Spaulding v. American Fire & Indem. Co.

• Decision Date: 04 November 1981
• Docket Number: No. 80-1328,80-1328
• Court: Florida District Court of Appeals
• Parties: Ruth SPAULDING, as the mother and natural guardian of Joseph Spaulding, a minor, Appellant. v. AMERICAN FIRE & INDEMNITY COMPANY, Fidelity & Casualty Company of New York, Kenilworth Insurance Company and Robert J. Troyan, Appellees.

Page 367

412 So.2d 367

Ruth SPAULDING, as the mother and natural guardian of Joseph Spaulding, a minor, Appellant. v. AMERICAN FIRE & INDEMNITY COMPANY, Fidelity & Casualty Company of New York, Kenilworth Insurance Company and Robert J. Troyan, Appellees.

No. 80-1328.

District Court of Appeal of Florida, Fourth District.

Nov. 4, 1981.

Rehearing Denied April 28, 1982.

Rehearing Denied June 9, 1982.

Marjorie D. Gadarian of Jones & Foster, P.A., West Palm Beach, for appellant.

Keith H. Park of Albury, Park, Glenn & Heuer, West Palm Beach, for appellees-American Fire & Indem. Co.

GLICKSTEIN, Judge.

This is an appeal from a final judgment on a counterclaim for declaratory relief holding that uninsured motorist coverage available to appellant is limited to $15,000. We disagree and reverse. Appellant also argues that the trial court erred in striking her motion for attorney's fees. As for that order, we affirm.

Appellant's minor son, Joseph Spaulding, was injured on December 1, 1978, while a passenger in a vehicle operated by Bradford Suder, owned by Bradford's father, Burton Suder, and insured by appellee, American Fire & Indemnity Company (AFIC) when a vehicle operated by appellee, Robert J. Troyan, and insured by appellee, Kenilworth Insurance Company, collided with the Suder vehicle. Appellant was insured by Fidelity & Casualty Company of New York (F & C).

The AFIC policy issued to Burton Suder provided bodily injury liability coverage of $250,000 per person and $500,000 per occurrence and uninsured motorist coverage of $15,000 per person and $30,000 per occurrence. Appellant's F & C policy provided uninsured motorist coverage of $10,000 per person and $20,000 per occurrence. Kenilworth's coverage of Troyan was only $10,000 per person and it offered its policy AFIC counterclaimed for declaratory relief to determine whether appellant had standing to assert the uninsured motorist coverage available to her was greater than $15,000; if she had standing, what amount of coverage was available to her; and whether stacking was applicable. Appellant filed a general denial and sought attorneys' fees. The trial court granted AFIC's motion to strike appellant's claims for attorneys' fees in her complaint and in her answer to counterclaim. It also granted AFIC's motion to sever the counterclaim. The parties proceeded to non-jury trial upon the sole question raised by the counterclaim of whether AFIC's uninsured motorist coverage was $15,000 or $250,000. The trial court concluded the lower amount was correct.

limits to appellant to settle her claim on behalf of her son. Although F & C approved the settlement AFIC did not. Therefore, appellant instituted an action ¹ for damages against Troyan and Kenilworth, for uninsured motorist benefits against AFIC and F & C and for attorneys' fees from AFIC. ²

Section 627.727(1), Florida Statutes (1977) required uninsured motorist coverage in any automobile liability insurance policy except "when, or to the extent that, any insured named in the policy shall reject the coverage." The statute further provided that if the named insured had rejected the coverage in a policy previously issued to him by the same insurer, coverage in a renewal policy need not be provided absent written request for same by the named insured. Section 627.727(2), Florida Statutes (1977) specified that the limits of the uninsured motorist coverage shall not be less than the limits of bodily injury liability insurance purchased by the named insured or such lower limit as the named insured may select.

The evidence here establishes that S & H Insurance, Inc. was Mr. Suder's insurance agent. Its president was Mr. Hawkins and its personal lines representative handling Mr. Suder's account was Ms. Hall.

Ms. Hall testified at her deposition, which was received into evidence, that on November 3, 1977, Mr. Suder spoke with her by The transcript of the non-jury trial reflects that the following took place:

telephone and authorized her to increase his bodily injury liability insurance per person from $100,000 to $250,000, but instructed her to maintain his uninsured motorist coverage per person at $15,000, although she informed him that coverage of $250,000 was available to him. Subsequent to the foregoing policy change, according to Ms. Hall, there were at least two changes in the policy prior to the accident-one to add one of his children to the policy ³ and another to add a Datsun ⁴-and on neither occasion did she offer increased UMI coverage to Mr. Suder. ⁵

THE COURT: Now, at this time, I think Mr. Park's (appellee's counsel) stipulation comes into effect because he says from November '77 there were no UMI limits offered following that through the date of the accident, through December of '78.

....

THE COURT: However, what I'm saying is he admits from this time following this date that there was no offer made. That's his stipulation.

