198 So. 3d 852
Fla. Dist. Ct. App.2016Background
- On July 30, 2006 Adam Smith was driving a Nissan owned by Elizabeth Motzenbecker (given to her daughter Chelsea Ackermecht) with Chelsea’s permission; Chelsea was a passenger. A collision occurred and both parties sued each other on different theories (negligent operation v. negligent maintenance).
- The Motzenbeckers and Ackermecht had a State Farm policy (Motzenbecker policy); Smith was insured under a separate State Farm policy issued to his mother (Smith policy). Both policies included liability and uninsured motorist (UM) coverage.
- State Farm paid the liability limits under the Smith policy to defend/settle Ackermecht’s claim against Smith. Smith sued for UM benefits under his own policy after that tender of limits.
- The Smith policy defined “uninsured motor vehicle” to exclude any land motor vehicle “insured under the liability coverage of this policy,” with a limited exception not applicable here. State Farm argued that under the policy language the Motzenbecker vehicle was insured under Smith’s liability coverage (as a non-owned car used by an insured), so it was excluded from UM coverage.
- The trial court denied State Farm’s summary judgment and entered judgment for Smith for UM limits ($150,000). The appellate majority reversed, holding the exclusion unambiguous and consistent with section 627.727, while the dissent would have affirmed as inequitable under the UM statute’s purpose.
Issues
| Issue | Plaintiff's Argument (Smith) | Defendant's Argument (State Farm) | Held |
|---|---|---|---|
| Whether the Smith policy’s definition excluding vehicles “insured under the liability coverage of this policy” bars UM recovery here | The exclusion is ambiguous or should not apply because it was intended to refer only to the specifically listed car (mother’s Saturn) and/or because denying UM benefits defeats the statute’s purpose — Smith paid for UM coverage | The policy unambiguously covers non-owned cars under its liability section; thus the Motzenbecker car was insured under the Smith policy’s liability coverage and is excluded from UM coverage | Held for State Farm: exclusion unambiguous; Motzenbecker car was insured under the liability provisions and excluded from UM coverage |
| Whether applying that exclusion violates section 627.727 (UM statute) by providing less coverage than required | Even if exclusion applies textually, enforcing it would undermine UM’s remedial purpose and leave a paid-for class I insured without recovery; subsection (3)(c) or the statute’s purpose should supply coverage | Precedent and statutory text permit treating a vehicle as insured under the liability provisions of the same policy; section 627.727(3)(c) does not apply to these facts | Held for State Farm: exclusion does not conflict with §627.727 because the vehicle was insured under the Smith policy; (3)(c) inapplicable) |
| Whether subsection 627.727(3)(c) (treating some insured vehicles as uninsured) applies | Smith contends (alternatively) that (3)(c) makes the vehicle uninsured because liability coverage was excluded to a class I insured | State Farm argues (and majority agrees) (3)(c) is tailored to Brixius-type facts (nonfamily permissive user injuring named insured/relative) and does not reach these facts | Held: (3)(c) does not apply; statute’s text controls and does not mandate UM coverage here |
| Whether summary judgment ruling interpreting policy is reviewed de novo | Smith urges ambiguities and public-policy analysis; State Farm urges plain meaning controls | Court notes contract/statutory construction on summary judgment is de novo review | Held: review de novo; on that review exclusion is unambiguous and governs |
Key Cases Cited
- Reid v. State Farm Fire & Cas. Co., 352 So.2d 1172 (Fla. 1977) (policy vehicle insured under liability portion does not become uninsured for UM claims even if liability benefits unavailable to a particular insured)
- Brixius v. Allstate Ins. Co., 589 So.2d 236 (Fla. 1991) (same principle; UM benefits not required where vehicle is insured under the same policy even if liability benefits are excluded to claimant)
- Nationwide Mut. Fire Ins. Co. v. Olah, 662 So.2d 980 (Fla. 2d DCA 1995) (policy language materially identical to the one here is clear and precluded UM recovery where vehicle was insured under liability portion of the same policy)
- Travelers Commercial Ins. Co. v. Harrington, 154 So.3d 1106 (Fla. 2014) (section 627.727 interpreted consistent with line of precedent limiting when a vehicle insured under the same policy may be treated as uninsured)
- Travelers Ins. Co. v. Warren, 678 So.2d 324 (Fla. 1996) (statutory subsection (3)(c) does not permit stacking UM onto liability under the same policy; the provision addresses specific Brixius-type facts)