20 Fla. L. Weekly Supp. 892a
Online Reference: FLWSUPP 2009RAMOInsurance — Personal injury protection — Coverage — Despite fact that insured no longer owned vehicle insured under his PIP policy on date of accident in which he was injured while driving vehicle belonging to girlfriend’s father, insured’s policy provided PIP coverage where transfer of ownership of vehicle did not automatically render entire PIP policy unenforceable under terms of policy, and insurer did not exercise discretion to cancel policy upon learning of vehicle sale
DAMADIAN MRI IN POMPANO BEACH P.A. d/b/a STAND UP MRI OF FORT LAUDERDALE (LUIS RAMOS, Patient), Appellant, vs. UNITED AUTOMOBILE INSURANCE COMPANY, Appellee. Circuit Court, 17th Judicial Circuit (Appellate) in and for Broward County. Case No. 10-27836 CACE (09). L.T. Case No. 06-002327 COSO (52). March 18, 2013.
OPINION
(LUZZO, Judge.) THIS CAUSE came before the Court, sitting in its appellate capacity, upon appeal by Appellant, Damadian MRI in Pompano Beach P.A. d/b/a Stand Up MRI of Fort Lauderdale (Luis Ramos, Patient) (“Damadian MRI”), of the trial court’s entry of final judgment in favor of Appellee, United Automobile Insurance Company (“United”). The court, having considered the briefs filed by the parties and being otherwise duly advised in the premises, dispenses with oral argument and finds and decides as follows:
On August 31, 2004, Luis Ramos (“Ramos”) entered into an insurance contract with United for personal injury protection (“PIP”) benefits. The insurance policy (policy number UAU000842198) provided coverage to Ramos for a 1992 Honda Prelude owned by Ramos for a one year period. On April 21, 2005, Ramos was involved in an automobile accident where he sustained injuries. Ramos assigned his rights to his PIP benefits to Damadian MRI upon receiving medical treatment. On May 31, 2005, Ramos submitted to an examination under oath, and stated that he had sold the insured vehicle several months prior to the accident. At the time of the accident, Ramos was driving a vehicle owned by his girlfriend’s father, which was insured under another policy issued by State Farm. On December 20, 2005, Damadian MRI filed its complaint against United for failure to pay under an assignment of PIP benefits. On December 30, 2005, United notified Damadian MRI that there were no benefits available because Ramos had sold the insured vehicle prior to the date of loss and did not have a legal interest in the vehicle. On November 16, 2006, United moved for final summary judgment. That motion was denied by the trial court. On February 4, 2010, United filed a renewed motion for final summary judgment. On May 19, 2010, the trial court granted final summary judgment. The trial court found that there was no coverage under the insurance policy because the covered automobile was sold by Ramos prior to the accident. On June 9, 2010, final judgment was entered in favor of United. On July 2, 2010, Damadian MRI timely filed a notice of appeal.
On appeal, Damadian MRI argues that the trial court erred in granting summary judgment. Specifically, Damadian MRI contends that the trial court erred when it denied the existence of PIP coverage when section 627.7275, Florida Statutes prohibits an insurer from cancelling PIP coverage for “any” reason. In opposition, United argues that the trial court properly granted its renewed motion for summary judgment because Florida Statutes require that in order to obtain PIP benefits from its own insurer an insured must be the owner of a motor vehicle, and at the time of the accident Ramos was no longer owner of the insured vehicle. This Court’s standard of review is de novo, because “this is an appeal from a summary judgment and, also, because the substantive question posed is a legal question of statutory construction.” Progressive Auto Pro Ins. Co. v. One Stop Medical, Inc., 985 So. 2d 10, 12 (Fla. 4th DCA 2008) [33 Fla. L. Weekly D1174a] (citing Florida Dept. of Revenue v. New Sea Escape Cruises, Ltd., 894 So. 2d 954, 957 (Fla. 2005) [30 Fla. L. Weekly S109a]).
Damadian MRI’s first argument is that the trial court erred in granting summary judgment by denying the existence of PIP coverage, when section 627.7275, Florida Statutes prohibits an insurer from cancelling PIP coverage for any reason. United agrees that at no time did it cancel the insurance policy or ever assert that the policy was cancelled. Rather, United argues that the insurance contract is unenforceable because Ramos had no insurable interest at the time of the loss because he had sold the insured vehicle months prior to the date of the automobile accident. This statute is inapplicable because it is undisputed that the policy was never cancelled.
The court has carefully considered the record on appeal and finds that the trial court erred when it determined that there were no genuine issues of material fact that the subject insurance policy provided no coverage. First, it is undisputed that United issued an insurance policy on August 31, 2004 that remained in effect for a one year period. Second, it is undisputed that United never cancelled the subject policy. Rather, United moved for summary judgment on its first affirmative defense that there was no coverage under the policy, and that an insured must have an insurable interest in the property at the time he takes out the insurance and at the time of the loss. Thus, United has the burden of pleading and proving its affirmative defense. See Custer Medical Center v. United Auto Ins. Co., 62 So. 3d 1086, 1097 (Fla. 2010) [35 Fla. L. Weekly S640a]. Based on the record on appeal, the court finds that United has failed to meet its burden.
