2 Fla. L. Weekly Supp. 148a

Insurance — Uninsured motorist coverage not available to named insured who is injured in a vehicle which is owned by spouse with no UM coverage and in which insured has no ownership interest

LAURA ALVAREZ v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY. 9th Judicial Circuit in and for Orange County. Case No. CI-93-4869. February 10, 1994. James C. Hauser, Judge.

SUMMARY JUDGMENT

Both sides have agreed that there are no facts in dispute and this case may be resolved by summary judgment. The legal issue to be resolved is:

Does Fla. Stat. 627.727(9)(d) apply if a named insured, with uninsured motorist coverage, is injured in a vehicle owned by a spouse with no uninsured motorist coverage, when the named insured has no ownership interest in the spouse’s vehicle?

FACTS

The plaintiff, Laura Alvarez, purchased insurance for her Honda automobile from the defendant, State Farm on November 20, 1990. She signed an approved department of insurance form for non stacking uninsured motorist coverage (UMC). In June 1991 she married Victor Alvarez. Mr. Alvarez was the sole title owner of a 1991 Nissan pick up truck. The truck was not insured for UMC. Ms. Alvarez did not have any ownership interest in the Nissan. In July 1991 Mr. Alvarez, as driver of the Nissan, was involved in an accident with another vehicle, in which Ms. Alvarez was a passenger. Unfortunately the other vehicle was insured for property and personal injury protection, but not for liability.

Ms. Alvarez filed suit against the defendant asserting UMC. State Farm defended claiming that because the accident took place in an automobile owned by her husband, who was a class I insured under Laura’s policy, UMC did not apply, based on Fla. Stat. 627.727(9)(d). Additionally the policy itself specifically excluded coverage if an insured was injured by a vehicle owned by a spouse or relative, that was not insured under the policy.

STATEMENT OF LAW

In 1971 the Florida supreme court established the limits regarding what insurance companies could exclude in UMC.¹ In the Florida supreme case, Shelby Mullis insured his 1963 Ford and the policy included UMC. The policy covered not only Shelby, but his spouse and relatives living with him, including his son Richard. Richard was injured while driving a Honda motorcycle, owned by his mother, that was not insured. Like the case at bar, the insurance policy signed by Shelby excluded coverage if the insured was injured in a vehicle that was owned by a member of the Mullis family, but was not insured. The Florida supreme court refused to enforce the policy provision, as being contrary to the Florida statutes and public policy.²

The supreme court stated at page 233

Whenever bodily injury is inflicted upon named insured or insured members of his family by the negligence of an uninsured motorist, under whatever conditions, locations or circumstances, any of such insureds happen to be in at the time, they are covered by uninsured motorist liability insurance issued pursuant to requirements of section 627.0851. They may be pedestrians at the time of such injury, they may be riding in motor vehicles of others or in public conveyances and they may occupy motor vehicles (including Honda motorcycles) owned by, but which are not “insured automobiles” of named insured.³ (emphasis added)

In 1987 Fla. Stat. 627.727 was amended, legislatively overruling a portion of the Mullis decision. However the amendment required that the named insured be given a separate form, approved by the department (of insurance), informing the named insured of the limitations imposed by the subsection and that such coverage was an alternative to coverage without such limitations. Fla. Stat. 627.727(9). The separate form is a condition precedent in order for Fla. Stat. 627.727(9) to be used as a defense by insurance companies.⁴ As stated previously Ms. Alvarez signed such a form and that issue is not in dispute. The 5th DCA has stated:

“Section 627.727(9)(d) creates a statutory exception to the Mullis rule invalidating UM coverage exclusions to Class I insured. However, if an insurer fails to satisfy the notice requirements of the statute, the law stated in Mullis governs and the exclusion is unenforceable.”⁵

So long as the statutory preconditions are satisfied, if the named insured purchased insurance for one car with UMC benefits, but was injured in another car owned by the named insured that did not have UMC benefits, the named insured would not be entitled to recovery. However if the insured was injured in another vehicle, that was not owned by either the insured or family member, then the insured would be entitled to UMC benefits. Fla. Stat. 627.727(9)(c).

Unfortunately, as drafted, Fla. Stat. 627.727(9)(d) does not clearly address the situation at bar, to wit: a named insured is injured in a vehicle owned by a spouse with no UMC, in which the named insured has no ownership interest. In deciding this case, it is helpful to analyze Fla. Stats. 627.727(9)(c) and (d) together.

