State Farm Mut. Auto. Ins. Co. v. Reis, 1D05-576.

Decision Date14 March 2006
Docket NumberNo. 1D05-576.,1D05-576.
Citation926 So.2d 415
PartiesSTATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, a foreign corporation, Appellant, v. Barbara REIS and Joseph Reis, Appellees.
CourtFlorida District Court of Appeals

J. Wiley Horton and Leslie G. Street of Pennington, Moore, Wilkinson, Bell & Dunbar, P.A., Tallahassee, for appellant.

David H. Burns and Talley Kaleko of Cox & Burns, P.A., Tallahassee, for appellees.

ALLEN, J.

The appellant, State Farm Mutual Automobile Insurance Company, the insurer under an automobile insurance policy providing coverage to Robert, Barbara, and Joseph Reis, challenges a final judgment by which damages were awarded to appellees Barbara Reis and Joseph Reis pursuant to the policy's uninsured/under-insured motorist provisions for their pain and suffering as a consequence of witnessing the death of Robert Reis in an Alabama automobile accident. Robert Reis, whose death was caused by the negligence of an under-insured driver, was the husband of Barbara Reis and the father of Joseph Reis. State Farm does not challenge the trial court's determination that the appellees' damages were independently recoverable by the appellees under the applicable tort law of Alabama as part of their own bodily injuries arising from the accident. State Farm argues instead that the insurance proceeds available for these damages under the policy's coverage provisions were exhausted when State Farm paid Robert Reis's estate the policy limits for bodily injury for "Each Person." Because the ambiguous coverage provisions of the policy may reasonably be read to provide coverage to the extent of the greater "Each Accident" coverage limit, we construe the coverage provisions as providing this greater amount of coverage and affirm the final judgment.

State Farm properly argues that the insurance policy should be construed under Florida contract law, and it also properly offers no argument that Florida tort law need be considered. See, e.g., Langston v. Personal Service Ins. Co., 377 So.2d 993 (Fla. 2d DCA 1979).

The standard of review in construing this insurance contract is de novo. Management Computer Controls, Inc. v. Charles Perry Constr., Inc., 743 So.2d 627 (Fla. 1st DCA 1999). Insurance contracts are construed according to their plain meaning. But when the relevant language of an insurance policy is susceptible to more than one reasonable interpretation, one providing coverage and the other limiting coverage, the policy is considered ambiguous. An ambiguous provision is construed in favor of the insured and strictly against the drafter. Swire Pacific Holdings, Inc. v. Zurich Ins. Co., 845 So.2d 161 (Fla.2003); Auto-Owners Ins. Co. v. Anderson, 756 So.2d 29 (Fla.2000).

The material contract provisions relating to uninsured/under-insured motorist coverages for bodily injury are set forth in the policy as follows:

Bodily Injury — means bodily injury to a person and sickness, disease or death which results from it.

. . .

We will pay damages for bodily injury an insured is legally entitled to collect from the owner or driver of an uninsured motor vehicle. The bodily injury must be sustained by an insured and must be caused by accident arising out of the operation, maintenance or use of an uninsured motor vehicle.

. . .

The amount of coverage is shown on the declarations page under "Limits of Liability — U — Each Person, Each Accident". Under "Each Person" is the amount of coverage for all damages due to bodily injury to one person. "Bodily injury to one person" includes all injury and damages to others resulting from this bodily injury. Under "Each Accident" is the total amount of coverage, subject to the amount shown under "Each Person", for all damages due to bodily injury to two or more persons in the same accident.

State Farm argues that this policy language means that when one insured seeks damages for bodily injuries suffered in an automobile accident and a second insured seeks damages for bodily injuries suffered in the same accident, but with the bodily injuries to the second insured having causally resulted from the bodily injuries to the first insured, the total amount payable under the policy to these two insureds is the amount of coverage specified for "Each Person." State Farm therefore sees the words "resulting from" as relating exclusively to causation and argues that when bodily injuries to a second insured would not have occurred "but for" the bodily injuries to the first insured, both insureds are subject to a single "Each Person" coverage limit.

