Strochak v. Federal Insurance Co.

United States Court of Appeals,
Eleventh Circuit.
No. 95-4748.
Rita STROCHAK, Plaintiff-Appellant,
v.
FEDERAL INSURANCE COMPANY, a New Jersey Corporation, Defendant-
Appellee,
Keevily, Spero-Whitelaw, Inc., Defendant.
April 8, 1997.
Appeal from the United States District Court for the Southern
District of Florida. (No. 93-8500-CIV-KLR), Kenneth L. Ryskamp,
District Judge.
Before KRAVITCH and BARKETT, Circuit Judges, and HARRIS*, Senior
District Judge.
PER CURIAM:
CERTIFICATION FROM THE UNITED STATES COURT OF APPEALS FOR THE
ELEVENTH CIRCUIT TO THE SUPREME COURT OF FLORIDA, PURSUANT TO
ARTICLE V, SECTION 3(b)(6) OF THE FLORIDA CONSTITUTION. TO THE
SUPREME COURT OF FLORIDA AND THE HONORABLE JUSTICES THEREOF:
Appellant Rita Strochak appeals the district court's order
granting summary judgment on her contract claim for excess
uninsured motorist coverage based on Florida Statute § 627.727(2)
(1990)1 in favor of Appellee Federal Insurance Company ("FIC").
*
Honorable Stanley S. Harris, Senior U.S. District Judge for
the District of Columbia, sitting by designation.
1
Florida Statute § 627.727(2) provides, in relevant part:
"The limits set forth in this subsection, and the provisions of
subsection (1) which require uninsured motorist coverage to be
provided in every motor vehicle policy delivered or issued for
delivery in this state, do not apply to any policy which does not
provide primary liability insurance that includes coverage for
liabilities arising from the maintenance, operation, or use of a
specifically insured motor vehicle. However, an insurer issuing
such a policy shall make available as a part of the application
for such policy, and at the written request of an insured, limits
up to the bodily injury liability limits contained in such
This case presents an important issue of Florida law that has not
been addressed by the Supreme Court of Florida. Thus, we believe
that the issue is appropriate for resolution by Florida's highest
court. We therefore defer our decision in this case pending
certification of the question to the Supreme Court of Florida. See
Varner v. Century Finance Co., Inc., 720 F.2d 1228 (11th Cir.1983).
I. STATEMENT OF THE FACTS AND PROCEDURAL HISTORY
This case arises out of an automobile accident that occurred
on November 14, 1992, in Broward County, Florida, in which Rita
Strochak sustained serious injuries when she was struck by a
phantom vehicle. At the time of the accident, Strochak was the
named insured under a "Masterpiece" personal excess liability
policy with FIC. Strochak filed suit against FIC seeking excess
uninsured motorists benefits in the amount of $5,000,000 under the
excess policy claiming entitlement under Florida Statute §
627.727(2) which requires insurers of excess policies to "make
available as a part of the application for such policy" excess
uninsured motorist coverage in an amount equal to the liability
limits of the excess policy. The question presented in this case
is the meaning of this phrase as it relates to automobiles
registered or principally garaged in Florida notwithstanding the
residence of the insured or the place where the insurance coverage
was initially purchased.
In 1985, Appellant's husband Donald Strochak applied for a
primary liability policy and an excess liability policy in New
Jersey from Keevily, Spero-Whitelaw, Inc. ("Keevily"), a New York
policy." Fla.Stat.Ann. § 627.727(2) (West 1990).
independent insurance producer. In filling out the application in
New York, Donald Strochak indicated New Jersey as his main
residence although he owned a house in Florida. During this
application process in New York, Donald Strochak executed a written
rejection of excess uninsured motorists ("UM") coverage. FIC
issued the excess policy, number 1051832901-01, effective June 17,
1985. This policy covered the two residences maintained by the
Strochaks, a co-op in New Jersey, listed as the primary residence,
and a house in Florida. The policy also covered three vehicles,
including the 1984 Lincoln which was involved in the accident. No
vehicle was registered or principally garaged in Florida at the
time the excess policy was issued. The 1984 Lincoln was registered
in New York and principally garaged in New Jersey.
