JOHN H. JERVIS and LINDA JERVIS v. JOSE CASTANEDA and GEICO GENERAL INSURANCE COMPANY

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
JOHN H. JERVIS and LINDA JERVIS, individually
and as husband and wife,
Appellants,
v.
JOSE CASTANEDA and GEICO GENERAL INSURANCE COMPANY,
Appellees.
No. 4D17-332
[April 25, 2018]
Appeal from the Circuit Court for the Fifteenth Judicial Circuit, Palm
Beach County; Gregory M. Keyser, Judge; L.T. Case No. 50-2011-CA-
006657-XXXX-MB-AE.
Kara Berard Rockenbach of Link & Rockenbach, P.A., West Palm
Beach, Andrew A. Harris of Burlington & Rockenbach, P.A., West Palm
Beach, Daniel G. Williams of Gordon & Doner, P.A., Palm Beach Gardens,
and Jeffrey M. Liggio and Geoff S. Stahl of Liggio Law, P.A., West Palm
Beach, for appellants.
Suzanne Youmans Labrit and James P. Terpening, III of Shutts &
Bowen LLP, Tampa, Francis A. Zacherl, III of Shutts & Bowen LLP, Miami,
and Amber Stoner of Shutts & Bowen LLP, Tallahassee, for appellees.
GROSS, J.
The core issue in this case is whether an insurance company that
completely fails to comply with the written notice provisions of section
627.727(1) & (9), Florida Statutes (2010), 1 is entitled to establish that an
insured knowingly rejected stacked coverage or knowingly accepted non-
stacked uninsured motorist coverage. We hold that the failure to serve the
mandatory notice precludes the insurance company from claiming that
1 As Geico correctly points out, the 2010 version of section 627.727 applies here.
See Hassen v. State Farm Mut. Auto. Ins. Co., 674 So. 2d 106, 108 (Fla. 1996)
(“[T]he statute in effect at the time an insurance contract is executed governs
substantive issues arising in connection with that contract.”).
the insured orally made a knowing choice regarding the stacking of UM
coverage.
Appellant John Jervis purchased uninsured motorist coverage from
Geico General Insurance, Co. for two vehicles. He completed an online
form which, in the circuit court, Geico argued was an election of non-
stacked coverage. The first circuit judge assigned to the case ruled on
summary judgment that Geico’s online form was void; the form was not
actually signed by Jervis, Jervis had no ability to reject or deselect non-
stacked coverage, and the signing page did not have the warning language
required by statute. The judge ruled:
The Court has determined as a matter of law that the
documentation used by GEICO does not comport with Florida
statute 627.727 which requires that the insured be provided
a form that in twelve (12) point type contains certain
warnings. It further provides that this form is to be signed by
the insured. If it is signed, then it is conclusively presumed
that there was an informed knowing of rejection of coverage
or election of lower limits. The court finds that the form
containing the twelve (12) point bold type was not actually
signed by the insured. The page on which the act of signing
took place did not have any required warning language. It
incorporated the warning by reference. It was not
electronically possible to actually sign on the M9 form. One
must sign on a precursor screen.
Therefore the M9 waiver of uninsured motorist coverage is
void.
Secondly, the signer had no electronic ability to deselect the
form’s preselected waiver of stacked UM coverage. By law the
presumption is that there is no waiver but this form defeats
the presumption. The insured’s only choices were to passively
accept or else to cancel.
Therefore the M9 waiver of uninsured motorist coverage is
void.
Geico has not challenged this order on appeal. After summary
judgment was granted, Geico amended its affirmative defenses to assert
that Jervis “made an oral rejection of stacked UM coverage.”
The case went to a jury trial on the oral rejection issue and the jury
ruled in favor of Geico.
