert. denied, 388 So.2d 1118 (Fla.1980); Beasley v. Wolf, 151 So.2d 679, 680 (Fla. 3d DCA 1963) (insurance policies "are to be construed strictly and most strongly against the insurer and liberally in favor of the insured, so as to effect the dominant purpose of payment to the insured.").

In the present case the policy language includes a newly acquired vehicle within the definition of "your covered auto." The policy only requires notification of the insurer within thirty days after acquisition. The interpretation that there is immediate coverage subject to a condition subsequent is certainly a permissible one. That being so, the rules of construction just cited require that we adopt the interpretation which favors the insured and affords insurance coverage.

More important, if the insurer's interpretation were correct, then paragraph (b) would not serve a purpose different from paragraph (a). If coverage begins only after the insurer has been directed to add the additional automobile, then coverage would be predicated on paragraph (a) because the vehicle would then be shown in the amended declarations. Under the insurer's approach, there would be no need for paragraph (b). If, however, paragraph (b) is read as written, then it serves the customary function of an "automatic insurance" clause by providing immediate coverage for a newly acquired vehicle--subject to the condition subsequent that the insurer be notified within thirty days.

The interpretation we adopt is supported by an unbroken line of authority. See 12 While the details of such policy provisions vary, see, e.g., 12 Couch on Insurance 2d Sec. 45:182, the policy language at issue in the present case is typical in providing for coverage while imposing a requirement for notification of the insurer within a time certain. When questions of interpretation have arisen, it has been consistently held that the requirement of giving notice to the insurer "is considered not to be a condition precedent to the taking effect of the automatic coverage provision, but rather to constitute a condition subsequent." 8 P. Kelly, Blashfield Automobile Law & Practice Sec. 320.5 at 24-25 (1987) (footnotes omitted); accord 12 Couch on Insurance 2d Sec. 45:205, at 490. Thus, under such a provision coverage attaches immediately upon acquisition of the after-acquired vehicle. 8 Blashfield Automobile Law & Practice Sec. 320.5 at 25. The purpose of the notification requirement is to permit the insurer to "adjust the premium accordingly to reflect the change in the risk assumed." 12 Couch on Insurance 2d Sec. 45:183, at 461. Thus, although the insurance is effective immediately upon delivery of the newly acquired vehicle, the coverage is not "free"; the insurer may adjust the premium retroactively to the date of acquisition.

                Couch on Insurance 2d Sec. 45:181 et seq.  It has

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