39 Fla. L. Weekly S647a
as passenger in insured vehicle being driven by permissive user — Family
vehicle exclusion for uninsured motorist benefits does not conflict with section
627.727(3), Florida Statutes, when the exclusion is applied to a class I insured
who seeks such benefits in connection with a single-vehicle accident where the
vehicle was being driven by a class II permissive user, and where the driver is
underinsured and liability payments from the driver’s insurer, when combined
with liability payments under the class I insured’s policy, do not fully cover
the class I insured’s medical costs — Uninsured motorist benefits are not
stackable under section 627.727(9), Florida Statutes, where such benefits are
claimed by an insured policyholder, and where a non-stacking election was made
by the purchaser of the policy, but where the insured claimant did not elect
non-stacking benefits — Family vehicle exclusion in an automobile policy, which
excludes a family vehicle from the definition of an uninsured motor vehicle,
does not conflict with section 627.727(3), Florida Statutes — Uninsured
motorist benefits are not stackable under section 627.727(9) if the named
insured or purchaser of the policy made a non-stacking election, as this waiver
applies on behalf of all insureds under the policy
HARRINGTON, Respondent. Supreme Court of Florida. Case No. SC12-1257. October
23, 2014. Application for Review of the Decision of the District Court of Appeal
– Direct Conflict of Decisions. First District – Case No. 1D11-15 (Columbia
County). Counsel: James Paul Waczewski of Luks, Santaniello, Petrillo, &
Jones, Tallahassee, and Raoul G. Cantero, III, and Maria Josefa Beguiristain of
White & Case LLP, Miami, for Petitioner. Stephen Charles Bullock and
Christopher M. Costello of Brannon, Brown, Haley & Bullock, P.A., Lake City,
for Respondent. Cynthia Skelton Tunnicliff and Gerald Don Nelson Bryant, IV, of
Pennington, Moore, Wilkinson, Bell & Dunbar, P.A., Tallahassee, for Amicus
Curiae Personal Insurance Federation of Florida. Henry Gerome Gyden and Dorothy
Venable DiFiore of Haas, Lewis, & DiFiore, P.A., Tampa, for Amicus Curiae
GEICO Insurance Company. Louis Kahn Rosenbloum of Louis K. Rosenbloum, P.A.,
Pensacola, for Amicus Curiae The Florida Justice Association.
Court of Appeal’s decision in Travelers Commercial Insurance Co. v.
Harrington, 86 So. 3d 1274 (Fla. 1st DCA 2012). In its decision the First
District ruled upon the following questions, which the court certified to be of
great public importance:
1. WHETHER THE FAMILY VEHICLE EXCLUSION FOR UNINSURED MOTORIST
BENEFITS CONFLICTS WITH SECTION 627.727(3), FLORIDA STATUTES, WHEN THE EXCLUSION
IS APPLIED TO A CLASS I INSURED WHO SEEKS SUCH BENEFITS IN CONNECTION WITH A
SINGLE-VEHICLE ACCIDENT WHERE THE VEHICLE WAS BEING DRIVEN BY A CLASS II
PERMISSIVE USER, AND WHERE THE DRIVER IS UNDERINSURED AND LIABILITY PAYMENTS
FROM THE DRIVER’S INSURER, WHEN COMBINED WITH LIABILITY PAYMENTS UNDER THE CLASS
I INSURED’S POLICY, DO NOT FULLY COVER THE CLASS I INSURED’S MEDICAL
2. WHETHER UNINSURED MOTORIST BENEFITS ARE STACKABLE UNDER SECTION
627.727(9), FLORIDA STATUTES, WHERE SUCH BENEFITS ARE CLAIMED BY AN INSURED
POLICYHOLDER, AND WHERE A NON-STACKING ELECTION WAS MADE BY THE PURCHASER OF THE
POLICY, BUT WHERE THE INSURED CLAIMANT DID NOT ELECT NON-STACKING
negative and quash the First District’s decision.2 We conclude that a family vehicle exclusion in an
automobile insurance policy, which excludes a family vehicle from the definition
of an uninsured motor vehicle, does not conflict with section 627.727(3),
Florida Statutes (2009). We also conclude that uninsured motorist (UM) benefits
are not stackable under section 627.727(9) if the named insured or purchaser of
the policy made a non-stacking election, as this waiver applies on behalf of all
insureds under the policy.
while riding as a passenger in a car owned by her father, but driven with
permission by a non-family member, Joey Williams. The vehicle was insured by
Travelers Commercial Insurance Company (“Travelers”). Harrington’s mother was
the named insured and the purchaser of the policy on the vehicle. The policy
insured three vehicles and provided liability and non-stacked uninsured motorist
coverage for Harrington, her mother, and her father. Specifically, the
Harrington’s policy provided for bodily injury liability coverage of $100,000
per person and $300,000 per accident, and non-stacked UM coverage of $100,000
per person and $300,000 per accident. The policy defined the term “your covered
auto” as any one of the three insured vehicles, which included the vehicle
involved in the accident.
