Young v. Progressive Southeastern Ins. Co.

• Decision Date: 10 February 2000
• Docket Number: No. SC93544.,SC93544.
• Citation: 753 So.2d 80
• Parties: Juan YOUNG, et al., Petitioners, v. PROGRESSIVE SOUTHEASTERN INSURANCE COMPANY, Respondent.
• Court: Florida Supreme Court

753 So.2d 80

Juan YOUNG, et al., Petitioners, v. PROGRESSIVE SOUTHEASTERN INSURANCE COMPANY, Respondent.

No. SC93544.

Supreme Court of Florida.

February 10, 2000.

Rehearing Denied April 20, 2000.

Anthony T. Martino of Clark, Charlton, Martino & Borders, P.A., Tampa, Florida; and Charles P. Schropp of Schropp, Buell & Elligett, P.A., Tampa, Florida, for Petitioners.

Tracy Raffles Gunn of Fowler, White, Gillen, Boggs, Villareal and Banker, P.A., Tampa, Florida, for Respondent.

Louis K. Rosenbloum, Pensacola, Florida, for the Academy of Florida Trial Lawyers, Amicus Curiae.

PARIENTE, J.

We have for review a decision passing upon the following question certified to be of great public importance:

IS A POLICY PROVISION WHICH EXCLUDES A VEHICLE OWNED OR OPERATED BY A SELF-INSURER FROM THE DEFINITION OF "UNINSURED MOTOR VEHICLE" FOR PURPOSES OF UNINSURED/UNDERINSURED MOTORIST COVERAGE PERMISSIBLE UNDER FLORIDA LAW AND PUBLIC POLICY?

Young v. Progressive Southeastern Ins. Co., 712 So.2d 460, 461 (Fla. 2d DCA 1998). We have jurisdiction. See art. V, § 3(b)(4), Fla. Const. We answer the certified question in the negative because the exclusion, which operates to prevent an insured from seeking either uninsured or underinsured motorist coverage under his or her insurance policy when the tortfeasor elects to be self-insured, is impermissible under Florida's uninsured motorist statutory scheme and the policy underlying that statute.

BACKGROUND

The petitioner, Juan Young, was stopped at a red light when he was struck from behind by a sheriff's vehicle owned by the Hillsborough County Sheriff's Office. Subsequently, Young and his wife sued the Sheriffs Office for damages. The Sheriffs Office was self-insured up to $100,000 per person and $200,000 per occurrence.

The Youngs alleged that their damages exceeded the limits of self-insurance established by the Sheriff's Office. Accordingly, the Youngs also filed suit against the respondent, Progressive Southeastern Insurance Company (Progressive), who had issued them an insurance policy providing uninsured/underinsured motorist coverage in the amount of $25,000.

In its answer, Progressive raised as an affirmative defense that a tortfeasor such as the Sheriff's Office who is self-insured does not qualify as either an uninsured or underinsured motorist. Progressive further asserted that the language of its uninsured motorist policy specifically excluded uninsured or underinsured motorist coverage when the tortfeasor's vehicle was self-insured:

[A]n uninsured motor vehicle does not include any vehicle:

... d. Owned by or operated by a self-insurer as contemplated by any financial responsibility law, motor carrier law, or similar law.

(Emphasis supplied.) On this basis, Progressive moved for summary judgment, which the trial court granted.

On appeal, the Second District affirmed the order granting summary judgment on the authority of Amica Mutual Insurance Co. v. Amato, 667 So.2d 802 (Fla. 4th DCA 1995), and its recent decision in Comesanas v. Auto-Owners Ins. Co., 700 So.2d 118, 119 (Fla. 2d DCA 1997). See Young, 712 So.2d at 461. The Second District then certified to this Court the question of the validity of the policy provision excluding self-insurers from the definition of "uninsured motorist" as one of great public importance. See id.

ANALYSIS

At this time, Progressive does not contest the Youngs' allegations that their damages exceed the limit of liability established in the certificate of self-insurance provided by the Sheriff's Office. However, because the tortfeasor chose to self-insure its vehicle rather than purchase a commercial liability policy to cover its tort liabilities, Progressive asserts that the Youngs are not entitled to either uninsured motorist coverage or underinsured motorist coverage under their insurance policy.

The core issue in this case is whether the uninsured motorist statute permits an uninsured motorist carrier to exclude coverage when its insured is injured through the negligence of a self-insured motorist and the damages exceed the limits established in the tortfeasor's certificate of self-insurance. The uninsured motorist statute provides that:

No motor vehicle liability insurance policy which provides bodily injury liability coverage shall be delivered or issued for delivery in this state ... unless uninsured motor vehicle 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....