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Section 627.727, Florida Statutes, lays certain ground rules for UM
coverage. Subsection 627.727(1) sets the parameters for an insured’s
written rejection of UM coverage or selection of lower uninsured limits than
the bodily injury liability limits of a policy. In great detail, the statute sets
out the mandatory procedure for an insured’s rejection of UM coverage or
selection of lower limits:
The rejection or selection of lower limits shall be made on a
form approved by the office. The form shall fully advise the
applicant of the nature of the coverage and shall state that the
coverage is equal to bodily injury liability limits unless lower
limits are requested or the coverage is rejected. The heading
of the form shall be in 12-point bold type and shall state: “You
are electing not to purchase certain valuable coverage which
protects you and your family or you are purchasing uninsured
motorist limits less than your bodily injury liability limits
when you sign this form. Please read carefully.” If this form
is signed by a named insured, it will be conclusively presumed
that there was an informed, knowing rejection of coverage or
election of lower limits on behalf of all insureds. The insurer
shall notify the named insured at least annually of her or his
options as to the coverage required by this section. Such
notice shall be part of, and attached to, the notice of premium,
shall provide for a means to allow the insured to request such
coverage, and shall be given in a manner approved by the
office. Receipt of this notice does not constitute an affirmative
waiver of the insured’s right to uninsured motorist coverage
where the insured has not signed a selection or rejection form.
Id. (emphasis added). The nine “shalls” in the statute lead to the
conclusion that the written notice is a mandatory prerequisite to an
insured’s waiver of the right to UM coverage.
Similar to the mandatory requirements of subsection (1), subsection
627.727(9) contains mandatory requirements for the way that insurers
can avoid the judicial doctrine of stacking: 2
2 “Stacking is a judicial creation, based on the common sense notion that an
insured should be entitled to get what is paid for. . . . Thus, if the insured pays
separate premiums for uninsured motorist protection on separate vehicles, the
insured should get the benefit of coverage for each individual premium paid.”
United Servs. Auto. Ass’n v. Roth, 744 So. 2d 1227, 1229 (Fla. 4th DCA 1999)
(internal citation omitted).
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(9) Insurers may offer policies of uninsured motorist coverage
containing policy provisions, in language approved by the
office, establishing that if the insured accepts this offer:
(a) The coverage provided as to two or more motor vehicles
shall not be added together to determine the limit of insurance
coverage available to an injured person for any one accident....
***
In connection with the offer authorized by this
subsection, insurers shall inform the named insured,
applicant, or lessee, on a form approved by the office, of
the limitations imposed under this subsection and that
such coverage is an alternative to coverage without such
limitations. If this form is signed by a named insured,
applicant, or lessee, it shall be conclusively presumed that
there was an informed, knowing acceptance of such
limitations. . . .
§ 627.727(9), Fla. Stat. (2010) (emphasis added). Subsection (9) mandates
notice to the insured in writing, on a form approved by the Office of
Insurance Regulation, 3 of the limitations allowed by the subsection.
Over the years, the legislature has created a statutory framework that
promotes UM coverage. See Quirk v. Anthony, 563 So. 2d 710, 714 (Fla.
2d DCA 1990). It is desirable for motorists to self-insure against potential
loss rather than look to state taxpayers for financial assistance after an
auto accident. In section 627.727, the legislature made plain its desire
that insureds make “informed” and “knowing” decisions about UM
coverage. §627.727(1), (9), Fla. Stat.
To the average insurance consumer, thinking about UM stacking is as
enjoyable as a dramatic reading from the Internal Revenue Code. So that
the insured need expend only minimal effort at becoming fully informed,
the statute requires certain information, in writing, to be placed before an
insured’s eyes as a mandatory prerequisite to an “informed” and “knowing”
decision about UM coverage. We described this mandatory notice
requirement in Government Employees Ins. Co. v. Douglas, 627 So. 2d 102,
103 (Fla. 4th DCA 1993):
[P]ursuant to [section 627.727], to limit coverage validly, the
insurer must first satisfy the statutorily mandated
3See § 624.05(3), Fla. Stat. (2010) (defining “Office” as used in the Insurance
Code).
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requirements of notice to the insured and obtain a knowing
acceptance of the limited coverage.
(Emphasis added). In affirming Douglas, the Supreme Court echoed our
discussion of the mandatory notice requirement of section 627.727:
As recognized by the Fourth District Court of Appeal, to limit
coverage validly, the insurer must satisfy the statutorily-
mandated requirement of notice to the insured and obtain a
knowing acceptance of the limited coverage. An insurer who
provides coverage with the section 627.727(9)(d) limitation is
also statutorily required to file revised, decreased premium
rates for such policies.
