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2022 S.D. 3

IN THE SUPREME COURT

OF THE

STATE OF SOUTH DAKOTA

* * * *

JOHN F. PAYNE and

ROBIN S. PAYNE, Plaintiffs and Appellants,

v.

STATE FARM FIRE AND

CASUALTY COMPANY, Defendant and Appellee.

* * * *

APPEAL FROM THE CIRCUIT COURT OF

THE FOURTH JUDICIAL CIRCUIT

MEADE COUNTY, SOUTH DAKOTA

* * * *

THE HONORABLE GORDON SWANSON

Judge

* * * *

ADAM BRADSKY

DAVID A. BRADSKY of

Bradsky, Bradsky, and Bradsky, P.C.

Rapid City, South Dakota Attorneys for plaintiffs and

appellants.

HILARY L. WILLIAMSON of

Fuller, Williamson, Nelsen,

 & Preheim, LLP

Sioux Falls, South Dakota Attorneys for defendant

and appellee.

* * * *

CONSIDERED ON BRIEFS

AUGUST 23, 2021

OPINION FILED 01/19/22
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KERN, Justice

[¶1.] John and Robin Payne (the Paynes) were denied uninsured motorist 

(UM) benefits under their State Farm personal liability umbrella insurance policy 

following a motorcycle accident with an uninsured vehicle in South Dakota. State 

Farm denied coverage for the accident because the policy, first executed in Virginia, 

did not include UM coverage. The Paynes, residents of Florida at the time of the 

accident, filed a declaratory action against State Farm seeking payment of 

$2,000,000 under Florida’s UM statute, which they contend applies to this dispute. 

State Farm moved for summary judgment claiming Virginia, rather than Florida,

law applied. The circuit court denied the motion, concluding Florida law applied to 

the dispute. The Paynes moved for declaratory relief which the court denied, 

holding that Florida law only required the insurer of a personal liability umbrella 

policy to offer UM coverage when the insured applied for the policy or made a 

written request to their insurer for UM coverage, conditions not met by the Paynes. 

The Paynes appeal, and State Farm submits a notice of review as to whether 

Florida law applies to the Paynes’ policy with State Farm. We affirm.

Factual and Procedural Background

[¶2.] John Payne (John) and his wife, Robin Payne (Robin), were riding their 

motorcycle in South Dakota on August 8, 2012, when they were in a motor vehicle 

accident with an uninsured motorist, Jody Kirk, sustaining significant injuries. At 

the time of the accident, John was covered by a personal liability umbrella policy 

(Policy) issued by State Farm. This Policy, which John first applied for in Virginia, 

was effective October 27, 2006, with one-year, automatically renewable terms, 
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providing $3,000,000 in personal liability coverage. Under Virginia law, State Farm 

was not required to include UM coverage nor offer UM coverage for purchase in the 

Policy.

[¶3.] John and Robin were married on April 30, 2011. In May or June of 

2011, the Paynes moved from Virginia to Florida in a recreational vehicle (RV), 

intending to establish a domicile in Florida while traveling in the RV around the 

continental United States. At the time of the move, John switched the insurance 

coverage specific to their motor vehicles, including the motorcycle involved in the 

accident, from State Farm to GMAC Insurance Company Online, Inc. (GMAC), and 

National General Insurance Company (NGIC). John kept only his umbrella policy 

and insurance for some rental properties in Virginia with State Farm. The Paynes 

set up a private mailbox in Florida at which they received all of their mail. Their 

mailbox service then forwarded mail to them during their travels as directed.

