25 Fla. L. Weekly Supp. 368a
Online Reference: FLWSUPP 2504KUROInsurance — Automobile — Declaratory action — Coverage — Diminished value of repaired vehicle — Insurer’s contention that policy does not cover diminished value claim violates Florida Financial Responsibility Law, and any policy provisions that support that contention would be rendered invalid — Where policy provides coverage for “all damages” to property and does not define damages or include specific exclusion for diminished value claims, insurer must provide coverage for diminished value claim
DAVID KUROW, Plaintiff, v. INFINITY AUTO INSURANCE COMPANY, Defendant. County Court, 9th Judicial Circuit in and for Orange County. Case No. 2016-CC-4271. June 16, 2017. Faye Allen, Judge. Counsel: Peter A. Shapiro, Esq., Law Offices of Peter A. Shapiro and Jonathan D. Wilson, Orlando, for Plaintiff. David Mercer, Tampa, for Defendant.
FINAL SUMMARY JUDGMENTIN FAVOR OF PLAINTIFF
Following the hearing of May 24, 2017, this Court finds as follows:
1. This is an action for declaratory relief pursuant to Chapter 86, Florida Statutes involving matters that do not exceed Fifteen Thousand Dollars ($15,000.00) exclusive of attorneys’ fees and costs.
2. At all material times, Defendant was licensed to do business in the State of Florida and was doing business in Orange County, Florida.
3. On or about June 17, 2015, Plaintiff was involved in a motor vehicle collision in Orange County, Florida in which Plaintiff’s 2007 Black Mercedes Benz CLK550 was damaged.
4. On that date, Plaintiff was in the 2007 Black Mercedes Benz CLK550 that was struck by a vehicle being driven by Keesha Harris who, for the purposes of this stipulation only, negligently caused the collision and who is liable to the Plaintiff for damages.
5. Defendant issued an insurance contract to Keesha Harris, Policy No.: 109-80035-385-0001 (“the Policy”), which provided Property Damage coverage among other coverages.
6. The Policy was in full force and effect on the date of the collision and provided Property Damage coverage to Keesha Harris.
7. As a result of the collision, Plaintiff contends he suffered/incurred a diminished value to his vehicle, i.e. the market value of the vehicle was diminished as a result of being involved in and damaged in the subject motor vehicle accident. Even though the Plaintiff’s vehicle was properly repaired, Plaintiff contends that its resale market value after the repairs was less than what it would have been had the vehicle not been involved in and damaged in the subject collision. Plaintiff contends that he submitted proof to support his claim for third-party diminished value damages.
8. Plaintiff also filed a law suit against Keesha Harris for damages for diminished value, case #2015-SC-014214-0, Orange County, FL. In that law suit, the parties, David Kurow and Keesha Harris entered a stipulation that included an assignment of Ms. Harris’ right to file suit against the Defendant to challenge the Defendant’s denial of coverage of the Plaintiff’s diminished value claim.
9. Keesha Harris assigned to Plaintiff all rights, claims and causes of action against Defendant arising out of the Defendant’s denial of coverage for Plaintiff’s diminished value claim.
10. Defendant denied coverage to Keesha Harris for the diminished value claim made against her by Plaintiff, and therefore, denied payment of the Plaintiff’s diminished value claim.
11. Plaintiff contends Defendant must provide coverage to Keesha Harris for Plaintiff’s diminished value claim and must pay the diminished value damages to Plaintiff up to the property damage limit of $10,000.00.
12. Defendant contends there is no coverage to Keesha Harris under the Policy since Plaintiff’s diminished value claim is not covered under the Policy and that Ms. Harris could not have purchased a policy of insurance or endorsement from the Defendant that would cover a diminished value claim brought against her. The application of insurance that Ms. Harris completed for the Defendant did not say anything about a diminished value claim not being covered under the Property Damage coverage.
13. The parties agree that the sole legal issue to be resolved by summary judgment for purposes of entry of a final judgment in this case is whether Defendant Infinity Auto Insurance Company should provide coverage to Keesha Harris and pay Plaintiff’s diminished value claim.
14. Section 324.021, Florida Statutes is a part of Florida’s Financial Responsibility laws and provides the minimum insurance required by the owner of a motor vehicle. Keesha Harris was subject to this section. Ms. Harris complied with Section 324.031, Florida Statutes by securing a motor vehicle liability policy. Section 324.021(1), Florida Statutes. The Defendant was required to make sure the Policy complied with Section 324.021. Section 324.021(7) provides that, at a minimum, the Defendant was to provide coverage to Ms. Harris “in the amount of $10,000.00 because of injury to, or destruction of, property of others in any one crash.” Of note is that this statute does not use the language “physical damage to tangible property” as the Defendant’s Policy does.
15. The case of Allstate Indem. Co. v. Wise, 818 So. 2d 524 (Fla. 2d DCA 2001) [26 Fla. L. Weekly D1373a] instructs that the financial responsibility law recognizes the existing privilege to own or operate a motor vehicle on the public streets and highways of this state when such vehicles are used with due consideration for others and their property and to promote safety and provide financial security requirements for such owners or operators whose responsibility is to recompense others for injury to person or property caused by the operation of a motor vehicle. The financial responsibility lass are designed to protect the public from losses resulting from the ownership and operation of motor vehicles, up to specific minimum amounts per person and per accident. An insurance policy procured to comply with the Financial Responsibility Law is an insurance policy for the benefit of the public using the highways of this State.
16. The Court finds that Defendant’s contention that its Policy does not cover a diminished value claim which involves damage/injury to property (a motor vehicle) violates the Florida Financial Responsibility Laws. Therefore, if any of the provisions of the Defendant’s Policy were to support the Defendant’s contention, they would be rendered invalid and construed and applied in accordance/conformance with the insurance code. Section 627.418, Florida Statutes; Freeman v. Am Integrity Ins. Co. of FL, 180 So. 3d 1203 (Fla. 1st DCA 2015) [40 Fla. L. Weekly D2756a].
