23 Fla. L. Weekly Supp. 151b
Online Reference: FLWSUPP 2302RENCInsurance — Automobile — Windshield replacement — Where policy states that glass repair or replacement is not to exceed “prevailing competitive price” and defines that term as price insurer can secure from competent glass repair facility conveniently located to insured at time insured makes claim, but there is nothing in policy explaining how insurer determines or defines “prevailing competitive price,” ambiguity is resolved by adopting reasonable interpretation of term that provides coverage — Plaintiff glass repair shop’s interpretation of term to mean price charged by it as a competent repair facility conveniently located to insured is reasonable
SUPERIOR AUTO GLASS OF TAMPA BAY, INC., a/a/o Suzanne Renczkowski, Plaintiff, v. GEICO INDEMNITY COMPANY, Defendant. County Court, 5th Judicial Circuit in and for Hernando County. Case No. 2010SC1084. February 27, 2015. Donald M. McCathran, Jr., Judge. Counsel: Michael L. Grossman, Cohen, Battisti & Grossman, Winter Park, for Plaintiff. Frank Zacherl and Vanessa Septien, Shutts & Bowen, LLP, Miami, for Defendant.
REVERSED. FLWSUPP 2407GEIC (GEICO Indemnity Co. v. Superior Auto Glass of Tampa Bay, Inc., 2015-AP-2006, 8-19-2016)
ORDER ON DEFENDANT’S MOTION FOR SUMMARYJUDGMENT; PLAINTIFF’S CROSS-MOTION FORSUMMARY DISPOSITION; AND PLAINTIFF’S SECONDMOTION FOR SUMMARY DISPOSITION
THIS CAUSE having come before the Court for hearing on Defendant’s Motion for Summary Judgment; Plaintiff’s Cross-Motion for Summary Disposition; and Plaintiff’s Second Motion for Summary Disposition Relating to Windshield Sunscreen Film, and the Court having reviewed: all of the motions; all memorandums of law filed by both attorneys; the case law citations within the motions and/or memorandums; all attachments and/or affidavits attached to the motions for summary judgment; and having considered the argument of counsel for each party, and the Court being duly advised, the Court sets forth the following:
On September 13, 2010, Suzanne Renczkowski (hereinafter referred to as the “Insured”) sustained damage to the windshield of her 2001 Chevrolet Malibu. On September 13, 2010, Plaintiff replaced the Insured’s windshield and the Insured signed an assignment of benefits to Plaintiff. The Insured was a named insured under policy number 4146-75-79-37 underwritten by Defendant which provided coverage for the loss. Plaintiff billed Defendant $439.69 for the replacement of the Insured’s windshield. Defendant paid $308.89 leaving a balance of $130.80.
On October 14, 2010, Plaintiff filed a complaint against Defendant alleging breach of contract.1 On November 8, 2010, Plaintiff filed an amended complaint against Defendant seeking payment of the $130.80 owed plus prejudgment interest, attorney’s fee, and costs. On December 20, 2010, Defendant filed an answer and affirmative defenses. On January 14, 2011, Plaintiff filed a reply to Defendant’s answer and affirmative defenses. The parties engaged in discovery for several years.2 The case was ultimately scheduled for a jury trial by the Court. As the jury trial approached, the attorneys for each party filed their respective motions for summary judgment / disposition and the jury trial was canceled.3
Defendant’s Motion for Summary Judgment argues: GEICO’s policy is unambiguous; and, GEICO fulfilled their obligations under the policy by paying the prevailing competitive price for the windshield replacement and/or repair. Plaintiff’s Cross-Motion for Summary Disposition argues: the plain meaning of GEICO’s prevailing price amendment obligates GEICO to pay any price that can be secured from a competent glass repair facility, not the lowest price that can be secured; and, Plaintiff’s interpretation of the prevailing competitive price provision presents an ambiguity which must be construed in favor of the plaintiff. Plaintiff makes two other arguments: the prevailing competitive price standard is inapplicable because it only applies to window glass, which is separate and distinct from a windshield pursuant to Florida’s Uniform Statute Control Act; and, summary judgment for Defendant is inappropriate when outstanding questions of fact remain with regard to whether Defendant’s payment of $308.89 was for a windshield of “like kind and quality” and whether a competent, conveniently located repair facility would have accepted $308.89 to return the windshield to its pre-loss condition; however, the Court determines these are arguments in opposition to Defendant’s Motion for Summary Judgment. Furthermore, Plaintiff filed a second Motion for Summary Disposition arguing the amount paid did not include payment for windshield sunscreen film.4
The language of the policy that is in question is found in GEICO’s Automobile Policy Amendment, Glass Repair / Replacement, Section III — Physical Damage Coverages, Limit of Liability which reads,
The following numbered paragraph is added:
6. for glass repair or replacement, is not to exceed the prevailing competitive price. This is the price we can secure from a competent glass repair facility conveniently located to you at the time you make your claim. Although you have the right to choose any glass repair facility or location, the limit of liability for loss to window glass is the cost to:
(a) repair; or
(b) replace
such glass but will not exceed the prevailing competitive price. If the glass is replaced, then the cost will be paid at the prevailing competitive price for replacement. At your request, we will identify a glass repair facility that will perform the repairs at the prevailing competitive price.