Williams was also covered under the liability provisions of the Harrington’s
policy because the policy defined an “insured” as the named insured, the named
insured’s family, or any other person lawfully occupying the vehicle. Thus,
Harrington was a class I insured and Williams was a class II insured.3
Williams’ liability policy. This payment did not fully cover Harrington’s
medical expenses, and Travelers also tendered its liability limit of $100,000.
However, Harrington’s damages still exceeded the combined liability payments,
and she subsequently sought UM benefits from Travelers. Travelers denied the
claim on the ground that the vehicle was not an “uninsured motor vehicle” as
defined in the policy.
included an “underinsured” vehicle, that is a vehicle to which a liability
policy applies at the time of the accident but the amount paid under the policy
is not enough to pay the full amount of the insured’s damages. However, the
policy also contained a “family vehicle exclusion” which expressly provided that
an uninsured vehicle does not include any vehicle:
Owned by or furnished or available for the regular use of you or a
“family member” unless it is a “your covered auto” to which Coverage A of the
policy applies and bodily injury liability coverage is excluded for any person
other than you or any “family member” for damages sustained in the accident by
you or any “family member[.]”
seeking payment of stacked UM benefits in the amount of $300,000, despite the
fact that her mother, the named insured and purchaser of the policy, had
expressly selected and paid for non-stacking UM coverage.
granted summary judgment in favor of Harrington, concluding that the policy
provision excluding family vehicles from UM coverage was invalid because it
conflicted with section 627.727(3)(b) and (c), Florida Statutes (2009). The
trial court also concluded that the waiver executed by Harrington’s mother
electing non-stacking UM coverage did not apply to Harrington because Travelers
did not obtain a knowing acceptance of the limitation of non-stacking UM
coverage from Harrington personally.
coverage and stacking issues, but reversed the amount of the UM benefits awarded
and the attorney’s fees awarded because “Travelers’ asserted other defenses
which might impact the amount of the benefits due under the policy.”
Harrington, 86 So. 3d at 1278. The First District then certified two
questions of great public importance to this Court. Id. at 1278-79.
I. Whether the Family Vehicle Exclusion Conflicts
With Section 627.727(3), Florida Statutes
coverage conflicts with section 627.727(3), Florida Statutes (2009). More
specifically, whether the exclusion conflicts with subsection (b) or (c) of
section 627.727(3), when applied to a class I insured, injured in a car
accident, who seeks UM benefits when the combined liability payments from the
class II insured’s policy and the class I insured’s own policy do not fully
cover the insured’s medical expenses.4 As
explained below, we find that the exclusion does not conflict with either
A. Whether the Policy Exclusion Conflicts With Section
627.727(3)(b), Florida Statutes
vehicles insured for liability purposes, unless the insured expressly rejects UM
coverage. See generally § 627.727(1), Fla. Stat. (2009). In enacting the
UM statute, section 627.727, the Legislature intended “to provide for the broad
protection of the citizens of this State against uninsured motorists.” Salas
v. Liberty Mut. Fire Ins. Co., 272 So. 2d 1, 5 (Fla. 1972). But, as
originally enacted, “UM coverage came into play only when the offending owner or
operator carried no liability insurance whatsoever.” Shelby Mut. Ins. Co. v.
Smith, 556 So. 2d 393, 393 (Fla. 1990). This meant that “the tortfeasor had
to be completely uninsured before [UM] coverage was required to be applicable.
Even if an accident victim’s recovery from the tortfeasor’s insurer was less
than his damages, the statute did not originally require uninsured vehicle
coverage to be available for further compensation.” Williams v. Hartford
Accident & Indem. Co., 382 So. 2d 1216, 1218 (Fla. 1980). However, in
1973, the Legislature created subsection 627.727(3)(b) (originally subsection
627.727(2)(b)) to provide UM coverage for underinsured tortfeasors as well.
