Full Opinion

FIRST DISTRICT COURT OF APPEAL STATE OF FLORIDA ____________________________ No. 1D20-1422 ____________________________ ROXANNE WALLS and SKYLER THOMAS, as co-personal representatives of the Estate of Rachel Walls, Appellants, v. SOUTHERN OWNERS INSURANCE COMPANY, an out of state corporation, Appellee. ____________________________ On appeal from the Circuit Court for Holmes County. Timothy Register, Judge. March 31, 2021 LONG, J. The estate of Rachel Walls appeals the trial court’s summary judgment order that found a Southern Owners policy did not provide coverage where a GEICO policy provided similar coverage. Because the plain language of both contracts compel this result, we affirm. The Facts Rachel Walls died from injuries she sustained in a car crash. A volunteer employee of the not-for-profit corporation Partners for Pets was involved in the collision while transporting an animal for the organization. GEICO provided personal vehicle insurance coverage to the volunteer employee for bodily injury and property damage. Upon making a claim, GEICO paid out to its policy limit of $25,000. The estate of Rachel Walls obtained a $5,000,000 judgment against Partners for Pets. Partners for Pets had a corporate insurance policy with Southern Owners which also covered bodily injury and property damage. The Estate sought the Southern Owners policy limit of $1,000,000, but coverage was denied. Southern Owners asserted that a clause in their contract with Partners for Pets, referred to by the parties as an “escape” clause, limited coverage to circumstances where Partners for Pets “do[es] not have any other insurance available to you which affords the same or similar coverage.” The GEICO policy covered Partners for Pets as a “person or organization” which incurred “liability because of the acts or omissions of an insured,” namely the employee transporting the animal. The Estate challenged Southern Owners’ denial of coverage. The trial court entered summary judgment in favor of Southern Owners. The trial court applied the escape clause and concluded the Southern Owners policy did not provide coverage because the GEICO policy covered Partners for Pets with the same or similar coverage. The Estate now appeals that final order. The Law We have jurisdiction. Art V. § 4(b)(1), Fla. Const. Interpretation of a contract is reviewed de novo. Rose v. Steigleman, 32 So. 3d 644, 645 (Fla. 1st DCA 2010). When undefined terms are unambiguous, we apply the plain meaning in absence of “a genuine inconsistency, uncertainty, or ambiguity in meaning.” Taurus Holdings, Inc. v. U.S. Fid. & Guar. Co., 913 So. 2d 528, 532 (Fla. 2005) (quoting State Farm Mut. Auto. Ins. Co. v. Pridgen, 498 So. 2d 1245, 1248 (Fla. 1986)). Courts may not 2 “rewrite contracts, add meaning that is not present, or otherwise reach results contrary to the intentions of the parties.” Id. “Words and phrases in an insurance policy, when not specifically defined therein, must be given their everyday meaning and read in light of the skill and experience of ordinary people.” Direct Gen. Ins. Co. v. Morris, 884 So. 2d 1077, 1080 (Fla. 1st DCA 2004) (quoting Siegle v. Progressive Consumers Ins. Co., 788 So. 2d 355, 359–60 (Fla. 4th DCA 2001)). A. The Estate first argues that the trial court erred in finding that the GEICO policy insured Partners for Pets. But the plain language of the GEICO policy reflects that it did. There is no dispute that Partners for Pets incurred liability due to the actions of its employee, and the GEICO policy expressly covers a “person or organization” which incurs “liability because of the acts or omissions of an insured.” The Estate also argues that this policy was not “available” to Partners for Pets because it had already exhausted its policy limit. But the question is not whether the policy has money available, it is whether there is coverage available. And, if anything, evidence that the policy was paid to its limit would show that this was a covered event. Nevertheless, the dollar limit of a policy does not determine whether an event is covered under the policy. We agree with the Eleventh Circuit’s holding on this issue that “the amount of protection offered is a distinct inquiry from the type of coverage” and that “the term ‘coverage’ is intended to reference particularized risks included within a policy rather than the entire scope of protection the policy offers.” Southern-Owners Ins. Co. v. Easdon Rhodes & Assocs. LLC, 872 F. 3d 1161, 1166, 1169 (11th Cir. 2017). The Estate’s last point on this issue is that an exclusion in the GEICO policy applies. According to the policy’s terms, there is no coverage for bodily injury or property damage arising out of the “use of any vehicle or trailer while being used to carry persons or property for compensation or a fee.” But there was no evidence the Partners for Pets employee was compensated in any way for her work. The Estate’s own complaint stated that Partners for Pets employees were largely volunteers. The only other evidence, a W- 4, does not reflect any compensation. We reject this claim of error. 