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Unigard Insurance v. Yerdon
Citations: 417 So. 2d 713; 1982 Fla. App. LEXIS 21189Docket: No. 79-2242
Court: District Court of Appeal of Florida; July 7, 1982; Florida; State Appellate Court
Unigard Insurance Company is appealing an amended final judgment requiring it to pay a Class I insured from his stacked uninsured motorist policies. The trial court's order did not increase Unigard's total liability but ensured that Class II insureds received coverage. Evidence shows Coenen, the owner of two insured vehicles, was involved in an accident with an uninsured motorist on December 7, 1975, injuring himself and three passengers (Yerdon, Krickovich, and Walter). Unigard's policies provided $50,000 per person and $100,000 per accident in uninsured motorist coverage. Yerdon, who also owned insured vehicles with higher coverage limits, received $150,000 from his insurer, State Auto, which then sought $50,000 from Unigard, claiming a pro rata share of Yerdon's settlement. Unigard had already paid out $94,861.53 to Coenen and the other passengers, asserting only $5,138.47 remained under its policy. However, the trial court ruled that Coenen could stack his policies due to having paid separate premiums, thereby allowing for a total of $100,000 in coverage. The court determined that Unigard should deduct the amount already paid to Coenen from this stacked coverage, resulting in sufficient funds to cover Yerdon's claim. Unigard contends that only $100,000 was available for Class II insureds like Yerdon and that they could not stack policies, while State Auto and Yerdon argue that $150,000 in coverage is available based on the circumstances. Unigard's payment order affects the coverage available to various insured classes. If Unigard had prioritized payments to Class II insureds (Krickovich, Walter, Yerdon), Coenen could have fully accessed his second policy's coverage of $45,758.20. Unigard acknowledges that if Class II claims were settled first, Coenen's claim would be valid. However, if Unigard prevails, the coverage amount available will vary based on the insurer's payment sequence, raising concerns about fairness in claims handling. The legal principle from Harmon v. State Farm allows insurers to settle claims even if it exhausts coverage for others, but this case differs as Unigard's exposure isn't fixed; it fluctuates with the order of payments. Unigard exhausted coverage under one policy, not the total available. This approach could lead insurers to delay settling Class II claims until Class I claims are resolved, which may unfairly diminish coverage for Class II insureds. The recommended solution is to permit stacking for Class I insureds, ensuring maximum coverage for Class II without increasing insurer liability beyond what was contracted. This approach aligns with the insurer's obligations, promotes equitable outcomes, and mitigates questionable settlement practices. The judgment supporting this position is affirmed, with concurrence from Judge Hersey and dissent from Judge Hurley.