Siegle v. Progressive Consumers Ins. Co.

• Decision Date: 13 June 2001
• Docket Number: No. 4D00-1503.,4D00-1503.
• Citation: 788 So.2d 355
• Parties: Carole M. SIEGLE, Appellant, v. PROGRESSIVE CONSUMERS INSURANCE COMPANY, Appellee.
• Court: Florida District Court of Appeals

788 So.2d 355

Carole M. SIEGLE, Appellant, v. PROGRESSIVE CONSUMERS INSURANCE COMPANY, Appellee.

No. 4D00-1503.

District Court of Appeal of Florida, Fourth District.

June 13, 2001.

Mike Peacock and W. Christian Hoyer of James, Hoyer, Newcomer & Smiljanich, P.A., Tampa, Debra Brewer Hayes and Dennis Reich of Reich & Binstock, Houston, Texas, and Michael L. Sprain of the Sprain Law Firm, P.C., Houston, Texas, for appellant.

Douglas Stein and Francis A. Anania of Anania, Bandklayder, Blackwell, Baumgarten & Torricella, Miami, for appellee.

STEVENSON, J.

We sua sponte withdraw our May 2, 2001 opinion and issue the following in its place.

In this appeal, we must decide whether the insured is entitled to the "diminished market value" of her previously-wrecked automobile after the insurer elected to repair the vehicle under the parties' collision insurance contract. We hold that having restored Siegle's vehicle to its pre-accident level of performance, appearance and function, and having completed a top-notch repair, Progressive is not required to also compensate its insured for any remaining inherent diminution in value. Therefore, we affirm the trial court's dismissal of appellant's second amended complaint.

In 1997, the appellant, Carole M. Siegle, was involved in a car accident while driving her 1994 Acura. At the time of the collision, Siegle was insured by appellee, Progressive Consumers Insurance Company. As was its option under the insurance contract, Progressive elected to repair. Despite the quality of the repairs, Siegle contended that her vehicle suffered a reduction in market value of $2,677.19 by virtue of the fact that the car had been involved in a collision. When Progressive refused to pay this "inherent diminished value" loss, which Siegle defined as "the difference between the pre-loss value of the insured automobile and its value after it was repaired and returned," Siegle filed suit.¹ Siegle had no complaint with the quality of the work and agreed that Progressive repaired the vehicle "to the best of human ability." The trial court dismissed the complaint, finding that neither the insurance contract nor Florida law obligated Progressive to compensate Siegle for lost "market value."

Construction of the insurance contract and the determination of whether Florida law requires the insurer to provide coverage for diminished value are questions of law subject to de novo review on appeal. See State Farm Fire & Cas. Co. v. Nickelson, 677 So.2d 37 (Fla. 1st DCA 1996). Nevertheless, we begin our analysis with the trial judge's reasoning. As support for her dismissal of the complaint, the trial judge relied on Morrison v. Allstate Indemnity, No. 98-377-CIVJ-20C, 1999 WL 817660 (M.D.Fla. Sept.9, 1999).² While the Morrison court dismissed the plaintiffs' claim for inherent diminished value, it did so on the ground that there was no Florida law on this issue and absent a "clear dictate" from the Florida courts, the federal court would not impose this obligation upon an insurer. Thus, Morrison is not dispositive; we must examine the policy and relevant case law.

The parties' insurance contract provides in relevant part:

PAYMENT OF LOSS

We may pay the loss in money or repair or replace damaged or stolen property with other of like kind and quality....

. . . .

LIMITS OF LIABILITY

Our limit of liability for loss shall not exceed the lesser of:

1. the actual cash value of the stolen or damaged property less the applicable deductible shown in the Declarations;

2. the amount necessary to repair or replace the property with other of the like kind and quality less the applicable deductible shown in the Declarations; or

3. the amount stated in the Declarations page of this policy.

In sum, under the collision damage provisions of the policy, Progressive is obligated to pay for "loss" caused by collision. "Loss" is defined in the policy as "direct and accidental loss of or damage to" the insured vehicle. The insurer has the option of paying the "loss" in money or by repairing or replacing damaged or stolen property with other "of like kind and quality." The policy limits Progressive's liability to the lesser of the actual cash value of the damaged property or the amount necessary to repair or replace the property "with other of like kind and quality." Thus, like many such policies, Progressive may elect to replace the vehicle or repair it, depending on which option is most economical.