3 B. The Estate’s next argument is that the GEICO and Southern Owners policies did not afford the “same or similar coverage” and so the escape clause is inapplicable. We apply the plain meaning of the word similar: having characteristics in common. * And, contrary to the Estate’s contention, as used here the word similar is not ambiguous. There is therefore no need to venture outside its common definition or resort to any other interpretive tools associated with ambiguity. The Estate argues the policies are not similar because one is a personal policy and one is commercial, and because they have different policy limits. However, as we have explained, policy limits and coverage are distinct concepts. Both policies cover property damage and bodily injury and even use the exact same wording. The conclusion follows that the coverage afforded to this event by these insurance policies is at least similar, if not the same. The Estate would have us follow the reasoning of a previous Eleventh Circuit case, Southern-Owners Ins. Co. v. Wall 2 Walls Constr., LLC, 592 F. App’x. 766 (11th Cir. 2014), and find the word similar to be ambiguous. The court in Wall 2 Walls found that because the word has various definitions which “encompass varying degrees of likeness,” the word is ambiguous and thus interpreted the phrase similar coverage against the drafter. Id. at 770. But we do not find this argument persuasive. Instead we agree with the more recent Eleventh Circuit case, Easdon, where that court receded from Wall 2 Walls: We agree with our decision in Wall 2 Walls to the extent that we found the word “similar” ambiguous, standing alone. Without an adequate frame of comparative reference, it becomes extremely difficult to pinpoint exactly in what respects and to what extent insurance policies must be alike to properly qualify as “similar.” * See Similar, MERRIAM-WEBSTER ONLINE DICTIONARY, https://www.merriam-webster.com/dictionary/similar (last visited Jan. 21, 2021). 4 However, the opinion in Wall 2 Walls failed to consider the meaning of “coverage” within the context of the policy it examined. Properly defined as the inclusion of a specific risk under an insurance policy, “coverage” supplies the exact limiting factor required to sensibly deploy a word like “similar.” As we have discussed, the plain meaning of “coverage” limits the application of “similar” to the simple question of whether a risk is included in an insurance policy or not. This provides a reasonably precise metric to guide a reader's understanding of the word “similar” and obviates any ambiguity the term, standing alone, might otherwise have. Easdon, 872 F. 3d at 1169 (internal citations omitted). Words can have different meanings in different contexts. Here, the plain meaning of similar coverage is insurance coverage that covers a similar risk. And the policies here both covered property damage and bodily injury resulting from the employee’s operation of the motor vehicle. We cannot then conclude the GEICO policy does not provide similar coverage. C. The Estate’s last argument is that another clause in the Southern Owners contract, referred to as an “excess” clause, is mutually repugnant to the escape clause and as a result, the escape clause must fall. We agree with the trial court that these two clauses are not inconsistent. The policy’s excess clause applies when another insurance company pays out for the same liability but their payment is less than the policy limit in the Southern Owners contract. If Southern Owners provides coverage for the same liability, Southern Owners would pay only the difference between the other payment and the limit of its coverage. The Estate contends that both the excess and escape clauses cannot survive because they apply to the same situation. That is, where another insurance policy provides coverage for the same liability event. 5 But the clauses can co-exist because they are triggered by distinct circumstances. For example, the escape clause can apply when the coverage is the “same or similar,” and the excess clause can apply when the coverage is different but available to the same liability event. We take care to read the contract in pari materia and give “every provision its full meaning and operative effect.” Auto-Owners Ins. Co. v. Anderson, 756 So. 2d 29, 34 (Fla. 2000). We fulfill that duty through this interpretation. The Holding The phrase similar coverage refers to coverage that is similar. Coverage in the context of insurance refers to risk types that are covered by a policy. Both the GEICO policy and the Southern Owners policy would have provided Partners for Pets with similar coverage for this