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

I filed suit today on behalf of a client against Florida Farm Bureau for improperly canceling her automobile insurance.  In order to properly cancel automobile insurance, an insurer must strictly comply with Florida Statute Sections 627.728, 627.7281 and 627.7283.  My client was involved in an accident, and submitted the claim for Florida Farm Bureau.  Florida Farm Bureau denied the claim, asserting that it had canceled her insurance prior to the accident.  However, to the extent that Florida Farm Bureau attempted to cancel the policy, it did not comply with the above statutes, and therefore coverage was in force at the time of the accident. 

After the accident, my client was required to obtain insurance with another insurer.  That insurer charged a much higher premium rate because of the alleged cancellation.  (Whenever applying for insurance, the new insurer asks whether the proposed insured has ever been canceled, or non renewed.  If so, they charge a higher rate for the new policy.)  This higher premium rate usually lasts about 10 years after the cancellation/non-renewal.  In addition to other damages, I am seeking reimbursement of this increased premium rate as part of my client's damages in this case.    

As with most of these cases against my client's own insurer, the insurance company must pay my fees and costs if I win, and if I lose, I'll work for free.  I will keep you posted.

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My client is insured with Allstate automobile insurance.  She was in a one car accident, which resulted in body damage to the car, and the destruction of her clutch.  Allstate agreed to pay for the body damage, but refused to pay for the clutch. 

I filed suit today to try to force Allstate to pay for the damage to the clutch.  As with most of these case, if I win the insurance company must pay for my fees and costs, and if I lose, I'll work for free. 

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In Waters v. Miller, ____ F.3d ____ (11th Cir. April 15, 2009), Waters was rear-ended by Miller's tractor-trailer on November 29, 2005.  At the time of the accident, Miller was hauling cars from Florida to Georgia.  Miller carried commercial vehicle insurance with Progressive Express Insurance Company.  Progressive denied the claim asserting that the policy period was September 11, 2004 - September 11, 2005, and that the insured did not pay the premium to extend the policy past its expiration date of September 11, 2005.   

Waters filed a declaratory judgment action against Progressive, arguing that 1) pursuant to Florida Statue Section 320.02(5)(e), Progressive's policy remained in effect until Progressive notified the Florida Department of Highway Safety and Motor Vehicles that the policy had been canceled; and 2) Progressive knew or should have known that Miller was engaged in interstate trucking and that as a result, an MCS-90 endorsement should be read into the policy. 

Section 320.02(5)(e) states that a policy insuring commercial motor vehicles "may not be canceled on less than 30 days written notice by the insurer to the [FDHSMV]."  However, in this case, the 11th Circuit held that this statute does not apply when a policy expires as opposed to when a policy is canceled. 

Under the Motor Carrier Act of 1980, 49 U.S.C. Section 10101 et seq., and the regulations promulgated thereunder, certain interstate motor carriers must obtain an insurance policy containing an MCS-90 endorsement "providing that the insurer will pay within policy limits any judgment recovered against the insured motor carrier for liability resulting from the carrier's negligence[.]"  Coverage from policies containing an MCS-90 endorsement remains in effect until the insurance company gives 30 days' written notice to the FMCSA.  See, 49 C.F.R. Sections 387.15, 387.313(d). 

The Progressive policy at issue did not contain an MCS-90 endorsement, however, Miller argued that one should be incorporated into the Progressive policy because Progressive knew or should have known that Waters was engaged in interstate travel.  The 11th Circuit held that Waters did not present sufficient evidence to support a conclusion that Progressive knew or should have known Miller was driving the tractor-trailer interstate. 

Importantly, the 11th Circuit specifically held that because Waters failed to provide sufficient evidence that Progressive knew or should have known that Miller was engaged in interstate trucking the Court found it

unnecessary for us to reach the issue of whether the endorsement can be read into a policy that does not contain it, and we expressly decline to do so." 

In Footnote 3, the Court notes that "[s]ome court have incorporated the endorsement into policies as a matter of law." 

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In Metropolitan Casualty Insurance Company v. Tepper, 34 FLW S111 (Jan. 30, 2009) the Florida Supreme Court resolved a direct conflict between the 5th DCA and the 2nd DCA concerning when an uninsured motorists carrier can begin a subrogation action against the at-fault driver/owner.

