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Barbado v. Green & Murphy
* 758 So.2d 1173 (2000) | Cited 10 times | District Court of Appeal of Florida | May 3, 2000
Brenda Barbado appeals the dismissal of her complaint for professional negligence and breach of
fiduciary duty against appellee, Green & Murphy, P.A., and for breach of contract against appellee,
State Farm. In the final judgment, the trial court indicated that it had reviewed the court file and
memoranda of law and had conducted independent research. No hearing was held on the motion; the
trial court sua sponte dispensed with oral argument as noted in the final judgment. The court
concluded that "[t]he allegations contained in Plaintiff's Second Amended Complaint are
inconsistent with the record of the aforesaid file as well as the exhibits heretofore filed in the instant
litigation." We agree with appellant that it was error for the trial court to review collateral materials
in considering appellees’ motion to dismiss.
A motion to dismiss tests the legal sufficiency of the complaint. Bess v. Eagle Capital, Inc., 704 So. 2d
621 (Fla. 4th DCA 1997). A court may not go beyond the four corners of the complaint in considering
the legal sufficiency of the allegations. Id.; Sigma Fin. Corp. v. Investment Loss Recovery Serv., Inc., |
673 So, 2d 572 (Fla. 4th DCA 1996); Fish v. Post of Amvets No. 85, 560 So. 2d 337, 339 (Fla. ist DCA
1990)("Where a complaint is dismissed based on extraneous evidence leading the judge to believe that
the plaintiff is not entitled to relief, the judge has reversibly erred"). For example, defenses such as
collateral estoppel, res judicata, and the expiration of the statute of limitations are appropriately
raised in the answer, and not on a motion to dismiss. See United Serv. Auto. Ass'n v. Selz, 637 So. 2d
320 (Fla. 4th DCA 1994).
“A motion to dismiss a complaint is not a motion for summary judgment in which the court may rely
on facts adduced in depositions, affidavits, or other proofs.” Mancher v. Seminole Tribe of Fla., Inc.,
708 So. 2d 327, 327 (Fla. 4th DCA 1998)(reversing dismissal for lack of personal jurisdiction where the
trial court had considered sworn affidavits filed on behalf of the defendant, which tended to show
that it was protected from the suit by sovereign immunity); see also Perry v. Schlumbrecht, M.D., 724
So. 2d 1239 (Fla. 2d DCA 1999)(holding that, on motion to dismiss, it was error for trial court to
consider whether the incident, as alleged, involved potential medical malpractice or simple
negligence instead of merely whether the amended complaint stated a cause of action for medical
malpractice); Cowder v. Hillsborough County, 715 So. 2d 954 (Fla. 2d DCA 1998)(holding that it was
reversible error for trial court, on defense motion, to dismiss complaint, based upon factual finding).
Instead, on a motion to dismiss, all material allegations are accepted as true; speculation by the court
as to whether the allegations will ultimately be proven is not permitted. See Maciejewski v. Holland,
441 So. 2d 703, 704 (Fla. 2d DCA 1983).
At this juncture, it was error for the trial court to consider collateral matters and make a
determination of whether appellant would ultimately be able to prove her case. We, therefore, reverse
the final judgment, and remand with directions to reinstate appellant's cause of action.
REVERSED AND REMANDED WITH DIRECTIONS.
FARMER and HAZOURIL, JJ., concur.
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Hill v. Murphy
“872 So.2d 919 (2003) | Cited 3 times | District Court of Appeal of Florida | September 12, 2003
Duane Hill appeals the trial court's order denying his motion to set aside the default and the default
judgment entered against him in a suit brought by Edward and Arlene Murphy. Because the Murphys
did not provide Hill with notice of the hearing on their motion for default judgment, we reverse that
portion of the order that refused to set aside the default judgment. However, because Hill did not
properly establish a meritorious defense, we affirm that portion of the order that refused to set aside
the default.
On May 28, 2002, the Murphys sued Hill, Mark S. Kiser, and Hill Design and Construction, Inc., for
damages arising out of their failure to complete an addition to the Murphys’ house. The complaint
alleged counts against Hill for negligent supervision, civil conspiracy, and violations of Florida's
Deceptive and Unfair Trade Practices Act (FDUTPA). Despite being served with the complaint, Hill
never filed an answer. On July 5, 2002, the clerk entered a default against Hill. Because Kiser and Hill
Design and Construction had filed answers, the case continued as to them.
On September 3, 2002, the trial court rendered a final default judgment against Hill for $68,303.48.
Hill first learned of the default judgment when he was served with a notice of taking deposition in
aid of execution on September 5, 2002. Hill then promptly moved to set aside both the default and the
default judgment. Hill filed an affidavit in support of his motion, asserting that he had not been
served with the complaint, that he had never received notice ofthe entry of final judgment, that he
_~ had never signed a contract or entered into an agreement with the Murphys, and that he did not
know of any basis for a suit against him. After an evidentiary hearing, the trial court denied Hill's
motion in its entirety. This appeal followed.
On the issue of setting aside the default, the parties agree that Hill had the burden to establish due
diligence in moving to set aside the default, excusable neglect in failing to respond to the complaint,
and a meritorious defense to the allegations of the complaint. Coquina Beach Club Condo. Ass'n v.
