Sellers v. U.S. Fidelity & Guaranty Co., 34949
| Decision Date | 20 April 1966 |
| Docket Number | No. 34949,34949 |
| Parties | Joseph SELLERS and Inez Sellers, Petitioners, v. UNITED STATES FIDELITY & GUARANTY COMPANY, Respondent |
| Court | Florida Supreme Court |
William H. Clark and Harrell, Caro, Middlebrooks & Wiltshire, Pensacola, for petitioners.
Robert P. Gaines and Beggs, Lane, Daniel, Gaines & Davis, Pensacola, for respondent.
The District Court of Appeal, First District, has certified its decision in United States Fidelity & Guaranty Company v. Sellers (1965), 179 So.2d 608, as one which passes upon a question of great public interest. Therefore, our jurisdiction to review the decision is invoked pursuant to Section 4(2), Article V, State Constitution, F.S.A.
The specific question raised in the certification may be stated as follows:
May an automobile liability insurance carrier providing coverage against injury by an uninsured motorist in accord with the requirements of § 627.0851, Florida Statutes (F.S.A.), after accepting a premium for such coverage, deny coverage on the ground that the insured has other similar insurance available to him?
No statement of facts in addition to those appearing in the District Court opinion appears necessary to our disposition of the case.
It is our view that the statute, F.S. § 627.0851, F.S.A., operates to invalidate Condition 5 in the United States Fidelity and Guaranty Company automobile liability insurance policy providing petitioners' coverage against injury by an uninsured motorist. We agree with the chancellor in this respect and quash the decision of the District Court of Appeal.
The pertinent language of the statute (§ 627.0851) is that no automobile liability insurance shall be delivered unless coverage is provided '* * * for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles because of bodily injury * * *'. The limits of such a policy of insurance are required to be the same as provided in the Motor Vehicle Responsibility Law (F.S. § 324.021(7), F.S.A.). Provision is made in the last paragraph (number 4) of § 627.0851 for the insurer providing said coverage and making payment thereunder to the insured, to recover to the extent of such payment from the proceeds of any settlement or judgment which the insured obtains from any person Or organization legally responsible for the bodily injury.
It appears to us that the statute expresses the statutory requirements both as to coverage to be provided by the insurer, and as to its sources of recovery of insurance protection it paid from other persons, including other insurers legally responsible for the bodily injury to insureds, to the exclusion of inconsistent language inserted in an automobile liability policy. There appears no latitude in the statute for an insurer limiting its liability through 'other insurance'; 'excess-escape' or 'pro rata' clauses, as attempted in Condition 5. If the statute is to be meaningful and controlling in respect to the nature and extent of the coverage and to the sources of recovery and subrogation of the insurer, all inconsistent clauses in the policy to the controlling statutory language such as are contained in Condition 5 must be judicially rejected.
The 'other insurance' clause was first challenged as being in conflict with a state uninsured motorist statute in the case of Travelers Indemnity Company v. Wells, 209 F.Supp. 784 (W.D.Va.1962). The U.S. District Court of the Western District of Virginia held the Virginia uninsured motorist statute invalidated the 'other insurance' clause. The District Court was overruled by the U.S. Court of Appeals for the Fourth Circuit in Travelers Indemnity Company v. Wells, 316 F.2d 770 (4th Cir.1963). In a footnote to its opinion the Court of Appeals remarked that it did not have the benefit of an opinion of the Supreme Court of Appeals of Virginia which would give it guidance. Soon thereafter the Virginia Supreme Court of Appeals in the case of Bryant v. State Farm Mutual Automobile Insurance Company, 205 Va. 897, 140 S.E.2d 817 (1965), declined to follow the holding of the U.S. Court of Appeals for the Fourth Circuit in Wells. The Virginia Court in Bryant specifically held that the 'other insurance' clause was rendered void and of no effect by the provisions of the Virginia uninsured motorist statute.
In Bryant the plaintiff, while an occupant in an automobile belonging to a third party, was negligently injured by an uninsured motorist. After establishing the amount of his damages by suit against the uninsured motorist, plaintiff made a claim under the uninsured motorist endorsement in the liability policy of the third party owner. The claim was settled; then plaintiff made a claim under the uninsured motorist endorsement in his own automobile liability policy. State Farm, his insurer, denied liability, relying upon the exact language of the 'other insurance' clause which is involved in this case. The lower court held for State Farm and the Supreme Court of Virginia reversed.
The Virginia court noted that Virginia law requires all automobile liability insurance policies issued in the state to include an endorsement undertaking '* * * to pay the insured all sums to which he shall be legally entitled to recover as damages from the owner or operator of an uninsured motor vehicle * * *.' (Section 38.1--381(b), Code of Virginia (1964 Cum.Supp.).) The court held that the 'other insurance' clause, even though approved by the Virginia State Corporation Commission, was in derogation of the requirement of the statute and therefore of no effect.
Both the Virginia statute and the Florida statute contain subrogation clauses providing that an insurer making payments under its uninsured motorist coverage is entitled to the proceeds of any recovery against the uninsured motorist or any other person or organization legally responsible for the injury by the insured, at least to the extent of the insurer's payment. Section 627.0851(4), Florida Statutes, F.S.A.; Section 38.1--381(f), Code of Virginia (1964 Cum.Supp.).
As the 'other insurance' clause presently before the Court undoubtedly is written into thousands of automobile liability insurance policies issued in...
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