It is from this policy language that appellant argues that Progressive, in electing to repair, is required to restore the vehicle to its pre-accident "value," even though the repairs may be physically adequate in every respect. If there is any loss in market value after the repairs have been completed, appellant argues that the policy requires Progressive to pay that diminished value:

Loss in value is part of the entire loss. The loss in value occurs when the vehicle is damaged. Although repairs may reduce loss, they may not eliminate it. Unless Appellee compensates Appellant for this deficiency, it has not fulfilled its obligation to indemnify its insured for the loss and to restore him to his pre-loss condition.³

Appellant's reasoning is three-fold. First, appellant argues that from a plain reading of the policy, loss in value is a "loss" and should be compensated under Progressive's obligation to pay for damage to the automobile. Appellant buttresses this argument with her claim that, under Florida law, the term "repair" has been interpreted as an obligation that an insurer restore the covered vehicle to its pre-accident "function, appearance and value." Second, citing Florida law which provides that exclusions from coverage must be precise and clearly stated, appellant argues that, since the policy does not specifically exclude loss in value, Progressive should be required to pay for it. Third, appellant argues that, at the very least, the policy language is ambiguous such that the phrase "repair ... with other of like kind and quality" could, by reasonable interpretation, be understood to cover diminished market value after the repair.

Siegle cites Auto-Owners Insurance Co. v. Green, 220 So.2d 29 (Fla. 1st DCA 1969), and Arch Roberts & Co. v. Auto-Owners Insurance Co., 305 So.2d 882 (Fla. 1st DCA 1974), to support her contention that the law in Florida is that the term "repair" means that an automobile insurer is obligated to restore a collision-damaged vehicle to its pre-accident function, appearance and value. In our view, these cases lend only minimal and unpersuasive support to appellant's position.

In Green, the issue was whether the insured was obligated to allow the insurer to repair the damaged automobile and sign a release after the insurer had paid only the estimated repair costs, making no provision for any hidden damages and assuming no obligation to restore the car to its pre-accident condition. The insurer's obligation to restore the vehicle to its pre-accident condition and value following election of the option to repair was conceded. See 220 So.2d at 31. Then, several years later, the Arch Roberts panel cited Green for the proposition that "the contractual undertaking of the insurer for damages due to collision is substantial restoration as to function, appearance and value," despite the fact that the principle was not the holding of Green but only the agreement of the parties. 305 So.2d at 883. Moreover, the holding in Arch Roberts was that, having deprived the insurer of the opportunity to repair the vehicle, the insurer's liability was limited to the estimated cost of repair. As in Green, the issue in Arch Roberts did not require the panel to decide whether the insurer must repair and compensate for any inherent diminished value.

We start with the basic legal principle in Florida that the scope and extent of insurance coverage is defined by the language and terms of the policy. See, e.g., Union Am. Ins. Co. v. Maynard, 752 So.2d 1266, 1268 (Fla. 4th DCA 2000)

; United States Fire Ins. Co. v. Morejon, 338 So.2d 223, 225 (Fla. 3d DCA 1976). Where the language of the policy is plain and unambiguous, "there is not need for judicial construction and the contract must be enforced as written." Fla. Power & Light Co. v. Penn Am. Ins. Co., 654 So.2d 276, 278 (Fla. 4th DCA 1995)(citing Great Global Assurance Co. v. Shoemaker, 599 So.2d 1036 (Fla. 4th DCA 1992)). Any ambiguities in insurance policy contracts are interpreted liberally in favor of the insured and strictly against the insurer. See Prudential Prop. & Cas. Ins. Co. v. Swindal, 622 So.2d 467 (Fla.1993). Lastly, we note that exclusions from coverage must be clearly defined. See Liberty Mut. Ins. Co. v. Capeletti Bros., Inc., 699 So.2d 736, 738 (Fla. 3d DCA 1997).

We affirm the trial judge's ruling and reject appellant's claim for coverage. Here, we must focus on the phrase "repair ... with other of like kind and quality." Words and phrases in an insurance policy, when not specifically defined therein, "must be given their everyday meaning and read in light of the skill and experience of ordinary people." Lindheimer v. St. Paul Fire & Marine Ins. Co., 643 So.2d 636, 638 (Fla. 3d DCA 1994). In construing words in insurance policies, it is appropriate for courts to turn to legal and non-legal dictionaries for common meanings. See Gov't Employees Ins. Co. v. Novak, 453 So.2d 1116, 1118 (Fla.1984)

(using Webster's Third New International Dictionary to construe the term "accident" in the context of an insurance automobile policy and the Florida Motor Vehicle No Fault Law). Turning to the instant case, (1) to "repair" is to "restore to a good condition"; (2) "kind" refers to the "essential quality or character" of a thing; and (3) "quality" means the "peculiar and essential nature" of a thing or can connote a "degree of excellence." THE MERRIAM WEBSTER DICTIONARY 410, 596, 621 (1994 ed.). A repair with like kind and quality would thus require the...