State Farm Mut. Auto. Ins. Co. v. Pridgen, No. 68124
| Court | United States State Supreme Court of Florida |
| Writing for the Court | EHRLICH; McDONALD |
| Citation | 498 So.2d 1245,11 Fla. L. Weekly 598 |
| Docket Number | No. 68124 |
| Decision Date | 26 November 1986 |
| Parties | 11 Fla. L. Weekly 598 STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Petitioner, v. Louis G. PRIDGEN, et al., Respondents. |
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v.
Louis G. PRIDGEN, et al., Respondents.
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Harris Brown, Michael J. Obringer and Robert B. Guild of Mathews, Osborne, McNatt, Gobelman & Cobb, Jacksonville, for petitioner.
Joseph M. Ripley, Jr. of Joseph M. Ripley, Jr., P.A., Jacksonville, for respondents.
EHRLICH, Justice.
We have for review Pridgen v. Bill Terry's, Inc., 478 So.2d 837 (Fla. 1st DCA 1985), which conflicts with Paris v. State Farm Mutual Automobile Insurance Co., 365 So.2d 439 (Fla. 3d DCA 1978), cert. denied, 373 So.2d 460 (Fla.1979). We have jurisdiction. Art. V, § 3(b)(3), Fla. Const.
This case involves an exclusionary clause to the "comprehensive" loss provisions of an automobile insurance policy. The exclusion excepts from coverage loss to the vehicle occurring under certain specified circumstances. The Pridgens' 1978 Chevrolet Camaro and the Sumners' 1978 Pontiac Firebird were insured under policies issued by petitioner, State Farm Mutual Automobile Insurance Company. Both policies contained "Coverage D," providing comprehensive coverage for loss to the vehicle, including loss caused by theft or larceny. The policies also contained an exclusion from coverage for "LOSS TO ANY VEHICLE DUE TO ... CONVERSION, EMBEZZLEMENT OR SECRETION BY ANY PERSON WHO HAS THE VEHICLE DUE TO ANY LIEN, RENTAL OR SALES AGREEMENT."
In August of 1982, respondent Pridgen entered into an oral agreement with William S. Royall, III, an automobile salesman for Bill Terry's, Inc., whereby Pridgen
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agreed to transfer both possession and title of his 1978 Camaro to Royall for the purpose of resale. Proceeds were to be applied to the down payment on a new car which Pridgen intended to purchase from Bill Terry's. As part of the oral agreement, Pridgen agreed that respondent Sumner would deliver possession and title of his 1978 Firebird to Royall for the purpose of resale, proceeds of which were also to be applied to Pridgen's down payment.After the automobiles were delivered to Royall, he sold the two vehicles. However, rather than applying the proceeds to the down payment, as agreed, he used the proceeds from the sales to pay his own debts. Royall later wrote Pridgen three personal checks, all of which were returned for insufficient funds. Based on the foregoing, Royall was charged with two counts of grand theft, pursuant to section 812.014, Florida Statutes (Supp.1982). After entering a plea of guilty, Royall was adjudicated guilty as charged in January of 1983.
Pridgen and Sumner made demand on State Farm under their respective policies. State Farm refused to pay the claims, citing the exceptions contained in the exclusionary clause. In November of 1983, the respondents filed suit against State Farm, Bill Terry's, Inc. and Royall. 1 State Farm filed a motion for summary judgment, asserting that coverage was excluded in situations where an automobile is voluntarily transferred under a "sales agreement" 2 and a conversion occurs. Accepting State Farm's position, the trial court entered final summary judgment in favor of State Farm. The trial court reasoned that because respondents "voluntarily delivered their vehicles to Mr. Royall for resale and he thereafter sold the same and converted the money to his own use" the loss sustained by the respondents was "due to a conversion" and was thus "excluded by the policies" in question.
On appeal, the district court reversed, finding the exclusionary clause ambiguous, "in that it is uncertain whether [it applies] to situations wherein a sales agreement is the result of the would-be purchaser's fraudulent inducements, or to situations in which a vehicle is first legally obtained and then is later converted by the intended buyer." 478 So.2d at 840. The district court construed the "ambiguous" clause, in favor of the respondents, to apply only in the latter situation. The court reasoned that because there was some evidence in the record from which it could be concluded that Royall initially intended to convert the vehicles, thus gaining possession and title of the vehicles through false inducement, summary judgment was improperly granted.
The district court correctly concluded and State Farm concedes that the conversion of the vehicles by Royall resulted in a loss due to "theft" 3 under the
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Taurus Holdings v. U.S. Fidelity, SC04-771.
...to allow for such a construction the provision must actually be ambiguous. In State Farm Mutual Automobile Insurance Co. v. Pridgen, 498 So.2d 1245, 1248 (Fla.1986), we emphasized that insurance contracts are interpreted according to the plain language of the policy except "when a genuine i......
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