Wash. Nat'l Ins. Corp. v. Ruderman
| Decision Date | 03 July 2013 |
| Docket Number | No. SC12–323.,SC12–323. |
| Citation | 117 So.3d 943 |
| Parties | WASHINGTON NATIONAL INSURANCE CORPORATION, etc., Appellant, v. Sydelle RUDERMAN, etc., et al., Appellee. |
| Court | Florida Supreme Court |
OPINION TEXT STARTS HERE
Daniel J. Koleos of Koleos Rosenberg, P.A., Plantation, FL; Adam J. Kaiser and Jeffrey J. Amato of Dewey & LeBoeuf LLP, New York, NY, for Appellant.
Gary M. Farmer, Sr., Steven R. Jaffe, and Mark S. Fistos of Farmer Jaffe Weissing Edwards Fistos & Lehrman, P.L., Fort Lauderdale, FL; Neil Rose of Bernstein, Chackman, Liss & Rose, Hollywood, FL; and Steven M. Dunn of Dunn & Johnson, P.A., Bay Harbor Islands, FL, for Appellees.
Laura A. Foggan of Wiley Rein LLP, Washington, DC; William D. Horgan of
Banker Lopez Gassler, Tallahassee, FL, for Amicus Curiae Complex Insurance Claims Litigation Association.
Bard D. Rockenbach of Burlington & Rockenbach, P.A., West Palm, FL, Amicus Curiae, Florida Justice Association.
Jason S. Mazer and Benjamin C. Hassebrock of Ver Ploeg & Lumpkin, P.A., Miami, FL, for Amicus Curiae United Policyholders.
This case is before the Court for review of a question of Florida law certified by the United States Court of Appeals for the Eleventh Circuit that is determinative of a cause pending in that court and for which that court has indicated there appears to be no controlling precedent. We have jurisdiction. Seeart. V, § 3(b)(6), Fla. Const. In Ruderman ex rel. Schwartz v. Washington National Insurance Corp., 671 F.3d 1208 (11th Cir.2012), the Eleventh Circuit certified the following multi-part question:
I. IN THIS CASE, DOES THE POLICY'S “AUTOMATIC BENEFIT INCREASE PERCENTAGE” APPLY TO THE DOLLAR VALUES OF THE “LIFETIME MAXIMUM BENEFIT AMOUNT” AND THE “PER OCCURRENCE MAXIMUM BENEFIT”?
Id. at 1212. The Eleventh Circuit further explained that answering this question might include answering the three following sub-questions:
A. Does an ambiguity exist about whether the Policy's “Automatic Benefit Increase Percentage” applies only to the “Home Health Care Daily Benefit” or whether it also applies to the “Lifetime Maximum Benefit Amount” and the “Per Occurrence Maximum Benefit”?
B. If an ambiguity exists in this insurance policy—as we understand that it does—should courts first attempt to resolve the ambiguity by examining available extrinsic evidence?
C. Applying the Florida law principles of policy construction, does the Policy's “Automatic Benefit Increase Percentage” apply to the “Lifetime Maximum Benefit Amount” and to the “Per Occurrence Maximum Benefit” or does it apply only to the “Home Health Care Daily Benefit”?
