23 Fla. L. Weekly Supp. 635a

Online Reference: FLWSUPP 2306BECKInsurance — Automobile — Windshield repair — Declaratory judgment — Policy term “prevailing competitive price,” which is defined by policy as price insurer can secure from competent and conveniently located repair facility, is ambiguous as applied by insurer and must be construed in favor of repair shop/assignee — Insurer is obligated to pay price charged by repair shop so long as insurer could have secured that price on its own and shop is competent and conveniently located

CLEAR VISION WINDSHIELD REPAIR (a/a/o ROBERT BECKMANN), Plaintiff, vs. GOVERNMENT EMPLOYEES INSURANCE COMPANY, Defendant. County Court, 17th Judicial Circuit in and for Broward County. Case No. 14-16657 COCE 50. November 4, 2015. Honorable Peter B. Skolnik, Judge. Counsel: Emilio Stillo, Mac Phillips, Lawrence Kopelman, and Andrea Jakob, for Plaintiff. Vanessa Septien and Frank Zacherl, for Defendant.

ORDER GRANTING PLAINTIFF’S PARTIAL SUMMARYJUDGMENT FOR DECLARATORY RELIEF AS TO THEMEANING OF “PREVAILING COMPETIVIVE PRICE”

THIS CAUSE came before the Court on May 22, 2015 for hearing on Plaintiff’s Motion for Partial Summary Judgment as to Count I, and the Court, having reviewed the motion and entire Court file; having reviewed the relevant legal authorities; having heard argument from counsel; and having been sufficiently advised in the premises,

ORDERS AND ADJUDGES that for the reasons set forth below, the Plaintiff’s motion is GRANTED.Background

On or about June 17, 2014 Robert Beckmann’s Jeep Patriot Sport SUV sustained damage to its windshield. At the time of the loss, Mr. Beckmann was insured under an automobile insurance policy issued by the Defendant, Government Employees Insurance Company (“Geico”).

Mr. Beckmann hired the Plaintiff, Clear Vision Windshield Repair LLC, to provide the necessary labor and parts to repair the windshield. In exchange, Mr. Beckmann assigned his rights under the policy to the Plaintiff. The Plaintiff submitted its bill to the Defendant, but was not reimbursed the amount Plaintiff contends is owed under the policy. By way of this lawsuit, the Plaintiff is seeking damages for breach of contract, and declaratory relief as to the policy language governing the Defendant’s payment methodology.The Policy

The policy states the following as it relates to payment of comprehensive and collision benefits

LOSSES WE WILL PAY

Comprehensive (Excluding Collision)

1. We will pay for each loss, less the applicable deductible, caused by collision to the owned or non-owned auto. This includes glass breakage.

No deductible will apply to loss to windshield glass.

At the option of the insured, breakage of glass caused by collision may be paid under the Collision coverage, if included in the policy.

The policy also contains a section that purports to limit the Defendant’s liability:

LIMIT OF LIABILITY

The limit of our liability for loss:

1. Is the actual cash value of the property at the time of loss;

2. Will not exceed the prevailing competitive price to repair or replace the property at the time of loss, or any of its parts, including parts from non-original equipment manufacturers, with other of like kind and quality and will not include compensation for any diminution of value that is claimed to result from the loss. Although you have the right to choose any repair facility or location, the limit of liability for repair or replacement of such property is the prevailing competitive price which is the price we can secure from a competent and conveniently located repair facility. At your request, we will identify a repair facility that will perform the repairs or replacements at the prevailing competitive price;

(emphasis added).The Issue

The issue presented concerns interpretation of the applicable provision and any ambiguity arising from same.

The Plaintiff’s position is that the plain meaning of the policy language obligates GECIO to pay a price that can be secured from a competent and conveniently located glass repair facility and that the language is unambiguous upon plain reading.

Alternatively, the Plaintiff contends that if the policy can reasonably be interpreted or applied more than one way — one limiting coverage and the other expanding it — the language must be interpreted broadly and in favor of coverage based on the ambiguous nature of the term “prevailing competitive price”. GEICO General Ins. Co. v. Hollingsworth, 2015 WL 376406 (Fla.5th DCA 2015) [40 Fla. L. Weekly D308a]; see also State Farm Mutual Automobile Insurance Company v. Menendez, 70 So.3d 566, 570 (Fla.2011) [36 Fla. L. Weekly S469a].

The Defendant’s position is that the term “prevailing competitive price” must be construed as the price that it can secure from any body shop of its choosing so long as they are competent and conveniently located.

Plaintiff contends Defendant’s application of the policy term “prevailing competitive price” creates ambiguity. The Plaintiff’s position is that the policy term should be construed broadly in favor of the insured in that GEICO must pay the charge if the repair facility is competent, conveniently located, and GEICO could have secured the same price that the insured secured.

