Florida Insurance Law Blog : Florida Insurance Lawyer & Attorney : Mark Nation Law Firm : Orlando, Longwood, Gainesville

In Diaz-Hernandez v. State Farm Casualty Insurance Company, ____ So.2d ____ (May 27, 2009), the court was asked to resolve the following issue:

We must decide whether the provision in State Farm's UM policy, which requires the Insured to file suit against the known uninsured motorist and State Farm, is against the public policy of the UM statute, section 627.727, Florida Statutes (2007), and therefore, void.

In a rather straightforward opinion, the court held that:

the provision in the UM policy, requiring the Insured to join the uninsured motorist in the lawsuit filed against the UM carrier, State Farm, is against public policy, we reverse the order dismissing the Insured's second amended complaint with prejudice, and remand for further proceedings.

In its reasoning, the court noted that the State Farm policy imposed an "additional burden" on the Insured that was not required by the UM Statute.  This additional burden on the Insured required that the policy term by deemed invalid. 

This decision in in line with case law in Florida which holds that a UM insurer cannot require its insured to pursue an uninsured motorist to a judgment or settlement prior to proceeding against its insurer.  See, Liberty Mutual Insurance Co. v. Reyer, 362 So.2d 390 (Fla. 3rd DCA 1978).  See also, Metro. Cas. Ins. Co. v. Tepper, 2 So.3d 209 (Fla. 2009). 

A copy of the Diaz-Hernandez can be downloaded by clicking here

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In an earlier blog concerning this case, I noted we represented two large car dealerships who had been sued in major class actions.  Universal Underwriters Insurance Company insured both dealerships.  The dealers asked Universal Underwriters to defend and indemnify them for the claims in the class actions. Universal agreed to defend the claims, but advised that even though the class actions covered multiple years, the dealers were only entitled to indemnity coverage under one of policy years. Each dealer carried $500,000 in indemnity coverage per year for most of the years involved in the class actions. Therefore, it was Universal's position that the dealers were only entitled to $500,000 in coverage, while the dealers believed that they were entitled to up to the full policy limits per year for each of the years involved in the class actions.

One of my clients also sued Universal for breach of contract for failing to settle the class action when Universal could have settled the claim for slightly more than the $500,000 which it believed was available to pay for damages, but significantly less than what the court ultimately determined were the actual policy limits.  (I did not sue for "bad faith," but filed a simple breach of contract claim for breaching the contract by failing to settle when the insurer could have done so below the actual policy limits.)  Universal defended by claiming that we were actually suing for "bad faith," and could not do so given its reasonable belief concerning its available policy limits. 

Last week the 11th Circuit gave us a complete victory on the two issues involved in the case.  First, the11th Circuit agreed that the car dealers were entitled to the available policy limits for each of the years involved in the class actions.  Second, the court held that the breach of contract action for failing to settle could proceed regardless of Universal's "good faith or bad faith."  The court noted that whether Universal breached the contract can be determined "objectively" without regard to Universal's intent or belief.  A copy of the decision can be downloaded by clicking here

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By virtue of a divorce decree, Lovallo was the equitable owner of a ten-year, renewable, term life insurance policy her former husband purchased from Jackson.  Lovallo states that she notified Jackson that she was the equitable owner of the policy, and that in spite of this notice, Jackson did not notify her at the expiration of the 10 years that the policy was set to expire.  If she had been provided notice, she could have renewed the policy.  Her former husband died shortly after the policy expired. 

The 1st DCA "assume[d] without deciding" that Lovallo had all the rights of any owner of the policy.  (The court cited several cases that supported this assumption).  But, then held that as an owner, Lovallo was not entitled to notice that the policy was expiring.  There court noted that was nothing in the policy itself that required the insurer to give notice that the policy was expiring and could be renewed, and there was no statute that required such notice.  The court noted that statutory notice of the ability to renew is required with regard to many different types of insurance, such as,  automobile, worker's comp, marine, property, and casualty insurance, but that no such notice is required with regard to life insurance.  See, Jackson National Life Insurance Company v. Lovallo, ____ So.2d ____ (Fla. 1st DCA May 4, 2009). 

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