See Smith, 556 So. 2d at 393-94; see also ch. 73-180, § 4,
Laws of Fla. This subsection provides as follows:
(3) [T]he 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[.]
exclusion in the Travelers policy is void because it conflicts with section
627.727(3)(b), which provides that underinsured vehicles shall be considered
uninsured for purposes of UM coverage, and that Harrington is entitled to both
liability and UM benefits under the Travelers policy. See
Harrington, 86 So. 3d at 1276-77. We disagree.
considered uninsured for purposes of UM coverage, it also provides that the term
uninsured motor vehicle is “subject to the terms and conditions of such
coverage.” § 627.727(3)(b), Fla. Stat. And, an insurance “ ‘policy may contain
other general conditions affecting coverage or exclusions on coverage’ as long
as the limitations are unambiguous and ‘consistent with the purposes of the UM
statute.’ ” Sommerville v. Allstate Ins. Co., 65 So. 3d 558, 562 (Fla. 2d
DCA 2011) (quoting Varro v. Federated Mut. Ins. Co., 854 So. 2d 726,
728-29 (Fla. 2d DCA 2003)). Here, the terms and conditions of the insurance
policy expressly and unambiguously excluded the vehicle in question from the
definition of an “uninsured motor vehicle.” Thus, the family vehicle exclusion
does not conflict with section 627.727(3)(b) because the statute clearly states
that the term “uninsured motor vehicle” is subject to the terms and conditions
of the policy.
e.g., Smith v. Valley Forge Ins. Co., 591 So. 2d 926, 927 (Fla. 1992)
(holding that the insurance policy’s provision excluding “any vehicle that is
‘owned by or furnished or available for the regular use of you or any family
member’ ” from the definition of an uninsured vehicle was valid and precluded
the recovery of UM benefits); Reid v. State Farm Fire & Cas. Co., 352
So. 2d 1172, 1173 (Fla. 1977) (holding that a policy may exclude the vehicle it
insures from the definition of an uninsured motor vehicle); see also
Nationwide Mut. Fire Ins. Co. v. Olah, 662 So. 2d 980, 982 (Fla. 2d DCA
1995) (reversing an award of UM benefits because the policy contained a valid
exclusion limiting UM benefits to a vehicle not covered under the liability
section of the policy); State Farm Mut. Auto. Ins. Co. v. McClure, 501
So. 2d 141, 142-43 (Fla. 2d DCA 1987) (concluding that the policy definition of
“uninsured motor vehicle” which excluded a vehicle insured under the liability
portion of the policy was not void against public policy).
So. 2d 324, 326-27 (Fla. 1996), “section 627.727(3)(b) does not require a
stacking of both liability and UM benefits under the same policy[,]” and section
627.727(3)(b) does not negate the effect of a policy’s “your car” exclusion.
Although in Warren, we were addressing a claim by a class II insured
seeking UM benefits as opposed to a class I insured like Harrington, this is not
a material distinction. Indeed, the facts in Warren are virtually
identical to the facts of this case and compel the same result.
insured by Travelers, that was involved in an accident that resulted in Warren’s
death. Id. at 325-26. Similar to the case at hand, the Travelers policy
in Warren contained a “your car” exclusion, which provided that the car
insured under the policy was not an uninsured motor vehicle within the meaning
of the policy. Id. at 326. Warren’s estate, like Harrington, collected
the liability limits from Travelers and then sought to collect UM benefits from
Travelers on the ground that the vehicle was underinsured because the damages
exceeded the liability limits. Id.
policy’s exclusion, but the “[First District] reversed, concluding that section
627.727(3)(b)[,] overrode the insurance policy’s ‘your car’ exception, thereby
allowing [Warren’s] estate to recover both liability and UM benefits under the
same policy.” Id. (footnote omitted). However, on review, a plurality of
this Court quashed the First District’s decision, concluding that section
627.727(3)(b) did not negate the effect of the policy’s “your car” exclusion and
“that the ‘liability insurer’ referred to in section 627.727(3)(b) means an
insurer other than the insurer providing UM coverage to the claimant.”
Id. at 327-28. Thus, given our holding in Warren, Harrington could
not receive UM benefits under the Travelers policy because Travelers already
paid out the liability limits. To hold otherwise would not only permit stacking
of liability and UM coverages under the same policy, but it would also require
treating a vehicle as both insured and uninsured under the same policy in
contravention of a long line of well-established precedent. See, e.g.,
Reid, 352 So. 2d at 1173-74 (holding that a vehicle cannot be both
insured and uninsured under the same policy); Bulone v. United Servs. Auto.
