12 Fla. L. Weekly Supp. 51e
Insurance — Automobile — Cancellation — Notice — Trial court erred in entering summary judgment in favor of finance company/lienholder of vehicle in action for breach of contract against insurer that refused coverage for collision damage because it had cancelled coverage on vehicle due to nonpayment of financed premium although no pre-cancellation notice was sent to lienholder — Requirements of sections 627.848(1)(c) and (d), that in event that cancellation of motor vehicle insurance policy is based on default in payment of financed premium ten days written notice of intent to cancel must be mailed to each insured named in finance agreement and to any mortgagee, required that notice be sent only to insured not to lienholder that was not part of premium finance agreement and not mortgagee — Where insurer cancelled insurance effective the date it received notice to cancel from the premium finance company, there was no coverage for loss in accident occurring six days later — Insurer complied with requirement of section 627.728(12) to send notice of termination of coverage to all known lienholders within 10 business days after termination, and there is no merit to lienholder’s argument that pre-cancellation notice was required
OCEAN HARBOR CASUALTY INSURANCE COMPANY, Appellant, vs. SOUTHERN AUTOMOTIVE FINANCE COMPANY, Appellee. Circuit Court, 17th Judicial Circuit (Appellate) in and for Broward County. Case No. 02-16823 (25). September 21, 2004. Robert A. Rosenberg, Judge.
ORDER AND OPINION
THIS CAUSE comes before the court upon direct appeal from an Order Granting Summary Judgment in favor of plaintiff/appellee, Southern Automotive Finance Company, and against defendant/appellant, Ocean Harbor Casualty Insurance Company. The Court having considered the record, reviewed the briefs submitted by the parties, and being otherwise duly advised in premises, finds and decides as follows:
This appeal arises from a summary judgment on breach of contract granted in favor of Southern Automotive Finance Company, the lienholder of a motor vehicle that Ocean Harbor Casualty Insurance Company insured. On October 13, 2000, Michael Scaduto purchased a motor vehicle which Southern Automotive financed. On October 20, 2000, Scaduto added this vehicle, a 1997 Ford F-150, to an existing automobile insurance policy from Ocean Harbor. The premium for the policy was financed through Puritan Budget Plan. The agreement between Scaduto and Puritan stated that Puritan would have a power of attorney to cancel the policy for nonpayment of the premium. On February 27, 2001, Puritan mailed Scaduto a Ten (10) Day Notice of Intent to Cancel the policy after he failed to make a monthly premium payment. Thereafter, on March 19, 2001, Puritan sent Ocean Harbor a letter notifying them that Scaduto’s policy should be canceled effective March 19, 2001. After receiving the notice, Ocean Harbor sent a written notice of cancellation to Southern Finance on March 27, 2001. In the meantime, on March 26, 2001, Scaduto was involved in a motor vehicle accident which caused damage to the 1997 Ford F-150.
Subsequently, Southern Finance made a claim for collision damages from the accident, which Ocean Harbor denied on the grounds that the policy had been canceled on March 20, 2001. As a result, Southern Finance brought an action for breach of contract against Ocean Harbor. Plaintiff then moved for summary judgment on the grounds that there were no material issues of law or fact.
Southern Finance argued below that Florida Statute §627.728 provides that Ocean Harbor had a responsibility to send a ten day notice of cancellation before canceling the policy at the direction of Puritan. Southern Finance also argued that Florida Statute §627.848(1)(d) was applied. The trial court granted Southern Automotive Finance Company motion for summary judgment.
Ocean Harbor argues on appeal that the trial court erred in finding as a matter of law that insurance coverage was in effect for the 1997 F-150 on the date of the collision and it breached the contract of insurance by failing to pay the claim for damages incurred as a result of the collision.
The standard of review for summary judgment is de novo. American Zurich Insurance Co. v. St. George Crystal, LTD., 870 So.2d 243 (Fla. 2nd DCA 2004). This court’s review of the summary judgment requires the Court to determine whether the county court correctly ruled as a matter of law that Ocean Harbor was required to give Southern Finance ten (10) days notice before canceling Scaduto’s insurance policy.
Under Florida law, cancellation based upon default of a motor vehicle insurance policy, where the insurance premium is financed, is governed by §627.848 Florida Statutes. Section § 627.848(1)(a) provides that at least ten (10) days written notice shall be mailed to each of the insured shown on the premium finance agreement. Id. It has long been the case in Florida that the term insured has a restricted meaning and does not apply to anyone not specifically named in the policy. Southeastern Fidelity Insurance Co. v. Suwannee Lumber Manufacturing Co., Inc., 411 So. 2d 950 (Fla. 1st DCA 1982). In this case, the only named insured on the original policy and the October 20, 2000 endorsement is “Michael Scaduto.” In fact, Southern Finance is not named anywhere on the policy or in the declaration. Thus, pursuant to Florida Statute 627.848, Puritan was only required to give ten days written notice of the intent to cancel to the insured, Scaduto, which Puritan did on February 27, 2001.
The intent behind Florida Statute 627.848 was that the insurer not be burdened with the responsibility of insuring that the finance company complies with the notice provisions of the statute prior to cancellation. Bamboo Garden of Orlando v. Oak Brook Property and Casualty Co., 773 So.2d 81 (Fla. 5th DCA 2000). Additionally, Florida Statute §627.848(1)(d) which requires that notice be given to any applicable government agency, person and mortgagee in accordance with all statutory, regulatory and contractual restrictions does not apply to this matter. In this case, Southern Finance fits none of these statutory descriptions; it is merely a lienholder. Alfred v. Security National Insurance Co., 766 So.2d 449, (Fla. 4th DCA 2000). Puritan was under no obligation to provide prior notice of cancellation to Southern Finance. Southern Finance was not a part of the contract or agreement between Puritan and Scaduto.
As required by statute, Puritan sent Ocean Harbor the cancellation notice on March 19, 2001 (it was received on March 20, 2001). See Fla. Stat. §627.848(1)(c). In accordance to the March 19, 2001 letter, Ocean Harbor canceled Scaduto’s insurance policy, effective March 20, 2001; therefore, there was no coverage under the policy for the loss on March 26, 2001.
Furthermore, Ocean Harbor Casualty Insurance Company, was also in compliance with Florida Statute §627.728(12), which requires that, “no later than 10 business days after termination of a policy subject to this section, the insurer must send written or electronic notice of the termination to all holders of liens on the subject vehicle which lienholders are known to the insurer.” Southern Automotive Finance Company’s, argument concerning the requirement of notice prior to cancellation is without merit.
Thus the trial court’s grant of summary judgment in favor of Southern Automotive Finance Company is in error. Accordingly, summary judgment in favor of Defendant/Appellant, Ocean Harbor Casualty Insurance Company should be entered.
Accordingly, it is hereby
ORDERED AND ADJUDGED that the trial court’s Order Granting Summary Judgment in Favor of Plaintiff/Appellee, Southern Automotive Finance Company, is reversed, and this cause remanded from entry of an order consistent with the ruling.
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