Travelers Ins. Co. v. WarrenTravelers Ins. Co. v. Warren
James H. White, Jr. of Staats, White & Clarke, Panama City, for Respondent.
George A. Vaka of Fowler, White, Gillen, Boggs, Villareal & Banker, P.A., Tampa, for Nationwide Insurance Companies, Amicus Curiae.
Louis K. Rosenbloum of Levin, Middlebrooks, Mabie, Thomas, Mayеs & Mithell, P.A., Pensacola, for The Academy of Florida Trial Lawyers, Amicus Curiae.
GRIMES, Justice.
We review Warren v. Travelers Insurance Co., 650 So. 2d 1082, 1084 (Fla. 1st DCA 1995), wherein the district court of appeal certified the following question to be of great public importance:
MAY AN INJURED PERSON WHO IS ENTITLED TO RECOVER BODILY INJURY LIABILITY BENEFITS, BUT WHOSE DAMAGES EXCEED THE POLICY LIMIT FOR LIABILITY COVERAGE, ALSO RECOVER UNDER THE SAME POLICY FOR UNINSURED MOTORIST BENEFITS, WHERE THE POLICY EXCLUDES THE INSURED VEHICLE FROM ITS DEFINITION OF “UNINSURED VEHICLE?”
We have jurisdiction pursuant to
The pertinent facts are undisputed. In April of 1990, Dianna Lynn Warren was a
The car was owned by Bryant‘s father, Edward Chancey, and insured under a policy issued by The Travelers Insurance Company and The Phoenix Insurance Company (“insurers“). The policy provided for $50,000 of liability coverage per person and $50,000 of uninsured motorist (“UM“) coverage pеr person. Further, the policy provided that “[a]nyone else while occupying your car if the occupancy is (or is reasonably believed to be) with your permission ... is also an insured” for purposes of UM coverage. The policy defined an uninsured motor vehicle to include an insured vehicle “to which a bodily injury liability insurance policy or bond applies at the time of the accident, but the limits are less than the total damages for bodily injury or death resulting from the accident.” However, the policy also provided that ”your car“—the car insured under the policy—was not an uninsured motor vehicle within the meaning of the policy.
As personal representative of his wife‘s estate, Brett Allan Warren sought recovery, alleging that his wife‘s injuries and wrongful death were caused by the negligent operation and/оr the negligent maintenance of the car. The estate settled with the insurers for $50,000, the liability coverage limit under the policy. The estate, however, reserved all claims for benefits under the UM provisions of the policy and subsequently made a demand upon the insurers, claiming entitlement to UM benefits under the same policy. The insurers denied the claim, аnd the estate filed an action claiming entitlement to UM benefits.
The trial court granted summary judgment in favor of the insurers, concluding that the “your car” exception precluded the estate from recovering UM benefits. The district court of appeal reversed, concluding that
In the instant case, the “your car” exception would clearly prevent the estate from collecting under both the liability and the UM provisions of the policy. However, all automobile insurance policies must offer UM protection as broad as the UM statute requires. Valiant Ins. Co. v. Webster, 567 So. 2d 408, 410 (Fla. 1990). Therefore, the issue before us is whether
Prior to this Court‘s decision in Shelby, the legislature enacted chapter 88-370, Laws of Florida, which reinstated the Dewberry concept of setting off the liability coverage payments from UM coverage rather than from the damages. However, the next year, the legislature passed chapter 89-243 containing the amendment at issue in this case. From the House of Representatives’ final staff analysis and economiс impact statement, it is clear that the amendment was intended to return UM coverage to its pre-1988 status in which liability payments would be offset against damages rather than UM coverage. Fla. H.R. Comm. on Ins., CS for HB 331 (1989) Staff Analysis (June 30, 1989). Under the heading “EFFECT OF PROPOSED CHANGES,” the staff analysis states: “The bill reverses the amendments made by section 15 of chapter 88-370, thereby restoring excess uninsured mоtorist coverage. It also amends s. 627.727(3)(b), to clear up Legislative intent that UM coverage is excess.” Id. By referencing Shelby Mutual Insurance Co. v. Smith, 527 So. 2d 830 (Fla. 4th DCA 1988), the staff analysis makes plain that chapter 89-243 amended section (3)(b) of the UM statute to ensure that the UM coverage would be excess over liability coverage even in instances where the tortfeasor‘s liability coverage was grеater than the claimant‘s UM coverage. See id.
The staff analysis does not suggest that chapter 89-243 was intended to enable class II insureds who are injured in a single-car accident to recover both liability and UM benefits under the same policy. Thus, we hold that
The legislature‘s response to this Court‘s decision in Brixius v. Allstate Insurance Co., 589 So. 2d 236 (Fla. 1991), reinforces our interpretation of
Responding to our decision in Brixius, the legislature amended the UM statute in 1992 to add
There are other reasons why we do not believe that the legislature intended for class II insureds to recover both liability and UM benefits under the same policy. As noted in Bulone:
It is also important to consider that an insurance carrier has no right of subrogation against its own insured. Ray v. Earl, 277 So. 2d 73 (Fla. 2d DCA), cert. denied, 280 So. 2d 685 (Fla. 1973). When USAA pays an underinsured motorist claim involving a solvent tortfeasor, it typically receives subrogation rights from its insured against the tortfeasor. See
§ 627.727(6), Fla. Stat. (1993) . If the “underinsured” tortfeasor is construed to include the insured on the policy, then the subrogation right cаnnot exist. Without a subrogation right, there is nothing to distinguish this theory of underinsured motorist coverage from liability coverage. Thus, the result is a policy that provides twice the disclosed limit of liability coverage for the claims of passengers. See Millers Casualty Ins. Co. v. Briggs, 100 Wash. 2d 1, 665 P. 2d 891 (1983).....