United advances that the trial court properly granted summary judgment in favor of United because Florida law requires that in order for an insurer to be liable for PIP benefits, an insured must be the owner of a motor vehicle pursuant to section 627.736(4)(e), Florida Statutes. Thus, United contends that the insurance policy is unenforceable pursuant to section 627.405, Florida Statutes since Ramos sold and transferred title to the motor vehicle prior to the accident. Section 627.405 provides, in pertinent part:
No contract of insurance of property or of any interest in property or arising from property shall be enforceable as to the insurance except for the benefit of persons having an insurable interest in the things insured as at the time of the loss.
§ 627.405, Fla. Stat. The court finds Johnson v. Aetna Life and Cas. Co., 472 So. 2d 859 (Fla. 3d DCA 1985), instructive. In Johnson, the Third District Court of Appeal affirmed a summary judgment in favor of Aetna. Id. at 860. The Johnson court held,
In this case, ownership of the Toyota was transferred to Joyce by virtue of the January 22, 1982 judgment of dissolution. From that point on, Gerald had no insurable interest. He had neither an interest in the vehicle itself, nor any possible exposure to legal liability arising from its use. Consequently, on February 14, 1982, when the accident occurred, the insurance contract was unenforceable with regard to the Toyota.
Johnson, 472 So. 2d at 861 (internal citation omitted) (referring to section 627.405, Florida Statutes). In the instant case, the summary judgment evidence demonstrates that at the time of the incident, Ramos was not the owner of the vehicle under United’s insurance policy. However, the fact that the insurance policy may not provide liability coverage does not render other provisions of the insurance policy unenforceable or invalid. See Ward v. Nationwide Mut. Fire Ins. Co., 364 So. 2d 73, 77 (Fla. 2d DCA 1978) (stating “[i]f an insurer intends to restrict coverage, it should use language clearly stating its purpose.”)
Under Florida law, “actions for PIP benefits are based on the insurance contract and thus are governed by contract principles.” Allstate Ins. Co. v. Kaklamanos, 843 So. 2d 885, 892 (Fla. 2003) [28 Fla. L. Weekly S287a]. United’s sole argument is that the transfer of ownership of the subject vehicle rendered the entire insurance policy, including the PIP section, unenforceable. However, “[t]he fact that appellant did not own the insured vehicle does not preclude [appellant] an insurable interest and coverage under the policy.” Overton v. Progessive Ins. Co., 585 So. 2d 445, 448 (Fla. 4th DCA 1991). The coverage is determined by the insurance policy itself. Id.
It is clear from the record before the court that Damadian MRI seeks payment pursuant to Part E of Ramos’ insurance policy. That section provides, in pertinent part, that United will pay the medical benefits of the “named insured” “incurred as a result of bodily injury caused by an accident arising out of the ownership, maintenance, or use of a motor vehicle and sustained by: (a) the named insured. . . .” (Policy at pg. 13) (emphasis added). United does not cite to, nor does the insurance policy require, that the named insured maintain ownership of the vehicle. Furthermore, the subject insurance policy does not limit medical benefits to the insured vehicle, but rather, states that benefits will be paid arising out the “use of a motor vehicle.” Id. (emphasis added).
This court’s decision is further supported by the insurance policy’s cancellation provisions. The insurance policy permits two types of cancellation: (1) automatic; and (2) discretionary. The insurance policy enumerates specific conditions upon which the insurance policy would automatically terminate. None of the facts of the instant case apply to the automatic termination provision. However, the court notes that the insurance policy allows that the policy “may be canceled” “upon the transfer of ownership of the covered motor vehicle. . .” (Policy at pg. 17) (emphasis added). The court is not persuaded by United’s argument that it was without knowledge that Ramos was not the owner the insured vehicle until Ramos’ examination under oath conduct on May 31, 2005. Despite this newly acquired information, United never exercised its option to terminate the insurance policy. In fact, United concedes that the insurance policy was never cancelled.1 United could have drafted an insurance policy where a situation such as the one that occurred in this case resulted in automatic termination, but it chose not to. See Green v. Life & Health of Am., 704 So. 2d 1386, 1390(Fla. 1998) [23 Fla. L. Weekly S42a] (stating “[i]t is well settled that, as a general rule, parties are free to ‘contract-out’ or ‘contract around’ state or federal law with regard to an insurance contract, so long as there is nothing void as to public policy or statutory law about such a contract.”) On this basis, the court finds, as a matter of law, that there was PIP coverage pursuant to the insurance policy.
Accordingly, it is hereby:
ORDERED AND ADJUDGED that the trial court’s final judgment is REVERSED and REMANDED for proceedings consistent with this opinion.
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1The court declines to address Damadian MRI’s contention that United failed to provide PIP coverage under section 627.7275, Florida Statutes, as it is undisputed that United never cancelled the insurance policy.
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