Court Opinion

ID: 9946761
Source: CourtListenerOpinion
Date Created: 2024-03-01 15:04:21.298819+00
Date Added: 2024-06-11T14:23:39.126641
License: Public Domain

SIXTH DISTRICT COURT OF APPEAL
                        STATE OF FLORIDA
                       _____________________________

                              Case No. 6D23-399
                       Lower Tribunal No. 21-CA-000533
                       _____________________________

                               ROSEMARY ARWAY,

                                    Appellant,
                                        v.

                 PROGRESSIVE AMERICAN INSURANCE COMPANY,

                                    Appellee.
                       _____________________________

                  Appeal from the Circuit Court for Lee County.
                             Keith R. Kyle, Judge.

                                  March 1, 2024

GANNAM, J.

      Rosemary Arway appeals the entry of summary judgment for Progressive

American Insurance Company.1 The trial court entered summary judgment against

Arway on the ground that her claim for underinsured motorist (UM) benefits under

an insurance policy issued by Progressive was time barred by a five-year statute of

limitations running from the date of Arway’s collision with an underinsured, third-

      1
       This case was transferred from the Second District Court of Appeal to this
Court on January 1, 2023.
party tortfeasor. Progressive’s insurance contract with Arway, however, under the

holding in Woodall v. Travelers Indemnity Co., 699 So. 2d 1361 (Fla. 1997), tolled

the statute of limitations until the tortfeasor’s bodily injury (BI) liability insurance

benefits were fully paid to Arway. Accordingly, Arway timely filed her UM claim

against Progressive, and we reverse and remand for further proceedings.

                                           I.

      On August 25, 2015, Arway was seriously injured in an automobile collision

with an underinsured motorist. At the time of the collision, Arway was covered

under a Florida automobile insurance policy issued by Progressive, which included

UM benefits coverage. The UM coverage section of the policy (Part III) included an

exhaustion provision, conditioning Progressive’s payment of UM benefits on the

payment of all BI liability benefits by the underinsured motorist’s insurer:

             [Progressive] will pay for damages . . . that an insured
             person is legally entitled to recover from the owner or
             operator of an uninsured motor vehicle[2] because of
             bodily injury: 1. sustained by an insured person; 2. caused
             by an accident; and 3. arising out of the ownership
             maintenance, or use of an uninsured motor vehicle.

             [Progressive] will pay under this Part III only after the
             limits of liability under all applicable bodily injury
             liability bonds and policies have been exhausted by
             payment of judgments or settlements.

      2
       The term “uninsured motor vehicle” is defined in the policy to include an
underinsured motor vehicle.

                                           2
(Emphases removed.) And the policy’s “General Provisions” section (Part VII)

included a no-action provision, conditioning suit against Progressive on compliance

with all policy terms:

             [Progressive] may not be sued unless there is full
             compliance with all the terms of this policy.

      On November 27, 2018, in accordance with the policy, Arway notified

Progressive that the underinsured motorist’s insurer had tendered its BI coverage

limits of $50,000 to settle Arway’s claims against the motorist, and Arway requested

that Progressive approve the settlement and release of Arway’s claims against the

motorist. On December 26, 2018 (three years, four months after the collision),

Progressive approved the settlement and offered to pay Arway $1,000 to resolve her

claim for UM benefits under the Progressive policy. Arway and Progressive traded

several additional demands and counteroffers, and on December 21, 2020 (five

years, four months after the collision), Arway demanded $150,000 from Progressive

to resolve her UM claim. On January 15, 2021, Progressive denied Arway’s UM

claim on the ground that the statute of limitations had run on August 25, 2020—five

years after Arway’s collision with the underinsured motorist.

      On January 25, 2021, Arway sued Progressive for breach of the policy’s UM

provisions. The trial court held Arway’s UM claim time barred and entered final

summary judgment for Progressive on March 15, 2022. Arway timely appealed the

judgment.

                                         3
                                          II.

                                          A.

      Whether Arway’s UM claim was barred by the applicable statute of

limitations is a question of law we review de novo. See Maki v. NCP Bayou 2, LLC,

368 So. 3d 1081, 1084 (Fla. 6th DCA 2023); see also Fiddlesticks Country Club,

Inc. v. Shaw, 363 So. 3d 1177, 1181 (Fla. 6th DCA 2023) (“Because this presents a

purely legal issue, we review the order granting summary judgment de novo.”).

                                          B.

      The trial court correctly determined that Arway’s UM claim is governed by

the five-year statute of limitations for actions on written contracts under

section 95.11(2)(b), Florida Statutes, running from the date of Arway’s collision

with the underinsured motorist. See Woodall v. Travelers Indem. Co., 699 So. 2d

1361, 1362–63, 1362 n.2 (Fla. 1997). But the trial court erred in holding Arway’s

UM claim time barred because, under Woodall, the exhaustion and no-action

provisions of the Progressive policy tolled the statute of limitations until the

underinsured motorist’s BI liability insurance benefits were fully paid to Arway. See

699 So. 2d at 1363–65.

      Under general contract principles, a cause of action for breach accrues, and

the statute of limitations begins to run, when an action can be brought on the contract.