Defendant’s Motion for Summary Judgment, Exhibit A. Neither party challenges that the above is the applicable language of the policy. The focus of both parties in their motions, and the Court in this Order, is the meaning of the phrase “prevailing competitive price.”
Where the language in an insurance contract is plain and unambiguous, a court must interpret the policy in accordance with the plain meaning so as to give effect to the policy as written. In construing insurance contracts, ‘courts should read each policy as a whole, endeavoring to give every provision its full meaning and operative effect.’ Courts should ‘avoid simply concentrating on certain limited provisions to the exclusion of the totality of others. However, ‘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.” Berkshire Life Ins. Co. v. Adelberg, 698 So. 2d 828, 830 (Fla. 1997) [22 Fla. L. Weekly S513a]; Washington National Insurance Corporation v. Ruderman, 117 So. 3d 943, 948 (Fla. 2013) [38 Fla. L. Weekly S511a]. “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].
As the Florida Supreme Court wrote in Berkshire, “the average man has no conception of the judicial niceties of the problem and even the most learned judge or lawyer, in attempting to understand and comprehend the niceties of the distinction, is left in a state of bewilderment and confusion.” Berkshire Life Ins. Co. v. Adelberg, 698 So. 2d 828, 830 (Fla. 1997) [22 Fla. L. Weekly S513a]. The insured “was entitled to a clear explanation of terms rather than a fine distinction which was never written into [the] contract for insurance coverage.” Id. If an insurance policy is,
drawn in such a manner that it requires the proverbial Philadelphia lawyer to comprehend the terms embodied in it, the courts should and will construe them liberally in favor of the insured and strictly against the insurer to protect the buying public who rely upon the companies and agencies in such transactions. We recognize that ‘unless restricted by statute or public policy, insurance companies have the same right as individuals to limit their liability and impose conditions upon their obligations. However, the insurance company has a duty to do so clearly and unambiguously.
Washington National Insurance Corporation v. Ruderman, 117 So. 3d 943, 951 (Fla. 2013) [38 Fla. L. Weekly S511a].
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 that GEICO paid in this case” to determine they have paid the prevailing competitive price. Defendant’s Motion for Summary Judgment, Page 6. 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.
Defendant relies upon an affidavit and deposition of Steven Blome, and attachments to each, to support the argument Defendant paid the “prevailing competitive price”. At the time of the affidavit and deposition, Steven Blome was the manager of GEICO’s glass department. One of the attachments to the affidavit is a letter, dated September 8, 2008, to various shop owners and/or managers advising them of GEICO’s new pricing agreement that will apply to glass service provided in their local market. The letter instructs that “these rates are competitive for your market” and are “based on the most current published NAGS benchmark list.” NAGS is the National Auto Glass Society. The letter then sets forth the rates Defendant will pay. However, none of this information is in the policy itself. There was nothing preventing Defendant, as the drafter of the policy, from inserting the language contained in the letter sent to shop owners into the insurance policy.
Florida law holds if “the policy is ambiguous it must be construed against the insurer and in favor of coverage without resort to consideration of extrinsic evidence.” Washington National Insurance Corporation v. Ruderman, 117 So. 3d 943, 952 (Fla. 2013) [38 Fla. L. Weekly S511a]. Therefore, although the Court has reviewed extrinsic evidence presented (attached to motions, memorandums, depositions, or contained in other motions ruled upon by the Court) to be as familiar with the issues presented as possible, the Court has not considered any extrinsic evidence in an attempt to clarify any potential ambiguity for the purpose of ruling on the summary judgment / summary disposition motions.
