Shelby Mut. Ins. Co. of Shelby, Ohio v. Smith

• Decision Date: 11 January 1990
• Docket Number: No. 72870,72870
• Parties: 15 Fla. L. Weekly S15 The SHELBY MUTUAL INSURANCE COMPANY OF SHELBY, OHIO, Petitioner, v. Mary Lou SMITH, Respondent.
• Court: Florida Supreme Court

Page 393

556 So.2d 393

15 Fla. L. Weekly S15

The SHELBY MUTUAL INSURANCE COMPANY OF SHELBY, OHIO, Petitioner, v. Mary Lou SMITH, Respondent.

No. 72870.

Supreme Court of Florida.

Jan. 11, 1990.

Rehearing Denied Feb. 27, 1990.

G. Bart Billbrough of Walton, Lantaff, Schroeder and Carson, Miami, for petitioner.

Walter C. Jones, IV of Kocha & Jones, P.A., West Palm Beach, and Philip M. Burlington of Edna L. Caruso, P.A., West Palm Beach, for respondent.

Bonita L. Kneeland of Fowler, White, Gillen, Boggs, Villareal & Banker, P.A., Tampa, amicus curiae for Florida Ass'n for Ins. Review.

George A. Vaka of Fowler, White, Gillen, Boggs, Villareal & Banker, P.A., Tampa, amicus curiae for the Florida Defense Lawyers Ass'n.

GRIMES, Justice.

We have for review Shelby Mutual Insurance Co. v. Smith, 527 So.2d 830 (Fla. 4th DCA 1988), based upon conflict with United States Fidelity & Guaranty Co. v. Woolard, 523 So.2d 798 (Fla. 1st DCA 1988). We have jurisdiction. Art. V, § 3(b)(3), Fla.Const.

Smith's complaint alleged that in March of 1985 she was injured in an automobile accident caused solely by the fault of the other driver and that the tortfeasor's automobile liability insurer paid her $50,000, the full limits of its policy. Smith asserted that she had a policy with Shelby Mutual that provided for $25,000 uninsured motorist (UM) coverage and that Shelby Mutual nevertheless denied coverage even though her damages exceeded the limits of the tortfeasor's liability coverage. In its answer and counterclaim for declaratory relief, Shelby Mutual claimed that Smith's accident did not involve an "uninsured motor vehicle," as statutorily defined. Upon undisputed facts, the trial court entered final summary judgment in favor of Smith, determining that she was entitled to $25,000 coverage under her policy. The Fourth District Court of Appeal affirmed, recognizing conflict with Woolard, in which the First District Court of Appeal had held that a similarly situated vehicle was not an uninsured motor vehicle under the statute.

Originally, UM coverage came into play only when the offending owner or operator carried no liability insurance whatsoever. § 627.0851, Fla.Stat. (1961). However, subsection 627.727(3)(b), which defines "uninsured motor vehicle" as applied to insured vehicles, was implemented in 1973 (as subsection 627.727(2)(b) ) and has remained essentially unchanged. See ch. 73-180, § 4, Laws of Fla. The subsection provides:

(3) For the purpose of this coverage, the term "uninsured motor vehicle" shall, subject to the terms and conditions of such coverage, be deemed to include an insured motor vehicle when the liability insurer thereof:

....

(b) Has provided limits of bodily injury liability for its insured which are less than the limits applicable to the injured person provided under uninsured motorist's coverage applicable to the injured person.

§ 627.727(3)(b), Fla.Stat. (1985).

Subsection 627.727(1), which defines UM coverage, was amended in 1979 to provide:

The coverage provided under this section shall be over and above, but shall not duplicate the benefits available to an insured under, any workers' compensation law, personal injury protection benefits, disability benefits law, or any similar law; under automobile medical expense coverages; or from the owner or operator of the uninsured motor vehicle or any other person or organization jointly or severally liable together with such owner or operator for the accident. Only the underinsured motorist's automobile liability insurance shall be set off against underinsured motorist coverage.

§ 627.727(1), Fla.Stat. (1979).

In 1982, subsection (2)(b) was added:

In addition, the insurer shall make available, at the written request of the insured, excess underinsured motor vehicle coverage, providing coverage for an insured motor vehicle when the other person's liability insurer has provided limits of bodily injury liability for its insured which are less than the damages of the injured person purchasing such excess underinsured motor vehicle coverage. Such excess coverage shall provide the same coverage as the uninsured motor vehicle coverage provided in subsection (1), except that the excess coverage shall also be over and above, but shall not duplicate, the benefits available under the other person's liability coverage. The amount of such excess coverage shall not be reduced by a setoff against any coverage, including liability insurance. An insurer shall not provide both uninsured motor vehicle coverage and excess underinsured motor vehicle coverage in the same policy.