Wagner, 813 So. 2d 1061, 1063 (Fla. 2d DCA 2002). The only issue truly in dispute is whether Hill
established a meritorious defense.
This court has repeatedly held that in order to establish a meritorious defense, the defendant must
tender either a defensive pleading showing the defense or a sworn motion or affidavit stating the
facts supporting the meritorious defense. Id. at 1064; Collins v. Collins, 519 So. 2d 729, 730 (Fla. 2d
DCA 1988); Abray Constr. Co. v. Star Swimming Pools, Inc., 426 So. 2d 1046, 1047 (Fla. 2d DCA 1983).
Counsel's bare assertion in an unsworn motion that the defendant has a meritorious defense is
legally insufficient to allow the court to set aside the default. Abray Constr., 426 So. 2d at 1047.
In this case, Hill filed an affidavit in support of his motion to set aside the default in which he
asserted that he did not sign a contract with or enter into any agreement with the Murphys. While
this assertion does constitute a factual allegation in an affidavit, it does not establish a meritorious
defense. The counts against Hill allege negligent supervision, civil conspiracy, and violations of the
FDUTPA. None of these counts depend on the existence ofa contract between Hill and the Murphys.
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Hill v. Murphy
872 So.2d 919 (2003) | Cited 3 times | District Court of Appeal of Florida | September 12, 2003
A factual allegation that does not meet the substance of the allegations against the affiant does not
and cannot state a "meritorious" defense. Moreover, Hill's attorney's conclusory assertion that
"[cllearly, Duane D. Hill, Jr. has a meritorious defense to this case" is legally insufficient.
Accordingly, the trial court did not abuse its discretion in refusing to set aside the clerk's default.
As an alternative, Hill contends on appeal that the default should be set aside because the complaint
fails to state a cause of action against him. However, Hill's arguments addressed to the complaint do
not attack the sufficiency of the allegations but, rather, contest the merits of the claims. This is an
improper basis for a motion to dismiss for failure to state a cause of action. See Consuegra v. Lloyd's
Underwriters at London, 801 So. 2d 111, 112 (Fla. 2d DCA 2001) (noting that a motion to dismiss for
failure to state a cause of action is not a substitute for summary judgment and that in ruling on such
a motion the trial court must consider only the allegations contained within the four corners of the
complaint). Therefore, the trial court did not abuse its discretion in refusing to set aside the default.
The trial court's order refusing to set aside the default judgment is another matter. As to the default
judgment, Hill argued that he was entitled to notice of the hearing on the motion for entry of a final
default judgment even though he had been defaulted because the damages the Murphys sought were
unliquidated. Hill asserted that the Murphys did not provide him with the required notice and that
this lack of notice required that the default judgment be set aside. We agree.
_~
This court recently addressed the identical issue concerning a default judgment involving
unliquidated damages:
Although the issue of liability was properly determined without an evidentiary hearing, the trial
court erred in awarding damages . . . without holding a hearing because the damages were not
liquidated. Florida Rule of Civil Procedure 1.440(c) requires a hearing on claims for unliquidated
damages, even if a party has been defaulted. Pierce v. Anglin, 721 So. 2d 781, 783 (Fla. 1st DCA 1998);
Tand v. C.F.S. Bakeries, Inc., 559 So. 2d 670, 671 (Fla. 3d DCA 1990). Damages are unliquidated when
their ascertainment requires the taking of testimony. Pierce, 721 So. 2d at 783; Bowman v. Kingsland
Dev., Inc., 432 So. 2d 660, 662 (Fla. 5th DCA 1983). Damages are liquidated when they can be
determined by mathematical calculation or the application of definite rules of law. Charlotte Harbor
Props. Assocs., Ltd. v. Huff, 632 So. 2d 229, 229 (Fla. 2d DCA 1994); Bowman, 432 So. 2d at 662.
Medcom USA, Inc. v. Ryder Homes & Groves Co., 847 So. 2d 594, 596 (Fla. 2d DCA 2003): see also
Fiera.com, Inc. v. DigiCast New Media Group, Inc., 837 So. 2d 451, 452 (Fla. 3d DCA 2002).
Here, as in Medcom, the damages were unliquidated. The Murphys’ complaint alleged only that their
damages exceeded $15,000. Nothing in the record shows that the Murphys' damages could be
determined by either mathematical calculation or the application of a specific rule of law. Because
the Murphys’ damages were unliquidated, Hill was entitled to an evidentiary hearing on the amount
of damages even though he had been defaulted. Further, under rule 1.440(c), he was entitled to notice
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Hill v. Murphy
“872 So.2d 919 (2003) | Cited 3 times | District Court of Appeal of Florida | September 12, 2003
of that hearing. While the Murphys asserted at the hearing that they had sent a notice of hearing to
Hill, the trial court reviewed the record and noted that the only notice was mailed after the default
judgment against Hill had already been entered. Accordingly, it is apparent that Hill had no notice of
the hearing. Because Hill was entitled to notice of the hearing at which he could challenge the
amount of damages to be imposed, the trial court abused its discretion in refusing to set aside the
default judgment.
