The question of what protections insurers have in cases involving underinsured or uninsured (UM) motorists has long been a thorny one. An entire body of law has developed around the question, one constantly being reshaped by legislative revision and judicial interpretation. A key question within that area of law: what is the impact to the insurer of other settlement agreements with the underinsured motorist’s liability carrier?
This June, Florida’s Fourth District Court of Appeal visited this question in Liberty Mutual Insurance Co. v. Wolfson, 45 Fla. L. Weekly, June 26, 2020. In Wolfson, an underinsured motorist collided with an insured’s car, causing permanent injuries. The insured filed a claim under his UM policies and the insurers (Liberty Mutual) declined to pay. The insured sued, and in a trial solely on damages, a jury awarded $1.6 million to the insured. The insurers filed a motion to set off settlements which they argued duplicated part of the jury verdict. At an evidentiary hearing on that motion, the insurer was able to demonstrate that one insurer, Nationwide, had paid $100,000 on the claim and another insurer, AIG, had entered a release wherein it waived subrogation rights in exchange for a $480,667.50 payment. The trial court, in the Seventeenth Judicial Circuit in Broward County, denied the insurers’ motion, finding most vitally that no Florida Statute specifically authorizes one UM carrier to obtain a set-off for duplicate benefits paid by another UM carrier.
Liberty Mutual appealed, and the Fourth District Court of Appeal unanimously reversed. The Court held that the Florida Statute §627.727, controlled. That statue reads, in pertinent part:
“The coverage described in this section shall be over and above, but shall not duplicate, the benefits available to an insured under any workers’ compensation law, personal injury protection benefits, disability benefits law, or similar law; under any automobile medical expense coverage; under any motor vehicle liability insurance coverage; or from the owner or operator of the uninsured motor vehicle or any other person or organization jointly or severally liable together with such owner or operator for the accident; and such coverage shall cover the difference, if any, between the sum, of such benefits and the damages sustained, up to the maximum amount of such coverage provided under this section.” (Emphasis in opinion) Florida Statute §627.727(1) (2018).
The Court held that the phrase “similar law” within the text of §627.727(1) clearly contemplated and intended to encompass uninsured and underinsured motorists within the umbrella of §627.727 itself, which is a legislatively-enacted type of insurance coverage. Nehme v. Smithkline Beecham Clinical Labs, Inc., 863 So.2d 201, 205 (Fla. 2003) (“Under the doctrine of noscitur a sociis (a word is known by the company it keeps) one examines the other words used within a string of concepts to derive the legislature’s overall intent.”) Applying that rule in this case, the Court held that §627.727 plainly means that benefits provided under one UM policy cannot duplicate benefits already paid to an insured under another UM policy. The insurer, as a result, was entitled to set off those amounts already paid to the insured from the jury’s verdict. The Court’s message in Wolfson was clear: the Florida Legislature adopted §627.727 as a statutory scheme intended to protect insurers from paying out duplicate benefits in a variety of ways, including underinsured and uninsured motorist cases, and it is not, ultimately, the province of the Court to change or rewrite laws enacted by the legislature.