Ass’n, 660 So. 2d 399, 400-02 (Fla. 2d DCA 1995) (explaining that the UM
statute does not require an automobile policy to treat vehicles as both insured
for purposes of liability coverage and uninsured for purposes of UM coverage);
Allstate Ins. Co. v. Baker, 543 So. 2d 847, 850 (Fla. 4th DCA 1989) (“[A]
vehicle cannot be transformed from an insured vehicle into an uninsured vehicle
simply because liability coverage was barred due to a valid enforceable
household exclusion in the same policy[.]”).
with section 627.727(3)(b).
B. Whether the Exclusion Conflicts With
Section 627.727(3)(c), Florida Statutes
vehicle exclusion conflicts with section 627.727(3)(c), Florida Statutes (2009).
For the reasons explained below, we find that it does not.
insurer excludes liability coverage for a non-family member, who while driving
the insured vehicle, injures the named insured or the named insured’s family.
Specifically, the statute provides as follows:
(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
. . . .
(c) Excludes liability coverage to a nonfamily member whose
operation of an insured vehicle results in injuries to the named insured or to a
relative of the named insured who is a member of the named insured’s
subsection (3)(c) to provide UM coverage when a non-family member’s operation of
an insured family vehicle results in an injury to an insured and the insurer
excludes liability coverage for the non-family member. The family vehicle
exclusion here does not conflict with subsection (3)(c) because the liability
policy does not exclude coverage for non-family members. Rather, the
Harrington’s liability policy, consistent with the purposes of subsection
(3)(c), covers any person who drives, with permission, any of the vehicles
insured under the policy, and also provides that an insured vehicle is
considered uninsured for purposes of UM coverage if the liability policy
excludes coverage for non-family members whose operation of the vehicle cause
injury to the named insured or the named insured’s family. Thus, there is no
conflict. Furthermore, as we explained in Warren, 678 So. 2d at 328,
“section 627.727(3)(c) d[oes] not stack UM coverage on top of liability coverage
under a single policy.”
section 627.727(3)(c), Florida Statutes (2009). We therefore answer the first
certified question in the negative.
II. Stacking of UM Benefits Under
Section 627.727(9), Florida Statutes
under section 627.727(9), Florida Statutes (2009), when the named insured and
purchaser of the policy expressly elected non-stacking UM coverage, but the
insured claiming the UM benefits did not expressly make a non-stacking election.
We answer this question in the negative and conclude that the coverage election
made by the named insured is binding on behalf of all insureds under the policy.
627.727(9) provides that an insurer may offer non-stacking coverage provided
that the insurer informs the insured of the limitations of such coverage and the
insured executes an approved form expressly electing non-stacking coverage.
See generally § 627.727(9), Fla. Stat. (2009). In this case, upon
purchasing the policy, Harrington’s mother, the named insured, executed a
coverage election form expressly electing non-stacking UM coverage and, as a
result of this election, paid a corresponding lower insurance premium. The
additional insureds under the policy, Harrington and her father, did not sign
the form. Despite this election, the trial court and the First District
concluded that the election of non-stacking coverage did not apply to Harrington
because she did not personally sign the form waiving stacked UM coverage.
Harrington, 86 So. 3d at 1277.
statutory language found in section 627.727(9) from that found in section
627.727(1), Florida Statutes (2009). Section 627.727(1) requires that UM
coverage be provided with any liability policy in equal limits to the liability
policy, unless the insured expressly rejects the coverage or elects lower
coverage limits by executing an approved form. § 627.727(1), Fla. Stat. This
section further provides that “[i]f this form is signed by a named insured, it
will be conclusively presumed that there was an informed, knowing rejection of
coverage or election of lower limits on behalf of all insureds.”
Id. (emphasis added). Similarly, section 627.727(9) requires that an
election of non-stacking UM coverage be expressly made by executing an approved
form and further provides that “[i]f this form is signed by a named insured,
applicant, or lessee, it shall be conclusively presumed that there was an
informed, knowing acceptance of such limitations.” § 627.727(9), Fla. Stat.
