Race v. Nationwide Mut. Fire Ins. Co.

• Decision Date: 23 February 1989
• Docket Number: No. 70997,70997
• Parties: 14 Fla. L. Weekly 75 Richard T. RACE and Suzanne Race, his wife, Petitioners, v. NATIONWIDE MUTUAL FIRE INSURANCE CO., Respondent.
• Court: Florida Supreme Court

Page 347

542 So.2d 347

14 Fla. L. Weekly 75

Richard T. RACE and Suzanne Race, his wife, Petitioners, v. NATIONWIDE MUTUAL FIRE INSURANCE CO., Respondent.

No. 70997.

Supreme Court of Florida.

Feb. 23, 1989.

Rehearing Denied May 26, 1989.

Edward R. Blumberg of Deutsch & Blumberg, P.A. and Jeanne Heyward, Miami, for petitioners.

Michael J. Murphy of Gaebe, Murphy & Mullen, Coral Gables, for respondent.

George A. Vaka of Fowler, White, Gillen, Boggs, Villareal and Banker, P.A., Tampa, amicus curiae for Allstate Ins. Co.

PER CURIAM.

We review Nationwide Mutual Fire Insurance Co. v. Race, 508 So.2d 1276 (Fla. 3d DCA 1987), because of asserted conflict with the decisions of this Court in Government Employees Insurance Co. v. Novak, 453 So.2d 1116 (Fla.1984), and Hernandez v. Protective Casualty Insurance Co., 473 So.2d 1241 (Fla.1985), and the decisions of the Second and Fourth Districts in Halpin v. Hilderbrand, 493 So.2d 75 (Fla. 4th DCA 1986), and Allstate Insurance Co. v. Gillespie, 455 So.2d 617 (Fla. 2d DCA 1984). We have jurisdiction. Art. V, § 3(b)(3), Fla. Const.

The question presented is whether petitioners ("Race") may recover under the uninsured motorist ("UM") provision of their automobile insurance policy for injuries received from an uninsured motorist's intentional assault at the scene of a prior automobile accident.

Race was stopped at a red light when he was rear-ended by Robert Thompson. Race walked back to Thompson, who remained in his car, to exchange identification and insurance information. After a discussion about what to do with the cars and whether to call the police, Thompson stepped out of his car and asked Race for identification. As Race reached into his bag to remove his insurance papers and identification, Thompson, who thought Race was pulling out a gun, knocked Race to the ground. When Race tried to get up, Thompson hit him again. Race suffered permanent injuries, including broken teeth, a broken jaw, and a fractured hand.

Thompson was uninsured and Race sought both personal injury protection ("PIP") and UM benefits from his own insurer, respondent Nationwide. After initially denying Race's claim for PIP coverage, Nationwide stipulated that it was liable for PIP benefits because Race's injuries "arose out of the maintenance, use or operation of his motor vehicle," and the trial court entered summary judgment in favor of Race on the PIP claim.

Nationwide denied Race's UM claim, contending that his injuries resulted from "an intentional assault by a third person outside of the plaintiffs' motor vehicle and not as a result of the operation, maintenance or use of an 'uninsured motor vehicle.' " The trial court, however, granted summary judgment in favor of Race, finding that Race's injuries did "result[ ] from an accident arising out of the ownership, maintenance or use of the uninsured or underinsured vehicle." The trial court also found that Nationwide was estopped from denying UM benefits based upon the judgment rendered in the prior PIP coverage litigation.

The Third District reversed. The district court first held there was no estoppel because the coverage issues in PIP and UM were not identical. The court then applied the nexus test for coverage established by this Court in Novak and found an insufficient nexus between the uninsured vehicle and the injury to allow recovery.

In Novak, a woman was shot in her car by a stranger when she refused to give him a ride. In our opinion, we recognized that two questions had to be considered in construing the policy language which provided PIP coverage for an " 'accident ... arising out of the ownership, maintenance, or use of a motor vehicle.' " 453 So.2d at 1118. We first held that from the victim's perspective, the event was a completely unexpected and unusual occurrence and therefore qualified under the policy language as an "accident." Next, we recognized that the phrase "arising out of" does not have the same meaning as "proximately caused by," and that the language of the policy should be liberally construed to effect broad coverage. Thus, we held that while there must be some nexus between the motor vehicle and the injury, the automobile itself need not cause the injury. The court ruled that Ms. Novak was entitled to PIP benefits because there was

a highly substantial connection between Ms. Novak's use of the motor vehicle and the event causing her fatal injury. Obtaining a ride in or possession of the motor vehicle was what motivated the deranged Endicott to approach and attack the deceased.

Id. at 1119. Two years later in Hernandez, we reaffirmed the principles of Novak in upholding the payment of PIP benefits for injuries inflicted by a policeman as the insured exited his vehicle while being arrested for a traffic violation.