[¶4.] In October 2011, State Farm mailed a renewal certificate for the 

Paynes’ umbrella policy to the Paynes’ private mailbox in Florida. The renewal did 

not change the terms of the Policy from the original 2006 policy in any way except 

for an update to the effective dates of the policy, which provided coverage from 

October 27, 2011 to October 27, 2012. From Florida, John paid the premium for the 

2011 renewal online through his bank account at a bank based in Virginia. At the 

time of the August 8, 2012 accident in South Dakota, the Paynes’ Policy, renewed in 

2011, was in effect. State Farm denied coverage for the accident, arguing the 

umbrella policy did not provide UM coverage.
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[¶5.] In March 2013, the Paynes filed a complaint against Jody Kirk, Duane 

Kirk (her father-in-law who owned the uninsured vehicle she was driving), GMAC, 

NGIC, and State Farm seeking UM benefits for alleged injuries and damages 

resulting from the accident. As the case progressed, all defendants except State 

Farm settled or were dismissed from this lawsuit. Regarding their claims against 

State Farm, the Paynes asserted that under South Dakota’s choice of law statute, 

these claims should be governed by Florida law. They further asserted that State 

Farm’s Policy violated Florida’s UM statute. Florida’s UM statute (§ 627.727) 

generally requires insurers to either provide or offer (depending on the type of 

insurance) UM coverage up to the amount of the policy’s bodily injury liability 

limits or $1,000,000, whichever is less. State Farm’s failure to provide or offer this 

coverage, the Paynes argue, entitles them to full UM coverage of $1,000,000 as a 

remedial reformation of their Policy contract as required by Florida law. The 

Paynes further argue that this coverage is stackable1 in that the Policy was 

underwritten with two automobile exposures and that coverage should be stacked 

between the two unidentified automobiles mentioned in the exposures, entitling 

them to total coverage of $2,000,000.

[¶6.] On October 20, 2015, State Farm filed a motion for summary 

judgment, claiming that the Policy originated in Virginia and under Virginia law 

there was no UM coverage available to the Paynes through their Policy for the 2012 

1. Coverage being “stackable” refers to the “ability to add the coverages 

available from different vehicles and/or different policies to provide a greater 

amount of coverage [than] available under any one vehicle or policy.” Erie 

Ins. Exch. v. Petrie, 242 A.3d 915, 917 n.2, (Pa. Super. Ct. 2020); see also 12

Couch on Ins. § 169:4 (3d ed.).
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motorcycle accident. Judge Jerome Eckrich held a hearing on November 17, 2015,

on the motion and denied State Farm’s motion in a memorandum decision and 

order on February 23, 2016. The court held that Florida law applied to this case 

and that under Florida law, insurers were required to make UM coverage available 

in certain circumstances when offering an umbrella policy to an insured in Florida, 

if it was not already included in the policy.

[¶7.] On October 10, 2017, the Paynes moved for declaratory relief stating 

that they were entitled to stackable UM coverage totaling $2,000,000. Judge 

Gordon Swanson (hereinafter the circuit court) held a hearing on the Paynes’ 

motion for declaratory relief on December 5, 2017; thereafter, the court issued a 

memorandum decision denying the Paynes’ motion on February 2, 2018. The court 

observed that, in conformance with Judge Eckrich’s summary judgment ruling 

issued in February 2016, South Dakota’s choice of law statute mandated application 

of Florida law to the Paynes’ case. However, the circuit court disagreed with Judge 

Eckrich’s conclusion that “Florida law requires the insurer to make available 

uninsured motorist coverage when offering an umbrella policy without uninsured 

motorist coverage in Florida.”

[¶8.] Instead, in its memorandum decision denying declaratory relief, the 

circuit court determined that under Florida law, an insurer offering an umbrella 

insurance policy need only offer UM coverage at the time of the insured’s 

application for insurance or upon the written request of the insured. Because the 

Paynes did not apply for their Policy while domiciled in Florida or make a written 

request for UM coverage from State Farm, the court concluded that State Farm did 
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not violate Florida’s UM statute and that the Paynes were not entitled to UM 

coverage.

[¶9.] The Paynes appeal, raising one issue which we restate as follows:

I. Whether Florida law requires an insurer to offer 

uninsured motorist coverage on a personal liability 

umbrella insurance policy and, if so, whether a 

noncompliant personal liability umbrella policy should be 

read and applied as if it complied with Florida law.