The Murphys argue that Hill cannot raise the notice issue on appeal because he did not allege this as
a basis for setting aside the default judgment in his motion. This ignores the fact that Hill raised and
argued this issue at the hearing on his motion to set aside the default judgment. The Murphys did
not object to the argument at the hearing and did not request a continuance to provide the proof of
notice that they now allege exists. Because the Murphys did not object when Hill raised this issue at
the hearing, they cannot now object on appeal. Parlier v. Eagle-Picher Indus., Inc., 622 So. 2d 479, 481
(Fla. Sth DCA 1993) (noting that the general rule of appellate review that issues not raised in the trial
court will not be considered on appeal applies to procedural irregularities as well as substantive
issues). Accordingly, we reverse the default judgment and remand for further proceedings.
Affirmed in part; reversed in part; and remanded for further proceedings.
_—~ SALCINES and WALLACE, JJ., Concur.
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| Home / Browse Decisions / $o.2d / 821S0.2d / 821$0.2d 1261 (2002)
_ PATRIOTCOM, INC. v. VEGA
No. 4D01-3688. Email | Print | Comments (0)
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{ a, AA LAee
| 821 S0.2d 1261 (2002)
PATRIOTCOM, INC., Appellant, v. Richard L. VEGA and Joseph Kohut, Appellees.
| District Court of Appeal of Florida, Fourth District.
_ July 31, 2002.
Pa a
_ Attorney(s) appearing for the Case
OM. Amir, John Wien and Eleanor Weinberger of0.M. Amir & Company, Hallandale Beach, for appellant.
Brian J. Stack ofStack FernandezAnderson Harris & Wallace, P.A., Miami, for appellees.
_ PER CURIAM. .
We reverse the order of dismissal because the trial court went beyond the four corners of the complaint in determining the motion to dismiss. In
| particular, the trial court considered corporate documents not attached to the complaint and an improperly raised affirmative defense in appellee's
| motion to dismiss. It is well settled that it is error for a court to grant a dismissal based upon factual evidence not contained in, and contradictory to, the
| complaint's allegations. See Barbado v. Green & Murphy, P.A., 758,80.201173, 1174, (Fla. 4th DCA 2000). It is also well settled that an affirmative defense
| cannot be raised in a motion to dismiss, unless the defense appears upon the face of a prior pleading. See id.; accordRamos v. Mast, 78980.24.1226, 1227
(Fla. 4th DCA 2001). Here, the motion to dismiss asserted a defense, lack of authority to bring the action, that had not been pled, did not appear on the
| face of the complaint, and was contrary to the complaint's allegations. See Beach Roundhouse Town Corp. v. Skinner, 356 S0,2d 881, 881-82 (Fla. 3d DCA
| 1978).
Reversed.
| WARNER, GROSS and HAZOURI, JJ., concur.
| Comment
| Your Name
| YorEmal
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—, Stubbs v. Plantation General Hospital Limited Partnership
988 So.2d 683 (2008) | Cited 0 times | District Court of Appeal of Florida | July 30, 2008
Christine Stubbs appeals the final order entered by the trial court dismissing her complaint with
prejudice. Concluding that the complaint states a cognizable cause of action and that the trial court
improperly looked beyond the four corners of the complaint in ruling on the motion to dismiss, we
reverse.
In her complaint Stubbs alleged that, while a patient at Plantation General Hospital, she fell and
injured herself as a result of the hospital's negligence. More specifically, the complaint alleged that
defendant Lorenzo Rivera, while acting as an orderly for the hospital, directed Stubbs to move from a
test bed to a gurney and that she asked for assistance because she was feeling nauseous and dizzy and
then began vomiting on the test bed. The complaint further alleged that Rivera began yelling at
Stubbs to move onto the gurney and that when she attempted to comply, she fell to the floor thereby
sustaining physical injury.
Rivera and Surgi-Staff, Rivera's alleged employer, filed a motion to dismiss the complaint for lack of
subject matter jurisdiction. The motion alleged that Stubbs’ claims were based upon professional
negligence, not ordinary negligence, and thus were barred by the two-year statute of limitations
applicable to professional negligence actions. See § 95.11(4), Fla. Stat. (2005). The motion further
alleged that Stubbs' medical negligence claim was barred because it had not been submitted to
pre-suit screening. See § 766.106, Fla. Stat. (2005).
Upon review, the trial court granted the dismissal motion, stating:
GRANTED with prejudice based upon the allegations in the Second Amended Complaint (including
paragraphs 12-16) the Court finds as a matter of law that Lorenzo Rivera, R.N. was exercising his
nursing judgment at all times material hereto, and therefore, this claim comes under the authority of
Florida Statutes Chapter 766.
Stubbs challenges this ruling, claiming that the trial court erred in going outside the four corners of
the complaint in granting the motion to dismiss. We agree.
"Generally, the standard of review of an order dismissing a complaint with prejudice is de novo."
Palumbo v. Moore, 777 So. 2d 1177, 1178 (Fla. 5th DCA 2001).
"A motion to dismiss for failure to state a cause of action admits all well pleaded facts as true, as well
as reasonable inferences that may arise from those facts." Id. "[A] court may not properly go beyond
the four corners of the complaint in testing the legal sufficiency ofthe allegations set forth therein.”
Hewitt-Kier Constr. Inc. v. Lemeal Ramos and Assocs., Inc., 775 So. 2d 373, 375 (Fla. 4th DCA 2000)
(quoting Reed v. Sampson, 349 So. 2d 684, 685 (Fla. 4th DCA 1977)).
