12 Fla. L. Weekly Supp. 681b

Insurance — Personal injury protection — Coverage — Insured person — Passenger in leased vehicle — Definition of “owner” in section 627.732(5) is definition to be used when determining whether driver’s insurance affords PIP coverage to passenger of rental vehicle, not more restrictive definition in driver’s insurance policy — Where there is genuine issue of material fact as to whether rental agreement between driver and car rental company is security agreement that allows leasing driver to have “right of possession” of vehicle so as to allow driver to be owner of vehicle, and thereby qualify vehicle as “covered vehicle” and passenger as “insured person,” insurer’s motion for summary judgment is denied

SEMINOLE CHIROPRACTIC CENTER, as Assignee of Cedric Church, Plaintiff, v. PROGRESSIVE EXPRESS INSURANCE COMPANY, a corporation authorized and doing business in the State of Florida, Defendant. County Court, 18th Judicial Circuit in and for Seminole County. Case No. 02-SC-003514. March 8, 2005. John R. Sloop, Judge. Counsel: Lee M. Jacobson. George Milev.

ORDER ON DEFENDANT’S AMENDED MOTION FOR SUMMARY JUDGMENT

THIS CAUSE came on for hearing February 1, 2005 on Defendant’s Amended Motion for Summary Judgment, the Court having heard argument of counsel and being otherwise fully advised in the premises, and states as follows:

1. Defendant has moved this Court to determine, that as a matter of law, Plaintiff’s assignor, Cedric Church, is not an insured person under the personal injury protection (PIP) portion of the insurance policy Defendant issued to Ernest Atkins.

FINDINGS OF FACT

2. The material undisputed facts are as follows:

a. At all material times, Ernest Atkins maintained a policy of PIP insurance with Defendant, that was in full force and effect on the date of accident.

b. At all material times, Ernest Atkins leased a vehicle from Enterprise Leasing Company and had rightful possession of the vehicle.

c. On May 15, 2002, Ernest Atkins, Cedric Church and Chester Roberts were passengers in the vehicle Ernest Atkins leased from Enterprise Leasing Company and were involved in an automobile accident.

d. Cedric Church did not own a motor vehicle nor reside with a relative who owned a motor vehicle for which security was required by Florida Law.

e. Cedric Church sought treatment from Plaintiff, a medical provider, as a result of the injuries suffered in the automobile accident.

f. Plaintiff billed Ernest Atkins’ PIP carrier for the treatment provided to Cedric Church.

g. Defendant denied PIP coverage to Cedric Church.

h. Defendant concedes that Enterprise Leasing Company complied with FLA. STAT. §627.7263 (2002), which shifts the PIP benefits portion of the policy of insurance from Enterprise to Defendant and making Mr. Atkins’ insurance policy the “primary” source of PIP benefits.

i. Defendant paid PIP benefits to its insured, Mr. Atkins, under his policy of insurance.

j. Under the policy of insurance issued to Ernest Atkins, the has made specific definitions of the following terms: “insured person”, “covered vehicle” and “owner.”

k. The pertinent portion of the definition of “insured person”, as defined by the Defendant’s policy of insurance is, “any other person sustaining bodily injury while occupying a covered vehicle.”

l. The pertinent portion of the definition of “covered vehicle”, as defined by Defendant is:

“any additional vehicle on the date you become the owner if:

(a) you acquire the vehicle during the policy period shown on the Declarations Page;

(b) we insure all vehicles owned by you; and

(c) no other insurance policy provides coverage for that vehicle.

m. An “owner” under Defendant’s policy of insurance is defined as follows:

“Owner” means any person who, with respect to a vehicle:

(a) Holds legal title to the vehicle

(b) Has legal possession of the vehicle that is subject to a written security agreement with an original term of six (6) months or more; or

(c) Has legal possession of the vehicle that is leased to that person under a written agreement for a continuous period of (6) months or more.

n. For purposes of this motion, a vehicle is a “covered vehicle” under the Defendant’s policy of insurance if it is a “replacement vehicle” defined as:

Any replacement vehicle on the date you become the owner if:

(a) you acquire the vehicle during the policy period shown on the declarations page;

(b) the vehicle that you acquire replaces one shown on the Declarations page; and

(c) no other insurance policy provides coverage for that vehicle.

o. Fla. Stat. §627.732(5) (2002) — a section of the Florida Motor Vehicle No-Fault Law defines “owner” as:

a person who holds the legal title to a vehicle; or, in the event a motor vehicle is the subject of a security agreement or lease with an option to purchase with the debtor or lessee having the right to possession, then the debtor or lessee shall be deemed the owner for the purposes of §§ 627.730-627.7405.

DEFENDANT’S ARGUMENT

3. Defendant argues that its insured, Ernest Atkins was not the “owner,” as defined by the policy of insurance, of the leased vehicle and therefore the leased vehicle was not a “covered vehicle” under the policy.