The specific relief the Plaintiff seeks is:

1. A declaration that the term “prevailing competitive price” under the Limit of Liability section quoted above is ambiguous as applied by the Defendant;

Analysis

Policy language is considered to be ambiguous if the language is susceptible to more than one reasonable interpretation, one providing coverage and the other limiting coverage. Washington National Insurance Corporation v. Ruderman, 117 So. 3d 943, 948 (Fla. 2013) [38 Fla. L. Weekly S511a]. It has long been a tenet of Florida insurance law that an insurer, as the writer of an insurance policy, is bound by the language of the policy, which is to be construed liberally in favor of the insured and strictly against the insurer. Id. The principle of the law is firmly imbedded in the jurisprudence of this State that contracts of insurance should be construed most favorably to the insured. Berkshire Life Ins. Co. v. Adelberg, 698 So. 2d 828, 830 (Fla. 1997) [22 Fla. L. Weekly S513a]. “Florida case law does not allow insurers to ‘use obscure terms to defeat the purpose for which a policy is purchased.’ ” Purrelli v. State Farm Fire & Cas. Co. 698 So. 2d 618,620 (Fla. 2d DCA 1997) [22 Fla. L. Weekly D2099d].

The Defendant cites to a final summary judgment entered in the Pasco County case of Superior Auto Glass of Tampa Bay, Inc. v. GEICO General Insurance Co., Case No. 51-2010-SC 002045WS (Pasco Cty. Ct., 2014)(Frimanty, J.) (the “Pasco County Order”). The Pasco order cites to three cases from foreign jurisdictions. See Cascade Auto Glass, Inc., 58 Cal.Rptr. 3d 54 (Ct. App. 2007); Glass Serv. Co., Inc. v. State Farm Mutual Automobile Insurance Company, 530 N.W.2D 867 (Minn.Ct.App.1995) and Levy v. State Farm Mutual Automobile Insurance Company, 58 Cal. Rptr. 3d 54 (Ct.App.2007).

The Court finds the Pasco decision unpersuasive. The Court also finds the foreign decisions relied upon by the Pasco Court to be distinguishable from the policy language before the Court. The policies interpreted by the foreign jurisdictions provide some type of methodology for determining the “prevailing competitive price.” See Cascade, 115 P.3d at 752 (“The prevailing competitive price means labor rates, parts, and material prices charged by a substantial number of repair facilities in the area where the insured vehicle is to be repaired.”), Levy, 58 Cal. Rptr. 3d at 56 (“The prevailing competitive price means prices charged by a majority of the repair market in the area which the car is to be repaired as determined by a survey made [State Farm].”) ; Glass Serv. Co. Inc., 530 N.W.2d at 869 (“State Farm’s policy defines ‘prevailing competitive price’ as ‘prices charged by a substantial number of the repair facilities in the area * * * as determined by a survey.”).

The Plaintiff contends that the policy requires the Defendant to pay the Plaintiff the price it charged as long as the Plaintiff is “competent” and “conveniently located,” and is a price GEICO could also have secured.

The Plaintiff cites to another windshield replacement/repair case Superior Auto Glass of Tampa Bay, Inc. v. GEICO Indemnity Co., 23 Fla. L. Weekly Supp. 151b (Hernando Cty. Ct., Feb. 27, 2015) (McCathran, J.) (the “Hernando County Order”) as an example of a Court who has found virtually identical policy language ambiguous.

Judge McCathran Jr. states in the Hernando Order:

Defendant argues, “GEICO must only show that a single competent glass facility conveniently located to [the insured] at the time of the claims would have made the glass repair for the amount GEICO paid in this case”. Defendant was the drafter of the policy language and could have inserted this specific language if this was the definition they intended to use when defining the phrase “the prevailing competitive price”. The Court is aware of no impediment which would have prevented GEICO from providing this clear definition of “prevailing competitive price” within the policy. However, the policy does not contain the specific language Defendant argues.

* * *

Plaintiff argues nothing in the policy language states the price has to be the lowest price GEICO may obtain. The Court holds Plaintiff’s interpretation is reasonable. There is nothing in the policy language explaining or setting forth how GEICO determines or specifically defines the “prevailing competitive price”. Therefore, there is one interpretation of the policy providing coverage (Plaintiff’s interpretation) and one interpretation limiting coverage (Defendant’s interpretation). As the policy language is susceptible to more than one reasonable interpretation, it is considered ambiguous.

The focus is more properly placed on the amount of the Plaintiff’s charge, as opposed to the amount of the Defendant’s reimbursement. The amount of loss as covered by the policy as matter of logic and common sense has to be a range. The policy language used by the Defendant to limit its liability is based on the term “prevailing competitive price,” which is a price that the Defendant can¹ secure from a competent² and conveniently located facility³. The policy does not say that the price is one the Defendant does secure or has secured or is based on a survey or other accumulation of prices charged by multiple repair facilities in the neighborhood. Thus, so long as the Defendant can secure the price that the insured was able to obtain from the repair facility, the Defendant must pay that amount so long as the facility was also competent and conveniently located.

