Whitten v. Progressive Cas. Ins. Co.

Decision Date18 February 1982
Docket NumberNos. 57709,59022,s. 57709
PartiesSteven WHITTEN, a minor, and Leland Whitten, Appellants, v. PROGRESSIVE CASUALTY INSURANCE CO., a foreign corporation, Appellees.
CourtFlorida Supreme Court

Nolan Carter, Orlando, for appellants.

John L. Sewell, Francis E. Pierce, III and Ronald L. Harrop of Gurney, Gurney & Handley, Orlando, for appellees.

ADKINS, Justice.

This appeal presents two causes consolidated for review on the Court's own motion. Fla.R.App.P. 9.040(a). The Circuit Court of the Ninth Judicial Circuit, Orange County, upheld the constitutionality of section 57.105, Florida Statutes (1979), thereby giving this Court jurisdiction under article V, section 3(b)(1), Florida Constitution (1972). The rest of the case was transferred from the Fifth District Court of Appeal pursuant to Florida Rule of Appellate Procedure 9.040(b).

On July 15, 1977, appellant Steven Whitten, a minor, received serious injuries in a traffic accident caused by the negligence of another driver. Whitten was operating a motorcycle borrowed from Roy V. Eloranta, a minor, and insured by appellee Progressive Casualty Insurance Company. Appellant settled his claim against the tortfeasor's insurer for $15,000, the entire amount of the liability insurance policy. Steven and his father, Leland Whitten, then sought additional compensation from uninsured vehicle coverage by suing Progressive together with their own insurer, Nationwide Mutual Insurance Company.

The Progressive Casualty Motorcycle Insurance application form listed Jack R. Eloranta as the applicant and Roy V. Eloranta as the principal operator. The form also contained a "Notice of Rejection of Uninsured Motorists Coverage" signed by Jack Eloranta. The motorcycle insurance policy, which was issued to Jack R. Eloranta as the named insured, included the word "Rejected" next to the uninsured motorist coverage.

The Circuit Court for Orange County granted Progressive's motion for summary judgment and motion to tax costs including statutory attorney's fees. Appellants bring this appeal from the final order of the trial court ruling section 57.105, Florida Statutes (1979), constitutional.

The first issue concerns the effectiveness of Jack Eloranta's rejection of uninsured motorist coverage under section 627.727, Florida Statutes (1977).

Appellants claim that the rejection by Jack Eloranta was invalid as a matter of law. They argue that Roy Eloranta, as principal operator of the motorcycle, should have been listed as a named insured and given the right to reject uninsured motorist coverage. In the alternative, they seek jury resolution of the question whether Roy should have been a named insured on his father's policy.

Appellee Progressive contends that Jack Eloranta was the proper person to reject the uninsured motorist coverage. Progressive argues that his rejection was binding on any additional insureds under the policy.

Section 627.727(1), Florida Statutes (1977), reads in part:

No automobile liability insurance covering liability arising out of the ownership, maintenance, or use of any motor vehicle shall be delivered or issued for delivery in this state with respect to any motor vehicle registered or principally garaged in this state unless coverage is provided therein or supplemental thereto for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles because of bodily injury, sickness, or disease, including death, resulting therefrom. However, the coverage required under this section shall not be applicable when, or to the extent that, any insured named in the policy shall reject the coverage.

(Emphasis added).

This statute provides that the appropriate party to reject uninsured motorist coverage is the named insured, not the principal or other operator of the motor vehicle. The policy issued by Progressive included a signed rejection of uninsured motorist coverage by Jack Eloranta, the insured named in the policy. His valid rejection was binding on Roy and any additional insureds named in the policy.

Other courts have reached similar conclusions in resolving this issue. In United States Fidelity and Guaranty Co. v. Williams, 375 So.2d 328 (Fla. 1st DCA 1979), cert. denied, 386 So.2d 642 (Fla.1980), uninsured motorist coverage was rejected by the named insured, the mother of the decedent. According to the district court, "(a)lthough appellee's decedent was rated on the policy as the sole operator of the insured vehicle, this did not make her a 'named insured' for purposes of uninsured motorist coverage under the terms of the policy or under section 627.727, Florida Statutes (1977)." Id. at 329. Applied to the present case, Roy Eloranta's status as the principal operator would not make him a named insured for the purpose of rejecting uninsured motorist coverage.