The interpretation of
section 627.727 in Warren creates statutory requirements never disclosed to the insurance carriers or to the families who have purсhased the coverage. If such class II coverage is a desired public policy, the legislature should give the insurance companies notice of the change so that they can increase their premiums to cover the risk. Likewise, before the legislature requires Florida‘s families to pay the premiums necessary to double protection for class II insureds, this issue should be debated by the legislature.
Furthermore, under the Warren court‘s interpretation of
Our position is further buttressed by the decisions of a number of our sister states. In his treatise on uninsured and underinsured motorist insurance, Professor Widiss aptly summarizes the position оf our sister states on the question of whether a claimant
Judicial decisions in several states have affirmed the enforceability of provisions excluding coverage for persons who are injured as a consequence of the negligent operation of a vehicle that is insured by the insurance policy which includes the underinsured motorist coverage providing the benefits which are sought by a claimant. One persuasive reason for sustaining this limitation on the coverage is to preclude transforming underinsured motorist insurance into liability insurance for the operators of a vehicle covered by the applicable motor vehicle policy which includes both coverages.... A transformation of underinsured motorist insurance into liability insurance is neither intended by insurers nor contemplated in setting the premiums for the coverage.
....
When there is a single vehicle accident involving an insured vehicle, sometimes a claimant—usually a passenger in the vehiclе-attempts to recover under both the vehicle‘s liability insurance providing coverage for the driver and the underinsured motorist insurance in the same insurance policy. In these cases, courts have almost uniformly rejected such claims. The result in these cases has sometimes been predicated on the provision in the coverage terms which explicitly precludes treating the “insured vehicle” as an “underinsured vehicle.” As the Louisiana Court of Appeal succinctly put it: “One cannot be insured with respect to liability coverage and underinsured with respect to UM coverage under the same insurance policy ... and policy provisions which effectuate this result do not violate the terms of Louisiana‘s uninsured motorist statute.”
3 Alan I. Widiss, Uninsured and Underinsured Motorist Insurance, § 35.7, at 178-82 (2d ed. 1995) (footnotes omitted).
Acсordingly, we quash the decision below and direct that summary judgment be reinstated in favor of the insurers. Additionally, we approve the decision in Bulone. We also disapprove of Travelers Insurance Cos. v. Chandler, 569 So. 2d 1337 (Fla. 1st DCA 1990), to the extent it is inconsistent with our decision herein.5
It is so ordered.
OVERTON and HARDING, JJ., concur.
WELLS, J., concurs with an opinion, in which SHAW, J., concurs.
ANSTEAD, J., dissents with an opinion, in which KOGAN, C.J., concurs.
WELLS, Justice, concurring.
I concur in the result reached by the majority that under
(3) For the purpose of this coverage, the term “uninsured motor vehicle” shall, subject to the terms and conditions of such coverage, 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.
Under the plain language of this section alone, the plaintiff here is entitled to UM coverage. The liability insurer for the tortfeasor‘s motor vehicle had provided limits of bodily injury coverage which were less than the total damages suffered by the plaintiff, who was an insured for purposes of the UM сoverage as a person occupying the covered vehicle. When construing an unambiguous statute, this Court should not depart from the plain meaning of the statute, even if the Court believes that the construction would effect bad policy. See Van Pelt v. Hilliard, 75 Fla. 792, 798, 78 So. 693, 694 (Fla. 1918). Moreover, I cannot agree with the majority‘s reading of the statute‘s legislative history or its finding of legislative intent.
However, I am compelled to my decision because of the recognition that the right to subrogation is integral to UM coverage under
SHAW, J., concurs.
ANSTEAD, Justice, dissenting.
I would approve the decision of the district court. Under Florida‘s uninsured motorist statute, a vehicle is considered to be “uninsured” even when there is liability coverage if that liability coverage is less than the damages sustained by an injured party. Hence, an injured party may recover because thе tortfeasor was “underinsured” and had inadequate liability coverage to pay the injured party‘s damages.
As noted in the concurring opinion of Justice Wells, the uninsured motorist statute is clear and unambiguous in requiring coverage for the pending claim. There is nothing patently unreasonable about such a statute and, given its clarity, we are obligated tо follow its mandate without invoking our own view as to the policy it reflects.
KOGAN, C.J., concurs.
Notes
(3) For the purpose of this coverage, the term “uninsured motor vehicle” shall, subject to the terms and conditions of such coverage, 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 totаl damages sustained by the person legally entitled to recover damages.