Sterling v. Ohio Cas. Ins. Co.

• Decision Date: 21 July 2006
• Docket Number: No. 2D05-1875.,2D05-1875.
• Parties: James D. STERLING and Carolyn, Sterling, as Parents and Natural Guardians of James D. Sterling, Jr., a minor; and James D. Sterling and Carolyn Sterling, individually, Appellants, v. The OHIO CASUALTY INSURANCE COMPANY, Appellee.
• Court: Florida District Court of Appeals

936 So.2d 43

James D. STERLING and Carolyn, Sterling, as Parents and Natural Guardians of James D. Sterling, Jr., a minor; and James D. Sterling and Carolyn Sterling, individually, Appellants, v. The OHIO CASUALTY INSURANCE COMPANY, Appellee.

No. 2D05-1875.

District Court of Appeal of Florida, Second District.

July 21, 2006.

Rehearing Denied August 25, 2006.

George A. Vaka of Vaka, Larson & Johnson, P.L., Tampa, for Appellant.

Wayne Tosko of Vasquez & Tosko, LLP, Orlando, for Appellee.

WALLACE, Judge.

James D. Sterling and Carolyn Sterling appeal a final summary judgment in favor of The Ohio Casualty Insurance Company. The trial court declared that the underinsured motorist coverage provided by Ohio Casualty on a business automobile insurance policy issued to "James D. Sterling, d/b/a J.D.'s Backhoe Service" did not provide coverage for the Sterlings' minor son when, as a pedestrian, he was struck by an underinsured motorist. We affirm. A business automobile insurance policy issued in Florida insuring exclusively business or commercial vehicles is not statutorily compelled to utilize a definition of "insured" that would provide uninsured or underinsured motorist coverage to a family member of the owner of the insured commercial vehicle when the family member is struck as a pedestrian. Ohio Casualty's policy did not voluntarily provide coverage for this claim. If the Sterlings desired to have higher limits of uninsured motorist coverage, they were free to purchase that coverage on their family automobiles.

On December 14, 2002, the Sterlings' minor son was walking near the intersection of Bell Tower Road and State Road 674 in Hillsborough County when he was struck by a vehicle driven by Crystal Freitas. Freitas had liability insurance on her vehicle, but it was insufficient to cover the damages sustained by the Sterlings' son.

At the time of the accident, the Sterlings had two insurance policies that had been obtained from an independent insurance agent. Southern-Owners Insurance Company, a member of the Auto-Owners Insurance Group, had issued a policy to "James D. & Carolyn Sterling" that provided coverage on two family automobiles, one driven for pleasure and the other driven to work or school. The policy provided uninsured motorist coverage in the amount of $50,000 per person on each of the two vehicles. This coverage stacked to provide $100,000 in total underinsured motorist coverage for this claim. The Sterlings paid a premium for this coverage of approximately $150 for a six-month term. The Sterlings settled their claim with Auto-Owners during the pendency of the proceedings in the trial court. There is no dispute that this policy, providing family automobile insurance coverage, was required to insure family members for such claims.

Mr. Sterling had obtained a second insurance policy, issued by Ohio Casualty, on a Ford F450 flatbed truck and a "gooseneck" trailer. This policy was issued with a declarations page entitled "Business Automobile Policy Declarations," and the coverage was provided using a standard "Business Auto Coverage Form" that is copyrighted by the Insurance Services Office and identified as form CA 00 01 07 97. The named insured on this policy is "James D. Sterling, d/b/a J.D.'s Backhoe Service." This policy provides $300,000 in uninsured motorist coverage on the truck at an annual cost of $106. It did not provide or charge for uninsured motorist coverage on the trailer.¹ The description of "covered autos" for this policy included only those autos described on the declarations page.

The liability coverage in the Ohio Casualty policy covered Mr. Sterling as the named insured, anyone driving the scheduled vehicles with his permission, employees under certain circumstances, and a few other narrow categories of people. Unlike a family automobile insurance policy, this business policy did not provide liability coverage for the family members of the named insured.

The uninsured and underinsured motorist coverage was provided on a form identified as form CA 86 14 02 01, entitled "Florida Uninsured Motorists Coverage Non-Stacked." This form indicates that it is to be used with a business auto coverage form. In this form, Ohio Casualty agrees to "pay all sums the `insured' is legally entitled to recover . . . from the owner or driver of an `uninsured motor vehicle.'" The definition of "insured" for purposes of this uninsured motorist coverage included anyone occupying a covered auto or occupying a temporary substitute for such an auto. It also covered anyone entitled to recover damages because of bodily injury sustained by an insured occupying such an auto. The policy does not expressly cover the family members of the named insured.

The policy was also issued with a form identified as form NP 71 13 05 01 and entitled "An Important Notice to Our Commercial Automobile Policyholders Regarding Changes to Your Uninsured Motorist Coverage." This notice states:

The intent of Uninsured and/or Underinsured Motorist Coverage on a Commercial Automobile Policy is to cover you or your employees while operating or occupying an owned automobile described on the policy. Court decisions in other jurisdictions have expanded the scope of the Uninsured/Underinsured Motorist Coverage beyond this intent. The Courts have ruled that the language in the Commercial Automobile Uninsured/Underinsured Motorist Covered endorsement was confusing. As a result of the confusing language, the Courts went on to say that employees of a business were entitled to the Uninsured/Underinsured Motorist Coverage of the employer's Commercial Automobile policy while operating a non-business owned automobile for non-business purposes.

This broadening of coverage, unless corrected, will result in higher insurance premiums and increased legal fees for you and your business.

We want to help you protect what's yours, so in response to these decisions, we have corrected the confusing language and returned the scope of Uninsured/Underinsured Motorist Coverage to its original intent. The Uninsured/Underinsured Motorist endorsement attached will only provide Uninsured/Underinsured Motorist Coverage to you or your employees while operating or occupying an owned auto described on the policy.

If you feel there is a need to extend any of the coverages of your Commercial Auto Policy to you or your employees for the use of any other automobile not described on the policy, we suggest you consult with your agent for assistance and guidance.

The Sterlings made a claim for underinsured motorist benefits under both the Auto-Owners and the Ohio Casualty insurance policies. When Ohio Casualty declined to provide uninsured motorist coverage for the Sterlings' claim, they filed an action for declaratory relief. The action also sought coverage from Auto-Owners. Both insurance policies were properly attached to the complaint. As explained earlier, the action against Auto-Owners settled. Thereafter, both the Sterlings and Ohio Casualty filed motions for summary judgment that are essentially motions for judgment on the pleadings because neither...