Washington National Insurance v. Ruderman
117 So. 3d 943
| Fla. | 2013Background
- Florida insureds challenge whether the Automatic Benefit Increase Percentage applies to the Home Health Care Daily Benefit as well as the Lifetime Maximum and Per Occurrence Maximum amounts.
- Policies provide daily benefit, per-occurrence cap, and lifetime cap, with an 8% annual increase shown on the certificate schedule.
- Certificate Schedule lists daily benefit, lifetime cap, per-occurrence cap, and the 8% increase; the policy language ties the increase to benefits and references the schedule.
- District court found ambiguity; Eleventh Circuit certified questions to the Florida Supreme Court due to lack of controlling precedent on extrinsic evidence and Florida law on ambiguity.
- Florida Supreme Court held the policy is ambiguous and must be construed against the insurer, applying the increase to all listed benefits without extrinsic evidence, and affirmed in part while conditioning fees.
- Dissent argued the increase applies only to the daily benefit and endorsed extrinsic-evidence analysis; majority rejected extrinsic-evidence-first approach.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the Automatic Benefit Increase apply to all benefits? | Ruderman argues ambiguity allows applying increase to all benefits. | Washington National argues increase applies only to daily benefit; caps are separate. | Yes; increase applies to daily, caps, and lifetime. |
| Should extrinsic evidence be used to resolve ambiguity? | Extrinsic evidence could clarify intended scope of increase. | Extrinsic evidence not required; policy language resolved ambiguity against insurer. | No; extrinsic evidence not required; ambiguity resolved against insurer. |
| Is the policy ambiguity resolved by reading the policy as a whole? | Whole-policy reading supports broader application of increase. | Whole-policy reading supports limiting increase to daily benefit. | Ambiguity remains after whole-policy reading; benefits encompass all listed items per schedule. |
Key Cases Cited
- State Farm Mut. Auto. Ins. Co. v. Menendez, 70 So.3d 566 (Fla.2011) (ambig. resolved against insurer; plain language governs)
- Anderson, 756 So.2d 34 (Fla.2000) (ambiguous policy provisions construed against drafter)
- Taurus Holdings, Inc. v. U.S. Fid. & Guar. Co., 913 So.2d 528 (Fla.2005) (ambiguities construed in favor of insured; plain meaning controls)
- Swire Pac. Holdings v. Zurich Ins. Co., 845 So.2d 161 (Fla.2003) (read policy as a whole; avoid narrowing interpretation)
- Excelsior Ins. Co. v. Pomona Park Bar & Package Store, 369 So.2d 938 (Fla.1979) (ambiguity resolved by ordinary rules of construction; extrinsic evidence as last resort)
- Anderson (repeat for emphasis), 756 So.2d 34 (Fla.2000) (insurer bound by policy language; liberally construed in favor of insured)
- J.S.U.B., Inc. v. U.S. Fid. & Guar. Co., 979 So.2d 871 (Fla.2007) (read policies with full context; ambiguity standard)
- Hartnett v. Southern Ins. Co., 181 So.2d 524 (Fla.1965) (liberal construction in favor of insured when policy drafted poorly)
- State Farm Fire & Cas. Co. v. CTC Dev. Corp., 720 So.2d 1072 (Fla.1998) (ambiguities construed against insurer)
- Penzer v. Transportation Ins. Co., 545 F.3d 1303 (11th Cir.2008) (Ambiguities are construed against insurer under Florida law)