Continental Insurance Co. v. Roth, 388 So.2d 617 (Fla.3d DCA 1980), found the father's rejection of uninsured motorist coverage binding on his son, even though the son was included as a named insured on the policy. The court held "that any named insured, as the statute says, may reject uninsured motorist coverage for all insureds-named or additional." Id. at 618 (emphasis in original). Therefore, it would make no difference whether Roy Eloranta should have been a named insured on the Progressive policy. His failure to reject the uninsured motorist coverage would not affect the valid rejection signed by Jack Eloranta, the named insured.

The decision of the named insured accepting or rejecting uninsured motorist coverage is binding on any additional insureds under the policy. Lancaster Oil Co., Inc. v. Hartford Accident & Indemnity Co., 486 F.Supp. 399 (N.D.Fla.1980) (selection of lesser coverage by president of insured corporation applies to employees driving company cars); Travelers Insurance Co. v. Bartoszewica, 404 So.2d 1053 (Fla.1981) (declaration of corporation as named insured of personal injury protection insurance policy does not include employees as named insureds); Del Prado v. Liberty Mutual Insurance Co., 400 So.2d 115 (Fla. 4th DCA 1981) (employee as permissive user of insured vehicle cannot complain of deficiencies regarding rejection of uninsured motorist coverage by employer corporation as named insured); Maxwell v. United States Fidelity and Guaranty Co., 399 So.2d 1051 (Fla. 1st DCA June 16, 1981) (Ervin, J., specially concurring) (employee as additional insured permissive operator of fleet vehicle must be considered bound by rejection of uninsured motorist coverage by insured employer); Mattingly v. Liberty Mutual Insurance Co., 363 So.2d 147 (Fla. 4th DCA 1978), cert. denied, 370 So.2d 460 (Fla.1979) (selection of lower amounts by automobile manufacturer as named insured covers lessees of motor vehicles); Glover v. Aetna Insurance Co., 363 So.2d 12 (Fla. 1st DCA 1978) (rejection of uninsured motorist insurance by president of insured employer extends to employees operating company's commercial vehicles); Kohly v. Royal Indemnity Co., 190 So.2d 819 (Fla.3d DCA 1966), cert. denied, 200 So.2d 813 (Fla.1967) (rejection of uninsured motorist coverage by automobile rental agency as named insured binds renters of cars). As the named insured in the Progressive policy, Jack Eloranta alone had the authority to reject or accept uninsured motorist coverage in amounts less than liability limits.

The circuit court correctly granted a summary judgment in favor of Progressive by determining as a matter of law that the policy did not include uninsured motorist coverage.

Appellants next challenge the assessment of attorney's fees against them pursuant to section 57.105, Florida Statutes (1979), which provides:

Attorney's fee.-The court shall award a reasonable attorney's fee to the prevailing party in any civil action in which the court finds that there was a complete absence of a justiciable issue of either law or fact raised by the losing party.

Appellants maintain that the above statute impinges upon this Court's procedural rulemaking authority under article V, section 2, Florida Constitution (1972). To the contrary, an award of attorney's fees is a matter of substantive law properly under the aegis of the legislature. See Estate of Hampton v. Fairchild-Florida Construction Co., 341 So.2d 759 (Fla.1976); Campbell v. Maze, 339 So.2d 202 (Fla.1976); Rivera v. Deauville Hotel, Employers Service Corp., 277 So.2d 265 (Fla.1973); Codomo v. Emanuel, 91 So.2d 653 (Fla.1956); State ex rel. Royal Ins. Co. v. Barrs, 87 Fla. 168, 99 So. 668 (1924).

This Court accordingly affirms the decision of the trial court declaring section 57.105, Florida Statutes (1979), constitutional.

Appellants' final contention pertains to the propriety of the award of attorney's fees under this statute based on the facts below.

This case affords the first opportunity for the Court to review the assessment of attorney's fees pursuant to section 57.105, Florida Statutes (1979). Several recent district court decisions interpreting the statute have provided useful standards and guidelines to assist trial courts in awarding legal fees.

Statutes authorizing an award of attorney's fees are in derogation of the common law. Therefore, such statutes must be strictly construed. Kittel v. Kittel, 210 So.2d 1 (Fla.1968).

As a prerequisite to an award of attorney's fees under section 57.105, the court must find "a complete absence of a justiciable issue of either law or fact raised by the losing party." Allen v. Estate of Dutton, 384 So.2d 171 (Fla. 5th DCA 1980), interpreted this phrase to mean a total or absolute lack of a justiciable issue, which is tantamount to a finding that the action is frivolous. The district court held that "a trial court must find that the action is so clearly devoid of merit both on the facts and the law as to be completely untenable." Id. at 175 (emphasis in original). See Trexler v. Fiat Motor Co.,...

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