Exotic Motorcars and Jewelry, Inc. v. Essex Insurance Company

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
July Term 2014
EXOTIC MOTORCARS AND JEWELRY, INC.,
Appellant,
v.
ESSEX INSURANCE COMPANY, A foreign company,
Appellee.
No. 4D13-3937
[November 19, 2014]
Appeal from the Circuit Court for the Fifteenth Judicial Circuit, Palm
Beach County; Eli Breger, Judge; L.T. Case No. 502008CA029422MB.
Bambi G. Blum of Bambi G. Blum, P.A., Miami, and Lance W. Shinder
of Lance W. Shinder, P.A., Boca Raton, for appellant.
Mitchell L. Shadowitz of Shadowitz Associates, P.A., Boca Raton, for
appellee.
MAY, J.
This is the second lap around our Court for Exotic Motorcars, as it
appeals an adverse ruling on coverage on its Dealer’s Open Lot policy with
Essex Insurance Company.1 The coverage issue arose from an accident
that occurred when Exotic’s owner drove a vehicle to another dealership
for an inspection and possible servicing. In its first lap, we held that the
subject vehicle, a very expensive Porsche, was a titled vehicle and
remanded the case “for the trial court to enter an amended final judgment
and to make findings accordingly.” On this lap, Exotic argues the trial
court erred in determining that the policy provided no coverage for the
Porsche. We agree and reverse.
1 We previously reversed and remanded the case because the trial court’s final
judgment after a four-day bench trial “contained no findings of fact, conclusions
of law, or other indication of the basis for the trial court’s ruling.” Exotic
Motorcars & Jewelry, Inc. v. Essex Ins. Co., 111 So. 3d 208, 208–09 (Fla. 4th DCA
2013) (on reh’g).
Exotic obtained the Porsche from a California wholesale dealer and
placed the car on its showroom floor. Two days later, a buyer signed a
purchase contract with Exotic for the Porsche and left a $5,000 non-
refundable deposit. Exotic’s owner testified that because Exotic did not
allow test drives of their expensive vehicles and had no service department,
he drove the Porsche to Champion Motors for the inspection. The accident
occurred en route to Champion. The buyer had planned to pick up the
Porsche at Champion following the inspection.
After the first appeal, we remanded the case for the trial court to enter
an amended final judgment. The issues to be addressed were whether the
Porsche was either in “transport” or on a “test drive” at the time of the
accident. The trial court entered an amended final judgment in favor of
the insurer.
The trial court found that although the vehicle was covered under the
policy, the accident was not a covered collision. The court found that the
collision did not occur during a “test drive” as that term is commonly
understood because “[n]o prospective purchaser was in the vehicle.” The
court also found that the vehicle was not covered because “transport”
means being moved by some method other than driving, and because “an
inspection or certification is not a direct purchase.” Lastly, the court found
that Exotic failed to prove damages even if the vehicle was covered. From
this judgment, Exotic has appealed.
Exotic argues on appeal that the trial court gave too narrow an
interpretation to the terms “test drive” and “transport”, thereby improperly
denying coverage under the policy. The insurer responds that the common
meaning of “test drive” requires the vehicle to be driven by the potential
purchaser, that “transport” and “drive” are not synonymous, and that an
inspection is not a “direct sale” under the policy. The insurer further
argues that if coverage is found, Exotic failed to prove damages.
We have de novo review of orders interpreting provisions of an
insurance policy. Penzer v. Transp. Ins. Co., 29 So. 3d 1000, 1005 (Fla.
2010).
We begin at the beginning with the applicable policy provisions. The
relevant part of the policy provides:
PART II – WHERE AND WHEN THIS POLICY COVERS
We cover loss which occurs during the policy period and which
occurs:
2
....
1. During a test drive of the covered vehicle . . . ;
2. During transport of the covered vehicle for direct purchase
or sale . . . .
(Emphasis altered).
“[W]hen an insurance coverage term is not defined, the term should be
given its plain and ordinary meaning.” Barcelona Hotel, LLC v. Nova Cas.
Co., 57 So. 3d 228, 230–31 (Fla. 3d DCA 2011). Where a policy does not
define a term, courts often discern the plain meaning of the term by relying
on other sources, such as dictionaries, to determine the accepted meaning
of the word. Id. at 231.
The Merriam-Webster Dictionary defines “test-drive” as “to drive (a
motor vehicle) in order to evaluate performance.”2 The Random House
Dictionary defines “test-drive” as “to drive (a vehicle) on the highway or a
special track or route in order to evaluate performance and reliability.”3
The Collins English Dictionary defines “test-drive” as “to drive (a car or
other motor vehicle) for a limited period of time in order to assess its
capabilities and limitations.”4 None of these definitions require a potential
purchaser to be driving the car.