See State Farm Mut. Auto. Ins. Co. v. Lee, 678 So. 2d 818, 821 (Fla. 1996). And we

                                           4
interpret insurance contracts according to their plain language. See Auto-Owners Ins.

v. Anderson, 756 So. 2d 29, 34 (Fla. 2000). Under the plain language of Arway’s

policy, exhaustion of the tortfeasor’s BI liability limits by payment to Arway,

whether by judgment or settlement, is a condition precedent to Progressive’s

obligation to pay UM benefits to Arway. Moreover, under the no-action provision

of the policy, any action by Arway against Progressive is conditioned on “full

compliance with all the terms of th[e] policy.” Thus, under general contract

principles and the policy’s plain language, Arway’s cause of action against

Progressive for breach of its UM payment obligations could not accrue, and the

statute of limitations could not begin to run, until after payment of the tortfeasor’s

BI liability limits to Arway by judgment or settlement.

      For UM claims, however, the accrual rule is different:

             The cause of action for [a UM claim] arises on the date of
             the accident with an uninsured/underinsured motorist
             since the right of action stems from the plaintiff’s right of
             action against the tortfeasor. The statute of limitations thus
             begins to run on the date of the accident rather than on the
             date of compliance with the conditions precedent
             contained in the insuring agreement.

State Farm Mut. Auto. Ins. Co. v. Kilbreath, 419 So. 2d 632, 633 (Fla. 1982). So,

how can we reconcile this holding with the exhaustion and no-action provisions in

Arway’s UM policy? The supreme court provided the answer in Woodall, where it

considered cognate provisions in a Travelers insurance policy. The court held, “the

                                           5
effect of the no-action and exhaustion clauses was to toll the statute of limitations

until the insured settled its claim against the tortfeasor’s liability carrier.” 699 So. 2d

at 1364–65.

      The exhaustion and no-action provisions in the Woodall Travelers policy are

functionally identical to the provisions in Arway’s Progressive policy. The Travelers

exhaustion provision provided, in pertinent part:

              [Travelers] will pay damages that the insured is legally
              entitled to recover from the owner or operator of an
              uninsured motor vehicle because of bodily injury suffered
              by the insured and caused by accident. Liability for such
              damages must arise out of the ownership, maintenance or
              use of the uninsured motor vehicle.

              [Travelers] will make payment under this coverage only
              after the limits of liability have been used up under all
              applicable bodily injury liability bonds or policies.

699 So. 2d at 1364 (cleaned up). The Travelers no-action provision provided:

              Legal action may not be brought against [Travelers] under
              any coverage provided under this policy, unless the
              insured has fully complied with all the provisions of the
              policy.

Id. (cleaned up). Analyzing this language under the date-of-collision accrual rule for

UM claims, the Woodall court held, “the language of the Travelers policy had the

effect of tolling the statute of limitations until such time as the [insureds] received

payment from [the tortfeasor’s] liability carrier.” Id.

                                            6
      The Woodall court, however, also upheld another aspect of the special accrual

rule for UM claims, explaining, “it is well established that an injured party may

directly pursue a claim against its [UM] carrier, without having to first resolve the

claim against the tortfeasor’s liability carrier.” Id. at 1363. Thus, an insured “need

not run the risk of having the statute of limitations run while waiting for the

tortfeasor’s liability carrier to respond.” Id. Given this rule, Travelers argued its own

policy provisions, requiring its insureds to wait on payment by the tortfeasor’s

liability carrier, were void as against public policy. Id. at 1364. But the supreme

court was “singularly unimpressed” with the argument “that an insurer may include

a provision in its policy and later claim that the insured cannot rely on the terms of

that provision because the provision was invalid,” concluding, “Travelers cannot

disavow the provisions of its own policy.” Id.

                                           III.

      The exhaustion and no-action provisions of Arway’s Progressive policy are

functionally identical to the Woodall Travelers policy. Thus, Woodall requires us to

hold that the exhaustion and no-action provisions of Arway’s Progressive policy

effectively tolled the statute of limitations until Arway received payment from the

tortfeasor’s BI liability carrier. Woodall also counsels that Arway could have sued

Progressive without waiting for payment from the liability carrier, but she was not

required to because the statute of limitations was tolled until the liability carrier paid.

                                            7
      Arway sued Progressive less than two years after Progressive approved

Arway’s settlement with the tortfeasor’s liability carrier, which was well within the

applicable five-year statute of limitations as tolled by the policy language.

Accordingly, we reverse the trial court’s summary judgment against Arway and

remand for proceedings consistent with this opinion.

      REVERSED and REMANDED.

TRAVER, C.J., and STARGEL, J., concur.

Alexander L. Brockmeyer, Thomas E. Shepard, and Gregory L. Evans, of Boyle,
Leonard & Anderson, P.A., Fort Myers, for Appellant.

Kansas R. Gooden, of Boyd & Jenerette, P.A., Miami, and Matthew D. Cavender,
of Boyd & Jenerette, P.A., Jacksonville, for Appellee.

 NOT FINAL UNTIL TIME EXPIRES TO FILE MOTION FOR REHEARING
          AND DISPOSITION THEREOF IF TIMELY FILED

                                         8