event. Therefore, the Southern Owners policy gives way. The contract included this expansive language and Partners for Pets signed it. It cannot now be undone. AFFIRMED. LEWIS, J., concurs; MAKAR, J., dissents with opinion. _____________________________ Not final until disposition of any timely and authorized motion under Fla. R. App. P. 9.330 or 9.331. _____________________________ MAKAR, J., dissenting. This case is about language in an insurance policy that provides $1 million of bodily injury coverage to an insured, “but only if you do not have any other insurance available to you which affords the same or similar coverage.” What’s clear about this language is that it is less than clear due to the divergent views of judges analyzing identical language, who are almost evenly split 6 between whether it is ambiguous or clear. 1 The Eleventh Circuit Court of Appeals has vacillated a bit, finding the language unclear and ruling for the insured on a “question of first impression,” but a few years later finding it clear and ruling for the insurer. 2 The more persuasive judicial approach 3 is that the language is ambiguous to reasonably intelligent persons and, as Florida law requires, it must be construed against the insurer who drafted it. Auto-Owners Ins. Co. v. Anderson, 756 So. 2d 29, 34 (Fla. 2000) (“If the relevant policy language [in an insurance policy] is susceptible to more than one reasonable interpretation, one providing coverage and the another limiting coverage, the insurance policy is considered ambiguous.”); see generally 2 Steven Plitt et al., Couch on Insurance § 21:11 (3d ed. 2020) (“Ambiguity in an 1 Compare S.-Owners Ins. Co. v. Wall 2 Walls Constr., LLC, 8:12-CV-1922-T-33TBM, 2013 WL 6196948, (M.D. Fla. Nov. 26, 2013) (Covington, J.), aff’d, S.-Owners Ins. Co. v. Wall 2 Walls Constr., LLC, 592 F. App’x. 766 (11th Cir. 2014) (Ed Carnes, C.J., & Jordan & Julie Carnes, JJ.) and Auto-Owners Ins. Co. v. Benjamin, 781 S.E.2d 137 (S.C. Ct. App. 2015), with S.-Owners Ins. Co. v. Easdon Rhodes & Assocs., LLC, 3:12CV601/RV/EMT, 2014 WL 11511070, (N.D. Fla. Oct. 30, 2014) (Vinson, J.), aff’d, S.- Owners Ins. Co. v. Easdon Rhodes & Assocs., LLC, 872 F.3d 1161 (11th Cir. 2017) (Tjoflat & Rosenbaum, JJ. & Goldberg, J.). 2 Compare Wall 2 Walls, 592 F. App’x. at 770 with Easdon Rhodes, 872 F.3d at 1169. 3 The conflicting decisions from other jurisdictions are persuasive only because none are binding on a district court of appeal in Florida, which must follow only its own decisions as well as those of the Florida Supreme Court and the United States Supreme Court. Bryan A. Garner et al., The Law of Judicial Precedent 33–34 (2016) (discussion of vertical precedents in state courts). The reasoning in Wall 2 Walls and Benjamin is more persuasive than Easdon Rhodes, which seemed sheepish in admitting that the language at issue was “not a model of clarity or precision” and that the panel engaged in “extensive analysis to justify” what it viewed as a “common sense” result. Easdon Rhodes, 872 F.3d at 1170. 7 insurance policy exists if the policy is susceptible to more than one interpretation and reasonably intelligent persons would honestly differ as to its meaning.”). That state and federal judges interpret the language differently strongly suggests that ambiguity exists, which must be construed in favor of the insured—an ancient principle of insurance law. U.S. Fid. & Guar. Co. v. Guenther, 281 U.S. 34, 37 (1930) (“[W]hen an insurance contract is . . . fairly susceptible of two different constructions, so that reasonably intelligent men, on reading the contract, would honestly differ as to the meaning thereof, that construction will be adopted which is most favorable to the insured.” (quoting Imperial Fire Ins. Co. of London v. Coos Cnty., 151 U.S. 452, 462−63 (1894))); Anderson, 756 So. 2d at 34 (“Ambiguous policy provisions are interpreted liberally in favor of the insured and strictly against the drafter who prepared the policy. Likewise, ambiguous insurance policy exclusions are construed against the drafter and in favor of the insured.” (internal citations omitted)). First off are the unfortunate facts of this case, which involve the tragic death of Rachel Walls in March 2018, arising out of an accident involving a family car driven by Madison Chafin, who was delivering a dog for her employer, Partners for Pets—an animal shelter operated in Florida’s panhandle. Partners for Pets had purchased a “commercial general liability” policy from Southern Owners Insurance Company. This general liability policy—which includes a broad range of risks that businesses encounter—was the only insurance policy that Partners for Pets had for its business operations. It had purchased no other insurance of any kind, relying solely on its commercial general liability policy with Southern Owners to insure against business risks. The