Although a potential purchaser could be the driver during a test drive,
it could also be a mechanic testing performance after repair, or a car
magazine testing a car to write a review on its performance.5 The term is
unambiguous. The plain meaning of “test drive” includes any person
driving the car for purposes of evaluating performance.
The insurer suggests that the Oxford Dictionary defines “test drive” as
“an act of driving a motor vehicle that one is considering buying in order
2 Test-Drive Definition, MERRIAM-WEBSTER.COM, http://www.merriam-
webster.com/dictionary/test-drive (last visited July 11, 2014).
3 Test Drive Definition, DICTIONARY.COM,
http://dictionary.reference.com/browse/test drive (last visited July 11, 2014).
4 Id.
5 See, e.g., Barry Winfield, 2009 Porsche 911 Carrera & Carrera S Test Drive,
POPULAR MECHANICS (Oct. 1, 2009),
http://www.popularmechanics.com/cars/reviews/drives/4270362.
3
to determine its quality.”6 This is not the only definition, and at best
creates an ambiguity, which is construed against the insurer. Swire Pac.
Holdings, Inc. v. Zurich Ins. Co., 845 So. 2d 161, 165 (Fla. 2003). While
the cases relied upon by the insurer use the term “test drive” in reference
to a potential purchaser driving the vehicle, they do not hold that a “test
drive” is limited to that circumstance. See, e.g., Duncan Auto Realty, Ltd.
v. Allstate Ins. Co., 754 So. 2d 863, 865 (Fla. 3d DCA 2000); Snyder v.
State, 362 So. 2d 971, 972 (Fla. 1st DCA 1978).
Here, Exotic’s owner testified that he considered his drive to be a “test
drive” because “a lot of these cars will sit in garages and they’re not very
functional.” Because of the rare nature of the vehicles sold by Exotic,
potential purchasers are not allowed to take test drives. Significantly,
Exotic does not perform repair service so any issue with the car would
have to be determined through a “test drive” by an employee and fixed at
another location.
In short, we hold that the term “test drive” includes the circumstances
in this case. The policy therefore provided coverage for the loss. We
reverse the trial court on its interpretation of “test drive” under this policy.
Having reached this conclusion, it is unnecessary for us to address the
alternative argument of whether the vehicle was in transport for direct
purchase or sale at the time of the accident.
Last, Exotic argues the trial court erred in finding that Exotic failed to
prove damages. We agree. We have de novo review of this issue. Norman
v. Padgett, 125 So. 3d 977, 978 (Fla. 4th DCA 2013).
The policy provides that the insurer will pay the smallest of the
following:
1. The dealer’s purchase price, plus capital improvements;
2. The actual cash value of the covered vehicle, or the
permanently installed equipment if that is all that is damaged
or lost;
3. The cost to repair the covered vehicle or its permanently
installed equipment with parts of like kind and quality, less
any betterment as a result of the repair. The cost to repair
6 Test Drive Definition, OXFORDDICTIONARIES.COM,
http://www.oxforddictionaries.com/us/definition/american_english/test-drive
(last visited July 11, 2014).
4
will not include any diminished value as a result of the loss;
[or]
4. The limit per covered vehicle on the Declarations Page.
Exotic Motors proved its loss. The purchase price of the Porsche from
the California wholesaler was $343,000.7 The purchaser agreed to buy the
Porsche from Exotic for $372,000. The adjuster’s report reflected the
actual cash value of the Porsche before the accident at $343,000. The
report also indicated that replacement parts to fix the vehicle alone would
cost around $125,000. This did not include labor. Despite this estimate,
the adjuster considered the Porsche “a possible total loss.”
To obtain the maximum salvage value, Exotic found a German
engineering performance company that would convert the Carrera GT into
a Mirage GT, one of only 25 others in the world. The conversion cost was
$395,000, plus $28,500 in storage and transportation fees. Exotic
obtained a loan, known as a floorplan, on the Porsche for $340,000. The
person who loaned the money ultimately “got the vehicle for . . . 340,000.”
Given the testimony at trial, Exotic sustained its burden to prove its
loss of $343,000. The trial court erred in finding that Exotic failed to prove
damages. It proved the Porsche’s pre-collision value, both the purchase
and sales price, and the cost of the conversion repair. Based on insurer’s
total-loss determination, Exotic was entitled to the full value of the Porsche
prior to the accident less the deductible of $2,500, plus prejudgment
interest.
Reversed and Remanded for entry of judgment for Exotic Motors for
$340,500, plus prejudgment interest, and for such further relief as deemed
necessary.
STEVENSON and LEVINE, JJ., concur.
* * *
Not final until disposition of timely filed motion for rehearing.
7 Exotic had not yet paid the California wholesaler for the Porsche at the time of
the accident. Ultimately, Exotic gave the wholesaler two cars—a Lamborghini
and a Mercedes Benz—in exchange for the lost Porsche.
5