Client Coverage Update
November 11, 2019 – Coverage Update
This month we would like to share with you some recent opinions of the Florida District Courts of Appeal which may be of interest to you.
In Owners Insurance Company v. Allstate Fire and Casualty Insurance Company and James M. Horne, Jr., 44 Fla. L. Weekly D2618a (Fla. 2d DCA October 25, 2019), the trial court erred in granting summary judgement when they determined that an automobile insurer was required to provide uninsured-motorist (“UIM”) coverage to insured’s resident relative, where the insured’s policy only covered resident relatives who did not own an automobile, and the relative at issue owned an automobile during the time of the accident in question. The Second District Court of Appeals held that if a policy does not provide liability coverage to certain resident relatives, then there is no mandate requiring UIM coverage for those resident relatives.
In Natalie S. Deutsch v. GEICO General Insurance Company, 44 Fla. L. Weekly D2639a (Fla. 4th DCA October 30, 2019), the Fourth District Court of Appeals held that there was no error in the trial court’s granting of summary judgment in favor of the insurer in a case where the plaintiff was seeking coverage from her insurer for injuries suffered while training in the back of a truck that operated as a mobile gym. The 4th DCA opined that the insurance policy clearly and unequivocally provides that a vehicle located for use as a premises is not an uninsured auto, where the truck was being used as a premises when the negligence occurred, and the clients worked out in the mobile gym only when it was stationary, parked, and connected to a power source, and never worked out when the gym was being driven as a vehicle.
Margaret Hurchalla, James Hurchalla, Lake Point Phase I, LLC, and Lake Point Phase II, LLC v. Homeowners Choice Property & Casualty Insurance Company, Inc., 44 Fla. L. Weekly D2527a (Fla. 4th DCA October 16, 2019), involved a complaint for declaratory judgment filed by the insurer more than one year after it began providing the insureds with a defense in a civil action. The insurer sought determination that they had no duty to defend and indemnify the insureds in the intentional tort litigation because the policy only covered bodily injury and property damage. The Fourth District Court of Appeals held that the trial court erred in granting summary judgement in favor of the insurer where the insurer’s motion failed to address any of the insureds’ affirmative defenses.
Owners Insurance Company v. Allstate Fire and Casualty Insurance Company and James M. Horne, Jr., 44 Fla. L. Weekly D2618a (Fla. 2d DCA October 25, 2019)
Facts and Procedural History
In Owners Insurance Company v. Allstate Fire and Casualty Insurance Company and James M. Horne, Jr., 44 Fla. L. Weekly D2618a (Fla. 2d DCA October 25, 2019), during the time of James Horne’s (“Mr. Horne”) automobile accident, Mr. Horne resided with his mother and stepfather, who had an automobile policy with Owners Insurance Company (“Owners”). All State sought a declaration that Horne was covered under the Owner’s policy for injuries he suffered as a result of the subject automobile accident. The Owners policy covered resident relatives, but only those “relatives who do not own an automobile.” During the time of the accident, Mr. Horne in fact did own an automobile. However, the trial court concluded that the Owner’s policy provided uninsured motorist coverage (UIM) coverage to Horne.
Appellate Court Decision
The issue presented to the Second District Court of Appeals was whether an insurer can exclude a resident relative who owns an automobile from UIM coverage without complying with the informed-acceptance and reduced-premiums requirements pursuant to Fla. Stat. § 627.727(9), if the policy does not provide liability coverage to that residence relative.
Under Florida law, if a motor vehicle insurance policy provides liability coverage to a resident relative, then it must also extend the same level of UIM coverage. See Fla. Stat. § 627.727(1); Flores v. Allstate Ins. Co., 819 So. 2d 740, 744 (Fla. 2002). A policy may include specified provisions that exclude certain insureds from UIM coverage if the named insured knowingly accepts such a limitation and the insurer offers a reduced premium rate. See Fla. Stat. § 627.727(9).
Owners neither obtained the informed acceptance nor provided the reduced rate required of insurers that include the statutory exceptions to the UIM-coverage mandate their own policies. Allstate contended that this rendered the Owners policy’s exclusion of resident relatives who own a vehicle invalid. The 2nd DCA reasoned that Owners did not need to rely on a statutory exception because UIM coverage for Mr. Horne was not mandated in the first place. Fla. Stat. § 627.727(1) requires policies to include UIM coverage for “persons insured thereunder.” Because Mr. Horne owned his own automobile, he was not an insured under the policy. Therefore, the 2nd DCA concluded that the policy did not provide Mr. Horne with bodily liability coverage, as there was nothing to which UM coverage was required to be the “mutual equivalent.” Fla. Stat. § 627.727 does not require insurance companies to provide coverage to all resident relatives. See Sterling v. Ohio Cas. Ins. Co., 936 So. 2d 43, 46 (Fla. 2d DCA 2006) (“[Section 627.727] has never mandated that specific persons be included in the policy’s definition of ‘persons insured thereunder.’”). The court reversed and remanded for further proceedings consistent with this opinion.
