Rando v. Government Employees Insurance Co.
2010 Fla. LEXIS 475, 39 So. 3d 244, 35 Fla. L. Weekly Supp. 201 (2010)
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Rule of Law:
Under Florida law, an uninsured motorist anti-stacking provision in an automobile insurance policy is unenforceable if the insurer fails to satisfy the informed consent requirements of section 627.727(9), Florida Statutes, even if the vehicle covered by that policy is not registered or principally garaged in Florida, provided the policy was executed, issued, and delivered in Florida to Florida residents.
Facts:
- John and Gail Rando previously lived in Delaware but moved to Florida in 2004 and established residency there.
- In 2005, John Rando suffered permanent, life-altering injuries in an automobile accident in Florida caused by an underinsured driver.
- At the time of the accident, John and Gail Rando were the named insureds on two motor vehicle insurance policies issued by Government Employees Insurance Company (GEICO).
- One policy (the Florida policy) covered two vehicles registered and principally garaged in Florida; the second policy (the Delaware policy) covered a vehicle registered and principally garaged in Delaware, where the Randos’ daughter resided.
- The Delaware policy was executed, issued, and delivered in Florida and contained no express choice of law provision.
- Both policies provided uninsured motorist coverage, and the Randos paid separate premiums for coverage on each vehicle.
- The Delaware policy included an anti-stacking provision stating that if separate policies with GEICO were in effect for the insureds, they could not be combined to increase the limit of liability for a loss.
- GEICO failed to obtain informed consent from the Randos regarding the anti-stacking provision in the Delaware policy.
Procedural Posture:
- John and Gail Rando originally filed suit against GEICO in state court.
- GEICO removed the case to the federal district court.
- The federal district court granted summary judgment in favor of GEICO, concluding that the anti-stacking provision contained in the Delaware policy was enforceable because the vehicle covered by the policy was neither registered nor principally garaged in Florida.
- The Randos appealed the district court’s decision to the Eleventh Circuit Court of Appeals (appellant: Randos; appellee: GEICO).
- The Eleventh Circuit Court of Appeals certified a question of Florida law to the Florida Supreme Court, given the absence of controlling Florida precedent.
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Issue:
Does Florida law permit an automobile insurance policy, executed, issued, and delivered in Florida to Florida residents for a car registered and garaged in Delaware, to validly include an uninsured motorist anti-stacking provision without the insurer satisfying the informed consent requirements of section 627.727(9), Florida Statutes?
Opinions:
Majority - Labarga, J.
No, an automobile insurance policy executed, issued, and delivered in Florida to Florida residents for a car registered and garaged in Delaware may not validly include an uninsured motorist anti-stacking provision without the insurer satisfying Florida's informed consent requirements. The court applied the lex loci contractus rule, determining that since the Delaware policy was executed, issued, and delivered in Florida, Florida law governs the parties' rights and liabilities. Florida public policy, reflected in section 627.727, Florida Statutes, favors uninsured motorist coverage, which is intended to protect the insured individual rather than a specific vehicle. While Florida law generally prohibits stacking most motor vehicle insurance, it expressly permits the stacking of uninsured motorist coverage. Section 627.727(9) provides a mechanism for insurers to offer anti-stacking provisions, but only if they obtain informed consent from the insured on an Office of Insurance Regulation (OIR)-approved form, informing them of the limitations and that it is an alternative to broader coverage. An insured's signature on this form creates a conclusive presumption of informed acceptance, and the insurer must file revised premium rates reflecting at least a 20 percent reduction. GEICO conceded it did not obtain the Randos' informed consent, rendering the anti-stacking provision unenforceable. The court rejected the argument that the informed consent requirement only applies to vehicles registered or principally garaged in Florida, clarifying that once a policy is executed, issued, and delivered in Florida to Florida residents, the requirements of subsection (9) extend to that policy, regardless of the vehicle's garaging location.
Dissenting - Canady, J.
Yes, an automobile insurance policy may validly include an uninsured motorist anti-stacking provision without satisfying Florida's informed consent requirements when the vehicle is not registered or principally garaged in Florida. Justice Canady argued that section 627.727(9) is ancillary to subsection (1), which mandates uninsured motorist coverage for policies delivered or issued in Florida only with respect to motor vehicles registered or principally garaged in Florida. He contended that the regulatory provisions of subsection (9) for limiting UM coverage, including the informed consent requirement, do not extend to policies covering vehicles that do not fall within the scope of subsection (1) (i.e., those not registered or principally garaged in Florida). Therefore, GEICO was not required to obtain informed consent for the anti-stacking provision in the Delaware policy.
Dissenting - Polston, J.
While a policy may provide for anti-stacking, it is only valid if the anti-stacking provision complies with section 627.727(9), Florida Statutes. Justice Polston agreed with the majority that Florida law applies to the policy due to the lex loci contractus rule and the parties' stipulation. He also agreed with the majority's analysis and application of section 627.727(9), concluding that because GEICO did not obtain the Randos' requisite informed consent, the anti-stacking provision is not enforceable under Florida law. However, Justice Polston dissented from the majority's direct negative answer to the certified question as phrased by the Eleventh Circuit, suggesting the question should have been rephrased to include the condition that compliance with section 627.727(9) is necessary for an anti-stacking provision to be valid under Florida law.
Analysis:
This case significantly clarifies the reach of Florida's consumer protection laws regarding uninsured motorist coverage, particularly concerning anti-stacking provisions. It reinforces Florida's strong public policy favoring comprehensive UM coverage and establishes that the informed consent requirement for limiting such coverage applies broadly to any policy governed by Florida law, irrespective of the covered vehicle's registration or garaging location, as long as the policy was issued in Florida to Florida residents. This ruling prevents insurers from circumventing Florida's statutory requirements by structuring policies to cover out-of-state vehicles while still transacting business in Florida with its residents. It provides a clear precedent that the quid pro quo for limiting UM coverage – informed consent and a premium reduction – is a fundamental element of enforceability when a policy is rooted in Florida.