Id. For the reasons set forth below we answer the main certified question in the affirmative, sub-question A in the affirmative, sub-question B in the negative, and sub-question C in the affirmative. We hold that under Florida law applicable to construction of insurance policies, because the policy is ambiguous it must be construed against the insurer and in favor of coverage without resort to consideration of extrinsic evidence. Thus, when so construed, the policy's automatic benefit increase applies to the daily benefit, the lifetime maximum benefit, and the per occurrence maximum benefit. 1
This case arose when Sydelle Ruderman, Sylvia Powers, and other Florida insureds filed a class action in the United States District Court for the Southern District of Florida against Pioneer Life Insurance Company, later succeeded by appellant Washington National Insurance Corporation (“Washington National”), concerning insurance policies that provide for reimbursement of certain home health care expenses.2 The controversy concerned whether the “Automatic Benefit Increase Percentage” (“automatic increase”) provision contained in the insureds' limited benefit home health care coverage insurance policies applies only to the daily benefit amount or also applies to the per occurrence maximum benefit amount and the lifetime maximum benefit amount. Each policy contains essentially identical language concerning the automatic increase and each policy includes a “Certificate Schedule” that sets forth the coverage amounts for each of the insureds. The policies provide coverage through a maximum daily benefit, called the “Home Health Care Daily Benefit.” The policy coverage is limited by a “Per Occurrence Maximum Benefit” for each illness and a “Lifetime Maximum Benefit” for all injuries and sicknesses during the life of the Policy. See Ruderman, 671 F.3d at 1210. The policies at issue, under the heading “Benefits,” provide as follows:
A. HOME HEALTH CARE: We will pay 100% of the usual and customary charges for Home Health Care expenses if the care was pre-authorized. If the care was not pre-authorized we will pay 75% of the usual and customary charges for Home Health Care expenses incurred, up to 75% of the Daily Benefit Amount shown in the schedule. These benefits will be paid up to the Home Health Care Daily Benefit shown in the schedule. All benefits will be limited to the Per Occurrence Maximum Benefit for each injury or sickness and the Lifetime Maximum Benefit Amount for ALL injuries and sicknesses which are shown in the certificate schedule.
The policies also provide:
B. AUTOMATIC DAILY BENEFIT INCREASE: On each policy anniversary, we will increase the Home Health Care Daily Benefit payable under this policy by the Automatic Benefit Increase Percentage shown on the schedule page.
....
The certificate schedule which is contained in each policy states the following:
See Ruderman, 671 F.3d at 1210.
The district court concluded that the various provisions in the policy, including the certificate schedule, demonstrated an ambiguity concerning whether the automatic increase applied only to the daily benefit or also applied to the lifetime maximum benefit amount and the per occurrence maximum benefit amount. The district court granted summary judgment for the insureds based on the court's understanding that Florida law requires that an ambiguous policy must be construed against the insurer and in favor of coverage. On appeal to the Eleventh Circuit, the appeals court stated:
We agree with the District Court's conclusion that the Policy is ambiguous about whether the Lifetime Cap and Per Occurrence Cap increase each year or whether only the Daily Benefit increases each year. The way the “Benefits” section of the Policy and the Certificate are drafted, it is reasonable to read the Certificate language “Benefits increase by 8% each year” as applying solely to the Daily Benefit; but it is also reasonable to read the Certificate language to mean that all the amounts listed within the Policy's “Benefits” section—including the “Per Occurrence Maximum Benefit” and the “Lifetime Maximum Benefit”—increase annually. Under Florida law, because “the relevant policy language is susceptible to more than one reasonable interpretation, one providing coverage and [ ] another limiting coverage, the insurance policy is considered ambiguous.”
Ruderman, 671 F.3d at 1211 (quoting Auto–Owners Ins. Co. v. Anderson, 756 So.2d 29, 34 (Fla.2000)). The Eleventh Circuit recognized that this Court held in Anderson that “[a]mbiguous policy provisions are interpreted liberally in favor of the insured and strictly against the drafter who prepared the policy.” Ruderman, 671 F.3d at 1211 (quoting Anderson, 756 So.2d at 34). However, the Eleventh Circuit concluded that “the correct approach under Florida law in resolving the ambiguity in the Policy is unclear.” Ruderman, 671 F.3d at 1211. The basis for this perceived lack of clarity was said to be the decision in Excelsior Ins. Co. v. Pomona Park Bar & Package Store, 369 So.2d 938 (Fla.1979), which predated Anderson.
Although the Eleventh Circuit recognized that Anderson held ambiguous insurance policy provisions are to be construed against the insurer, the court expressed concern that Excelsior “qualified the longstanding rule of construing an ambiguity against the drafter, [by] stating that ‘[o]nly when a genuine inconsistency, uncertainty, or ambiguity in meaning remains after resort to the ordinary rules of construction is the rule apposite.’ ” Ruderman, 671 F.3d at 1211 (quoting Excelsior, 369 So.2d at 942). The Eleventh Circuit was uncertain whether this language would require that the court consider extrinsic evidence concerning the terms of the policy before finally concluding...
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