Fla. Stat. 627.727(9)

(c) If the injured person is occupying a motor vehicle which is not owned by him or by a family member residing with him, he is entitled to the highest limits of uninsured motorist coverage afforded for any one vehicle as to which he is a named insured or insured family member. Such coverage shall be excess over the coverage on the vehicle he is occupying. (emphasis added)

(d) The uninsured motorist coverage provided by the policy does not apply to the named insured or family members residing in his household who are injured while occupying any vehicle owned by such insureds for which uninsured motorist coverage was not purchased. (emphasis added)

The difficulty in interpreting Fla. Stat. 627.727(9)(d) is what the legislature meant by the clause “owned by such insureds.” Ms. Alvarez, as the named insured did not have an ownership interest in the 1991 Nissan; thus she claims that the statute does not apply. However Mr. Alvarez, as the spouse of Ms. Alvarez, was also insured under Ms. Alvarez’s policy as a category I insured.⁶ Thus State Farm claims that since Mr. Alvarez was insured, owned the vehicle in the accident, but did not purchase UMC coverage, Ms. Alvarez should not be entitled to compensation.

It is black letter law that statutes must be read in pari materia with each other.⁷ Thus Fla. Stat. 627.727(9)(d) must be read in conjunction with Fla. Stat. 627.727(9)(c). Fla Stat. 627.727(9)(c) permits an insured to recover UMC, but only if the injured insured is in a vehicle not owned by either the named insured or a family member residing with him. Thus in order to be consistent with Fla. Stat. 627.727(c), Fla. Stat. 627.727(9)(d) the clause “owned by the insureds” must apply to either the insured or family member residing with the insured.

In addition this court finds significant that Fla. Stat. 627.727(9)(d) uses the plural “…owned by such insureds” instead of the singular “owned by such insured”. By using the plural, insureds, instead of insured, the legislature is referring to either the named insured or family member residing in his household. It is helpful to review Fla. Stat. 627.727(9)(d) again, with the significant language highlighted.

does not apply to the named insured or family members residing in his household who are injured while occupying any vehicle owned by such insureds for which uninsured motorist coverage was not purchased. (emphasis added)

Had the legislature intended to permit UMC for situations such as this, they could have easily done so. For example Fla. Stat. 627.727(9)(d) could have stated:

The uninsured motorist coverage provided by the policy does not apply to the named insured or family members residing in his household who are injured while occupying any vehicle owned by the named insured for which uninsured motorist coverage was not purchased. (emphasis added)

The legislative history to the 1987 amendment indicates that the clause “owned by such insureds” applies to either the named insured or any other class I insured under the policy.

“The uninsured motorist coverage available to an insured will be the coverage applicable to the vehicle in the accident. However if the injured person is occupying a vehicle that is not owned by him or a family member riding with him, he will be entitled to the highest limits of UMC for any vehicle as to which he is a named insured or insured family member. UMC will not apply to any vehicle for which such insurance is not purchased.”⁸ (emphasis added)

“The uninsured motorist coverage available to an insured will be the coverage applicable to the vehicle in the accident. However if an injured person is occupying a vehicle which is not owned by him or a family member riding with him, he will be entitled only to the UMC for any vehicle as to which he is a named insured…UMC will not apply to any vehicle for which it is not specifically purchased.⁹ (emphasis added)

This court is persuaded that the 1987 amendment was designed for UMC to follow the vehicle, not the insured, unless the insured was in a vehicle not owned by any of the insureds; thereby legislatively overruling Mullis. Although Fla. Stat. 627.727(9)(d) is not a model in clarity, this court finds that the statute prohibits recovery in the case at bar. Defendant’s motion for summary judgment is granted and plaintiff’s motion for summary judgment is denied.

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¹Mullis v. State Farm Mutual Automobile Insurance Company, 252 So.2d 229 (Fla. 1971).

²Mullis v. State Farm Mutual Automobile Insurance Company, 252 So.2d 229 (Fla. 1971).

³Id. See also Coleman v. Florida Insurance Guaranty Association Inc., 517 So.2d 686, 689 (Fla. 1988).

⁴Nationwide Mutual Fire Insurance Company v. Phillips, 609 So.2d 1385 (Fla. 5th DCA 1993).

⁵Id. at page 1390

⁶See appendix 1

⁷Forsythe v. Longboat Key Beach Erosion Control District, 604 So.2d 452 (Fla. 1992); Alachua Company v. Powers, 351 So.2d 32 (Fla. 1977).

⁸Senate Staff Analysis and Economic Impact Statement for CS/SB 829 May 25, 1987.

⁹House of Representatives Committee on Insurance Staff Analysis HB 1029, April 20, 1987.

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