estate of Ms. Walls obtained a $5 million judgment against Partners for Pets, a small portion of which was paid under a GEICO policy with $25,000 limits that the Chafin family had purchased for its car. To further satisfy the judgment, the estate sought to collect the $1 million in coverage on the Southern Owners policy. No dispute exists that Southern Owners ordinarily would be required to pay up to this amount under the facts of this case, which involves bodily injury arising from use of an auto not owned by Partners for Pets but used in its business (so-called “non- owned auto liability”). Indeed, the tragic accident in this case is 8 precisely the type of incident the Southern Owners policy ordinarily covers for a non-owned auto accident. But Southern Owners argued that it had no obligation to provide payment of any amount. It relied on language in its policy saying that its financial liability for the accident existed “only if you [i.e., Partners for Pets] do not have any other insurance available to you which affords the same or similar coverage.” It successfully contended that even though Partners for Pets had not purchased any other insurance of any kind, the third-party payment from GEICO pursuant to the Chafins’ policy fell within the exclusionary language. Stated differently, the Chafins’ policy with GEICO constituted “insurance available to [Partners for Pets]” that afforded “the same or similar coverage,” thereby eliminating the obligation of Southern Owners to pay anything to the estate. This interpretation of the policy language was error for a number of reasons. First of all, none of the key words or phrases in the limitation are defined, thereby injecting potential ambiguity and interpretive mischief from the outset as courts have recognized. For example, the term “available” and the phrase “available to you” have no definitions, making it guesswork as to what triggers the exclusion and when. Does the exclusion apply if Partners for Pets had purchased the same or similar insurance for itself from another insurer, thereby making that insurance “available to [Partners for Pets]” within the meaning of the phrase? The estate argues in favor of this interpretation. Or does it apply if Partners for Pets has no additional insurance available of any kind, but at some future date the insurance proceeds from a third party’s insurer may become available if an unowned auto accident occurs? Southern Owners argues in favor of this interpretation. The more natural and reasonable reading of the “available to you” language is the former interpretation. That’s because the ordinary and natural understanding in this context is that “available to you” means the insured has the “same or similar” insurance in or at hand. Imagine a hypothetical conversation between an insurance agent and a customer using the policy language: 9 Agent: Do you have any insurance policy available to you that covers the same or similar risks? Customer: No, we don’t have any other insurance – we’re relying entirely on this policy with you. “Available to you” is present tense, meaning now or at this time; it is distinct and different from “available to you in the future.” It is also distinct and different from insurance “available to a third party” or “potentially available to you from the proceeds of a third party’s insurance policy.” These differences matter greatly. Imagine an agent explaining to a potential insured that “if there exists any ‘other insurance policy that provides coverage’ for your truck at the time of the accident—even another person’s policy— our policy with you will be void and not cover your truck.” That is a different conversation based on different language not presented in this case. See, e.g., Calvert v. Safeco Ins. Co. of Ill., 462 F. Supp. 3d 1253, 1255 (N.D. Fla. 2020), aff’d, 20-12343, 2021 WL 81594 (11th Cir. Jan. 11, 2021) (affirming holding that clause stating “there is no other insurance policy that provides coverage for the additional vehicle” is clear and unambiguous and excludes coverage). Insureds—such as Partners for Pets—who do not have other insurance can justifiably believe their policies will provide $1 million in coverage under the policy’s plain language. Plus, they have no way of knowing if third parties—persons or entities they have never met and may never meet—potentially have purchased insurance that might become “available” someday in the future. Insureds know of and can only control their own insurance coverage, not that of unknown third parties. At best, the proceeds of the Chafins’ policy became “available” during the course of the litigation, but it is a linguistic stretch to conclude that the policy itself was “available to [Partners for Pets]” when Partners for Pets was not a named insured and didn’t even know the policy existed until litigation about the accident occurred. If that was