Plaintiff argues, by the language of the policy itself, Defendant must pay the entire bill submitted. Plaintiff argues the $439.69 is the price GEICO can secure from Plaintiff, a competent glass repair facility conveniently located to the insured at the time the insured made her claim.5 Plaintiff argues that based upon the language as written in the policy, the price charged by Plaintiff is “the prevailing competitive price” and there may be more than one “prevailing competitive price.” 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 Court finds the cases relied upon by Defendant to argue the policy language is unambiguous should be read to support the Court’s finding that GEICO’s policy as written is ambiguous. In Glass Service Company, Inc. v. State Farm Mutual Automobile Insurance Company, 530 N.W. 2d 867 (Minn. App. 1995) the appellate court addressed a claim of tortious interference with prospective business. As part of the facts and analysis the appellate court noted in the opinion that the insurer agreed “to pay the ‘prevailing competitive price’ for repairing or replacing broken glass.” Id. at 869. The insurer’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.” Id. The Minnesota court did not specifically rule upon the ambiguity, or lack thereof, of the phrase “prevailing competitive price.” However, when analyzing the definition contained in the Minnesota case, the policy contains a more specific definition and explanation of “prevailing competitive price”. GEICO’s policy does not contain the additional definition of “prices charged by a substantial number of the repair facilities in the area as determined by a survey.”
Defendant next cites Cascade Auto Glass, Inc. v. Idaho Farm Bureau Insurance Company, 141 Idaho 660, 115 P. 3d 751 (2005). The Supreme Court of Idaho did find a provision of an insurance policy, using the phrase “prevailing competitive price” unambiguous. However, the terms of the insurance policy addressed by the Supreme Court of Idaho were different than that contained in GEICO’s policy in the current case before the Court. The Idaho policy read,
Our limit of liability under [the comprehensive coverage in the policy governing automobile glass] . . . is:
(2) The cost of repair or replacement using parts of like kind and quality. . . The cost of repair or replacement is based on the cost of repair agreed upon by us or an estimate written based upon the prevailing competitive price. The prevailing competitive price means labor rates, parts, and material charged by a substantial number of repair facilities in the area where the insured vehicle is to be repaired.
Id. at 661. The language in the Idaho policy is more specific and provides the specific method in which the insurer determines the prevailing competitive price. The GEICO language in the current case before the Court does not contain this additional information regarding “labor rates, parts, and material charged by a substantial number of repair facilities in the area where the insured vehicle is to be repaired.” GEICO’s policy simply states “the prevailing competitive price” is “the price we [GEICO] can secure from a competent glass repair facility conveniently located to you at the time you make your claim.” There is no further explanation as to what factors are considered as was the case in Glass Service Company and Cascade.
Defendant also cites Levy v. State Farm Mutual Automobile Insurance Company, 150 Cal. App. 4th 1, 3-4 (2007) where the policy provided that,
The cost of repair or replacement is based on one of the following:
1. the cost of repair or replacement agreed upon by [the insured] and [State Farm];
2. a competitive bid approved by us; or
3. an estimate written based upon the prevailing competitive price.
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 by [State Farm]. If you ask, [State Farm] will identify some facilities that will perform the repairs at the prevailing competitive price . . . .”
The language addressed by the California appellate court is more specific than the language in GEICO’s policy as it provides the method to determine the prevailing competitive price. The California policy provides for prices charged by a majority of the repair market as determined by a survey. GEICO’s policy does not contain this specific methodology. GEICO’s policy contains no methodology as to how it determines the prevailing competitive price.
In Jonalisa, Inc. d/b/a Glass Doctor, a/a/o Michael Kelly v. Progressive American Insurance Company, 15 Fla. L. Weekly Supp. 1214a (Fla. Hillsborough Cty. Ct. 2008). The provision of the insurance policy to be interpreted read:
2. Payments for loss covered under Collision Coverage, Comprehensive Coverage, Custom Parts or Equipment Coverage and Additional Custom Parts or Equipment Coverage are subject to the following provisions:
e. in determining the amount necessary to repair damaged property to its pre-loss physical condition, the amount to be paid by us:
(i) Shall not exceed the prevailing competitive labor rates charged in the area where the property is to be repaired, and the cost of repair or replacement parts and equipment as reasonably determined by us; and . . . . (Emphasis contained in opinion).
The County Court in Jonalisa, Inc. focused their analysis and interpretation upon the words “repair” and “replace”. The County Court found these terms to be clear and unambiguous but did not interpret the phrase “the prevailing competitive labor rates”.
Finally, Defendant provided a copy of a Final Summary Judgment and Amended Final Summary Judgment in Pasco County Court Case 2010SC2045WS. The Pasco County Court granted summary judgment in favor of GEICO. The Court notes this Pasco County Court case, although persuasive, is not binding precedent upon the undersigned. From a review of the well-reasoned Pasco County Court Amended Summary Judgment, it appears the Pasco County Court addressed similar arguments as the undersigned. The Pasco County summary judgment does not contain citations to any Florida appellate court case that would be binding authority. The ruling is pending appeal before the Sixth Judicial Circuit Appellate Panel; however, an opinion has not been issued and the undersigned is without the benefit of appellate guidance. The undersigned respectfully comes to a different conclusion than the Honorable Pasco County Court.