The 1984 Lincoln was originally owned by Turnpike Ford, a car
dealership owned by Donald Strochak.2 Shortly after Donald
Strochak's death, in October of 1987, Rita Strochak purchased the
vehicle from the business and had it shipped to Florida. In March
of 1989, she registered the Lincoln in Florida. At this time, Rita
Strochak obtained a primary automobile liability policy from FIC
for the Lincoln, listing Delray Beach, Florida as her address.
This primary policy was issued and delivered in Florida.
For the 1989 renewal of the excess policy, FIC mailed a
Masterpiece policy addressed to Donald Strochak to the New Jersey
residence along with a letter explaining the newly created
2
The 1984 Lincoln was covered by a policy held by Turnpike
Ford in addition to being covered under Donald Strochak's FIC
personal excess policy until the time of Donald Strochak's
demise.
Masterpiece program, although Donald Strochak had been deceased for
eighteen months. The Masterpiece program, according to Patricia
Harris, FIC's underwriting representative, was the result of
marketing changes for FIC's 1989-1990 renewals. All policies held
by an insured which existed at the time that the Masterpiece
program was introduced were renewed into policies called
"Masterpiece." No new applications were required to renew existing
policies into a Masterpiece. The Masterpiece policy sent to Donald
Strochak in 1989, number 1051832-01, replaced all excess policies
held by Donald Strochak, except for two exceptions not relevant to
this case. The 1989 Masterpiece policy did not specifically
identify any vehicle for coverage, but, by its terms, covered all
vehicles unless specifically excluded, regardless of whether a
separate premium was paid for the vehicles. 3 No premium was paid
for any vehicle from 1989 to 1990. In March of 1990, the
Masterpiece policy was amended to list Rita Strochak as the named
insured and to list the mailing address as Delray Beach, Florida.
On June 17, 1990, the Lincoln, which was now registered and
principally garaged in Florida, was added to the Masterpiece
policy. This was accomplished through Keevily who notified FIC of
the addition of the Lincoln. Strochak began paying a separate
premium for the Lincoln in 1991. In April of 1992, Rita Strochak
asked Edmond Frankel, her son, to notify FIC of a change in her
mailing address from Florida back to New Jersey. Frankel called
3
Rita Strochak contends that the Lincoln was not covered at
this time as it was not listed specifically in the policy. Thus,
she argues that there was a gap in vehicle coverage under the
Masterpiece policy from 1989 to 1990.
Keevily who in turn notified FIC of this change. Rita Strochak
returned to New Jersey at this time with the Lincoln.
Effective June 17, 1992, the Masterpiece was renewed, listing
the 1984 Lincoln as garaged in Florida. This policy was in effect
at the time of the November 1992 accident.
In granting summary judgment in favor of FIC, the district
court assumed, without deciding, that Florida law applied. The
court then determined that FIC had complied with Florida law based
on Donald Strochak's written rejection of excess UM coverage in
1985 in New Jersey. The court further found that the excess policy
was continuously renewed from 1985 through the date of the accident
without a lapse in coverage.
We must first determine if the district court was correct in
applying Florida law. We review conflicts of law issues de novo.
Trumpet Vine Investments v. Union Capital Partners, Inc., 92 F.3d
1110, 1115 (11th Cir.1996). In determining which law applies, a
federal court sitting in diversity must apply the choice of law
rules of the forum state. Klaxon Co. v. Stentor Elec. Mfg. Co.,
Inc., 313 U.S. 487, 496, 61 S.Ct. 1020, 1021-22, 85 L.Ed. 1477(1941). Under Florida choice of law rules, a contract for
automobile insurance generally is interpreted according to the law
of the state where the contract was made. Sturiano v. Brooks, 523
So.2d 1126, 1129 (Fla.1988). However in specifically applying §
627.727 Florida law applies. Amarnick v. Automobile Ins. Co. of
Hartford, 643 So.2d 1130 (Fla.3d DCA 1994). In Sturiano the court
primarily addressed the question of whether interspousal immunity
barred a wife's claim under an automobile insurance policy when she
was the passenger and her husband was the negligent driver of a
vehicle. The court held that although the doctrine of interspousal
immunity is waived in Florida to the extent of applicable liability
insurance, the law of New York, the place where the contract in
Sturiano was executed, would apply. The court noted that the
insurance company did not know of the insured's move or connection
to Florida, and when parties "come to terms in an agreement, they
do so with the implied acknowledgment that the laws of that
jurisdiction will control absent some provision to the contrary."
