9 Fla. L. Weekly Supp. 283a
Insurance — Disability — Coverage — Exclusions — Workers’ compensation — Exclusion in disability insurance policy for any loss caused or contributed to by injury or sickness “to the extent you are entitled to benefits under, or obtain any settlement related to, any workers’ compensation or occupational diseases law” is ambiguous as to whether insured is completely barred from recovery under the disability policy because he received workers’ compensation benefits covering part of his loss — Because policy language is ambiguous and no duplication of benefits would occur, exclusionary language is construed against insurer — Summary final judgment in favor of insurer reversed — Remand with instructions to enter summary judgment for insured on issue of coverage
JOHN D. ATKINSON, Appellant, vs. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Appellee. Circuit Court, 13th Judicial Circuit (Appellate) in and for Hillsborough County. Case No. 01-5098, Division X. L.C. Case No. 01-1235-CC. Opinion filed February 18, 2002. James D. Arnold, Judge. Review of a final order of the County Court, Hillsborough County, Florida. Counsel: Sharon Proctor, Avon Lake, OH; and Lefferts L. Mabie, III, Tampa, for Appellant. Lee Craig, Tampa, for Appellee.
(PER CURIAM.) Appellant appeals the final judgment of the lower court denying his claim for benefits under a disability insurance policy. In the final judgment, the trial court determined that the language excluding coverage “to the extent” it was covered by workers’ compensation acted as a total bar to recovery under the policy. We disagree.
The facts are as follows. Appellant was injured at work. He was insured under a disability income policy issued to him by Appellee State Farm. As a result of the injury, Appellant applied for and received workers’ compensation benefits for the injury, which benefits covered approximately half his monthly income of about $4600.00. Thereafter he made a claim under his disability policy with State Farm for the same injury. The coverage amount therefor was $200 per month. Appellee denied benefits thereunder on the basis of an exclusionary clause in the policy, and Appellant sued for breach of contract.
In a hearing on Appellant’s motion for summary judgment the trial court found that the language of exclusion acted as a total bar to recovery in this action. The trial court held that the language was not ambiguous and acts as a complete bar to Appellant’s recovery under the policy. The trial court relied upon the authority of Cash v. American Health Insurance Corporation, 127 S.E. 2d 119 (Va. 1962) in granting summary judgment in favor of Appellee.
The facts are undisputed herein, and this court’s review is de novo. Hinckley v. Palm Beach County Board of County Comm’rs, 801 So.2d 193 (Fla. 4th DCA 2001).
The subject disability policy provided in pertinent part:
Total Disability Benefit. We will pay the Monthly Income Amount shown on page 3 for each month your Total Disability continues after the elimination period. We will pay this benefit when your Total Disability:
1. Is caused by Injury or Sickness
2. starts while this policy is in force; and
3. is continuous.
In addition, the policy contains only the following exclusion relevant to workers’ compensation:
This policy does not cover Total Disability or any other loss caused or contributed to by:…(f) Injury or Sickness to the extent you are entitled to benefits under, or obtain any settlement related to, any workers’ compensation or occupational diseases law, or any other state disability law or program.
(Emphasis supplied.)
Appellant argues that this Court should reverse the trial court’s entry of final summary judgment in favor of Appellee in light of the trial court’s error in construing the plain meaning of State Farm’s policy language. He contends that the words “to the extent” are merely limiting language; they do not act as a complete bar to recovery. Because workers’ compensation benefits did not cover the entire loss, and compensation by way of the disputed policy would not result in double recovery, Appellee should be required to pay the additional benefits contracted for. Even if “to the extent” is ambiguous in light of other language in the policy, the ambiguity should be construed in favor of the insured and against the insurer as required by law.
Appellee counters that it is the nature of the injury as being compensable in any amount by workers’ compensation that calls into play the exclusion, rather than the amount of benefits received. Appellee asserts that this court must affirm the trial court’s final summary judgment in favor of Appellee because the exclusionary clause clearly and unambiguously bars recovery by Appellant because he received workers’ compensation benefits.
The issue before this court is whether the policy language clearly and unambiguously excluded disability coverage under the facts of this case. When policy terms are ambiguous, they are to be construed strictly against the insurer and liberally in favor of the insured. State Farm Fire & Casualty Co. v. CTC Dev. Corp., 720 So.2d 1072, 1076 (Fla. 1998). “It is well-settled that insuring or coverage clauses are construed in the broadest possible manner to effect the greatest extent of coverage.” Union American Ins. Co. v. Maynard, 752 So.2d 1266, 1268 (Fla. 4th DCA 2000). Exclusionary clauses in insurance policies are always strictly construed against the insurer and in favor of coverage. First Floridian Auto and Home Ins. Co. v. Thompson, 763 So.2d 407 (Fla. 2d DCA 2000).