Here, the trial court went beyond the four corners of the complaint when it found that Rivera was a
“> registered nurse who was exercising his nursing judgment at all times material, since Stubbs’
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> Stubbs v. Plantation General Hospital Limited Partnership
988 So.2d 683 (2008) | Cited 0 times | District Court of Appeal of Florida | July 30, 2008
complaint alleged that Rivera was acting as an orderly during said timeframe.' In that regard, the
trial court improperly relied upon an affidavit filed by Rivera detailing his interaction with Stubbs. In
said affidavit, Rivera stated that he was employed as a registered nurse, rather than an orderly, and
that he was performing a nursing assessment of Stubbs at the time of her injury.
The allegations contained within the four corners of Stubbs’ complaint, when taken as true, do not
clearly sound in medical negligence. Accordingly, the motion to dismiss was improperly granted. See
Reeves v. N. Broward Hosp. Dist., 821 So. 2d 319, 322 (Fla. 4th DCA 2002) (explaining that the alleged
wrongful act must be directly related to the improper application of medical services to the patient
and the use of professional judgment and skill) (quoting Bell v. Indian River Mem'I Hosp., 778 So. 2d
1030, 1033-34 (Fla. 4th DCA 2001)).
Reversed.
FARMER and HAZOURI, JJ., concur.
1, In her answer brief, counsel for appellees misquoted the pleadings below, stating that the complaint alleged that “after
tests were conducted, plaintiff was on a test bed and was directed by... Surgi-Staff employee, Nurse Rivera, to move from
~ the test bed to a gurney." (Emphasis added.) In fact, the second amended complaint made reference in that paragraph to
"defendant Rivera."
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Home / Browse Decisions / So.2d / 819S0.2d / 819 So.2d 732 (2002)
SIEGLE v. PROGRESSIVE CONSUMERS INS. CO.
No. SCO1-1219. Email | Print | Comments (0)
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819 So,2d 732 (2002)
Carole M. SIEGLE, Petitioner, v. PROGRESSIVE CONSUMERS INSURANCE COMPANY, Respondent.
Supreme Court of Florida.
May 23, 2002.
mms,
Attorney(s) appearing for the Case
Mike Peacock and W. Christian Hoyer ofJames, Hoyer, Newcomer
& Smiljanich, P.A., Tampa, FL, for Petitioner.
Francis A, Anania and Douglas H. Stein ofAnania, Bandklayder, Blackwell, Baumgarten & Torricella, Miami, FL; and Barry Richard of Greenberg,
Traurig, P.A., Tallahassee, FL, for Respondent.
LEWIS, J.
We have for review a decision of the Fourth District Court of Appeal on the following question, which the court certified to be of great public importance:
Does an automobile collision policy which provides that the insurer must repair or replace the damaged vehicle with other of like kind and quality
obligate the insurer to compensate the insured in money for any diminution in market value after the insurer completes a first-rate repair which
returns the vehicle to its pre-accident level of performance, appearance, and function?
Siegle v. Progressive Consumers Ins. Co., 788 80.20 355, 362 (Fla. 4th DCA 2001). We have jurisdiction. See art. V, § 3(b)(4), Fla. Const.
Facts
In 1997, the petitioner, Carole M. Siegle, was involved in an automobile accident. See Siegle, 788 So.2d at 357. At the time of the accident, she was
insured by the respondent, Progressive Consumers Insurance Company (''Progressive''), under a contract of insurance containing the following
provisions:
PART IV-AUTO DAMAGE COVERAGE
Pat If you pay a specific premium for Auto Damage Coverage, we will pay for loss to your insured auto or its equipment caused by:
Coverage E-Collision
Coverage D-Comprehensive
| less any applicable deductibles for each separate loss.
We may pay the loss in money or repair or replace damaged or stolen property with other of like kind and quality.
As used in this PART:
~~,
2. Loss means direct and accidental loss of or damage to your insured auto, including its equipment.
LIMITS OF LIABILITY
Our limit of liability for loss shall not exceed the lesser of:
1. the actual cash value of the stolen or damaged property...
2. the amount necessary to repair or replace the property with other of the like kind and quality ...
3. the amount stated in the Declarations page of this policy.
As was its option, Progressive elected to repair Siegle's car.
Despite the petitioner's complete satisfaction with the repairs, ' she filed the instant cause of action for breach of contract seeking the recovery of the
"inherent diminished value" caused to her auto by the collision. See id. at 357. Petitioner defined inherent diminished value as "the difference between
the pre-loss value of the insured automobile and its value after it was repaired and returned." Citing Morrison v. Allstate Indemnity Co., No. 98-377-
Civ-J-20c (M.D.Fla. Sept. 9, 1999), the trial court dismissed Petitioner's complaint with prejudice.
On appeal, the Fourth District quoted extensively from Carlton v. Trinity Universal Insurance Co., 32. S.W.3d 4.54, (Tex. App.2000), and stated:
_ We hold that where an insurer has fully, completely, and adequately repaired or replaced the property with other of like kind and quality, any
_ teduction in market value of the vehicle due to factors that are not subject to repair or replacement cannot be deemed a component part of the cost
of repair or replacement...
Additionally, in the instant case, we find that the language of the policy simply does not obligate Progressive to both complete a quality, first-rate
_ repair of the vehicle and pay money to the insured.... These methods for compensation for the loss are set forth in the alternative...
