St. Paul Fire & Marine Ins. Co. v. Thomas

• Decision Date: 12 February 1973
• Docket Number: No. 71--90,71--90
• Citation: 273 So.2d 117
• Court: Florida District Court of Appeals
• Parties: ST. PAUL FIRE & MARINE INSURANCE COMPANY, Appellant, v. Terri L. THOMAS, a minor, by and through her mother and next friend Kathryn Thomas, and Kathryn Thomas, Individually, Appellees.

Page 117

273 So.2d 117

ST. PAUL FIRE & MARINE INSURANCE COMPANY, Appellant, v. Terri L. THOMAS, a minor, by and through her mother and next friend Kathryn Thomas, and Kathryn Thomas, Individually, Appellees.

No. 71--90.

District Court of Appeal of Florida, Fourth District.

Feb. 12, 1973.

Rehearing Denied March 7, 1973.

Jeanne Heyward, Miami, and Eugene L. Heinrich of McCune, Hiassen, Crum, Ferris & Gardner, Fort Lauderdale, for appellant.

Robert Orseck, of Podhurst, Orseck & Parks, Miami, and Edward L. Middlebrooks, of Ferrero, Middlebrooks & Houston, Fort Lauderdale, for appellees.

OWEN, Judge.

The plaintiffs in a personal injury action obtained a judgment against the defendant-tort-feasor (an insured under a homeowner's policy issued by St. Paul Fire & Marine Ins. Co.). Plaintiffs then brought this action against St. Paul to recover the amount of that judgment plus attorney's fees. The non-jury trial resulted in a judgment favorable to the plaintiffs. St. Paul appeals, raising the primary question of whether its policy afforded coverage at all, and if so, the collateral question of St. Paul's liability for that portion of the judgment against its insured which exceeds the policy limits.

The facts necessary for a consideration of these questions can be stated rather simply.

Terri L. Thomas, a minor, sustained serious personal injuries when a 1957 Renault automobile in which she was a passenger went out of control, left the roadway and overturned several times. She and her mother filed a complaint against one Herminio Roig as defendant, alleging that the injuries and damages were the fault of Roig who '. . . did carelessly and negligently throw a pop bottle from a vehicle, which was in the process of passing, or had just passed a 1957 Renault in which Terri L. Thomas was riding as a passenger and as a result of the throwing of said pop bottle from a moving vehicle into the path of the 1957 Renault . . .' caused the accident and the resulting personal injuries.

At the time of this occurrence, Herminio Roig was an insured under a standard homeowner's policy issued by St. Paul in which coverage 'E' provided personal liability coverage up to a limit of $25,000. When St. Paul became aware of the suit against Roig, its investigator took a written statement from Roig who stated (contrary to the allegations of the complaint) that at the time of the incident he was Driving his father's car, saw a bottle in the road, swerved to miss it but was unsuccessful, and it was this broken bottle which caused the 1957 Renault automobile to go out of control and overturn. A passenger in Roig's car gave a factually similar statement. ¹ Based upon this investigation, and primarily the statement from its insured, St. Paul determined that it did not have coverage, relying upon a 'Special Exclusion' in the policy which provided that the policy did not apply:

'(b) Under coverages E and F, to the ownership, maintenance, operation, use, loading or unloading of (1) automobiles or midget automobiles while away from the premises or the ways immediately adjoining. . . .'

St. Paul thereupon declined to furnish Roig a defense in the personal injury litigation.

Roig was also an insured under an automobile liability insurance policy issued by National Service Fire Insurance Company, which insurer accepted the defense of the personal injury litigation under a reservation of rights. During the course of the personal injury litigation National Service Fire became insolvent, and the attorneys retained by it to defend Roig were permitted to withdraw from representation. Thereafter, Roig was not represented by counsel. Subsequently he suffered a summary judgment on liability and the case went to trial on damages only. The jury verdict for plaintiffs was in the total amount of $119,000.00 for which amount final judgment was entered against Roig.