Natalie S. Deutsch v. GEICO General Insurance Company, 44 Fla. L. Weekly D2639a (Fla. 4th DCA October 30, 2019)
Facts and Procedural History
In Natalie S. Deutsch v. GEICO General Insurance Company, 44 Fla. L. Weekly D2639a (Fla. 4th DCA October 30, 2019), Garret Nodell (“Mr. Nodell”) owns and operates Mobile Fitness Centers of America, Inc., a mobile gym that operates out of the back of an Isuzu truck. Mr. Nodell drives to a client’s location and conducts workouts in the back of the truck. The gym is powered by either a generator or by Mr. Nodell plugging into the client’s electricity. The Appellant, Natalie Deutsch (“Ms. Deutsch”) trained with Mr. Nodell and sustained permanent injuries, due to Mr. Nodell’s negligence during training. The suit against Mr. Nodell and Mobile Fitness Centers was settled.
Ms. Deutsche also sued Geico, her auto insurance carrier, contending that the mobile gym was an uninsured/underinsured auto under her policy. The relevant policy language providing coverage states that Geico will pay damages for bodily injury caused by an accident which the insured is legally entitled to recover from the owner or operator of “an uninsured auto arising out of the ownership, maintenance or use of that auto.” The term “uninsured auto,” however, does not include “a land motor vehicle . . . located for use as a residence or premises . . . .” Both parties moved for summary judgment on the coverage issue.
The circuit court granted Geico’s motion and found that the “uninsured policy provisions clearly and unambiguously define what an uninsured auto is and is not,” and that the “unambiguous policy provisions clearly exclude coverage in the instant case.” Ultimately, the circuit court entered final judgment in favor of Geico.
Appellate Court Decision
The issue presented to the Fourth District Court of Appeal was whether the plaintiff may recover uninsured motorist benefits under her policy with Geico.
The 4th DCA reasoned that the policy clearly and unequivocally provides that a vehicle “located for use as a . . . premises” is not an “uninsured auto” within the meaning of the policy. The term “premises” is not defined by the policy.
Ms. Deutsch does not argue that the term “premises” is ambiguous. Instead, she asserts that the term should be interpreted as it was defined in Harrington v. Citizens Prop. Ins. Corp., 54 So. 3d 999 (Fla. 4th DCA 2010). The 4th DCA reasoned that Harrington does not control the outcome here because the defendants’ use of the truck as a gym falls within the wording of the policy’s exclusion of a “vehicle . . . located for use as a . . . premises.” In Harrington, the insured’s homeowner’s policy provided coverage for an ‘insured location’ which included a “premises . . . used by you as a residence.” Id. at 1003. This court found the “plain meaning” of the word premises by referring to excerpts from Black’s Law Dictionary and Merriam-Webster’s Collegiate Dictionary.
Black’s Law Dictionary defines “premises” as “[a] house or building, along with its grounds.” Black’s Law Dictionary 1219 (8th ed. 2004). The non-legal definition is, in part, either “a tract of land with the buildings thereon” or “a building or part of a building usu. with its appurtenances (as grounds).” Merriam-Webster’s Collegiate Dictionary 980 (11th ed. 2004).
Id. at 1003 (emphasis added).
Ms. Deutsch argues that Mr. Nodell’s truck does not fit within the Harrington definition of premises because “it is not a house, it is not a building, and it is not a tract of land.” It is true that the truck is not a house, a building, or a tract of land. Under the Geico policy, the central inquiry is not whether a truck is real estate, but whether the truck was “located for use as a . . . premises,” which Harrington defines as a “building, along with its grounds.”
The 4th DCA concluded that Mr. Nodell’s clients worked out in the mobile gym only when it was stationary, parked, and connected to a power source. The clients never worked out when the gym was being driven as a vehicle. When used as a gym, the stationary truck was “located for use as a” building, just as any gym in a strip mall. Because the truck was being used as a “premises” when the negligence occurred, it was not an uninsured auto under the policy.