§ 627.727(2)(b), Fla.Stat. (1983). Subsection (2)(b) was then deleted in 1984 and subsection (1) amended to read:

The coverage described under this section shall be over and above, but shall not duplicate, the benefits available to an insured under any workers' compensation law, personal injury protection benefits, disability benefits law, or similar law; under any automobile medical expense coverage; under any motor vehicle liability insurance coverage; or from the owner or operator of the uninsured motor vehicle or any other person or organization jointly or severally liable together with such owner or operator for the accident; and such coverage shall cover the difference, if any, between the sum of such benefits and the damages sustained, up to the maximum amount of such coverage provided under this section. The amount of coverage available under this section shall not be reduced by a setoff against any coverage, including liability insurance.

§ 627.727(1), Fla.Stat. (Supp.1984).

Shelby Mutual contends that the 1984 version of the statute is clear on its face and that no inquiry into legislative intent is necessary to determine the purpose of subsection 627.727(3)(b) under the 1984 amendment. It asserts that the subsection provides a threshold definition of uninsured motor vehicle that must be met before the provisions in subsection 627.727(1) can be given effect. Under its interpretation, UM coverage is stacked upon the tortfeasor's liability coverage, but only where UM limits exceed liability limits; otherwise, no UM coverage exists. This view has been approved by the district courts of appeal in Marquez v. Prudential Property & Casualty Insurance Co., 534 So.2d 918 (Fla. 3d DCA 1988), and Woolard. Smith, on the other hand, contends that the legislative history surrounding the 1984 amendment shows that the definition contained in subsection 627.727(3)(b) was not meant to be a threshold requirement. Under her scenario, UM coverage is stacked upon the tortfeasor's liability coverage regardless of the amount of the UM limits.

In resolving the issue in favor of Smith, the court below stated:

Prior to the 1984 amendments, section 627.727(1) allowed for the setoff of a tortfeasor's liability coverage against the injured party's underinsured motorist coverage; and section 627.727(2) required insurers to make available excess underinsured motorist coverage against which liability coverage could not be set off. The Florida Legislature's 1984 amendments barred the setoff of liability coverage and eliminated the provision for excess underinsured motorist coverage. The amendment was made applicable to new and renewal policies with an effective date of October 1, 1984, or later. The Florida Legislature, however, did not amend section 627.727(3)--the language of which has been set forth above. The failure to amend subsection (3) has created confusion about the Legislature's intentions as to the extent and scope of this coverage....

....

We conclude that the Legislature intended the 1984 amendment to section 627.727, Florida Statutes, to provide that all uninsured/underinsured motorist coverage be excess coverage and that it pay over and above the tortfeasor's liability coverage should said liability coverage be inadequate to fully compensate the injured insured.

Shelby Mut. Ins. Co., 527 So.2d at 832-33, 835. Accord Morrison v. Universal Underwriters Ins. Co., 543 So.2d 425 (Fla. 5th DCA 1989).

The district court of appeal supported its conclusion by reference to a legislative staff analysis concerning the enactment of the 1984 amendment. Following the 1982 amendment, insurers were required to provide traditional UM coverage and also excess and underinsured motor vehicle coverage. According to the legislative staff analyses of both the Senate and the House of Representatives, the 1984 amendment was designed to combine these coverages into a single form of UM coverage which would be excess underinsured motorist coverage. From examples given within the text of these analyses, it is clear that the authors intended that the 1984 amendment would create the result urged by Smith in this case.

However, we believe the court below misconstrued the language of the statute itself, thereby rendering superfluous what the legislative staffs may have intended. The plain meaning of statutory language is the first consideration of statutory construction. St. Petersburg Bank & Trust Co. v. Hamm, 414 So.2d 1071 (Fla.1982). Only when a statute is of doubtful meaning should matters extrinsic to the statute be considered in construing the language employed by the legislature. Florida State Racing Comm'n v. McLaughlin, 102 So.2d 574 (Fla.1958). Courts may look to legislative history only to resolve ambiguity in a statute. Department of Legal Affairs v. Sanford-Orlando Kennel Club, Inc., 434 So.2d 879 (Fla.1983). As we said in Heredia v. Allstate Insurance Co., 358 So.2d 1353, 1354-55 (Fla.1978):

In matters requiring statutory construction, courts always seek to effectuate legislative intent. Where the words selected by the Legislature are clear and unambiguous, however, judicial interpretation is not appropriate to displace the expressed intent. Foley v. State ex rel. Gordon, 50 So.2d 179, 184 (Fla.1951); Platt v. Lanier, 127 So.2d 912, 913 (Fla. 2d DCA 1961). It is neither the function nor prerogative of ...