Title: John Rando, Et Al. v. Government Employees Insurance Company

State: florida

Issuer: Florida Supreme Court

Document:

Supreme Court of Florida 
 
 
____________ 
 
No. SC09-240 
____________ 
 
JOHN RANDO, et al.,  
Appellants, 
 
vs. 
 
GOVERNMENT EMPLOYEES INSURANCE COMPANY, 
Appellee. 
 
[April 8, 2010] 
 
LABARGA, J. 
 
This case is before the Court for review of a question of Florida law certified 
by the United States Court of Appeals for the Eleventh Circuit that is determinative 
of a cause pending in that court and for which there appears to be no controlling 
precedent.  We have jurisdiction.  See art. V, § 3(b)(6), Fla. Const.  In Rando v. 
Government Employees Insurance Co., 556 F.3d 1173 (11th Cir. 2009), the 
Eleventh Circuit certified the following question to this Court:  
WHETHER, UNDER FLORIDA LAW, AN AUTOMOBILE 
INSURANCE POLICY—WHICH WAS EXECUTED, ISSUED 
AND DELIVERED IN FLORIDA TO THE NAMED INSUREDS 
RESIDING IN FLORIDA FOR A CAR THAT IS REGISTERED 
AND GARAGED IN DELAWARE—MAY VALIDLY PROVIDE 
THAT UNINSURED MOTORIST COVERAGE UNDER THAT 
 
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POLICY MAY NOT BE COMBINED WITH UNINSURED 
MOTORIST COVERAGE PROVIDED BY A SEPARATE 
AUTOMOBILE POLICY ALSO ISSUED BY THE INSURER TO 
THE NAMED INSUREDS IN FLORIDA. 
 
As we discuss below, we answer the certified question in the negative.  We 
conclude that under Florida law, the uninsured motorist anti-stacking provision 
contained in the Randos’ motor vehicle insurance policy—which was executed, 
issued and delivered in Florida to the named insureds residing in Florida and thus 
subject to Florida law—is unenforceable where the insurer, the Government 
Employees Insurance Company (GEICO), failed to satisfy the informed consent 
requirement of section 627.727(9), Florida Statutes (2005).1  
Facts and Procedural Background 
 
The facts of this case are fully set forth in the Eleventh Circuit Court of 
Appeals’ opinion in Rando v. Government Employees Insurance Co., 556 F.3d 
1173 (11th Cir. 2009).  We summarize the salient facts here.  Florida resident John 
Rando sustained permanent, life-altering injuries in a 2005 automobile accident.  
The accident occurred in Florida and was caused by an underinsured driver.  At the 
time of the accident, John Rando and his wife Gail Rando were the named insureds 
                                          
 
 
1.  The certified question, Florida’s uninsured motorist statute, and the 
Delaware policy each use the term “uninsured” motorist coverage to encompass 
both uninsured and underinsured motorist coverage.  The Randos’ case technically 
falls into the class of underinsured motorist coverage since the at-fault party was 
insured and the Randos did recover $10,000 under that policy. 
 
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on two motor vehicle insurance policies issued by GEICO.  One policy, the Florida 
policy, covered two vehicles that were registered and principally garaged in 
Florida.  The second policy, the Delaware policy, covered a vehicle that was 
registered and principally garaged in Delaware, where the Randos’ daughter 
resided.  The Randos lived in Delaware until 2004, when they moved to Florida 
and established residency here.  The Delaware policy was executed, issued and 
delivered in Florida.  There was no express choice of law provision in the 
Delaware policy. 
 
Each of the Randos’ motor vehicle policies provided uninsured motorist 
coverage, and the Randos paid premiums for coverage on each vehicle.  Following 
the accident, the Randos were paid the full amount of uninsured motorist benefits 
under the Florida policy.  However, they were denied benefits under the Delaware 
policy because of a provision that prohibited the combining, or stacking, of 
uninsured motorist benefits from separate GEICO motor vehicle policies.  The 
anti-stacking provision in the Delaware policy stated:  
If separate policies with us are in effect for you or 
any person in your household, they may not be combined 
to increase the limit of our liability for a loss. 
 