Ms. Deutsch argues her injuries should be covered under her Geico policy because they arose out of the “ownership, maintenance, or use” of a vehicle. She relies on three cases: Heritage Mut. Ins. Co. v. State Farm Mut. Auto. Ins. Co., 657 So. 2d 925 (Fla. 1st DCA 1995); Nat’l Merchandise Co. v. United Serv. Auto. Ass’n, 400 So. 2d 526 (Fla. 1st DCA 1981); Nat’l Indem. Co. v. Corbo, 248 So. 2d 238 (Fla. 3d DCA 1971). The 4th DCA found that these cases are not controlling because those courts were not interpreting the language at issue here — the definition of an uninsured auto.
The 4th DCA held that the mobile gym was not an uninsured auto under the plaintiff’s policy, and therefore did not reach the issue of whether they agreed with the analysis utilized in Heritage Mutual, National Merchandise, and Corbo. The case was affirmed.
Margaret Hurchalla, James Hurchalla, Lake Point Phase I, LLC, and Lake Point Phase II, LLC v. Homeowners Choice Property & Casualty Insurance Company, Inc., 44 Fla. L. Weekly D2527a (Fla. 4th DCA October 16, 2019)
Facts and Procedural History
In Margaret Hurchalla, James Hurchalla, Lake Point Phase I, LLC, and Lake Point Phase II, LLC v. Homeowners Choice Property & Casualty Insurance Company, Inc., 44 Fla. L. Weekly D2527a (Fla. 4th DCA October 16, 2019), Lake Point Phase I, LLC, and Lake Point Phase II, LLC (“Lake Point”) brought a civil action against Margaret and James Hurchalla (collectively “Hurchalla”), alleging that she tortuously interfered with agreements which Lake Point had with South Florida Water Management District (“SFWMD”) and Martin County. Initially, appellee Homeowners Choice Property & Casualty Insurance Company, Inc. (“Homeowners Choice”), Hurchalla’s homeowner’s insurer, provided Hurchalla with a defense. Homeowners Choice defended Hurchalla for more than a year in the tort litigation.
After a year of litigation, Homeowners Choice filed a declaratory action against Hurchalla, Lake Point, SFWMD, and Martin County, seeking a determination that Hurchalla’s insurance policy does not provide coverage for the claims asserted against her for “intentional acts,” but covered only bodily injury or property damage. Hurchalla filed an answer and denied the allegations regarding lack of coverage and also raised affirmative defenses of laches, estoppel, waiver, failure to state a cause of action and breach of the duty of good faith and fair dealing.
Homeowners Choice subsequently filed a motion for summary judgment, on grounds that the policy provided coverage only for bodily injury or property damage, not intentional acts. The motion was initially denied on grounds that there were disputed facts regarding waiver, estoppel and laches. After the tort litigation resulted in a substantial verdict against Hurchalla, Homeowners Choice filed a renewed motion for final summary judgment, arguing that because the jury found against Hurchalla on an intentional tort, there were no disputed issues of material fact. Homeowners Choice argued that under the policy, coverage was excluded for intentional torts. Hurchalla opposed the motion, arguing both that Homeowners Choice had not negated her affirmative defenses and that she had not received a reservation of rights letter required by section Fla. Stat. § 627.426(2), which fact was supported by both deposition testimony and affidavit. The trial court then entered final summary judgment. Despite the conflicting evidence, the court granted the motion, determining that the claim and verdict were based on an intentional tort, for which coverage was excluded under the policy.
Appellate Court Decision
Hurchalla raised five affirmative defenses, including estoppel. Homeowners Choice’s renewed motion for summary judgment failed to address any of them, and the trial court granted summary judgment without addressing those defenses. The Fourth District Court of Appeals reasoned that this was an error on the part of the trial court. In Doe v. Allstate Insurance Co., 653 So. 2d 371 (Fla. 1995) an insurance company may be estopped from denying coverage, even where the policy does not cover the claim, where the insured has been prejudiced by the insurer’s assumption of the insured’s defense.
Here, Hurchalla alleged equitable estoppel as an affirmative defense. Her claim was legally sufficient, and Homeowners Choice did not negate it factually. Therefore, the court erred by granting summary judgment. As to the remaining affirmative defenses, none were addressed in the motion for summary judgment nor in anything filed with the court. Nor did the court address these. Whether they are legally sufficient may be addressed in further proceedings.
For the foregoing reasons, the 4th DCA reversed the final summary judgments entered in both consolidated appeals and remand for further proceedings.
As always, we will continue to keep you advised regarding any pertinent legislative changes. Should you have any questions regarding the above, do not hesitate to contact the undersigned.
Very Truly Yours,
JOHN BOND ATKINSON