The Defendant argues that this interpretation would require it to pay any charge, including those that are excessive in nature. This Court disagrees. For a repair facility to maintain its competence it must charge prices that are fair and reasonable in amount. In other words, if the repair shop charges $1,000,000 to fix a windshield, then that shop is simply not competent. If the Defendant believes that the prices in cases such as the one at issue are unduly excessive it may challenge the competency of the repair facility in setting those charges.Multiple Interpretations

The Plaintiff contends that multiple interpretations of the same policy language is persuasive evidence that the policy is ambiguous. At hearing before the Court, the Defendant contended the “prevailing competitive price” may not be the “lowest” price. The Plaintiff also presented to the Court the Defendant’s Motion for Reconsideration of the February 27, 2015 Hernando Order. In Defendant’s March 9, 2015 Motion for Reconsideration the Defendant’s interpretation of their policy was:

“the plain language ‘prevailing competitive price’ itself, even without reference to the definition of that term, makes clear that GEICO will pay no more than the lowest price available locally, no matter which vendor does the work”.

“In the capitalist system in which we live, the lowest price is always the price that prevails among competent vendors in the marketplace”

“Thus, giving full and proper effect to the actual Policy language used, the ‘prevailing competitive price’ will always be the lowest price”.

If trained legal minds are unable to agree as to whether the provision is clear and unambiguous, the average insured could never clearly understand what his or her benefits are. In Security Ins. Co. Of Hartford v. Investors Diversified Ltd., Inc., 407 So.2d 314 (Fla. 4th DCA 1981), the court stated:

“The insurance company contends that the language is not ambiguous, but we cannot agree and offer as proof of that pudding the fact that the Supreme Court of California and the Fifth Circuit in New Orleans have arrived at opposite conclusions from a study of the essentially the same language.”

Security Insurance, supra at 316 (Emphasis in original).

The “proof of the pudding” in the instant case is that GEICO itself has come to two different interpretations of the application of its policy language in the span of ninety days. Similarly, in Stroehmann v. Mutual Life Ins. Co. of New York, 300 U.S. 435, 57 S. Ct. 607, 81 L. Ed. 732 (1937), the Supreme Court found a life insurance policy ambiguous, stating in pertinent part:

“Examination of the words relied upon to show an exception to the incontestability clause of the policy discloses ample cause for doubt concerning their meaning. The arguments of counsel have emphasized the uncertainty. The District Court and the circuit Court of Appeals reached different conclusions, and elsewhere there is diversity of opinion. . . . Without difficulty respondent could have expressed in plain words the exception for which it now contends. It has failed, we think, so to do. And applying the settled rule, the insured is entitled to the benefit of the resulting doubt.”

Stroehman, supra at 441 (Emphasis added).Conclusion and Declaration

The Court’s focus is on the ambiguity surrounding the application of the term the “prevailing competitive price”. When an insured makes a claim, the insurer has a contractual obligation to pay for the loss. The Court finds that there is an ambiguity in the application of the policy terms.

The Plaintiff views “prevailing competitive price” in the context of the price charged in that a plain reading of the policy requires GEICO to pay the charge provided that the facility is competent, conveniently located and the price is one GEICO can secure.

The Defendant views “prevailing competitive price” in the context of reimbursement in that it is the price they “choose” to secure from a competent and conveniently located facility.

The amount of the loss is the price charged by a competent and conveniently located facility, even if that price exceeds lower prices that the insurer can secure or has secured from other repair facilities that it has chosen. An ambiguity is the result of a poorly written contract. Once an ambiguity is created, Courts are required to interpret that ambiguity. The Court interprets the provision broadly in favor of the insured and against the drafter.

The Plaintiff has articulated doubt as to its rights under the policy as a result of the inherent ambiguity in the application of the policy terms, and has shown there is a bona fide, actual, present and practical need for the declaration set forth below because the Plaintiff’s interest is adverse to the Defendant’s, and the requested declaration presents ascertainable facts that make the policy ripe for declaratory relief. This result is supported by Florida public policy on auto-glass claims⁴.

The Court hereby declares that the term “prevailing competitive price” as applied by the Defendant to be ambiguous. Therefore, it is to be construed in favor of the Plaintiff. As a matter of law, the Defendant is obligated to pay the price charged by the Plaintiff so long as the Defendant could have secured that price on its own and the Plaintiff is competent and conveniently located.

The Court makes no ruling at this juncture as to Plaintiff’s Count for Breach of Contract.

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¹The ordinary use of the word “Can” means “be able to.” Oxford Dictionaries, http://www.oxforddictionaries.com/us/definition/american_english/can, last visited June 11, 2015.

²“Competent” means “[d]uly qualified; answering all requirements; having sufficient capacity, ability or authority; possessing the requisite physical, mental, natural or legal qualifications; able; adequate; suitable; sufficient; capable; legally fit. Black’s Law Dictionary 284 (6th ed. 1990).

³Based on context and common sense, “conveniently located facility” means a repair shop that is easily accessible to the insured.

⁴This ruling is consistent with Florida public policy on windshield repair claims. It is noteworthy that the legislature enacted Fla. Stat. 627.7288, which prohibits a motor vehicle insurer from applying a deductible to a windshield claim, to protect Florida’s citizens from dangerous driving conditions by removing financial disincentives to a driver replacing or repairing a damaged windshield. An insured is provided greater coverage from the policy being construed according to its plain words as opposed to GEICO’s construction wherein the insured must speculate as to the “lowest price” vendor while driving a vehicle with damaged glass.