 
The Randos originally filed suit against GEICO in state court, but thereafter 
GEICO removed the case to the federal district court.  The district court concluded, 
and the parties stipulated, that Florida law applies to determine the rights and 
 
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liabilities under the Delaware policy.  The district court granted summary 
judgment in favor of GEICO, concluding that the anti-stacking provision contained 
in the Delaware policy was enforceable because the vehicle covered by the policy 
was neither registered nor principally garaged in Florida.  The Randos appealed the 
district court’s decision to the Eleventh Circuit Court of Appeals.  Given the 
absence of controlling Florida precedent, the Eleventh Circuit certified for this 
Court’s determination the question of whether the anti-stacking provision 
contained in the Delaware policy is enforceable under Florida law.  As we explain 
below, we conclude that the provision is not enforceable. 
Analysis 
The question certified to this Court is a pure question of law.  Consequently, 
the standard of review is de novo.  See Jackson-Shaw Co. v. Jacksonville Aviation 
Authority, 8 So. 3d 1076, 1085 (Fla. 2008) (citing Macola v. Gov’t Employees Ins. 
Co., 953 So. 2d 451, 454 (Fla. 2006)).  We begin by explaining why Florida law 
applies to the issue raised by the certified question.  We continue with an overview 
of Florida law in the area of uninsured motorist coverage and stacking, and we 
address the certified question in this case.   
Applicability of Florida Law to Interpret the Randos’ Delaware Policy 
In this case, we are guided by the lex loci contractus rule, which provides 
that the law of the state where an insurance contract is executed is the law that 
 
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“governs the rights and liabilities of the parties in determining an issue of 
insurance coverage.”  State Farm Mut. Auto. Ins. Co. v. Roach, 945 So. 2d 1160, 
1163 (Fla. 2006).  Because the Delaware policy was executed, issued, and 
delivered in Florida, it is the law of Florida that forms the basis for our 
interpretation of the parties’ rights and liabilities in this case.2   
Uninsured Motorist Coverage and Stacking 
 
As noted in the district court’s order, Florida’s public policy, as reflected in 
section 627.727, Florida Statutes, favors the providing of insurance coverage for 
losses caused by uninsured motorists.  “Uninsured motorist protection does not 
inure to a particular motor vehicle, but instead protects the named insured or 
insured members of his family against bodily injury inflicted by the negligence of 
any uninsured motorist under whatever conditions, locations, or circumstances any 
of such insureds happen to be in at the time.”  Coleman v. Florida Ins. Guar. Ass’n, 
Inc., 517 So. 2d 686, 689 (Fla. 1988) (citing Mullis v. State Farm Mut. Auto. Ins. 
Co., 252 So. 2d 229 (Fla. 1971)).   
In the event of a loss caused by an uninsured motorist, stacking allows an 
insured who pays separate premiums for uninsured motorist coverage to obtain 
benefits for each premium paid.  Rando, 556 F.3d at 1775 n.1 (quoting United 
                                          
 
 
2.  Moreover, as we previously noted, both parties stipulated to the 
applicability of Florida law.  
 
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Servs. Auto. Ass’n v. Roth, 744 So. 2d 1227, 1229 (Fla. 4th DCA 1999)).  Florida 
law with respect to the stacking of uninsured motorist coverage has evolved over 
the last four decades.  At present, although Florida law prohibits the stacking of 
most forms of motor vehicle insurance coverage, uninsured motorist coverage is 
expressly excluded from this prohibition.  See § 627.4132, Fla. Stat. (2009) 
(providing that the prohibition against stacking of motor vehicle insurance policies 
contained in that statute “does not apply . . . [t]o uninsured motorist coverage”).  
Therefore, the stacking of uninsured motorist coverage is permissible under Florida 
law.  Moreover, the stacking of uninsured motorist coverage was permissible at the 
times relevant to the events in this case.  We have explained the rationale for 
stacking uninsured motorist coverage as follows: 
The owner of several vehicles, by paying a single premium for 
coverage applicable to only one of them, secures coverage for himself 
and his family while occupying the uninsured vehicles as well as the 
insured vehicle.  Thus, when an insured pays additional uninsured 
motorist coverage premiums, he has purchased additional coverage 
“coextensive with and supplementing the insurance already available 
under a single coverage.”  Schermer, Automobile Liability Insurance, 
§ 31.02 [8] (1987).  Otherwise, nothing would have been gained by 
payment of an additional premium because the insured’s purchase of a 
single uninsured motorist coverage protects him “whenever or 
wherever bodily injury is inflicted upon him by the negligence of an 
uninsured motorist.”  Mullis, 252 So. 2d at 238. 
 
