Insurance — Garage policy — Illusory policy — Exclusion of
coverage for theft of vehicles from unprotected lot did not render illusory a
garage policy for used auto sales lot that insurer knew was an unprotected lot
where the policy provided coverage for risks other than theft — No merit to
argument that insurer engaged in inequitable conduct by adding exclusion to
policy just one day before issuance of policy where the same exclusion appeared
in initial quote from insurer

SHUTT ENTERPRISES INC., Appellant, v. CENTURY SURETY COMPANY, Appellee.
Circuit Court, 6th Judicial Circuit (Appellate) in and for Pinellas County. Case
No. 13-0043-AP-88B. UCN 522013AP000043XXXXCI. May 5, 2014.

Shutt Enterprises, Inc. appeals the trial court’s order granting final
summary judgment in favor of Century Surety Company in an insurance coverage
dispute. The court below found the insurance policy at issue to be unambiguous
and preclude Shutt’s claim for loss due to theft because the lot from which the
vehicle was stolen was not a “protected lot.” Shutt does not dispute that the
lot protection exclusion in the insurance policy, as written, would preclude
coverage of the loss. Rather, Shutt contends that enforcement of that exclusion
is improper because, at the time it issued the policy, Century was aware that
Shutt’s lot was an unprotected lot, and therefore, any theft from Shutt’s lot
would be completely excluded from coverage.

Our review of an order granting summary judgment is de novo. American
Strategic Ins. Co. v. Lucas-Solomon, 927 So. 2d 184 (Fla. 2nd DCA 2006) [31
Fla. L. Weekly D1198a].

In April of 2011, Shutt applied for an insurance policy from Century, seeking
coverage in connection with its used auto sales business. On April 15, 2011,
based on the information provided in Shutt’s application, Century provided Shutt
with a quote of $6,682.00 for insurance coverage under a “garage policy.”
Included with this quote were several policy forms detailing exactly what would,
and what would not, be covered under the policy. Form 1901, titled “Additional
Conditions and Exclusions,” was included with the quote. This form explicitly
states that Century would not pay for loss due to theft of an auto or any
portion of an auto if:

On May 10, 2011, Century inspected Shutt’s property to determine if, and on
what terms, it was willing to insure Shutt. It was apparent at the inspection
that Shutt’s lot was an unprotected lot. On May 11, 2011, after concluding its
inspection of the property, Century and Shutt entered into the insurance policy
at issue in this appeal. Subsequently, a vehicle was stolen from Shutt’s used
car lot. When Shutt filed a claim for coverage under its policy, Century denied
coverage on the basis that, because the vehicle was stolen from an unprotected
lot, the theft was excluded from coverage.

Shutt contends that enforcement of the protected lot exclusion is improper
because, at the time it issued the policy, Century was aware that Shutt’s lot
was an unprotected lot and that the exclusion would eliminate all coverage for
theft from Shutt’s lot. Shutt also argues that Century’s reliance on the policy
exclusion should be barred by Century’s inequitable conduct of inserting the
protected lot exclusion only one day prior to issuing the policy, and not
bringing to Shutt’s attention that the policy provided substantially less
coverage than was requested in the insurance application.

Shutt relies on Poland v. Phillips, 371 So. 2d 1053 (Fla. 3d DCA 1979)
for the proposition that an insurer may not deny coverage based on a policy
condition which it knew the insured could not comply with at the time the policy
was issued. In Poland, an insurance policy containing exclusions which
operated on the premise that the building would not be insured if it were vacant
was issued for an abandoned building with full knowledge that the building was
vacant. Because the insurance policy contained exclusions voiding the entire
policy if the building was vacant, and with full knowledge that the building was
abandoned the insurer issued the policy anyway, the court found that the insurer
could not then deny coverage under the vandalism exclusion. Id.

There is a fundamental difference, however, between an enforceable
exclusion that pertains to a particular kind of loss but leaves other coverage
intact, and an exclusion that completely contradicts a grant of coverage.
Colony Ins. Co. v. Total Contracting & Roofing, Inc., 2011 WL 4962351
(S.D. Fla. 2011) [23 Fla. L. Weekly Fed. D397a]. In order for coverage to be
considered illusory, an exclusion must entirely contradict the insuring
provisions. Id. at 5. Unlike what appears to have been the case in
Poland, the policy exclusion in the instant case, like that in Colony
Ins. Co., does not entirely contradict the insuring provisions. All
exclusions, by definition, exclude something from coverage, and to that
extent will always contradict some aspect of a general liability insurance
policy. The protected lot policy exclusion only excludes coverage of theft from
an unprotected lot. The policy provides coverage for a myriad of other risks,
including liability, personal injury protection, medical payments, uninsured
motorist, and property damage. Refusing to insure all risk does not render an
insurance policy illusory.

Even though the policy exclusion for an unprotected lot is clear and
unambiguous, Shutt contends that by adding this exclusion to the policy just one
day before issuance, Century engaged in a “sleight-of-hand withdrawal of
coverage,” and should be barred from enforcing the exclusion because of its
inequitable conduct. This argument lacks merit. On April 15, 2011, Century gave
Shutt a preliminary quote of $6,682.00 for insurance coverage of a standard
protected lot, expressly excluding coverage of theft of vehicles from an
unprotected lot in attached Form 1901. After inspecting the property on May
10th, Century offered Shutt the insurance policy at issue. That policy contained
the same Form 1901 exclusion of theft from an unprotected lot, and was offered
for the same premium of $6,682.00 as originally quoted. Contrary to Shutt’s
contention, there was no sleight-of-hand withdrawal of coverage.

The unprotected lot policy exclusion was clear and unambiguous. The exclusion
did not completely eviscerate coverage, nor did it contradict the other
provisions of the policy. The initial policy quote provided the same coverage
and for the same premium as the policy issued to Shutt. Accordingly, we affirm.
(DAY, RAMSERGER and WILLIAMS, JJ.)