It is our opinion that these requirements were the quid pro
quo given by the legislature to insurers for the right to limit
uninsured motorist coverage by this exclusion. As further
recognized by the Fourth District in its opinion in this case, if
the policy exclusion is valid despite noncompliance with the
statute, the provision of section 627.727(9)(d) is rendered
meaningless.
Government Employees Ins. Co. v. Douglas, 654 So. 2d 118, 120-21 (Fla.
1995) (emphasis added).
The record in this case is that Geico’s notice was void, which means
that, in the eyes of the law, there was no section 627.727 notice at all.
Without such notice, there can be no informed and knowing acceptance of
the limitations on stacking. To allow an insurance company to prove that
an insured orally and knowingly rejected stacked coverage in the absence
of the statutory notice would undermine the legislature’s determination
that such written notice is mandatory. The summary judgment ruling in
this case conclusively established that the notice was void. Jervis’s second
motion for summary judgment should have been granted, obviating the
necessity of a trial. Similarly, at the jury trial, Jervis’s motion for directed
verdict should have been granted.
We do not find Belmont v. Allstate Ins. Co., 721 So. 2d 436 (Fla. 2d DCA
1998), to be controlling. That case involved a policy issued in 1991, where
the insurance company provided a section 627.727 notice in the form
“recommended by the insurance commissioner.” Id. at 437 n.1. That
notice provided that the insured’s selection of any option regarding UM
coverage applied to “future renewals or replacements of such policy which
are issued at the same bodily injury liability limits.” Id. A later policy
increased bodily injury liability limits. On summary judgment, the trial
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court held that the insured’s initial non-stacking election under the 1991
policy controlled the later policy. Id. at 437.
Relying on the language of the initial notice, the Second District
reversed, holding that because the coverage limits had increased, the
insured was “entitled to stacked coverage unless Allstate can establish
that the [insured] waived the right to a written rejection by making an oral,
knowing rejection of non-stacked coverage. Id. at 438. 4
We do not apply Belmont here for two reasons. First, Belmont involved
an initial notice that complied with section 627.727; in this case there was
no notice. Second, Belmont based its decision on “the contract language
in Allstate’s form,” not on the requirements of section 627.727. Id. at 438
n.2. Our decision is based on the language of the statute. Nothing in
Belmont indicates that it turns on the absence of a statutory notice before
the initial purchase of a policy. We note that the 2010 version of the
statute appears to place the burden on the insured to request a UM
coverage change on subsequent policies, and pay for such increased
coverage, after the insured accepted coverage limitations, with proper
notice, on an earlier policy. See n.4. Thus if the Belmont fact situation
had occurred in this case, without the crucial language in its initial
627.727 notice, Allstate could successfully argue that where the company
gave proper notice prior to the insured’s initial selection of UM limitations,
the burden was on the insured to request an increase in stacking or UM
coverage on a renewal policy, and pay the increased premium, where
bodily injury liability limits had increased.
We also decline to follow Muhammed v. Allstate Ins. Co., 582 So. 2d 768(Fla. 3d DCA 1991). That one paragraph decision involved a notice form
that “arguendo departs from the one statutorily provided by section
4The 2010 version of section 627.727(9) gives effect to an initial acceptance of
UM limitations, even where later policy limits are increased:
When the named insured, applicant, or lessee has initially accepted
such limitations, such acceptance shall apply to any policy which
renews, extends, changes, supersedes, or replaces an existing
policy unless the named insured requests deletion of such
limitations and pays the appropriate premium for such coverage.
(Emphasis added).
Under this statute, the insured would be precluded from arguing that he or
she requested different coverage on a replacement policy unless the appropriate
premium for such coverage had been paid. See Roth, 744 So. 2d at 1230.
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627.727.” Id. at 768. There is too little description of the notice to
determine if it is analogous to the void notice in this case.
For these reasons, we reverse the final judgment in favor of Geico and
remand for the entry of a final judgment in favor of appellants entitling
appellants to stacked UM coverage.
WARNER and LEVINE, JJ., concur.
* * *
Not final until disposition of timely filed motion for rehearing.
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