4. Defendant argues that Cedric Church is not an “insured person” as defined by the policy of insurance issued to Ernest Atkins because he was not in a “covered vehicle” as defined by the policy of insurance.

5. As such, Defendant argues that because Ernest Atkins was not the “owner” of the rental vehicle, his passenger, Cedric Church cannot be provided PIP benefits under the policy because Mr. Church was not in a “covered vehicle” and thus precluded from being “insured person” under the policy.

6. In support of its motion, Defendant cites the following cases as controlling authority: Allstate Ins. Co. v. Morgan, 870 So.2d 2 (Fla. 2d DCA 2003); Progressive Consumer Ins. Co. v. Delva, 11 Fla. L. Weekly Supp. 302a (11th Judicial Circuit, Feb. 17, 2004); Progressive Express Ins. Co. v. Harrison, et al., 11 Fla. L. Weekly Supp 405a (11th Judicial Circuit, March 23, 2004); and Nationwide Mut. Fire Ins. Co. v. Mazzarino, 766 So.2d 446 (Fla. 4th DCA 2000).

PLAINTIFF’S ARGUMENTS

7. Plaintiff argues that the use of Progressive’s definition of the term “owner” is impermissible and the statutory definition of “owner” is controlling. Specifically, Plaintiff states that language inserted into a policy of insurance cannot be more restrictive than those rights afforded to the citizens of Florida by statute.

8. In doing so, Plaintiff cites, inter alia, the following cases and their holdings:

a. Wechsler v. Novak, 26 So. 2d 884 (Fla. 1946) (the general right to contract is subject to the limitation that the agreement must not violate the Federal or State Constitutions or state statutes or ordinances of a city or town or some rule of common law).

b. Standard Accident Ins. Co. v. Gavin, 184 So. 2d 229 (Fla. 1st DCA 1966) (It is well settled in this State where a contract of insurance is entered into on a matter surrounded by statutory limitations and requirements, the parties are presumed to have entered into such agreement with reference to the statute, and the statutory provisions become part of the contract) citing 18 Fla.Jur. 72 Insurance Section 73; Citizen’s Ins. Co. v. Barnes, 124 So. 722 (Fla. 1929); Poole v. Travelers Ins. Co., 175 So. 138 (Fla. 1938).

c. Auto-Owners Ins. Co. v. Bennett, 466 So. 2d 242 (Fla. 2d DCA 1984) (Uninsured motorist coverage is statutorily required to be provided for all persons who are insured under a policy for basic liability coverage; exclusions from that coverage are legally impermissible).

d. State Farm Mut. Auto. Ins. Co. v. Swearingen, 590 So.2d 506 (Fla. 4th DCA 1991) (Automobile policy’s three-year limitation on med-pay coverage was invalid — such limitation would have defeated legislative intent in med-pay statute).

9. Plaintiff argues that the definition of “owner” as defined by Progressive’s policy of insurance is more restrictive than and superseded by the definition of “owner” as defined by the Florida Legislature in FLA. STAT. §627.732(5) located on the “Definitions” portion of the Florida Motor Vehicle No-Fault Law, §§ 627.730-627.7405.

10. Plaintiff then argues that the Florida Motor Vehicle No-Fault Law provides PIP coverage to four classes of persons. See 627.736(4)(d).

11. Specifically, Plaintiff argues there must be PIP coverage afforded to Plaintiff’s assignors, the passengers of the rental vehicle leased by Progressive’s insured, under FLA. STAT. §627.436(4)(d)(4).

12. Plaintiff argues FLA. STAT. §627.436(4)(d)(4) provides coverage to “any other person” who sustained bodily injury in this State when occupying the “owner’s” motor vehicle.

13. Plaintiff suggests that Progressive’s insured was the “owner,” for purposes of the Florida Motor Vehicle No-Fault Law because the vehicle leased from Enterprise Leasing Company was “the subject of a security agreement” and Mr. Atkins had the right to possess such vehicle — thereby satisfying the statutory definition of “owner” and causing PIP coverage to be afforded to Cedric Church under Fla. Stat. §627.736(4)(d)(4) (Fla. Stat. 2002).

14. In support of this argument, Plaintiff points to the lease agreement between Enterprise and Defendant’s insured and testimony taken from Jennifer Denbow, an agent of Enterprise.

15. Ms. Denbow testified that the rental of the vehicle was “secured” by a Visa credit card ending in 4635. See Deposition of Jennifer Denbow at p. 7, lines 13-19.

16. Further, attached to Ms. Denbow’s deposition is the lease agreement that authorizes Enterprise to present the credit card used by Mr. Atkins as a means of “security” for the vehicle.

17. Therefore, Plaintiff argues that because the lease agreement was a “security agreement” and because Mr. Atkins had rightful possession of the vehicle, Mr. Atkins was the “owner” for purposes of the Florida Motor Vehicle No-Fault Law.