The undersigned would also point to this conflict in support of the determination that the policy language is ambiguous as, “the policy language ‘is susceptible to more than one reasonable interpretation, one providing coverage [Hernando County Court Order] and the other limiting coverage [Pasco County Court Order].” Washington National Insurance Corporation v. Ruderman, 117 So. 3d 943, 948 (Fla. 2013) [38 Fla. L. Weekly S511a]. “When language in a policy is ambiguous, courts must resolve the ambiguity in favor of the insured by ‘adopting the reasonable interpretation of the policy’s language that provides coverage.’ ” GEICO General Ins. Co. v. Hollingsworth, 2015 WL 376406 (Fla. 5th DCA 2015) [40 Fla. L. Weekly D308a]; See also State Farm Mut. Auto. Ins. Co. v. Menendez, 70 So. 3d 566, 570 (Fla. 2011) [36 Fla. L. Weekly S469a].
Based upon the above, it is hereby;
ORDERED and ADJUDGED that Defendant’s Motion for Summary Judgment filed with the Clerk of Court on November 4, 2014, is denied. Plaintiff’s Cross-Motion for Summary Disposition filed with the Clerk of Court on November 20, 2014, is granted as the policy language concerning the “prevailing competitive price” is ambiguous. Plaintiff’s Second Motion for Summary Disposition Relating to Windshield Sunscreen Film filed with the Clerk of Court on November 21, 2014, is denied as moot.
Defendant shall pay Plaintiff $130.80 for the amount of claim, plus prejudgment interest, plus $80.00 court costs, plus $20.00 for having two summons issued (per Clerk of Court system), plus any service of process fees, all of which shall bear interest at the statutory rate of 4.75% per year and thereafter pursuant to §55.03.
The Court reserves jurisdiction to determine the amount of prejudgment interest and service of process fees. Plaintiff’s attorney shall provide the Court with a written motion setting forth the amount of prejudgment interest and service of process fees they allege are owed. Plaintiff’s motion shall be filed within thirty (30) calendar days of the date of this Order. Defendant’s attorney shall file a response to Plaintiff’s motion within twenty (20) calendar days of receipt of Plaintiff’s motion. Plaintiff’s attorney and Defendant’s attorney shall personally confer in an attempt to resolve the amount of prejudgment interest and service of process fees without the necessity of a hearing.
In addition, the Court reserves jurisdiction to award attorney’s fees and costs, if appropriate. If Plaintiff is seeking an award of attorney’s fees and/or costs, Plaintiff’s attorney shall file a motion setting forth the lawful basis to such entitlement and setting forth the amount Plaintiff alleges is owed within thirty (30) calendar days of the date of this Order. Defendant’s attorney shall file a response to Plaintiff’s motion within twenty (20) calendar days of receipt of Plaintiff’s motion. Plaintiff’s attorney and Defendant’s attorney shall personally confer in an attempt to resolve the attorney’s fees and costs issue without the necessity of a hearing.
Plaintiff’s attorney shall be responsible for coordinating an evidentiary hearing regarding prejudgment interest, service of process fees, entitlement and the amount owed with the undersigned’s judicial assistant and Defendant’s attorney if the attorneys are unable to reach a settlement agreement. The Court reserves the right to enter an Order requiring the parties to mediate these issues prior to the scheduling of any evidentiary hearing.
A Final Judgment shall be entered once the prejudgment interest, service of process fees, attorney’s fees and costs issues are resolved. Any appeal of this Order or the Final Judgment shall be prosecuted in accordance with Fla. Sm. Cl. R. 7.230 and the Florida Rules of Appellate Procedure.
The Court will be entering an Order scheduling a hearing to address how this ruling will affect the other cases these same parties have pending before the Court.6
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1The Court treats the complaint as a Statement of Claim which is necessary to commence an action under Fla. Sm. Cl. R. 7.050(a)(1).
2The undersigned was assigned this case in April 2014.
3There was some disagreement among the parties whether the full Florida Rules of Civil Procedure were invoked, and if they were invoked, when they were in invoked. Therefore, the Court determined all motions, whether filed as a Motion for Summary Judgment under the Florida Rules of Civil Procedure, or a Motion for Summary Disposition under the Florida Small Claims Rules were timely filed, were properly argued, and would be ruled upon by the Court.
4This is the strip of window tint film across the top of the entire width of the windshield.
5Plaintiff submitted an affidavit of the owner in support of the Summary Disposition. Part of this affidavit contains statement concerning Plaintiff’s competency and location to the insured. Defendant did not present any evidence or make an argument challenging that Plaintiff is a competent repair facility conveniently located to the insured at the time the insured made her claim.
6There appears to be an additional twelve (12) cases involving these same parties pending before the Court.