In the instant case, we are called upon to decide to what extent, if any, the principles of Novak should be extended to UM coverage. On the one hand, PIP and UM coverage may be viewed as similar because in both instances the insured has paid a premium for the coverage. On the other hand, UM is a limited form of coverage which exists for the sole purpose of providing a source of financial responsibility for the uninsured or underinsured tortfeasor. Allstate Ins. Co. v. Boynton, 486 So.2d 552, 557 (Fla.1986).

In Leatherby Insurance Co. v. Willoughby, 315 So.2d 553 (Fla. 2d DCA 1975), the district court of appeal specifically addressed the question of whether injuries inflicted intentionally by an uninsured motorist could be considered an accident for purposes of UM coverage. The court reasoned that because UM coverage was statutorily designed to protect injured persons, the determination of whether the act causing the injury was intentional or accidental should be viewed from the eyes of the innocent victim. Thus, the court upheld the recovery of UM benefits for injuries suffered when an uninsured tortfeasor intentionally drove his truck into the claimant. The district court of appeal in Halpin later adopted the rationale of Willoughby on this point. Courts in other jurisdictions have reached similar conclusions. Dyer v American Family Ins. Co., 159 Ill.App.3d 766, 111 Ill.Dec. 530, 512 N.E.2d 1071, appeal denied, 117 Ill.2d 542, 115 Ill.Dec. 399, 517 N.E.2d 1085 (1987); Redden v. Doe, 357 So.2d 632 (La.Ct.App.1978); Keeler v. Farmers & Merchants Ins. Co., 724 S.W.2d 307 (Mo.Ct.App.1987); Sciascia v. American Ins. Co., 183 N.J.Super. 352, 443 A.2d 1118 (Law Div.1982), aff'd, 189 N.J.Super. 236, 459 A.2d 1198 (App.Div.1983); Kish v. Central Nat'l Ins. Group, 67 Ohio St.2d 41, 424 N.E.2d 288 (1981); Celina Mut. Ins. Co. v. Saylor, 35 Ohio Misc. 81, 301 N.E.2d 721 (Com.Pl.1973); Davis v. State Farm Mut. Auto. Ins. Co., 264 Or. 547, 507 P.2d 9 (1973). Contra McCarthy v. Motor Vehicle Accident Indemnification Corp., 16 A.D.2d 35, 224 N.Y.S.2d 909 (App.Div.1962), aff'd, 12 N.Y.2d 922, 188 N.E.2d 405, 238 N.Y.S.2d 101 (1963).

For reasons of public policy, we are persuaded to accept the Willoughby rationale as an exception to the principle that UM coverage can never be broader than the automobile liability coverage it is intended to replace. The fact that there are legitimate reasons against permitting self indemnification for intentional wrongs and that many automobile liability policies contain exclusions for intentional acts should not militate against the recovery of UM benefits by an innocent person injured by the intentional act of an uninsured motorist.

However, we are unwilling to apply the liberal PIP interpretation of nexus to claims for UM benefits. To do so would substantially expand the legislative intent of providing UM coverage to those "who are legally entitled to recover damages from owners or operators of uninsured motor vehicles because of bodily injury, sickness, or disease, including death, resulting therefrom." § 627.727(1), Fla.Stat. (1987). As this Court said in Mullis v. State Farm Mutual Automobile Insurance Co., 252 So.2d 229, 237-38 (Fla.1971), UM coverage "is statutorily intended to provide the reciprocal or mutual equivalent of automobile liability coverage prescribed by the Financial Responsibility Law...." Thus, we believe that the term "arising out of the ownership, maintenance, or use" of a motor vehicle as contained in a UM policy should be given the same interpretation as that language is construed in automobile liability policies.

In analyzing liability coverage for an act arising out of the ownership, maintenance, and use of a motor vehicle, 6B J. Appleman, Insurance Law and Practice, section 4317 (Buckley ed. 1979), states:

It has been stated that the liability of an insurer under the "ownership, maintenance, or use" provision should be measured in accord with the terms of a policy as understood by a person of reasonable intelligence. The word "coverage" as used in automobile liability policy means the sum of risks which the policy covers. Ownership, maintenance, or use of the automobile need not be the direct and efficient cause of the injury sustained.

Rather, the courts have only required that some form of causal relationship exist between the insured vehicle and the accident. However, liability does not extend to results distinctly remote, though within the line of causation.

....

Accordingly, three rather interesting rules have been set up to determine the insurer's liability: 1. The accident must have arisen out of the inherent nature of the automobile, as such; 2. The accident must have arisen within the natural territorial limits of an automobile, and the actual use, loading, or unloading must not have terminated; 3. The automobile must not merely contribute to cause the condition which produces the injury, but must, itself, produce the injury.

(Footnotes omitted.)

There are several pertinent cases construing automobile liability policies which provided coverage for accidents arising out of the use of the uninsured automobile.

In Fleming v....