State Farm Fire and Cas. Co. v. Metropolitan Dade County

• Decision Date: 03 May 1994
• Docket Number: No. 94-81,94-81
• Citation: 639 So.2d 63
• Parties: 19 Fla. L. Weekly D977 STATE FARM FIRE AND CASUALTY COMPANY, Appellant, v. METROPOLITAN DADE COUNTY and Leonard Elias, Appellees.
• Court: Florida District Court of Appeals

Page 63

639 So.2d 63

19 Fla. L. Weekly D977

STATE FARM FIRE AND CASUALTY COMPANY, Appellant, v. METROPOLITAN DADE COUNTY and Leonard Elias, Appellees.

No. 94-81.

District Court of Appeal of Florida Third District.

May 3, 1994.

Rehearing Denied June 19, 1994.

Taylor, Day & Rio and Vincent J. Rio, III, and Charles M. Johnston, for appellant.

Robert A. Ginsburg, County Atty., Thomas Goldstein and Gerald K. Sanchez, Asst. County Attys., for Dade County.

William F. Merlin, Jr., for Florida Ass'n of Public Ins. Adjusters, Inc.

Tom Baker, Stuart H. Singer and Jeffrey A. Norman, for Nat. Ins. Consumer Organization, Inc., and United Policyholders, Inc.

Susan M. Popik, for United Services Auto. Ass'n.

Nancy A. Copperthwaite, for Nat. Ass'n of Independent Insurers and American Ins. Ass'n, as amicus curiae.

Before SCHWARTZ, C.J., and BASKIN and LEVY, JJ.

PER CURIAM.

State Farm Fire and Casualty Company [State Farm] appeals an adverse final summary judgment in favor of Metropolitan Dade County and Leonard Elias, the Metropolitan Dade County Consumer Advocate [collectively "County"]. We reverse.

In the wake of Hurricane Andrew, the County is requiring many homeowners to make structural improvements to their houses to bring them into compliance with the South Florida Building Code. ¹ In some cases they have to elevate the houses to conform to the County's Flood Elevation Requirements. ² The County sued State Farm seeking a judgment declaring that State Farm's replacement-cost homeowners insurance policies provided coverage for the costs of code upgrades and home elevation alterations. State Farm asserted that it was not required to finance these improvements because they are specifically excluded from its policies. The State Farm homeowners insurance policies at issue, Special Form 3 and Extra Form 5, contain the following pertinent provisions: The "Ordinance or Law" clause provides that State Farm is not responsible for loss caused by the enforcement of ordinances or laws regulating home construction; ³ the "increased cost limitation" clause excludes from coverage any increased costs of repairs which are incurred by bringing a home into compliance with ordinances. ⁴ State Farm argues that it provides coverage only for damage caused by the hurricane itself. Both parties filed motions for summary judgment.

The trial court granted the County's motion for summary judgment holding, as a matter of law, that State Farm must cover costs incurred by insureds to comply with the South Florida Building Code and the County Elevation Requirements. The court found that the exclusionary language was ambiguous and interpreted it to provide the increased coverage.

It is well-settled that the construction of ambiguities in an insurance policy is a question of law. Jones v. Utica Mut. Ins. Co., 463 So.2d 1153, 1157 (Fla.1985). "Despite the principle that policy provisions which tend to limit liability must be construed liberally in favor of the insured and against the insurer, where the language of a policy is clear and unambiguous on its face, the policy must be given full effect." American Motorists Ins. Co. v. Farrey's Wholesale Hardware Co., 507 So.2d 642, 645 (Fla. 3d DCA), review denied, 518 So.2d 1274 (Fla.1987) (citations omitted).

A court may resort to construction of a contract of insurance only when the language of the policy in its ordinary meaning is indefinite, ambiguous or equivocal. If the language employed in the policy is clear and unambiguous, there is no occasion for construction or the exercise of a choice of interpretations. In the absence of ambiguity ... it is the function of the court to give effect to and enforce the contract as it is written.

U.S. Fire Ins. Co. v. Morejon, 338 So.2d 223, 225 (Fla. 3d DCA 1976), cert. denied, 345 So.2d 426 (Fla.1977); Rigel v. National Casualty Co., 76 So.2d 285 (Fla.1954).

The first issue in this case is whether the policies are ambiguous. "An ambiguity arises when more than one interpretation 'may fairly be given' to a policy provision." Ellsworth v. Insurance Co. of N. Am., 508 So.2d 395, 400 (Fla. 1st DCA 1987). The policies before us do not present language susceptible of more than one interpretation. Under "Losses Not Insured," supra note 3, the policy provides that no coverage is afforded for losses which would not occur in the absence of excluded events. In other words, if the excluded event does not occur, the loss does not occur. The first excluded event in the policy is the enforcement of an ordinance or law regulating construction or repair of a structure. Clearly, the County must enforce its construction codes and requirements. Compliance with these requirements will occasion additional losses for many homeowners. The language in the "Ordinance or Law" exclusion is susceptible of only one interpretation: no coverage is provided for losses associated with construction regulation enforcement.

The second sentence of the second paragraph in the "Losses Not Insured" section clearly alerts the reader that such coverage will not be afforded regardless of whether any other cause or causes bring about the loss. The provision declares that the existence of an excluded event will, regardless of any other forces involved, remove the loss from the purview of coverage. No ambiguities are present in this provision.

Similarly, the "increased cost limitation" clause, supra note 4, is susceptible of only one interpretation. The clause asserts that no coverage will be afforded for increased costs associated with enforcement of construction laws or regulations. The plain, natural meaning of the phrase, Allstate Ins. Co. v. Shofner, 573 So.2d 47, 49 (Fla. 1st DCA 1990), alerts the reader to the fact that should enforcement of a construction regulation or law cause additional expenses, the policy does not cover them.

The County argues that State Farm's failure to define "enforcement" and "increased costs" in the policies renders the provisions ambiguous. We are not persuaded by this argument.

The "mere failure to provide a definition for a term involving coverage does not necessarily render the term ambiguous." Jefferson Ins. Co. v. Sea World, 586 So.2d 95, 97 (Fla. 5th DCA 1991). Terms in an insurance policy should be given their plain and unambiguous meaning. Old Dominion Ins. Co. v. Elysee, Inc., 601 So.2d 1243, 1245 (Fla. 1st DCA 1992); Shofner. Enforcement is "the act of enforcing: as a: compulsion especially by physical violence b:...