Coleman, 517 So. 2d at 689.   
Although the Randos paid three separate premiums for uninsured motorist 
coverage, the Delaware policy expressly precludes combining the Randos’ Florida 
 
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and Delaware policies in order to increase the amount of uninsured motorist 
benefits available to them.  In other words, the Delaware policy prohibits the 
stacking of the Randos’ Delaware uninsured motorist coverage with the Florida 
policy.  Because the Delaware policy was executed in Florida and Florida law 
governs whether the anti-stacking provision contained in the Delaware policy is 
enforceable, we next examine the treatment of anti-stacking provisions under 
Florida law.     
Limitations on Anti-Stacking Provisions in Florida 
In 1987, section 627.727, Florida Statutes, which governs uninsured 
motorist coverage in Florida, was amended to provide specific guidelines for 
limiting the scope of uninsured motorist coverage in a given insurance policy.  
This amendment resulted in the creation of section 627.727(9), Florida Statutes 
(1987).  See ch. 87-213, § 1, at 1341-42, Laws of Fla.  At the time the Delaware 
policy was executed, this subsection provided (and still provides) that insurers may 
offer their insureds policies which limit coverage under certain stated conditions: 
627.727 Motor vehicle insurance; uninsured and underinsured 
vehicle coverage; insolvent insurer protection.—  
. . . . 
(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, except as 
provided in paragraph (c).   
 
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(b) If at the time of the accident the injured person is occupying 
a motor vehicle, the uninsured motorist coverage available to her or 
him is the coverage available as to that motor vehicle. 
(c) If the injured person is occupying a motor vehicle which is 
not owned by her or him or by a family member residing with her or 
him, the injured person is entitled to the highest limits of uninsured 
motorist coverage afforded for any one vehicle as to which she or he 
is a named insured or insured family member.  Such coverage shall be 
excess over the coverage on the vehicle the injured person is 
occupying. 
(d) The uninsured motorist coverage provided by the policy 
does not apply to the named insured or family members residing in 
her or his household who are injured while occupying any vehicle 
owned by such insureds for which uninsured motorist coverage was 
not purchased. 
(e) If, at the time of the accident the injured person is not 
occupying a motor vehicle, she or he is entitled to select any one limit 
of uninsured motorist coverage for any one vehicle afforded by a 
policy under which she or he is insured as a named insured or as an 
insured resident of the named insured’s household. 
 
§ 627.727(9), Fla. Stat. (2005).  The stacking limitation in subsection (9)(a), which 
provides that insurers may issue a policy stating that “[t]he 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,” is akin to 
the anti-stacking provision contained in the Randos’ Delaware policy.   
However, section 627.727(9) also places limitations on how an insurer may 
restrict uninsured motorist coverage.  Section 627.727(9) provides that in order for 
an insurer to prohibit the stacking of multiple uninsured motorist policies, it must 
satisfy certain requirements: 
 
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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.  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.  Any insurer who provides 
coverage which includes the limitations provided in this subsection 
shall file revised premium rates with the office for such uninsured 
motorist coverage to take effect prior to initially providing such 
coverage.  The revised rates shall reflect the anticipated reduction in 
loss costs attributable to such limitations but shall in any event reflect 
a reduction in the uninsured motorist coverage premium of at least 20 
percent for policies with such limitations.  Such filing shall not 
increase the rates for coverage which does not contain the limitations 
authorized by this subsection, and such rates shall remain in effect 
until the insurer demonstrates the need for a change in uninsured 
motorist rates pursuant to s. 627.0651. 
 
§ 627.727(9), Fla. Stat. (2005) (emphasis added).   
 
 
Thus, while section 627.727(9) provides insurers with a mechanism to 
provide less coverage to an insured, it also protects the insured by requiring that 
the insurer obtain informed consent from the insured.  Using a form approved by 
the Office of Insurance Regulation (OIR), the insurer shall inform the named 
insured of the limitations authorized by section 627.727(9), and advise the insured 
that the offer is an alternative to a policy without those limitations.  The insured’s 
signature on the OIR-approved form establishes an informed and knowing 
 