18. Additionally, Plaintiff argues that Fla. Stat. §627.736(2) creates the only “authorized exclusions” that can be used to exclude coverage afforded by the statute. Thus, any of Defendant’s policy provisions that limit, restrict, erode and/or exclude coverage, are void and cannot be used to “whittle away” the intent of the legislature. Salas v. Liberty Mut. Fire Ins. Co., 272 So. 2d 1 (Fla. 1972); Mullis v. State Farm Mut. Auto. Ins. Co., 252 So. 2d 229 (Fla. 1971).

19. In the alternative, Plaintiff argues that there is a genuine issue of material fact that the vehicle leased by Progressive’s insured was a “replacement vehicle” under the policy of insurance and therefore, Plaintiff’s assignor was an “insured person” in a “covered vehicle.”

20. In support of the alternative argument, Plaintiff points to the deposition testimony of Ernest Atkins and Chester Roberts.

21. Ernest Atkins testified that the only reason he was driving the Enterprise vehicle on the day of the accident was because his BMW was broken down. See deposition of Ernest Atkins at p. 42, lines 10-12.

22. Chester Roberts, another passenger of the Enterprise vehicle testified, “the BMW tore up before the accident, that’s why we were in the rental car.” See deposition of Chester Roberts at p. 10, lines 4-5.

23. Plaintiff argues because Mr. Atkins acquired the motor vehicle during the policy period shown on the declarations page. This is so because he was the “owner” of the motor vehicle at the time of the accident, the rental car acquired replaces the one shown on the declarations page and no other insurance policy provides for coverage for that vehicle as the “primary” PIP insurance was shifted to Mr. Atkins. Further, it is contrary to Florida Law to collect double PIP benefits from two separate insurance carriers — thus, the Enterprise vehicle was a “replacement vehicle” and PIP coverage is afforded to the passengers of the vehicle rented by Defendant’s insured.

Legal Analysis

24. This Court finds that the term “owner” as defined by Defendant’s policy of insurance is more restrictive than that of the one the legislature created in FLA. STAT. §627.732(5).

25. This Court finds that the definition of “owner” as defined by the Florida Legislature is the definition that is to be used when determining whether Mr. Atkins’ policy of insurance with the Defendant affords PIP benefits to passengers of a rental vehicle. Standard Accident Ins. Co. v. Gavin, 184 So. 2d 229 (Fla. 1st DCA 1966).

26. After review of the Morgan case cited by Defendant and the appellate briefs of this case provided to this Court by counsel for Plaintiff, I take judicial notice of the briefs supplied by Plaintiff under the authority of FLA. STAT. 90.202(6) as they are records of another court of this state.

27. The Morgan case is distinguishable and irrelevant to the legal analysis of this case as presented by the arguments of counsel. This is so for two reasons: 1) Morgan involved the interpretation of a different insurer’s policy that contained language wholly different than the policy language at issue; and 2) after review of the appellate briefs, it is apparent that Morgan‘s attorney did not argue the restrictive language of Allstate’s definition of “owner.”

28. Additionally, the Delva and Harrison cases, although more on point, are not binding upon this Court and also used their term “owner” as defined by Progressive rather than the statutory definition to determine the outcome of the case. Because the statutory definition controls, I reject the outcomes of these cases as contrary to the required statutory definition of “owner”.

29. This case turns to whether Mr. Atkins was the “owner” of the Enterprise vehicle for purposes of PIP coverage as defined in Fla. Stat. §627.732(5).

30. This Court cannot make this determination because there is a genuine issue of material fact as to whether the Enterprise rental agreement between Mr. Atkins and Enterprise is a “security agreement” that allows for the debtor or lessee (Mr. Atkins) to have the “right of possession” of the vehicle, and if so, is Mr. Atkins is the “owner” for purposes of PIP coverage under the policy of insurance issued to him pursuant to Fla. Stat. §627.736(4)(d)(4).

31. Plaintiff presented sufficient un-rebutted record evidence that creates a genuine issue of material fact whether the lease agreement between Enterprise and Mr. Atkins is indeed a “security agreement.”¹

THEREFORE it is ORDERED AND ADJUDGED:

32. There exists a genuine issue of material fact as to whether the lease agreement between Enterprise and Mr. Atkins was a “security agreement” so as to allows Mr. Atkins to be the “owner” of the motor vehicle pursuant to FLA. STAT. §627.732(5).

33. Defendant’s Amended Motion for Summary Judgment is Denied.

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¹This Court need not go into the analysis as to whether the leased vehicle is a “replacement vehicle” under the policy of insurance of Defendant and makes no opinion regarding such because there is at least one genuine issue of material fact sufficient to defeat Defendant’s Amended Motion for Summary Judgment.

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