STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, APPELLANT,
v.
UNIVERSAL UNDERWRITERS INSURANCE COMPANY, APPELLEE
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State Farm sought declaratory judgment to determine its liability under an auto insurance policy for injuries arising from an accident while the insured vehicle was in the shop and a substitute vehicle was being used. The court held that while both insurers' policies were limited to $10,000 coverage for the third-party claimant, State Farm was only secondarily liable after Universal's coverage was exhausted, contrary to the trial court's equal-sharing arrangement.
The $10,000 coverage limitation under the Universal policy is valid as applied to Evans. However, where double or overlapping insurance coverage exists, the vehicle owner's insurer (Universal) is primarily liable for third-party damages, and State Farm is liable only after Universal's coverage is exhausted.
[1] Mutually repugnant escape clauses in insurance policies are invalid and inapplicable.
[2] When multiple insurance policies provide coverage for a temporary substitute vehicle, the policy issued to the owner of the temporary substitute vehicle is primarily liab…
Previewing 2 of 3 headnotes on this case. FLexlaw’s editorially structured points of law — every proposition, pinpointed — are reserved for members.
Join FLexlaw to unlock all legal intelligence“Where there is double or overlapping insurance coverage, the owner's insurer is primarily liable for damages to a third party injured as a result of negligence of the driver of the insured vehicle.”
Establishes the primary principle of liability allocation in overlapping coverage cases, reversing the trial court's equal-sharing approach.
Previewing 1 of 3 key quotes on this case — the court’s exact language, pinpointed for members.
Join FLexlaw to unlock all legal intelligenceThomas Witmyer's vehicle was in repairs, and Wayne Gowin Dodge provided a temporary substitute vehicle. Both Witmyer's State Farm policy and Gowin Dod…
The full statement of facts, procedural history, and disposition for this case are member content.
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McCORD, Chief Judge.
Appellant, State Farm Mutual Automobile Insurance Company, hereafter referred to as State Farm, brought an action for declaratory judgment in the trial court to determine its rights under a policy of insurance it had issued to Thomas E. Witmyer providing insurance for Witmyer’s automobile. Witmyer’s vehicle subsequently became inoperative, and while repairs were being made to it, he was furnished a temporary substitute vehicle by Wayne Gowin Dodge, Inc. Witmyer’s State Farm policy covered the temporary substitute vehicle. The substitute vehicle was also covered by a policy of insurance issued to Wayne Gowin Dodge by Universal Underwriters Insurance Company, hereinafter referred to as Universal.
On December 17,1974 (both the State Farm and Universal policies being in effect at that time), Witmyer, driving the temporary vehicle, struck a vehicle in which Juanita Evans was riding as a passenger. As a result of the accident, Evans was injured and filed suit for damages against Wayne Gowin Dodge, Witmyer, and Universal.
The declaratory judgment action instituted by State Farm sought determination of its liability, if any, to Evans under the policy it had issued to Witmyer. That policy provided bodily injury liability up to $10,000 per person. The Universal policy issued to Wayne Gowin Dodge had bodily injury liability limits of $100,000 per person but such limits were only applicable to any partner, paid employee, director, or stockholder of the named insured and certain others under certain conditions not applicable here. As to other persons using the automobile, the bodily injury liability limits were reduced to the minimum limit of liability specified in the Financial Responsibility Law of the state in which the accident occurred.
Thus, the Universal policy limit applicable to Evans was in the same amount of that applicable under the State Farm policy — $10,000.
The policy of each insurer contains mutually repugnant escape clauses. The trial court ruled and the parties agree that because the escape clauses are mutually repugnant, they are not applicable. See World Rent-A-Car, Inc. v. Stauffer, 306 So. 2d 131 (Fla. 2 DCA 1974). The trial court ruled that the two insurance companies would share liability equally up to the $20,000 total coverage of the two policies. By so ruling, the court necessarily ruled that the coverage of Evans under the Universal policy was limited to $10,000. Appellant contends the limitation is invalid but we agree with the trial court’s imposition of that limitation. See Insurance Company of North America v. Avis Rent-A-Car, 348 So. 2d 1149 (Fla.1977), and Diversified Services, Inc. v. Jackson, 348 So. 2d 1155 (Fla. 1977).
We disagree with the trial court’s ruling that the two insurance companies should share the damages equally. Where there is double or overlapping insurance coverage, the owner’s insurer is primarily liable for damages to a third party injured as a result of negligence of the driver of the insured vehicle. Here State Farm is liable for damages awarded to Evans only when the coverage of Universal’s policy has been exhausted. See Roth v. Old Republic Insurance Company, 269 So. 2d 3 (Fla.1972), and Rouse v. Greyhound Rent-A-Car, Inc., 506 F. 2d 410 (5th Cir. 1975).
Affirmed in part and reversed in part.
BOYER, J., and McLANE, RALPH M., Associate Judge, concur.
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Fid. & Cas. Co. OF NEW York v. Cope, 462 So. 2d 459 (Fla. 1985)…he injured party. .Under established insurance law Hartford’s coverage would be primary and Fidelity’s excess. Brosnan would have been an additional insured under Hartford’s policy. State Farm Mut. Auto. Ins. Co. v. Universal Underwriters Ins. Co., 365 So. 2d 778 (Fla. 1st DCA 1978), cert. denied, 373 So. 2d 462 (Fla.1979). . The demand letter did not include an offer to settle for that amount, but at trial it was treated as such an offer. . James Cope's individual claim was settled. . Should this Court r…
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State Farm Mut. Auto. Ins. Co. v. DAY CAR, Inc., 395 So. 2d 179 (Fla. 3d DCA 1980)…nce coverage is provided, but mutual non-covering “escape” clauses are present, as in the instant case, such clauses, being mutually repugnant, are nugatory. State Farm Mutual Automobile Insurance Company v. Universal Underwriters Insurance Company, 365 So. 2d 778 (Fla. 1st DCA 1978); World Rent-A-Car, Inc. v. Stauffer, 306 So. 2d 131 (Fla. 2d DCA 1974). It is settled in this jurisdiction that an owner’s insurance policy under Section 324.151(1)(a), Florida Statutes (1973) covers the owner as well as “any ot…
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Arkin v. OLD Republic Ins. Co., 368 So. 2d 956 (Fla. 3d DCA 1979)…fer, 306 So. 2d 131 (Fla. 2d DCA 1974), and Hartford Accident & Indemnity Company, Inc. v. Liberty Mutual Insurance Company, Inc., 277 So. 2d 775 (Fla.1973). But see State Farm Mutual Automobile Insurance Co. v. Universal Underwriters Insurance Co., 365 So. 2d 778 (Fla. 1st DCA 1978). See generally Annot., 69 A.L.R.2d 1122 (1960); and 18A Fla.Jur., Insurance § 941 (1971).…1 / 2
Authorities Cited
- Ins. Co. OF N. Am. v. AVIS Rent-A-Car Sys., Inc., 348 So. 2d 1149 (Fla. 1977)
- Roth v. OLD Republic Ins. Co. & N. River Ins. Co., 269 So. 2d 3 (Fla. 1972)
- World Rent-A-Car, Inc. v. Stauffer, 306 So. 2d 131 (Fla. 2d DCA 1974)
- Rouse v. Greyhound Rent-A-Car, Inc., 506 F.2d 410 (5th Cir. 1975)
- Diversified Servs., Inc. v. Jackson, 348 So. 2d 1155 (Fla. 1977)
- In the Interest of D. T. H. v. State, 348 So. 2d 1155 (Fla. 1977)