MR. PARK: That's correct, Your Honor.

While Mr. Hawkins was being cross-examined at trial by appellant's attorney, Mr. Damsel, as to what occurred when the Datsun 260-Z was added to the policy in September, 1978, the following took place:

THE COURT: .... Isn't the only relevant thing, so far as your position is concerned, is that no additional UMI was offered at that time?

MR. DAMSEL: Yes, sir.

....

Q. (By Mr. Damsel) Was there any additional UMI offered him at that time, Mr. Hawkins?

A. No, sir.

Burton Suder testified that all he wanted was $15,000 per person uninsured motorist coverage; and that such coverage was what he intended because he did not want to spend any more money on his automobile insurance. He stated on cross-examination that he did not recall any specific conversations concerning uninsured motorist coverage.

When considering Section 627.727(1), the court in Lancaster Oil Co. v. Hartford Accident & Indem. Co., 486 F.Supp. 399, 401 (N.D.Fla.1980), said:

Unless the named insured selects lesser coverage, the uninsured motorist coverage is by operation of law equal to the general liability coverage. Aetna Casualty and Surety Co. v. Fulton, 362 So.2d 364 (Fla. 4th DCA 1978); Lumbermen's Mutual Casualty Co. v. Beaver, 355 So.2d 441 (Fla. 4th DCA 1978); Allstate Insurance Co. v. Baer, 334 So.2d 135 (Fla. 3d DCA 1976). Rejection of coverage equal to the liability limits must be affirmative and knowing. Wilson v. National Indemnity Co., 302 So.2d 141 (Fla. 1st DCA 1974).

The question is whether the insurer was required to inform the insured, Burton Suder, of his statutory right to higher uninsured motorist coverage when his premium was increased for the coverage of another vehicle and for the coverage of another driver, even though the insured had previously affirmatively rejected higher coverage.

Our decision in United States Fire Ins. Co. v. Van Iderstyne, 347 So.2d 672 (Fla. 4th DCA 1977), provides the answer. In construing Section 627.727(1), Florida Statutes (1973) we said that an endorsement to an automobile liability insurance policy, adding an automobile and the premium therefore, constituted issuance of a severable and separate contract of insurance. Implicit in that decision is the conclusion that We have previously held that the addition of an automobile by endorsement to an insurance policy required the insurance company to afford the insured a new opportunity to reject uninsured motorist coverage. United States Fire Insurance Co. v. Van Iderstyne, 347 So.2d 672 (Fla. 4th DCA 1977).

when an automobile is added to the policy the insurer must offer uninsured motorist coverage equal to the liability coverage so that the insured may accept, totally reject or opt for lesser coverage. More recently in adopting the test established by the third district in Hartford Accident and Indemnity Co. v. Sheffield, 375 So.2d 598 (Fla. 3d DCA 1979), we said that if the original policy has been changed "in any material respect," then "the policy is 'new' rather than a 'renewal' and the insurance company is required to provide the insured with an opportunity to reject uninsured motorist coverage or to elect a decreased amount." United States Fidelity & Guaranty Co. v. Waln, 395 So.2d 1211, 1214 (Fla. 4th DCA 1981). Although we held in Waln that a mere substitution of automobiles, where the number of automobiles and the coverage remained the same, was not a material change in the policy, we also recognized to the contrary that the addition of another automobile constitutes a material change:

Id. See also Sheffield, supra at 600.

Sub judice we have not one, but two automobiles added to the policy between November 4, 1977 and December 1, 1978 and an uncontradicted record that no offer of increased uninsured motorist coverage was made in that period. There can be no informed rejection in the absence of an informing offer. ⁶

Lastly, we reject appellant's argument that the trial court erroneously struck her claims for attorneys' fees. The last sentence of Section 627.727(6), Florida Statutes (1977) expressly provides that "(t)he provisions of s. 627.428 shall not apply to any action brought pursuant to this section against the uninsured motorist insurer." (emphasis added). We think this clear unequivocal language means what it says, i. e., that an attorneys' fee award, as provided for in Section 627.428, ⁷ is impermissible in an action brought pursuant to Section 627.727. Our conclusion is also supported by several cases which hold that a fee award pursuant to Section 627.428(1) is a penalty provision and must be strictly construed. Lumbermens Mutual Ins. Co. v. American Arbitration Assoc., 398 So.2d 469 (Fla. 4th DCA 1981); Travelers Indemnity Co. v. Chisholm, 384 So.2d 1360 (Fla.2d DCA), pet. for review denied, 392 So.2d 1372 (Fla.1980); American Home Assur. Co. v. Keller Industries, 347 So.2d 767 (Fla.3d DCA 1977), cert. denied, 360 So.2d 1249 (Fla.1978), cert. dismissed, 367 So.2d 1124 (Fla.1979); American Bankers Ins. Co. of Florida v. Benson, 254 So.2d 851 (Fla.3d...