[¶10.] State Farm submits a notice of review, raising one issue which we 

restate as follows:

I. Whether the South Dakota choice of law statute 

mandates application of Florida law to the Paynes’ 

personal liability umbrella insurance policy.

Standard of Review

[¶11.] The applicable standard of review for all issues in this appeal is de 

novo, as all issues are questions of law. A circuit court’s choice of law determination 

is a question of law and is reviewed de novo. Burhenn v. Dennis Supply Co., 2004 

S.D. 91, ¶ 11, 685 N.W.2d 778, 782. Matters of statutory construction are similarly 

questions of law and are reviewed de novo. Id.; Huber v. Hanson Cnty. Plan.

Comm’n, 2019 S.D. 64, ¶ 10, 936 N.W.2d 565, 569. Finally, “[t]he interpretation of 

an insurance policy is a question of law, reviewed de novo.” Swenson v. Auto 

Owners Ins. Co., 2013 S.D. 38, ¶ 13, 831 N.W.2d 402, 407.

Analysis and Decision

[¶12.] State Farm raises by notice of review the claim that Judge Eckrich’s 

initial determination that Florida law applies to this conflict was erroneous based 

on the provisions of South Dakota’s choice of law statute relating to contracts, 
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SDCL 53-1-4. State Farm contends that Virginia law (which would deny the 

Paynes recovery), rather than Florida law, governs the contract because the original 

2006 policy was written in Virginia as a Virginia policy. This issue, if decided in 

State Farm’s favor, would render the Paynes’ claim that the circuit court erred in its 

interpretation of Florida law moot. However, because we determine that the 

Paynes cannot prevail even under Florida law, we need not consider this issue.

[¶13.] The Paynes contend that, under Florida law, State Farm was required 

to offer the Paynes UM coverage in accordance with the Florida uninsured motorist 

statute, Fla. Stat. § 627.727.2 This statute generally requires insurance companies 

to offer UM coverage for motor vehicle coverage policies. However, the statute also 

provides for certain insurance coverage options which do not require provision of 

UM coverage:

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 policy or 

$1 million, whichever is less.

Fla. Stat. § 627.727(2). In other words, the requirement that UM coverage be 

provided in every motor vehicle policy is not applicable to any policy which does not 

2. Fla. Stat. § 627.727 contains subsections (1)–(10). Only the first two 

subsections are relevant in this appeal and are reproduced in relevant part 

infra.
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provide primary liability insurance that includes coverage for liabilities arising from 

the maintenance, operation, or use of a specifically insured motor vehicle.

[¶14.] The Paynes’ Policy with State Farm is not primary liability insurance 

and does not include coverage for a specifically insured motor vehicle. For these 

reasons, Florida law does not require State Farm to have provided UM coverage to 

the Paynes as part of their Policy. Personal liability umbrella policies, like the 

Paynes’, are specifically excluded from Florida’s mandatory UM provision 

requirement, as they are excess policies, not primary liability insurance policies. 

Hooper v. Zurich Ins. Co., 789 So. 2d 368, 369 (Fla. Dist. Ct. App. 2001). For this 

reason alone, the Paynes’ Policy is excluded from the Florida statute’s UM coverage 

requirement.

[¶15.] Furthermore, even if the Paynes’ Policy provided primary liability 

insurance, the Policy does not include coverage for a specifically insured motor 

vehicle, which is a second requirement for Florida’s statutory UM coverage mandate

to apply. To be covered, the Paynes’ Policy would have had to specifically identify 

and insure a motor vehicle. Hooper, 789 So. 2d at 369. State Farm stated in its 

statement of undisputed material facts, and the Paynes did not dispute, that the

Policy does not identify or specifically insure any motor vehicles.3 Because the 

Paynes’ Policy was not a primary liability insurance policy and did not include 

3. Although the Paynes attempt to use the noted automobile exposures from the 

Policy to make their stacking argument, the language in the Policy discussing 

the automobile exposures does not identify or specifically insure any motor 

vehicles.
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coverage for a specifically insured motor vehicle, the requirement to provide UM 

coverage in Fla. Stat. § 627.727 does not apply to the Policy.