Southern Owners’s intent, it failed in the language it used. Moreover, it is likely that almost every vehicle lawfully operated in Florida is insured to some degree (often minimally), thereby rendering the Southern Owners policy potentially 10 worthless if an insured third-party vehicle is involved. Given the policy’s plain language, it’s implausible that insureds would pay premiums for $1 million in coverage for auto accident risks if it was explained to them that the $1 million in coverage vanishes entirely because months or years later it is determined that a third party’s insurance policy exists that might pay a de minimis part of a large monetary judgment against the insureds. Insureds are likely to see it as fortuitous that a third party has insurance to help pay for a severe accident in the future, not as a nullification of the $1 million of coverage for accident liability in their own policy. That enormous risk is not explained anywhere in the policy; the language at issue is neither highlighted nor explicitly described as an exclusion in the policy. Anderson, 756 So. 2d at 34 (noting that “exclusionary clauses are construed even more strictly against the insurer than coverage clauses”); see also Auto-Owners Ins. Co. v. Benjamin, 781 S.E.2d 137, 141 (S.C. Ct. App. 2015) (“Insurance policy exclusions are construed most strongly against the insurance company, which also bears the burden of establishing the exclusion’s applicability.” (citation omitted)). Instead, it is simply an ambiguous clause in the introductory sentence in the policy’s subpart addressing “Hired and Non-Owned Auto Liability.” The language at issue has been dubbed an “escape clause” in this litigation, aptly describing how the insurer seeks to escape all liability, but nowhere does the policy itself characterize it as such or explain the severe ramifications of the clause. An enforceable escape clause typically has clear language indicating that an insurance policy “shall not apply” or is “void” if “other valid and collectible insurance” exists. Tracy Raffles Gunn, Multiple Liability Insurance Policies, in FLA. AUTO. INS. LAW, § 6.3 at D.2 (11th ed. 2020) (emphasis added). A “classic” example of an escape clause—discussed in Maryland Casualty Company v. Reliance Insurance Company, 478 So. 2d 1068, 1070–71 (Fla. 1985)—was a vehicle policy that applied to an accident “but only if there is no other valid and collectible insurance available, either on a primary or excess basis, to such person or organization.” (emphasis added). Unlike the language in Southern Owners’s policy, this language speaks in understandable and specific terms, recognizing that the insurer has no financial responsibility after an accident if “valid 11 and collectible insurance” is “available” to a “person or organization” legally responsible for the vehicle’s operation. It is only at a later time, after an accident has occurred, that it can be determined that insurance is valid, collectible, and available. In contrast, Southern Owners’s policy speaks only to “insurance available to you [the insured]” rather than “valid and collectible insurance available” to persons or organizations who might be legally responsible: If Southern–Owners intended to write a broad escape clause, one that would deny coverage under the endorsement unless the insured lacked applicable auto insurance, “it was incumbent upon [it] to do so unambiguously.” . . . Southern–Owners could have done exactly that by replacing “same or similar coverage” with a phrase such as “any other valid and collectible insurance” or “any other insurance, whether primary, excess, contingent, or on any other basis.” S.-Owners Ins. Co. v. Wall 2 Walls Constr., LLC, 8:12-CV-1922-T- 33TBM, 2013 WL 6196948, at *5 (M.D. Fla. Nov. 26, 2013) (citing Anderson, 756 So. 2d at 34). The language at issue—which is construed against the insurer—falls far short of what’s required for an enforceable escape clause. Next, the phrase “same or similar” and the word “coverage” are not defined, again creating ambiguity and much interpretive discretion. The word “coverage” has no defined meaning and has a host of possible meanings depending on the audience. Southern Owners claims it has a narrow meaning that defines the types of insured risks in a policy, but not the amount potentially payable (e.g., a policy covers auto risks but not risks of homeownership). 4 But its policy addresses the concept of “coverage” immediately following the disputed clause and states: 4 See, e.g., Coverage, Black’s Law Dictionary (8th ed. 2004) (“[i]nclusion of a risk under an insurance policy; the risks within the scope of an insurance policy”); but see id. at Full Coverage (“[i]nsurance protection that pays for protection of a loss with no deduction.”) 