State Farm relies upon the Eighth Circuit's opinion in State Farm Mutual Automobile Insurance Co. v. Wolff, 926 F.2d 755 (8th Cir.1991), as support for its construction of the policy language. In that case, Ms. Wolff was rendered a quadri-plegic in a North Dakota automobile accident due to the negligence of a driver insured by State Farm. The "Limits of Liability" language in the liability coverage portion of the driver's policy was identical to the above-quoted "Limits of Liability" language in the appellees' policy in the present case. Ms. Wolff sought damages for her injuries and her husband sought damages for his resulting loss of consortium. After State Farm paid out the "Each Person" limit to Ms. Wolff, it took the position that no further coverage was available to cover Mr. Wolff's consortium claim. But Mr. Wolff argued that the "resulting from" language was intended to refer to derivative claims and that since his consortium claim was not a derivative claim under North Dakota law, he was entitled to recovery for his loss of consortium up to the "Each Accident" limit. The Wolff court wrote:

Wolff contends that his loss of consortium claim is not derivative, but a wholly independent cause of action. This is apparently meant to get around the "resulting from" language in the "Each Person" section. This argument, however, is irrelevant, because Wolff is arguing the legal attributes of a loss of consortium claim, and ignoring the nature of the injury. He cannot deny that without his wife's injuries, he would not have the cause of action. Therefore, his injury results from his wife's injuries, and the "Each Person" limit of liability applies.

Wolff argues that the "Each Accident" limit applies because his loss of consortium claim includes a claim for bodily injury because of his emotional distress and psychological injury. State Farm responds that the "Each Accident" limit is inapplicable because under the plain language of the policy Wolff would have to have sustained a separate bodily injury in the same accident. Both parties have extensively argued the issue of whether a loss of consortium claim would be considered a separate bodily injury under North Dakota law. We need not decide this issue, however, because Wolff's claim fails the second requirement for "Each Accident" coverage, namely that the injury occur in the same accident. Under North Dakota law, the injury giving rise to a loss of consortium claim occurs after the accident.

In sum, the plain language of the policy does not require State Farm to cover Wolff's loss of consortium claim. The claim is subject to the "Each Person" limit of liability as an injury resulting from the bodily injury of another. The claim does not fall under the "Each Accident" limit of liability, however, because Wolff's injury occurred after the accident.

926 F.2d at 757 (citations omitted). The first paragraph of this excerpt from Wolff would seem to indicate that those injuries to Mr. Wolff which would not have occurred except for the injuries to Ms. Wolff were subject to the same "Each Person" coverage limit applicable to Ms. Wolff's injuries, and that Mr. Wolff therefore was not entitled to recover for these injuries up to the "Each Accident" coverage limit. Although this language seems to support State Farm's argument in the present case, the Wolff court did not end its analysis at this point. Somewhat confusingly, the court instead proceeded to address arguments relating to whether the "Each Accident" coverage limit might nevertheless apply to the loss of consortium claim, with the court concluding that the "Each Accident" coverage limit was inapplicable, not because the consortium claim resulted from the wife's injuries but because Mr. Wolff's injury "occurred after the accident."

Although Wolff appears to be of dubious value in supporting the construction urged by State Farm in the present case,1 State Farm's suggested interpretation of the insurance contract is nevertheless one possible reading of the policy language. Significantly, however, other constructions of the policy language would support the trial court's ruling in this case.

As suggested by the husband's argument in Wolff, some courts have construed the "resulting from" language in the State Farm policy as referring to injuries and damages to additional persons which derive from the bodily injuries to the first injured person. In reading the policy language in this way, these courts limit the additional injured persons to the "Each Person" coverage amount only if their claims are "derivative" rather than "independent" in nature.

The unanimous decision of the Supreme Court of Montana in Treichel v. State Farm Mutual Automobile Insurance Co., 280 Mont. 443, 930 P.2d 661 (1997), typifies decisions construing the State Farm policy language in this way. In that case, Mr. Treichel was seriously injured and later died due to the negligence of a driver insured by State Farm. Ms. Treichel witnessed the accident and observed the severe head injuries her husband suffered as a consequence of the collision. The "Limits of Liability" language in the liability coverage portion of the driver's policy was identical to the "Limits of Liability" language in the appellees' policy in the present case. After State Farm paid Mr. Treichel's estate the amount of the "Each Person" coverage under the...

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