Karma Thornton and Connie Thornton v. American Family Life Assurance Company etc.
225 So. 3d 1012
| Fla. Dist. Ct. App. | 2017Background
- Connie Thornton purchased an AFLAC Specified Health Event policy effective Jan. 1, 2008, for “Two-parent Family” coverage covering insured, spouse, and “dependent children.”
- Policy defined “dependent children” as natural children who are unmarried, under age 25, and who qualify as legal dependents for tax exemption purposes under the U.S. Internal Revenue Code.
- Karma Thornton was 23, unmarried, living with and financially dependent on her parents when Connie bought the policy; she was 23 and not a student or disabled at the time of her injury in Sept. 2008.
- Karma suffered severe injuries (including major third-degree burns) in a motorcycle accident; the trial court found her injuries met the policy’s covered specified health events.
- The trial court ruled Karma was not a covered dependent because, under AFLAC’s reading of the Tax Code reference, dependents are limited to under 19 (unless student or disabled), and entered judgment for AFLAC.
- The First DCA reversed, holding the policy’s specific age phrase “under age 25” controls and, alternatively, any ambiguity must be construed for coverage.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Karma is a “dependent child” under the policy | Karma meets the policy: unmarried, financially dependent, under age 25 | AFLAC: the Tax Code reference incorporated I.R.C. §152 age limits (under 19 unless student or disabled), so Karma (23, not a student) is not covered | Court held Karma is a covered dependent because the policy’s specific “under age 25” controls over the general Tax Code reference |
| Whether the general Tax Code reference overrides the policy age term | Policy’s plain language establishes age limit under 25; Tax Code reference applies only to relationship/residency/support criteria | Tax Code reference should limit all eligibility criteria, including age, to I.R.C. definitions | Court held specific policy provision controls; the general Tax Code reference cannot curtail the explicit age limit |
| Whether any ambiguity exists in the policy definition | Any ambiguity should be resolved in favor of coverage | AFLAC argued the policy reasonably incorporates the I.R.C. age rules | Court held that if ambiguity exists, it must be construed against the insurer and for coverage, favoring the Thorntons |
| Appropriate remedy / disposition | Judgment for insureds for policy benefits | Affirm trial court judgment for AFLAC | Court reversed trial court’s determination of noncoverage and remanded for entry of judgment for appellants |
Key Cases Cited
- Fayad v. Clarendon Nat. Ins. Co., 899 So. 2d 1082 (Fla. 2005) (insurer must be bound by plain policy language; interpret insurance contracts by their plain terms)
- State Farm Fla. Ins. Co. v. Phillips, 134 So. 3d 505 (Fla. 5th DCA 2014) (specific contract provisions control over general conditions)
- Mathews v. Ranger Ins. Co., 281 So. 2d 345 (Fla. 1973) (insurer cannot withdraw coverage by applying a conflicting general reference)
- Washington Nat’l Ins. Corp. v. Ruderman, 117 So. 3d 943 (Fla. 2013) (ambiguities in insurance policies construed against insurer)
- State Farm Mut. Auto. Ins. Co. v. Mallard, 548 So. 2d 733 (Fla. 3d DCA 1989) (courts should guard against policies implying coverage while avoiding liability)
- Harnett v. So. Ins. Co., 181 So. 2d 524 (Fla. 1965) (ambiguities resolved in favor of the insured when policy language is obscure)