Sturiano, 523 So.2d at 1129. In Amarnick, however, Florida's
uninsured motorist statute § 627.727 was directly implicated. In
that case, the court reasoned that the purpose of § 627.727 was to
protect " "persons who are insured under a policy covering a motor
vehicle registered or principally garaged in Florida and who are
impaired or damaged in Florida by motorists who are uninsured or
underinsured and cannot thereby make whole the impaired party.' "
Amarnick, 643 So.2d at 1131 (quoting Decker v. Great American Ins.
Co., 392 So.2d 965, 968 (Fla.2d DCA 1980), rev. denied, 399 So.2d
1143 (Fla.1981)). The vehicle in Amarnick was principally garaged
in Florida, and notwithstanding that the policy was delivered in
New York, the court held that Florida law applied and the insurer
was required to provide the uninsured motorist coverage mandated by
§ 627.727. Amarnick, 643 So.2d at 1132. The court reasoned that
since the insurer knew that the vehicle was principally garaged in
Florida, the policy was written to cover risks occurring in
Florida. Thus, the court construed the policy as "issued for
delivery" in Florida and subject to the requirements of Florida,
and not New York, law. Id. Likewise, in this case, FIC was aware
that the 1984 Lincoln was principally garaged in Florida as
evidenced by the Coverage Summary of the 1992 Masterpiece policy
which listed Delray Beach, Florida, as the garage location. Thus,
this case appears to be controlled by Amarnick and Florida law
applies.4
On appeal, Strochak argues that Florida Statute § 627.727(2)
applies because Florida acquired an interest in 1990 when the
Lincoln became "registered or principally garaged" in Florida and
was added to the 1990 Masterpiece policy. Strochak contends that
this 1990 Masterpiece policy was the first excess policy which
provided any motor vehicle liability coverage for a vehicle
registered or principally garaged in Florida. In response, FIC
argues that it complied with Florida law when, in 1985, it offered
UM coverage to Donald Strochak, who executed a written rejection of
the offer.
There is no case law directly addressing this issue. "Where
there is any doubt as to the application of state law, a federal
court should certify the question to the state supreme court to
avoid making unnecessary Erie5 "guesses' and to offer the state
court the opportunity to interpret or change existing law."—Mosher
v. Speedstar Div. of AMCA Intern., Inc., 52 F.3d 913, 916-17 (11th
Cir.1995) (citing Jackson v. Johns-Manville Sales Corp., 781 F.2d
4Amarnick is the only appellate opinion on this question in
Florida, and this issue is certainly within the purview of this
case should the Florida Supreme Court decide to address it
further.
5
Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817,
82 L.Ed. 1188 (1938).
394, 396 (5th Cir.) cert. denied, 478 U.S. 1022, 106 S.Ct. 3339, 92
L.Ed.2d 743 (1986)). Thus we certify the following question to the
Florida Supreme Court.
IV. QUESTION TO BE CERTIFIED TO THE FLORIDA SUPREME COURT
(1) WHETHER AN EXCESS CARRIER HAS A DUTY TO MAKE AVAILABLE THE
UNINSURED MOTORISTS COVERAGE REQUIRED BY FLORIDA STATUTE §
627.727(2) TO AN INSURED UNDER AN EXISTING POLICY ON VEHICLES WHICH
HAD NEVER BEEN REGISTERED OR PRINCIPALLY GARAGED IN FLORIDA
WHENEVER ANY VEHICLE, COVERED OR SUBSEQUENTLY ADDED, FIRST BECOMES
REGISTERED OR PRINCIPALLY GARAGED IN FLORIDA.
Our particular phrasing of the question is not intended to
limit the Florida Supreme Court's inquiry. The entire record in
this case, together with copies of the briefs, shall be transmitted
to the Supreme Court of Florida.
QUESTION CERTIFIED.