Siegle, 788 So.2d at 360-61. The court affirmed the trial court's dismissal of Petitioner's complaint, and also certified the above-stated question to this
Court as one of great public importance.
oo,
Analysis
As this cause comes to us froma trial court order of dismissal, two important principles govern our review. First, "[wJhether a complaint is sufficient to
state a cause of action is an issue of law." W.R. Townsend Contracting, Inc. v. Jensen Civil Constr., Inc., 728 50.2d 297, 300 (Fla. ist DCA 1999).
Consequently, the ruling below is subject to de novo review. See id. Additionally, when presented with a motion to dismiss, a trial court is required to
“treat the factual allegations of the complaint as true and to consider those allegations in the light most favorable to the
(819 So.2d 735]
plaintiffs." Hollywood Lakes Section Civic Ass'n, Inc. v. City of Hollywood, 676 $0.2 500, 501 (Ela. 4th DCA 1996) (citing Caretta Trucking, Inc. v. Cheoy
Lee Shipyards, Ltd., 647 $0.24 1028, 1030 (Fla. 4th DCA 1994)).
In furtherance of her claim, Siegle contends that the instant policy language is ambiguous, resulting in a triggering of the rule that "{a)]mbiguities are
interpreted liberally in favor of the insured and strictly against the insurer who prepared the policy." Prudential Property & Casualty Ins. Co. v. Swindal,
622 $0.2d 467, 470 (Fla.1993). The ambiguity, Petitioner asserts, is a result of Progressive's failure to define the terms "repair," "replace," or "like kind
and quality." It is well settled, however, that an insurance contract is to be construed in accordance with the plain language of the policy. See Swindal,
622 S0.2d at 470; Stuyvesant Ins. Co. v. Butler, 314$0.20.567, 570 (Fla. 1975); Poole v. Travelers Ins. Co., 130 Fla. 806, 179 So. 138, 141-42 (1937). Thus, it
is only where courts first determine that policy language is ambiguous that contractual language is to be construed in favor of the insured. When an
insurance contract is not ambiguous, it must be given effect as written. See State Farm Fire & Cas. Co. v. Oliveras, 4£1 80,20 175, 178 (Fla. 4th DCA 1983).
A number of opinions from other jurisdictions have spoken directly to the issue as to whether the contract terms complained of by the petitioner here
create ambiguity within the policy. Of those, only the Superior Court of Delaware deemed the language ambiguous. See Delledonne v. State Farm Mut.
Auto. Ins. Co., 621 A.2d 350 (Del.Super.Ct.1992). In 2001, however, the Delaware Supreme Court held that "[t]he Delledonne Coutt... incorrectly stated
Delaware law by finding that the existence of two separate and distinct lines of authority in the interpretation of similar policy language is evidence of
ambiguity." O'Brien v. Progressive Northern Ins. Co., 785_4.24 281, 289 (Del.2001). Thus, no court has explicitly found the contract language at issue in
the instant case to be ambiguous.
Other jurisdictions have specifically deemed the language in question here unambiguous. Most recently, in analyzing the language before us in the
instant case, the Missouri Court of Appeals, Eastern District, stated: "[T]hese provisions direct a layman as to what they are entitled to under those
provisions. We find no ambiguity in the relevant provisions in the policy." Camden v. State Farm Mut. Auto. Ins. Co., 668,.W.3d78, 81 (Mo.Ct.App. 2001).
~~, Courts in Arizona, California, Louisiana, and Massachusetts have also deemed the disputed contract language unambiguous, ? Finally, the district court
below definitively stated: "We find no ambiguity in the policy, and we have no exclusion to narrowly tailor." Siegle, 788 So.2d at 361.
In the instant case, the petitioner asserts that Progressive's use of the terms "repair," "replace," and "like kind and quality" creates an ambiguity in the
policy. Since these terms create ambiguity, Siegle argues, this Court should interpret the term "loss" to include diminished value. It is clear, however,
that these terms are utterly unambiguous. The policy language reads:
T.IMTTS OF L.TARIT.ITY
Our limit of liability for loss shall not exceed the lesser of:
1. the actual cash value of the stolen or damaged property ...
2. the amount necessary to repair or replace the property with other of the like kind and quality ...
—, 3. the amount stated in the Declarations page of this policy.
Within this context, "repair" means "to restore by replacing a part or putting together what is torn or broken." Merriam-Webster's Collegiate
Dictionary 991 (10th ed.1999). As stated by the Fourth District in General Accident Fire & Life Assurance Corp. v. Liberty Mutual Insurance Co., 260 $9.24
249 (Fla. 4th DCA 1972),
terms of an insurance policy should be taken and understood in their ordinary sense and the policy should receive a reasonable, practical and
sensible interpretation consistent with the intent of the parties-not a strained, forced or unrealistic construction.
Id. at 253. Therefore, we conclude that "repair," as used in the instant contract of insurance, is not ambiguous.