Immediately after the judgment was entered, plaintiffs' counsel notified St. Paul in writing that the plaintiffs would compromise and settle their judgment against Roig for the limits of coverage provided under St. Paul's homeowner's policy, which plaintiffs' counsel stated 'was understood to be $25,000.00'. St. Paul promptly rejected such settlement offer. The plaintiffs then obtained from Roig an assignment of any claim he might have against St. Paul, and instituted the present suit in which they sought and recovered the full amount of their judgment against Roig, plus attorney's fees.

The primary question is whether St. Paul's policy provided personal liability coverage to Roig for the negligent conduct Alleged in the complaint. ² If not, St. Paul had neither the duty to defend nor the duty to pay any judgment rendered against Roig, and the present judgment must be reversed. However, if the policy did provide coverage, then St. Paul clearly breached its duty to defend Roig and we must then determine what effect that breach of duty, as well as St. Paul's subsequent conduct, had upon its liability to its insured.

By the insuring agreement in this policy, St. Paul agreed '. . . to pay on behalf of the Insured all sums which the Insured shall become legally obligated to pay as damages because of bodily injury . . .'. Under this broad, comprehensive language coverage for the insured's legal liability is provided Unless expressly excluded. Thus, the answer to the coverage question lies in determining whether Roig's liability (for injuries caused by his negligently throwing a pop bottle from a moving vehicle in which he was riding as a passenger) is within the policy Exclusion pertaining to use of an automobile (away from the premises).

The meaning of the exclusion is not clear. It says merely that the policy 'Does Not Apply * * * to the * * * use * * * of (1) automobiles * * *'. There is no language which expressly states what, if any, nexus or connection must exist between the insured's liability and the use of an automobile. However, Some connecting link is necessarily implied, or else the exclusion would be meaningless. See Brenner v. Aetna Ins. Co., 1968, 8 Ariz.App. 272, 445 P.2d 474. But how strong or weak must that connection be? For example, does this mean that the policy does not apply to a liability incurred 'while using' the automobile? Then clearly the exclusion applied in this case because Roig's liability arose 'while using' the automobile, (i.e., by riding in it. See American Fire & Casualty Co. v. Blanton, Fla.App.1966, 182 So.2d 36). On the other hand, does this language mean that the exclusion applies only if the liability is one 'caused by' the use of the automobile? Then just as clearly the exclusion did not apply since there was no causal connection between Roig's use of the car and his liability--his liability attached because of his negligent conduct in throwing the bottle onto the roadway, not in riding in the car.

Since there is an ambiguity as to whether the nature of the causal connection (between the liability and the use of the automobile) necessary to bring the activity within the ambit of the exclusion must be strong or direct (i.e., 'caused by'), or may be weak and remote (i.e., 'while using'), we are constrained to follow the well settled and almost universally accepted principle of construing the exclusion in a manner which affords the broadest coverage. Harris v. Carolina Insurance Co., Fla.1970, 233 So.2d 833; National Automobile Ins. Assoc. v. Brumit, Fla.1957, 98 So.2d 330. We conclude that before the policy exclusion would become applicable, the liability would have to be caused by the use of the automobile. Clearly, such did not occur in this case.

A number of courts, in considering the causal connection which must exist between the injury and the use of the automobile (in order to make applicable an exclusionary clause of the type involved here) have adopted the test of 'arising out of', which is the language used in the insuring agreement of the standard automobile liability insurance policy. ³ There is indeed considerable merit and logic to such a view, If we assume that the underwriting intent is for the automobile policy and the homeowner's policy to be complementary to one another, that is, that the coverage under one takes up where the other leaves off, with neither hiatus nor overlapping of such coverage. On this premise it would be entirely proper to conclude that if the injury must 'arise out of' the use of the automobile in order to be within coverage of the automobile policy, then the same test should apply in determining whether the injury or liability is within the exclusionary clause of the homeowner's policy. But, so far as we are aware, no court has permitted the exclusionary clause of the personal liability policy to become applicable where the causal connection between the injury and the use of the...