In general, under Florida Statute Section 627.727, if the insured intends to seek UM benefits, the insured must notify the UM carrier whenever the insured wishes to settle a case with the at-fault driver/owner. The UM carrier then has 30 days from receipt of the notice to either agree to the settlement, in which case the UM carrier waives its rights of subrogation against the at-fault driver/owner; or the UM carrier can pay the amount that the at-fault driver/owner is offering in settlement of the claim, in which case the UM carrier preserves its rights of subrogation against the at-fault driver/owner. (The UM carrier also waives its rights of subrogation if it fails to properly respond to the insured’s request within 30 days of receipt of the notice).

The question in Tepper, was when can the UM carrier initiate the subrogation action after paying its insured the amount which was being offered by the at-fault driver/owner.

The UM Statute says that “upon final resolution of the underinsured motorist claim, the underinsured motorists insurer is entitled to seek subrogation against the underinsured motorist and the liability insurer for the amounts paid to the injured party.” Fla. Stat. § 627.727(6)(b). The 2nd DCA held that this language allowed the UM carrier to file the subrogation action as soon as the UM carrier paid its insured the amount being offered by the underinsured motorist; while the 5th DCA held that this language required that the UM carrier wait until after its insured’s UM claim against it had been finally resolved before the UM carrier could initiate the subrogation action.

The Supreme Court affirmed the 5th DCA, holding that the final resolution of the entire UM claim was a “condition precedent to the UM carrier’s entitlement to bringing a subrogation action.” Recognizing that this holding could prejudice UM carriers when the underlying UM claim was not concluded before the 4 year tort statute of limitations had expired, the Supreme Court also held that the statute of limitations for the subrogation claim does not begin to run until the entire underlying UM claim has concluded.
 

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On January 8, 2009, the 1st DCA decided O'Brien v. State Farm Mut. Automobile Ins. Co., 34 FLW D110a. In O’Brien, Mr. O’Brien purchased a $1,000,000 umbrella policy from State Farm. He rejected UM coverage in writing on the umbrella. Thereafter, Mr. O'Brien added vehicles which were covered under the umbrella policy, and ultimately added his 4 children as they began to drive.

Tragically, sometime later, Mr. O’Brien’s daughter was killed by an underinsured driver. State Farm tendered the limits on the underlying policies which included UM, but refused to pay anything under the umbrella.

The trial court agreed with State Farm about the lack of coverage, and the 1st DCA affirmed. The 1st DCA analyzed Section 627.727(2), Fla. Stat., (the section of the UM statute dealing with umbrella policies), and held that it only requires an insurer to make UM “available as part of the application, and at the written request of an insured.”  The Court stated there was no need to obtain another waiver of UM coverage under the umbrella after the initial waiver was obtained. The Court noted that subsection (2) does not contain the same strict notice requirements as subsection (1) (the section dealing with primary policies), but implied that even under subsection (1) there would have been no need for additional waivers under these circumstances as long as the other requirements of subsection (1) had been met.

The 1st DCA distinguished Strochak v. Federal Ins. Co., 717 So. 2d 453 (Fla. 1998)(holding that when moving from New Jersey to Florida, excess insurer was required to obtain a new UM rejection/selection form when vehicles first become registered or principally garaged in Florida and when the policy is delivered or issued for delivery in Florida); and Fireman’s Fund Ins. Co. v. Pohlman, 485 So. 2d 418 (Fla. 1986)(holding that insured entered a “separate and severable contract of insurance” when an automobile policy endorsement added coverage for an additional vehicle after Section 627.4132, Fla. Stat., had been amended to permit stacking.)
 

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The typical statute of limitations on an uninsured motorists claim is 5 years from the date of the accident. In Rundell v. Progressive Express Insurance Company, 33 FLW D2665 (Fla. 1st DCA November 17, 2008), Progressive filed a declaratory judgment action alleging that there was no UM coverage for a passenger injured in an accident.

More than 5 years from the date of the accident, the passenger sought UM benefits under the policy. Progressive sought a declaration that the claim was barred by the 5 year statute of limitations. The Court first confirmed that the passenger’s UM claim was a compulsory counterclaim; and then, citing Londono v. Turkey Creek, Inc., 609 So. 2d 14 (Fla. 1992), held that in cases where the damages are “fungible,” such as for money damages, the “statutes of limitations do not apply to compulsory counterclaims.”
 

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