Likewise, Progressive's use of "replace" in the contract was only intended to mean that the insurer would "restore [the insured's automobile] to a
former place or position," or "take the place of ... as a substitute or successor."' Merriam -Webster's Collegiate Dictionary 992 (10th ed.1999). Finally, "of
like kind and quality" is properly interpreted to require that the insurer place the insured in possession of a car "the same or nearly the same" as the
damaged auto, in terms of the "fundamental nature" and "degree of excellence" of the automobile. Id. at 674, 642-43, 955. As used by Progressive, the
meanings of both "replace" and "of like kind and quality" are unambiguous and clear. See Nateman v. Hartford Cas. Ins. Co., 544,580,204 1026, 1028 (Fla.
3d DCA 1989) ("Whena policy provision remains undefined, common everyday usage determines its meaning."). Based upon an analysis of the policy
language here, it is clear that the contract terms are not ambiguous, and the petitioner's argument is without merit.
Based upon our conclusion that the terms of the instant contract of insurance are unambiguous, we turn now to the petitioner's assertion that the policy
language should be interpreted to cover diminished value. All three District Courts of Appeal that have been faced with the issue before us today have
held that the disputed policy language does not provide coverage for diminished value. In Rezevskis v. Aries Insurance Co., 784.80.2d 4,72 (Fla. 3d DCA
2001), the court stated:
Pursuant to the repair or replace limitation of liability in the Aries policy, the insurer's responsibility is limited to the amount necessary to return
_ the car to substantially the same condition as before the loss. Nowhere does that obligation include liability for loss due to a stigma on resale
resulting from “market psychology’ .... The Aries policy's express provision that the insurer's responsibility is limited in the amount necessary to
repair or replace permits no other reasonable interpretation. Thus, the diminished value resulting from damage not susceptible to repair or
replacement does not fall within the insurer's obligation under the policy.
<—™, Id, at 474. Likewise, in the instant case, the court below held:
_ Additionally, in the instant case, we find that the language of the policy simply does not obligate Progressive to both complete a quality, first-rate
repair of the vehicle and pay money to the insured.... [The] methods for compensation for the loss are set forth in the alternative, i.e., if Progressive
elects to repair then it is not also obligated to pay the loss in money or to replace the property with one of like kind. To adopt the construction of
the policy advanced by appellant would require that these methods of compensating for the loss be cumulative. The policy makes no allowance for
this dual method of compensation for the insured's loss.
Siegle, 788 So.2d at 361. Finally, in another recent opinion, the Second District simply stated: "We adopt the policy set forth in those two opinions
(Rezevskis and Siegle] and find that the insurance policy in this case did not require payment for the diminished value of Mr. Smith's fully repaired
vehicle." Smith v. Superior Ins. Co., 802. $0.20 424,, 425 (Fla. 2d DCA 2001),
In Rezevskis, the court interpreted policy language identical to the disputed contractual text in the instant case. See Rezevskis, 784 So.2d at 473. In
Smith, the policy language differed only marginally. See Smith, 802 So.2d at 425. Clearly, however, each of these three courts determined that a proper
reading of the policy language provided no coverage for the diminished value of the plaintiffs! vehicles.
In support for its claim that the policy language here should be construed to cover diminished value, Petitioner cites Arch Roberts & Co. v. Auto-Owners
Insurance Co., 305 So.2d 882 (Fla. ist DCA 1974), Auto-Owners Insurance Co, v. Green, 220 $9,2d 29 (Fla. ist DCA 1969), and Fort Lauderdale Lincoln
Mercury, Inc. v. Corgnati, 715$0,2d
311 (Fla. 4th DCA 1998). We find, however, that a cursory examination of these cases reveals that they are either
simply inapposite here or not persuasive.
In Green, "[b]oth parties ... concede[d] that the contractual undertaking of the insurer for damages due to a collision is substantial restoration as to
function, appearance, and value." 220 So.2d at 31 (emphasis added). The issue before the court in Green was whether, under the insurance contract, the
insurer could force the insured to accept uncertain repairs and release all further claims against the insurer. See id. As the defendant insurance company
in Green conceded precisely what is at issue in the instant case, and the dispute in Green revolved around an issue not presented here, this case has no
impact upon the instant action.
In Arch Roberts, the insurer offered to repair an insured auto and the insured refused the offer. The issue before the court was whether the insurance
company had fulfilled its obligation under the policy by making an unsuccessful offer to repair. See Arch Roberts, 305 So.2d at 883. The court held that
the plaintiff insured had prevented the insurance company from exercising its option to repair the car, and thus could not recover. See id. Along with
«this holding, however, the court did state:
Upon making that election [to repair] it was then obligated to restore it to substantially the same condition as to function, appearance, and value as
existed before the accident. Should it fail to do so, it would then be liable to the owner for its value immediately prior to the accident.
id. at 884 (emphasis added). This dicta may be used to suggest that the First District's definition of "repair" apparently would include the concept of
diminished value.
Finally, the petitioner relies upon Corgnati, based upon the court's inclusion of diminished value in the plaintiff's recoverable damages there. See
Corgnatt, 715 So.2d at 314. This case, however, is easily distinguished. In Corgnati, the district
(819 So.2d 738)
court was interpreting the Deceptive and Unfair Trade Practices Act, under which
oo,
the measure of actual damages is the difference in market value of the product or service in the condition in which it was delivered and its market
value in the condition in which it should have been delivered according to the contract of the parties.
id. at 314. In Corgnati, the court was construing the language of a consumer protection statute, the damages provisions of which contemplated
compensation for diminished value. See id. Here, by contrast, we must determine whether an insurance policy's text covers the non-repairable
diminished value of an automobile. Corgnatiis inapposite to that inquiry.