17. The Defendant’s Policy must be read in accordance and in conformance with the minimum financial responsibility laws for property damage; therefore it must provide coverage for Plaintiff’s diminished value claim.
18. Notwithstanding the above, the Court further finds that an interpretation of the terms/provisions of the Policy leads to the conclusion that Plaintiff’s diminished value claim against Keesha Harris is a covered claim.
19. When interpreting the Policy, the Court takes in consideration the following: (1) that insurance contracts/policies are to be liberally construed to provide coverage; (2) the fundamental principal that contracts are interpreted against the drafter; (3) when there is no ambiguity in the contract/policy, its language should be given a plain and simple meaning; and (4) there should be a reasonable contract interpretation to avoid an absurd result.
20. It is well established in Florida when construing insurance contracts, the courts generally apply liberal interpretations to coverage provisions. It is axiomatic that insurance policies, as well as the Insurance Code, will be construed in favor of the insured and insurance coverage. Bakers Life and Casualty Co. v. Vadra., 563 So.2d 200, 201 (Fla. 3rd DCA 1990).
21. Next, there is no reason why such policies cannot be phrased so that the average person can clearly understand what he is buying. And so long as these contracts are 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. [Emphasis added] Hartnett v. Southern Ins. Co., 181 So.2d 524, 528 (Fla. 1965).
22. Third, where the language of the policy is plain and unambiguous, there is no need for judicial construction and the contract must be enforced as written. Siegle v. Progressive Consumers Insurance Co., 788 So. 2d 355, 359 (Fla. 4th DCA 2001) [26 Fla. L. Weekly D1506a]. Also, if there is a single guiding principal that governs a court’s interpretation of an insuring agreement, it is to give effect to the parties’ intent as expressed in the plain language of the written policy. Id. at 360.
23. Finally, the words of a contract will be given a reasonable construction, where that is possible, rather than an unreasonable on, and the court will likewise endeavor to give construction most equitable to the parties, and one which will not give one of them an unfair or unreasonable advantage over the other. So that interpretation which evolves the more reasonable and probable contract should be adopted, and a construction leading to an absurd result should be avoided. James v. Gulf Life Ins. Co., 66 So.2d 62, 63 (Fla. 1953).
24. The Policy states, on page 6, “Limits of Liability — As to any insured person, the limits of liability shown on the Declarations Page shall apply. We [the Defendant] will pay these limits of liability [$10,000.00] as follows: . . . 3. The property damage limit for ‘each accident’ is the most we will pay for ALL damages to property, including loss of its use, in one accident.” (Emphasis in bold added). The Defendant used the phrase “ALL damages” which would include diminished value, being that diminished value is one of the damages that one can recover in Florida as a result of property damage to a motor vehicle. The word “ALL” means what it says, everything, or in the context of property damage, every kind of damage that can result from property damage to a vehicle which would include diminished value. Defendant did not use the defined term property damage in the above clause; therefore that definition is not applicable.
25. “Damages” is not defined in the Policy, so this Court must look to Florida law for the legally recognized elements of damages that Defendant must pay arising out the property damage caused (to Plaintiff’s Mercedes). One of the elements of damages that a person can recover when a motor vehicle suffers property damage is diminished value. Under Florida law, diminished value is the difference between the value of the vehicle that suffered property damage immediately before the collision and its value after it was repaired and returned. Carole M. Siegle v. Progressive Consumers Insurance Co., 788 So. 2d 355 (Fla. 4th DCA 2001) [26 Fla. L. Weekly D1506a]. Thus, Plaintiff’s claim for diminished value against Keesha Harris is covered as a damage caused by property damage (i.e. damage to the Plaintiff’s Mercedes).
26. Giving the Policy its plain meaning, given the lack of any ambiguity, and with the underlying principle that the Policy should be construed against the Defendant, its drafter and in favor of coverage with a reasonable interpretation to avoid an absurd result, diminished value is covered.
27. If the Defendant wanted to avoid having to pay Plaintiff’s claim for diminished value against its insured Keesha Harris, it could have easily written an exclusion into the Policy under the “Exclusions — Part A Only, We do not cover:.” Policy, p.4. Under the Exclusions, there are 32 enumerated exclusions, notably, not one of which is for diminished value. It would have been as simple as adding two words to the Policy Exclusions, 33. Diminished value, which simply, clearly, and unambiguously would let the buyer of the insurance policy, Keesha Harris, know that diminished value would not be covered.
28. There is no way that Ms. Harris, or any buyer of the Policy, would think, given the way it was worded, that diminished value, would not be covered. A finding of no coverage would mean that Ms. Harris would have to pay the diminished value claim out of her own pocket, an absurd result as the Defendant does not sell an alternative policy or endorsement that would specifically cover diminished value in Defendant’s view.
29. Based on the above, Defendant’s Motion for Final Summary Judgment is Denied. Plaintiff’s Amended Motion for Final Summary Judgment is Granted. Plaintiff is entitled to the following Declaratory Judgment: Defendant must provide coverage for the Plaintiff’s diminished value claim against Defendant’s insured Keesha Harris under the Property Damage Coverage of the Policy, and Defendant must pay for Plaintiff’s diminished value claim arising out of the June 17, 2015 motor vehicle collision up to the Property Damage limit of $10,000.00, the amount which will be determined in the case of Kurow v. Harris, pending in the County Court for Orange County, FL. This Court finds that Plaintiff is entitled to an award reasonable attorneys’ fees and costs — jurisdiction is reserved to determine the amount of such.