12 Coverage. We will pay those sums the insured becomes legally obligation to pay as damages because of “bodily injury” or “property damage” arising out of the maintenance or use of an “auto” a. You do not own . . . and which is used in your business. (bold in original; italics added). The plain and ordinary meaning of this statement is that “coverage” means the payment of money for damages arising from bodily injury or property damage arising from use of a business’s non-owned auto. This meaning is consistent with the plain and ordinary meaning in standard dictionaries. See Coverage, Merriam-webster.com, https://www.merriam-webster.com/dictionary/coverage, (last visited Feb. 11, 2021) (defining “coverage” as “something that covers: such as . . . inclusion within the scope of an insurance policy or protective plan” or “the amount available to meet liabilities”); Coverage, Oxfordlearnersdictionaries.com, https://www.oxfordlearnersdictionaries.com/us/definition/englis h/coverage (last visited Feb. 11, 2021) (defining “coverage” as “protection that an insurance company provides by promising to pay you money if a particular event happens”); Coverage, Collinsdictionary.com, https://www.collinsdictionary.com/us/dictionary/english/coverag e (last visited Feb. 11, 2021) (defining “coverage” as “the extent of the protection provided by insurance”). The natural understanding of coverage—as buttressed by the policy’s own language and standard dictionary definitions—is that it includes the financial scope of responsibility of an insurer for a specified risk (“I have $1 million in auto coverage, $1 million in homeowners coverage, and $1 in life insurance coverage;” or “My coverages are $1 million auto, $1 million homeowners, and $1 million life;” or “My policy has coverage up to its policy limits of $1 million.”). A policy could define “coverage” to mean something different in the context presented, but the Southern Owners policy does not; instead, it refers to coverage in terms of payment of money, buttressing that its natural meaning refers to payment for financial risks. 13 The same can be said of the phrase “same or similar,” whose plasticity opens up a range of potential meanings and renders it ambiguous. What is “same or similar” coverage becomes mirage- like, absent a clearer definition of “coverage.” Remember that the interpretive focus is on whether Partners for Pets had “any other insurance available to [Partners for Pets] which affords the same or similar coverage.” The Chafins’ policy with GEICO, of course, did not afford any coverage to Partners for Pets as an insured; instead, it covered only the Chafins’ use of their automobile and indirectly provided a payment of $25,000 to contribute to the $5 million judgment against Partners for Pets. It was a personal policy, not a commercial policy, and—most importantly—covered a mere 1/40th of the financial risk of an auto accident compared to the $1 million in coverage the Southern Owners policy afforded. Rather than being the “same or similar coverages,” the two policies were at polar extremes (with the GEICO policy covering 2.5% of the financial risks involved) thereby making the GEICO policy dissimilar from the coverage that Partners for Pets had obtained from Southern Owners. While a distinction can be made, and in some contexts is legitimately made, between the financial limits of a policy and the types of risks a policy covers, the most reasonable and natural understanding of the phrase “same or similar coverage” in the context of this case is that the $25,000 GEICO policy does not provide the “same or similar” coverage as the Southern Owners policy. To many in the insurance industry, the two policies may be deemed “similar” because they both extend to risks causing bodily injury and property damage. But that overlooks the more natural reading, which is that coverage is more broadly understood as encompassing the types of risk as well as the amount potentially payable, e.g., an automobile policy that covers $1 million in bodily injury and property damage. In conclusion, insurers control the language used in their policies, which is strictly construed against them if not made sufficiently clear, as is the case here; indeed, “exclusionary clauses are construed even more strictly against the insurer than coverage clauses.” Anderson, 756 So. 2d at 34 (emphasis added). Courts are 14 divided as to the disputed language’s meaning, which itself buttresses the conclusion that the language is ambiguous and must be construed against its drafter and in favor of the insured. Because the language at issue is susceptible to many interpretations, making it ambiguous in the context of this case, reversal of the summary judgment entered against the estate and in favor of Southern Owners is required. _____________________________ Theodore R. Howell of Perry & Young, P.A., Panama City, for Appellants. Gregory M. Shoemaker, Esq. of Wade, Palmer & Shoemaker, P.A., Pensacola, for Appellee. 15