Because the phrase “on behalf of all insureds” is not present in subsection (9),
the First District agreed with the trial court that the Legislature intended
that “the subsection (9) waiver of stackable coverage must be personally made by
the insured who claims such benefits.” Harrington, 86 So. 3d at 1277. We
resort to statutory interpretation in order to determine whether Harrington’s
mother’s election of non-stacking coverage applied on behalf of all the insureds
under the policy because the contract unambiguously stated that the coverage
selection applied on behalf of all insureds under the policy.5 See, e.g., State Farm Mut. Auto. Ins. Co.
v. Menendez, 70 So. 3d 566, 569 (Fla. 2011) (“In interpreting an insurance
contract, we are bound by the plain meaning of the contract’s text.”); V
& M Erectors, Inc. v. Middlesex Corp., 867 So. 2d 1252, 1253 (Fla. 4th
DCA 2004) (“[W]here the contract [language] is clear and unambiguous there is no
reason to go further.” (quoting Lab. Corp. of Am. v. McKown, 829 So. 2d
311, 313 (Fla. 5th DCA 2002))); Gen. Sec. Ins. Co. v. Barrentine, 829 So.
2d 980, 981-82 (Fla. 1st DCA 2002) (“If the language of an insurance policy is
clear, it must be construed to mean what it says and nothing more. Courts have
no power to create insurance coverage, if it does not otherwise exist by the
terms of the policy.” (internal citations omitted)).
intend for the named insured’s election to apply on behalf of all the insureds
under the policy since, unlike in section 627.727(1), the Legislature did not
expressly include the language “on behalf of all insureds” in the presumption
clause in section 627.727(9). Under the First District’s interpretation, any
insured under the policy, other than the named insured who signed the waiver,
would be able to collect stacked UM benefits, despite the fact that the named
insured affirmatively made a non-stacking election and paid a reduced premium
based on this election. Not only would this put the additional insureds in a
better position than the named insured — giving them a benefit they did not pay
for — but it also prevents the insurer from receiving the “reduced liability
risk” that they bargained for. See Acquesta v. Indus. Fire & Cas.
Co., 467 So. 2d 284, 285 (Fla. 1985) (“[The insured] correctly expects the
insurance company to be bound by the contract in all respects which are of
benefit to him and the law will enforce those expectations. [Likewise, t]he
insurer correctly expects [the insured] to be bound in all respects which are of
benefit to it. More precisely, both are entitled to all they bargained and paid
for.” (quoting Indus. Fire & Cas. Co. v. Acquesta, 448 So. 2d 1122,
1123 (Fla. 4th DCA 1984))).
coverage; instead, UM coverage premiums are calculated based on the coverage
selected for the policy as whole. Yet, the First District’s interpretation
creates the potential predicament that individuals under the same policy will
elect both stacked and non-stacked UM benefits, making the calculation of a
single UM premium impractical, as well as virtually impossible. See
Cont’l Ins. Co. v. Roth, 388 So. 2d 617, 618 (Fla. 3d DCA 1980) (“We
envision no rational apportionment of the [UM] premium among named insureds,
should some want the coverage, and others not; nor can we believe that it was
the intention of the legislature, [the insurer], or the [insured], that a
bargain for [UM] coverage be struck per capita, within each policy, rather than
on a policy-by-policy basis.”).
non-stacking UM coverage is binding on all insureds under the policy under
section 627.727(9). We therefore answer the second certified question in the
negative and quash the First District’s decision.
JJ., concur. LEWIS, J., concurs in result.)
3(b)(4), Fla. Const.
pure questions of law. See Rando v. Gov’t Emps. Ins. Co., 39 So.
3d 244, 247 (Fla. 2010).
recognize two classes of insureds, Class I insureds and Class II insureds.
“[C]lass I insureds are named insureds and resident relatives of named
insureds.” Travelers Ins. Co. v. Warren, 678 So. 2d 324, 326 n.2 (Fla.
1996). Class II insureds are all other lawful occupants of an insured vehicle
who are not the named insureds or a resident relative of the named insured;
essentially, they are “third party beneficiaries to the named insureds’ policy.”
insured vehicle may be treated as uninsured if the liability insurer “[i]s
unable to make payment with respect to the legal liability of its insured within
the limits specified therein because of insolvency,” is not at issue here. §
627.727(3)(a), Fla. Stat. (2009).
stated that “I, on behalf of all insureds under the policy, understand and agree
that selection of any of the above options applies to my liability insurance
policy and future renewals or replacements of such policy which are issued at
the same Bodily Injury Liability Limits.”
* * *