[¶16.] However, under Fla. Stat. § 627.727(2), insurers who are excused from 

providing UM coverage must still “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 policy or $1 million, whichever is less.” The 

Paynes contend that in order for State Farm to have complied with this statutory 

provision, State Farm was required to make UM coverage available when they sent 

the 2011 renewal contract to the Paynes. However, the plain language4 of the 

provision clearly states that the insurer must only make UM coverage available “as 

a part of the application for such a policy, and at the written request of the insured.” 

Fla. Stat. § 627.727(2) (emphasis added). The Paynes never filled out an application 

or in any way applied for the 2011 renewal contract, nor did they request in writing 

that UM coverage be made available to them. Therefore, State Farm had no 

obligation to make UM coverage available to the Paynes as part of their Policy.

[¶17.] The Paynes nevertheless contend that the renewal policy mailed to 

them by State Farm should be construed as an application under Strochak v. 

Federal Insurance Company, 717 So. 2d 453 (Fla. 1998). In that case, the Florida 

Supreme Court considered a policy that had been originally created in a state other 

than Florida that was subsequently renewed in Florida. To complete the renewal, 

4. Well-settled Florida law states that “when a statute is clear, courts will not 

look behind the statute’s plain language for legislative intent or resort to 

rules of statutory construction to ascertain intent.” State v. Burris, 875 So.

2d 408, 410 (Fla. 2004).
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the Strochak plaintiff was required to fill out a “worksheet” which the Florida 

Supreme Court determined was effectively an application for purposes of Fla. Stat. 

§ 627.727(2).

[¶18.] But Strochak is distinguishable from the Paynes’ situation in a 

number of important respects. The Strochak plaintiff was requesting new 

insurance coverage in the renewal policy and, accordingly, provided information on

a form for the insurance company’s review. Here, the Paynes were not requesting 

new insurance coverage with their renewal policy and did not provide further

information for State Farm’s consideration. The only action the Paynes took while 

in Florida to secure the continuation of the Policy was to pay the premium. 

Furthermore, the original policy in Strochak differed from the renewed Policy in 

that it was “issued in the name of a different insured, contained a different policy 

number and provided different coverage.” Strochak, 717 So. 2d at 455. The Paynes’ 

renewed Policy was identical to the original Policy with the only change being the 

term of the Policy. Because the Paynes made no application for a new or modified 

policy, State Farm had no duty to make UM insurance coverage available to the 

Paynes as part of their Policy.

[¶19.] The Paynes also contend that Fla. Stat. § 627.727(1) requires that 

State Farm advise the Paynes annually of the option of purchasing UM coverage. 

Subsection (1) states in relevant part, “The insurer shall notify the named insured 

at least annually of her or his options as to the coverage required by this section.” 

This sentence refers to coverage required by § 627.727(1) governing motor vehicle 

liability policies as a whole. It does not apply to policies excluded from the UM 
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coverage requirement, as provided in § 627.727(2). As previously discussed, State 

Farm is not required under subsection (2) to provide UM coverage to the Paynes as 

part of their Policy. Because the above quoted sentence in subsection (1) requires 

notification only of “coverage required by this section,” and UM coverage in a 

personal liability umbrella policy with no specifically insured vehicle is excluded 

from this coverage requirement in § 627.727(2), State Farm had no duty to notify

the Paynes annually of their UM coverage options.

[¶20.] While the Paynes urge us to read UM coverage into their State Farm 

Policy and permit stacking of UM coverage among vehicles, this view could only 

prevail if we found that Fla. Stat. § 627.727 required State Farm to have provided 

UM coverage in the Paynes’ Policy. Because we determine that Florida law did not 

require State Farm to provide UM coverage, we do not undertake this analysis. For 

the foregoing reasons, we affirm.

[¶21.] JENSEN, Chief Justice, and SALTER, DEVANEY, and MYREN, 

Justices, concur.