The county court held that the term “to the extent” is not ambiguous and acts as a complete bar to Appellant’s recovery under this policy. In so doing, the court relied upon Cash v. American Health Ins. Corp., 127 S.E. 2d 119 (Va. 1962). However, Cash does not support the county court’s holding because, although the policy language construed in Cash is similar to the language in the instant policy, other facts and language, which distinguish it from the present case, appear to have contributed to its outcome. Cash involved a group health insurance policy that included the following exclusionary language:
NOT COVERED ITEMS OF EXPENSE FOR HOSPITAL CARE shall be construed to include…
(2) expense occasioned by injury arising out of, or in the course of, employment to the extent it is the statutory liability of the employer of the insured or member… .
Id. at 120. In Cash the plaintiff, a city employee, received a settlement of his third party tort claim, and out of the settlement proceeds he reimbursed the worker’s compensation carrier the amount it had paid for medical expenses as required by statute. Plaintiff then sued his health insurer to obtain reimbursement of the medical expenses he had incurred, but had not paid, arguing that the exclusion in the health insurance policy did not apply because he had reimbursed the workers’ compensation carrier, and therefore, the medical bills were no longer the liability of the employer to pay. The Virginia court disagreed with this argument because the policy excluded coverage to the extent it was the statutory liability of the employer to pay, not to the extent the benefits were paid. The court reasoned that, because the city was paying premiums on both policies, it did not intend to provide what amounted to double recovery to an injured employee. The court said “it is obvious that the city did not intend to provide its employees with a group hospitalization and medical expense policy for injuries sustained in the course of their employment, on which it paid one-half of the premiums, while at the same time it was required to provide a duplicate coverage under the Workmen’s Compensation Act.” It added that reimbursement paid to the workers’ compensation carrier did not affect the statutory liability of the employer. Id. Because plaintiff’s expenses were fully covered, an interpretation of the term “to the extent” does not factor into the outcome of the Cash decision. Rather, it was the potential for a double burden on the city and a windfall to the plaintiff that were the basis for the decision. The court focused on the term “statutory liability” in reaching its conclusion, rather than “to the extent.” Indeed, had the workers’ compensation benefits and their subsequent reimbursement in Cash not fully compensated the plaintiff therein, it is entirely possible that the outcome of the case would have been different. Thus, despite the similarity in the policy language to that of the instant case, we find that the holding in Cash is inapplicable to this case.
Another case cited by Appellee, Aetna v. Smith, 568 S.W. 2d 11 (Ark. 1978), also does not support the county court’s decision. The policy language therein contained an exclusion barring recovery for injury “sustained by any person to the extent that benefits therefor are in whole or in part paid or payable under any workers’ compensation law… .” Id. at 12. (Emphasis added.) Significantly, the phrase “in whole or in part” is not in the disputed policy’s exclusion. Moreover, in Aetna v. Smith, the insured would have received double recovery if the policy exclusion had not applied, because the insured received full workers’ compensation benefits, and the Arkansas Supreme Court determined that the legislature had not intended to endorse double recovery in this context. Id. at 13. Thus, it cannot be said that the differences in the facts and the policy language in Aetna v. Smith are insignificant as compared to the present case, and we find it to be inapplicable to this case.
It seems that State Farm is interpreting, and wishes this court to interpret, the phrase “to the extent” as though it meant “if.” The policy would then read that it “does not cover loss caused or contributed by…injury or sickness if you are entitled to benefits under…worker’s compensation…”. But, that is not what the policy says. It employs the term “to the extent,” a term which is not defined in the policy. Had State Farm intended to completely exclude coverage because the nature of the disability was such that it would be covered in any part by workers’ compensation, it could have said so, and Appellant provided several examples of suggested language that give effect to Appellee’s asserted intent. For example, as Appellant suggests, the policy could have said “this policy does not cover total disability or any other loss caused by or contributed to by injury or sickness for which you are entitled to benefits under…workers’ compensation.” Rather, State Farm’s language was identical to the foregoing, except that it added “…to the extent you are entitled to benefits under…any workers’ compensation.” (Emphasis supplied.)
The only Florida case cited by State Farm, General American Ins. Co. v. Yambo, 428 So.2d 300 (Fla. 3d DCA 1983), provides another example of effective exclusionary language, and highlights State Farm’s failure employ such language here. The exclusion in Yambo stated that “benefits shall not be payable…for or in connection with any…injury arising out of or in the course of any occupation…” Id. at 300. (Emphasis supplied.) The court held that the exclusion barred recovery because the injuries were work related. Id.
Undoubtedly, if it were Appellee’s intent that the policy be supplemental insurance, it could have stated this purpose more clearly as well. For example, it could have said “benefits will be reduced by any amounts payable … under workers’ compensation,” as in Songe v. Tennessee Life Ins. Co., 260 So.2d 149 (La. App. 1972). However, because we find the policy language to be ambiguous, and because no duplication of benefits would occur, we must construe the language against the insurer. We therefore determine that the exclusion is inapplicable under the facts of this case, and Appellant is entitled to benefits under the State Farm policy. Accordingly, we reverse the summary final judgment entered in favor of State Farm and remand with instructions to grant Atkinson’s motion for summary judgment on the issue of coverage under the policy.
It is therefore ORDERED that the decision of the county court is REVERSED and the cause REMANDED for proceedings consistent with this opinion.
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