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acceptance of the limitations.  Additionally, the statute requires the insurer to file 
revised rates that reflect a minimum of a twenty percent decrease in rates as a 
result of the limited coverage.   
Thus, Florida law provides a mechanism for insurers to include anti-stacking 
provisions in their policies; however, in order to do so, the insurers must satisfy the 
requirement of informed consent by the insured.  “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.”  Gov’t Employees Ins. Co. 
v. Douglas, 654 So. 2d 118, 120-21 (Fla. 1995).  It is this requirement that we 
conclude dictates the outcome in this case.  GEICO concedes that it did not obtain 
informed consent from the Randos for the anti-stacking provision.  Consequently, 
the anti-stacking provision is unenforceable under Florida law because GEICO did 
not satisfy the informed consent requirement.    
Because uninsured motorist coverage protects the insured, we reject the 
argument that the informed consent requirement does not apply in this case 
because the vehicle covered by the Delaware policy was not “registered or 
principally garaged” in Florida.  The language “registered or principally garaged” 
is derived from section 627.727(1), Florida Statutes (2005), which compels 
insurers to provide uninsured motorist coverage in or supplemental to any motor 
vehicle liability insurance policy “delivered or issued for delivery in this state with 
 
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respect to any specifically insured or identified motor vehicle registered or 
principally garaged in [Florida].”  Although subsection (1) compels the issuance of 
uninsured motorist coverage with respect to certain vehicles—those vehicles 
registered or principally garaged in Florida—we do not interpret this language as 
limiting our application of subsection (9) only to policies for vehicles registered or 
principally garaged in Florida.  Once GEICO’s Delaware policy was executed in 
Florida and issued and delivered to the named insureds in Florida, the requirements 
in subsection (9) extended to that policy and to any attempts to limit the stacking of 
the Randos’ uninsured motorist coverage.  In sum, we conclude that section 
627.727(9) applies in this instance and that the Randos’ informed consent was 
required by Florida law in order to validate the anti-stacking provision contained in 
the Delaware policy.  Because GEICO did not obtain the Randos’ informed 
consent before the Delaware policy was executed in Florida, the anti-stacking 
provision is not enforceable under Florida law.  
Consequently, we answer the certified question in the negative and return 
this case to the Eleventh Circuit Court of Appeals for further consideration. 
It is so ordered.   
QUINCE, C.J., and PARIENTE, LEWIS, and PERRY, JJ., concur. 
CANADY, J., dissents with an opinion. 
POLSTON, J., dissents with an opinion. 
 
NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION, AND 
IF FILED, DETERMINED. 
 
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CANADY, J., dissenting. 
 
Because I conclude that the provisions of section 627.727(9), Florida 
Statutes (2005), have no application to policies with respect to motor vehicles that 
are not “registered or principally garaged in the state,” as provided in section 
627.727(1), I would answer the certified question in the affirmative. 
 
Based on statutory context and history, subsection (9) of section 627.727 is 
most reasonably understood as ancillary to subsection (1), which provides that—
absent a written rejection—no motor vehicle liability policy within the statute’s 
scope be issued without the provision of uninsured motorist (UM) coverage.  The 
provisions of subsection (9) permit insurers to offer policies with unstacked UM 
coverage when certain conditions are met, thereby providing a means for insurers 
to escape subsection (1)’s implied prohibition on unstacked coverage.  See Sellers 
v. U.S. Fid. & Guar. Co., 185 So. 2d 689 (Fla. 1966).  That implied prohibition 
does not arise with respect to policies that are outside the scope of subsection (1). 
 
Subsection (1) embodies a regulatory rule adopted by the Legislature 
governing policies which are “delivered or issued for delivery in this state” and 
which cover “motor vehicle[s] registered or principally garaged in this state.”  The 
text of subsection (1) reflects a conscious limitation on the scope of the regulatory 
rule mandating the offering of UM coverage.  For that regulatory rule to apply it is 
not sufficient that the insurance policy “be delivered or issued for delivery in this 
 
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state.”  It is also necessary that the vehicle covered by the policy be a “motor 
vehicle registered or principally garaged in the state.” 
 