While it is undeniable that the panel deciding Arch Roberts may have included compensation for diminished value within the concept of "repair," this
conclusion, in our view, is not supported by proper reasoning or authorities. We do not find Arch Roberts, Green, or Corgnati persuasive.
An examination of cases from sister jurisdictions reveals a nationwide split of authority. When interpreting the contractual language at issue here, some
courts have found diminished value a covered loss despite the liability-limiting repair provision, while others have read the provision to foreclose
recovery for diminished value. A number of jurisdictions seemingly ignore the limitation of the insurer's liability under the insurance contract to the
cost of repairs, and simply deem the "proper measure of damages" a comparison of the car's market value prior to and after the losscausing event. 3
Additionally, two states seemingly adopt the position that the term "repair or replace" is grounded in perceptions of monetary value, as opposed to
physical functionality. Each of these decisions concludes that, "It cannot be said that there has been a complete restoration of the property unless it can
be said that there has been no diminution of value after repair of the car." Dunmire Motor Co. v. Or. Mut. Fire Ins. Co., 166 Or. 690, 114 P.2d 1005, 1009
(1941); see also Campbell v. Calvert Fire Ins. Co., 234.8,C. 583, 109 S.E.2d572 (1959). We respectfully decline to join the jurisdictions finding that the
instant contract of insurance covers diminished value-this conclusion simply requires either ignoring the policies' language, or giving the contracts'
text a meaning that the drafters never intended. Instead, we agree with the large number of courts that have concluded that diminished value is not
covered. 4
[819 So.2d 739]
In Florida, insurance contracts are construed in accordance with the plain language of the policies. See Swindal, 622 So.2d at 470. Furthermore,
When possible, courts should give effect to each provision of a written instrument in order to ascertain the true meaning of the instrument. Where
the contract is susceptible to an interpretation that gives effect to all of its provisions, the court should select that interpretation over an
alternative interpretation that relies on negation of some of the contractual provisions.
o™, Inter-Active Servs., Inc, v. Heathrow Master Ass'n, Inc., 721 S0.2¢ 433, 435 (Fla. 5th DCA 1998) (citation omitted), Thus, our review must include a close
reading of the policy provisions at issue in the instant case, and an attempt to construe the contractual language in a manner which gives all the
provisions effect.
In its most pure form, the instant disagreement centers on what interpretation is to be given the following two passages:
PAYMENT OF LOSS
We may pay the loss in money or repair or replace damaged or stolen property with other of like kind and quality.
LIMITS OF LIABILITY
Our limit of liability for loss shall not exceed the lesser of:
1. the actual cash value of the stolen or damaged property ...
2. the amount necessary to repair or replace the property with other of the like kind and quality ...
3. the amount stated in the Declarations page of this policy.
Clearly, the intent of the drafter of these provisions was to provide the insurer with two options upon the occurrence of a "loss." The insurer could
reimburse the insured through money payment, or it could pay to repair or replace the automobile. If, as here, the repair option was chosen, the
insurer's liability was limited to the monetary amount necessary to repair the car's function and appearance, commensurate with the condition of the
auto prior to the loss.
Proper interpretation of the policy language at hand requires that we deem diminished value a loss not covered by this policy. Acceptance of the
petitioner's position that the proper definition of "repair" includes compensation for lost value would negate the insurer's choice of remedy explicitly
contained in the contractual text, an action directly counter to Inter-Active. If we accepted the petitioner's arguments, even where the insurer chose to
repair an insured vehicle, thereby limiting its liability to the cost of repair or replacement, it would be bound to also pay a portion of the car's cash value
—a "strained, forced, [and] unrealistic construction" in violation of long-standing contractual interpretation principles. Gen. Accident Fire & Life
Assurance Corp. v. Liberty Mut. Ins. Co., 260 So,2d at 253.
As no coverage for diminished value exists under this contract of insurance, this Court certainly cannot create coverage "out of whole cloth." Pastori v.
Commercial Union Ins. Co., 4,730.20 40, 41 (Fla. 3d DCA 1985); see also Duncan Auto Realty, Ltd. v. Allstate Ins, Co., 754,80.2d 863, 864-65 (Fla. 3d DCA
2000). In contract interpretation cases, the issue to be addressed is not what this Court or the petitioner would prefer that the policy cover, but what
losses the mutually agreedupon contractual language covers. Thus, even if we were inclined to do so, we could not interpret the policy in accordance
with the petitioner's assertions. The contract of insurance before us clearly does not cover a covered automobile's loss of value due to an accident.
Should parties in the petitioner's situation wish to obtain coverage
[819 So.2d 740]
for diminishment in value due to accident, they may either contract for the coverage initially, or urge the Legislature to mandate coverage through the
enactment of a statute. Certainly, however, we cannot manufacture coverage that does not exist. We recognize that one may sustain an economic value
1US>. WILeLL uu Le pal uL udiuage 1d pericer dub evely LEeSpecre. MUWEVEL, Lue CAIDSLELILE UL cll CLEIULICILE UL luss uues LIVE LIGIISLULLIL Gd CULILLALL LLILU pluvidiig,
coverage when that item is clearly not subject to payment under the policy.