§ 627.727(1), Fla. Stat. (1995).¹ As we explained in Allstate Insurance Co. v. Boynton, 486 So.2d 552, 557 (Fla.1986):

The legislature wisely enacted a scheme whereby a motorist may obtain a limited form of insurance coverage for the uninsured motorist, by requiring that every insurer doing business in this state offer and make available to its automobile liability policyholders UM coverage in an amount equal to the policyholder's automobile liability insurance. The policyholder pays an additional premium for such coverage.

The reason insurers are statutorily required to offer uninsured motorist coverage to the insured is

to protect persons who are injured or damaged by other motorists who in turn are not insured and cannot make whole the injured party. The statute is designed for the protection of injured persons, not for the benefit of insurance companies or motorists who cause damage to others.

Brown v. Progressive Mut. Ins. Co., 249 So.2d 429, 430 (Fla.1971) (emphasis supplied).

Because the uninsured motorist statute "was enacted to provide relief to innocent persons who are injured through the negligence of an uninsured motorist; it is not to be `whittled away' by exclusions and exceptions." Mullis v. State Farm Mut. Auto. Ins. Co., 252 So.2d 229, 238 (Fla.1971). For these reasons, provisions in uninsured motorist policies that provide less coverage than required by the statute are void as contrary to public policy. See, e.g., Salas v. Liberty Mut. Fire Ins. Co., 272 So.2d 1, 5 (Fla.1972); Mullis, 252 So.2d at 233-34. Thus, we must determine whether a policy provision that excludes coverage when an insured is injured by a self-insured motorist is contrary to the uninsured motorist statute and void as against the public policy of the statute.

The uninsured motorist statute never specifically provides a definition of an "uninsured" motor vehicle. However, the uninsured motorist statute sets forth in section 627.727(3) the circumstances under which a vehicle will be considered "uninsured" even when the vehicle is actually insured. For example, an "uninsured motor vehicle" shall

be deemed to include an insured motor vehicle when the liability insurer thereof:

. . . .

(b) Has provided limits of bodily injury liability for its insured which are less than the total damages sustained by the person legally entitled to recover damages....

§ 627.727(3) (emphasis supplied). This is commonly referred to as an "underinsured" motor vehicle. See also § 627.727(6)(a)-(c) (specifically referring to an "underinsured motorist insurer").

We first address whether a self-insured motorist with a certificate of self-insurance with limits of liability lower than the damages sustained by the injured person should be considered an underinsured motorist as defined in the uninsured motorist statute. Pursuant to the statutory provisions, a motorist is underinsured when the "liability insurer" provides limits of bodily injury liability less than the total damages sustained. § 627.727(3)(b). In addition, sections 627.727(6)(a) and (b) also refer only to motorists with liability insurers as "underinsured" motorists.² Thus, under sections 627.727(3) and (6), in order to be considered underinsured, the tortfeasor must have a liability insurer. The term "liability insurer" is undefined in the part of the Insurance Code related to uninsured motorists coverage. See generally § 627.727. However, an "insurer" is broadly defined in section 624.03, Florida Statutes (1995), as "every person engaged as indemnitor, surety, or contractor in the business of entering into contracts of insurance or of annuity."

In Diversified Services, Inc. v. Avila, 606 So.2d 364 (Fla.1992), a company that leased automobiles provided its lessees compliance with the Financial Responsibility Law through a program of self-insurance.³ This Court was asked to consider whether the self-insured company was an "insurer" that was required by section 627.727 to offer uninsured motorist coverage to its lessees. We determined in Avila that because the self-insurer was not an authorized insurance company, it had no obligation to provide uninsured motorist coverage. 606 So.2d at 366. We concluded in Avila that

providing compliance [with financial responsibility laws] through self-insurance is not the same as issuing a "motor vehicle liability policy"; therefore, section 627.727 is not applicable. Nor does Budget's status as a self-insurer make it an "insurer" under the Florida Insurance Code.

Id. (emphasis supplied); see also Lipof v. Florida Power & Light Co., 596 So.2d 1005, 1007-08 (Fla.1992) (determining that an entity complying with the financial responsibility law by posting a surety bond rather than buying commercial insurance should not be considered an "insurer" required to offer uninsured motorist coverage). Accordingly, we agree with Progressive that because a self-insurer is not a liability insurer under the Florida Insurance Code, a self-insured motorist cannot be considered an underinsured motorist based on the statutory language of section 627.727(3) that limits the definition of underinsured motorists to those having liability insurers.

Having determined that a motorist possessing a certificate of self-insurance with limits of liability lower than the damages sustained is not "underinsured" because a person or entity who is a "self-insurer" is not a ...