There is no basis for concluding that the reference to “policies of uninsured 
motorist coverage” in subsection (9) extends to policies of “uninsured motorist 
coverage” that do not fall within the scope of subsection (1).  Subsection (9) is part 
of a unified statutory scheme governing UM coverage which is anchored in 
subsection (1).  Nothing in the text or history of the statute suggests that the 
subsidiary regulatory provision in subsection (9) reaches further than the 
underlying regulatory provision in subsection (1).  On the contrary, when 
subsection (1) refers to “the coverage required under this section,” it suggests that 
the subsequent subsections must be understood in pari materia with subsection (1) 
and that a policy of insurance cannot fall within the scope of subsection (9) if it 
does not fall within the scope of subsection (1).  This interpretation is reinforced by 
the reference in subsection (9) to “the offer authorized by this subsection”—
language which indicates that subsection (9) operates not as a freestanding 
regulatory requirement but as an alternative to certain policy requirements that 
ordinarily flow from subsection (1). 
 
Accordingly, the offer of unstacked UM coverage authorized by subsection 
(9) operates as an alternative to the offer of stacked UM coverage required by 
subsection (1).  The conditions associated with subsection (9)’s alternative offer of 
 
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unstacked coverage are irrelevant to policies that are not subject to the requirement 
for the offer of stacked coverage under subsection (1). 
 
In short, the text of section 627.727 does not require that the conditions in 
subsection (9) be applied to a policy of insurance providing unstacked UM 
coverage on a vehicle that is neither registered nor principally garaged in Florida.  I 
therefore dissent from the majority’s contrary conclusion. 
 
 
POLSTON, J., dissenting, 
 
 
I dissent to the majority’s answer to the certified question.  I would answer 
the question, as phrased by the Eleventh Circuit, with a qualified affirmative.  A 
policy may provide for anti-stacking, but only if the anti-stacking provision in a 
policy controlled by Florida law complies with section 627.727(9), Florida Statutes 
(2005).  I could agree with the majority’s decision to answer the certified question 
in the negative if the majority had rephrased it as follows: 
WHETHER AN AUTOMOBILE INSURANCE POLICY, 
CONTROLLED BY FLORIDA LAW—ISSUED TO THE NAMED 
INSUREDS RESIDING IN FLORIDA FOR A CAR THAT IS 
REGISTERED AND GARAGED IN DELAWARE—MAY 
VALIDLY PROVIDE THAT UNINSURED MOTORIST 
COVERAGE UNDER THAT POLICY MAY NOT BE COMBINED 
WITH UNINSURED MOTORIST COVERAGE PROVIDED BY A 
SEPARATE AUTOMOBILE POLICY ALSO ISSUED BY THE 
INSURER TO THE NAMED INSUREDS IN FLORIDA,WITHOUT 
SATISFYING SECTION 627.727(9), FLORIDA STATUTES. 
 
 
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Although I disagree with the majority’s answer to the question as certified, I 
agree with the majority that Florida law applies to the policy at issue because the 
Eleventh Circuit certified the question on the parties’ stipulation that Florida law 
applies under the lex loci contractus rule.  The Delaware policy contains no choice 
of law provision that is applicable in this case; therefore, lex loci contractus was 
properly applied.  See Shaps v. Provident Life & Accident Ins. Co., 826 So. 2d 
250, 254 n.3 (Fla. 2002) (“Under Florida’s conflicts of law rules, the doctrine of 
lex loci contractus directs that, in the absence of a contractual provision specifying 
governing law, a contract, other than one for performance of services, is governed 
by law of the state in which the contract is made.” (quoting Shaps v. Provident Life 
& Accident Ins. Co., 244 F.3d 876, 881 (11th Cir. 2001)); State Farm Mut. Auto. 
Ins. Co. v. Roach, 945 So. 2d 1160, 1164 (Fla. 2006) (“[Lex loci] will control 
absent some provision to the contrary.”).   
 
Because Florida law applies, I agree with the majority’s analysis and 
application of section 627.727(9) to this case.  Consequently, I agree that, because 
GEICO did not obtain the Randos’ requisite informed consent, the anti-stacking 
provision is not enforceable under Florida law. 
 
Accordingly, although I agree with the majority’s analysis, I respectfully 
dissent to the majority’s negative answer to the certified question.   
   
 
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Certified Question of Law from the United States Court of Appeals for the 
Eleventh Circuit - Case No. 08-13247-BB 
 
Bryan S. Gowdy of Mills Creed and Gowdy, P.A., Jacksonville, Florida, and 
Timothy S. Babiarz of Babiarz Law Firm, P.A., The Villages, Florida, 
 
 
for Appellant 
 
Angela C. Flowers of Kubicki Draper, Ocala, Florida, 
 
 
for Appellee