Finally, the petitioner asserts that the absence of an exclusion from coverage for diminished value should cause this Court to find coverage here. This
argument, however, is directly contrary to the tenets of insurance contract interpretation, as well as the Fourth District's decision in United States Fire
o> Insurance Company v. Meridian of Palm Beach Condominium Association, Inc., 700 $9,2d 161 (Fla. 4th DCA 1997). There, the court held that "policy
exclusions cannot create coverage where there is no coverage in the first place." Id. at 162; see also Lassiter Constr. Co. v. American States Ins. Co., 699
So.2d 768, 770 (Fla. 4th DCA 1997). This statement of the law is undeniable— the existence or nonexistence of an exclusionary provision in an insurance
contract is not at all relevant until it has been concluded that the policy provides coverage for the insured's claimed loss. As a result, this argument is
entirely without merit.
Conclusion
Based upon the foregoing, we approve the decision of the court below and answer the certified question in the negative.
It is so ordered.
WELLS, C.J., and SHAW, HARDING, ANSTEAD, and QUINCE, JJ., concur.
PARIENTE, J., concurs in result only.
FootNotes
1. Siegle "had no complaint with the quality of the work and agreed that Progressive repaired the vehicle ‘to the best of human ability.'" Siegle, 788
So.2d at 357.
2. See Johnson v. State Farm Mut. Auto. Ins. Co., 157 Ariz. 1, 7542.20 330, 331 (CLApp. 1988); Ray v. Farmers Ins. Exch., 200 Cal.App.3d 1411, 246 Cal.Rptr.
593, 595 (1988); Townsend v. State Farm Mut. Auto. Ins. Co., 793.$0.20 473, 480-81 (La.Ct.App.2001); Roth v. Arnica Mut. Ins. Co., No. 98-3551
(Mass.Super.Ct. Aug. 3, 1999) (unpublished opinion),
3. See MEA Ins. Co. v. Citizens Nat'l Bank ofHope, 260 Ark. 849, 54.5.8.W.2d 70 (1977); State Farm Mut. Auto. Ins. Co. v. Mabry, 274.Ga.4,98, 556.S.E.2d
eo, 114 (2001); Dodson Aviation, Inc. v. Rollins, Burdick, Hunter ofKan., Inc., 15.Kan.App.2d 314, 807 P.2d.1319 (1991); Edwards v. Md. Motorcar Ins. Co., 204
A.D. 174, 197 N.Y.S. 460 (N.Y.App.Div.1922).
4. See Johnson v. State Farm Mut. Auto. Ins. Co., 157 Ariz. 1, 154 P.2d 330 (Ct.App.1988); Ray v. Farmers Ins. Exch., 200 CaLApp.3d 1411, 246 Cal.Rptr. 593,
596 (1988); O'Brien v. Progressive Northern Ins. Co., Nos. 99C-05-033-ESS & 99C-07-325-FSS (Del. Super.Ct.2000), aff'd, 785.A.2d 281 (Del.2001); Gen.
Accident Fire & Life Assurance Corp. v. Judd, 400 8.W.2d 685 (Ky.1966); Townsend v. State Farm Mut. Auto. Ins. Co., 7932.80.20 473 (La.Ct.App.2001);
Roth v. Arnica Mut. Ins. Co., No. 98-3551 (Mass.Super.Ct. Aug. 3, 1999); Camden v. State Farm Mut. Auto. Ins. Co., 66 S.W.3d 78 (Mo.Ct.App.2001); Kent v.
Cincinnati Ins. Co., No. CA2001-04-100 (Ohio Ct.App. Dec. 10 2001); Munoz v. Allstate Ins. Co., No. 9906-2855 (Pa.Ct.Comm.Pl. Nov. 15,1999)
(unpublished opinion) (holding that under Pennsylvania's "reasonable expectations" standard, diminished value recovery was not reasonable); Grubbs
v. Foremost Ins, Co,, 82 5.D. 98, 141 N.W.24 777 (1966); Carlton v. Trinity Universal Ins. Co., 32.S.W.3d
454 (Tex.App.2000); Bickel v. Nationwide Mut. Ins.
Co,, 206
Va. 419, 143.8,E.2d
903 (1965).
oom,
Fo
Home / Browse Decisions / So.2d / 643$0.2d / 643 $0.2d 621(1994)
HOLLAND v. ANHEUSER BUSCH, INC.
No. 93-02964. Email | Print | Comments (0)
View Case Cited Cases Citing Case
643 So.2d 621 (1994)
Russell E. HOLLAND, Appellant, v. ANHEUSER BUSCH, INC., Appellee.
District Court of Appeal of Florida, Second District.
April 8, 1994.
Attorney(s) appearing for the Case
Burton E. Burdick, Ft. Lauderdale, for appellant.
Tracy
A. Raffles and George A. Vaka of Fowler, White, Gillen, Boggs, Villareal & Banker, P.A., Tampa, for appellee.
LAZZARA, Judge.
Russell Holland (Holland) appeals the trial court's order dismissing his amended complaint with prejudice. We conclude that the amended complaint
states a valid cause of action. Accordingly, we reverse and remand with directions to reinstate the amended complaint.
Holland originally sued Anheuser-Busch, Inc. (Anheuser) in a three-count complaint alleging negligence, breach of contract, and breach of implie