[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
FILED
U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
No. 03-12737
February 3, 2005
________________________
THOMAS K. KAHN
CLERK
D. C. Docket No. 99-01507-CV-AJ
MARK ANDREW TOBIN,
Plaintiff-Appellant,
versus
MICHIGAN MUTUAL INSURANCE CO.,
Defendant-Appellee.
________________________
No. 03-12738
________________________
D. C. Docket No. 02-23442-CV-AJ
CRAIG MACKAY,
individually and as personal representative of Ana
Gutierrez Mackay and Jonathan Patrick Mackay,
Plaintiff-Appellant,
versus
MICHIGAN MUTUAL INSURANCE CORPORATION,
Defendant-Appellee.
________________________
No. 03-12739
________________________
D. C. Docket No. 99-01102-CV-AJ
HELEN J. HUNTER, individually
and on behalf of all others
similarly situated,
Plaintiff-Appellant,
versus
MICHIGAN MUTUAL INSURANCE CORPORATION,
a Michigan Corporation,
Defendant-Appellee.
________________________
Appeals from the United States District Court
for the Southern District of Florida
_________________________
(February 3, 2005)
Before BARKETT, HULL and COX, Circuit Judges.
PER CURIAM:
In this declaratory judgment action, plaintiffs Mark Andrew Tobin, Helen J.
Hunter, and Craig MacKay (the “plaintiffs”) leased vehicles from Ford Motor
2
Company or a Ford subsidiary (collectively “Ford”)1 and now seek to recover
under an insurance policy that defendant Michigan Mutual Insurance Company
(“Michigan Mutual”) issued to Ford. Because Ford and Michigan Mutual, as the
contracting parties, agreed that the policy was not intended to cover retail lessees
of Ford, the district court reformed the policy between Ford and Michigan Mutual
to exclude medical payment and uninsured motorist coverage to retail lessees,
including the plaintiffs. After review of plaintiffs’ appeal, we certify questions to
the Florida Supreme Court.
I. FACTUAL BACKGROUND
A. Plaintiffs’ Leases with Ford
This consolidated appeal arises out of three separate automobile accidents
involving vehicles leased from Ford. Mark Tobin, while driving a vehicle that he
leased from Ford, was injured in an accident with an uninsured driver. Helen
Hunter was similarly injured in an accident with an uninsured driver while driving
a vehicle that she had leased from Ford. Ana and Jonathan Mackay were killed in
an accident with an uninsured driver while the Mackays were traveling in a vehicle
leased from Ford.
1
Certain vehicles were leased from a Ford subsidiary, such as Ford Motor Credit or
Jaguar Credit Corporation. For purposes of this appeal, and to simplify matters, we refer to all
vehicles as leased from Ford.
3
The “Red Carpet” lease agreements Hunter and the Mackays entered into
with Ford provide that “lessor is not providing vehicle insurance or liability
insurance” and require that the lessee “must insure the vehicle during this lease.”
Similarly, the lease agreement for Tobin’s vehicle states that “[t]he Lessee must
insure the vehicle for the term of the lease.”
B. Michigan Mutual’s Policy
Ford entered into a separate insurance agreement with Michigan Mutual (the
“policy”), which contains three sections. The commercial general liability section
provides coverage for Ford’s premises and operations activities. The business auto
section provides coverage for a group of vehicles used by Ford for business
purposes. The personal auto section is designed to provide coverage to a group of
vehicles assigned to Ford management personnel under the lease evaluation
program. The lease agreement signed by the Ford personnel in the lease evaluation
program, unlike the retail lease agreements signed by the plaintiffs here,
specifically states that “the Company [Ford] provides insurance on the vehicle
during the term of the lease.” Ford employees who participate in the lease
evaluation program also receive a certificate of no-fault insurance and an
identification card that indicates their coverage under the Michigan Mutual policy.
This consolidated appeal involves only the personal auto section of the
4
Michigan Mutual policy and specifically what is entitled the personal auto policy
supplement (“auto supplement”) to the policy. We outline the key provisions of
the auto supplement. The first page of the auto supplement is a Declarations sheet
that lists the “Named Insured.” Specifically, Item 1 of the Declarations sheet lists
the “Named Insured” as “Ford Motor Company, its U.S. subsidiaries, and any
person to whom an automobile has been assigned, leased or loaned.” (Emphasis
added.)2
Item 2 on that same Declarations sheet describes the vehicles insured as
follows: “Description of Auto . . . See Endorsement ¶ FO RD 04.” In turn,
Endorsement ¶ FO RD 04 defines “Your Covered Auto” as vehicles with one of
these three tag designations: “L – Leased Vehicles; E – Executive Vehicles; and S
– Sales Vehicles.” These three tag designations are used by Ford to specify
vehicles assigned, leased, or loaned to Ford’s employees and retirees for business
or personal use. None of these tag designations is used for vehicles leased to retail
customers, such as the plaintiff lessees.
Further, the auto supplement provides primary coverage to the insured for
2
The definition section, applicable to the entire auto supplement, provides that throughout
the policy, “you” or “your” refers to the “named insured” as follows:
(1) The “named insured” shown in the Declarations; and
(2) The spouse if a resident of the same household.
5
liability, for medical payments, and for uninsured motorist coverage. “Insured” in
the medical payment section of the auto supplement is defined as:
1. You or any “family member:”
A. While “occupying” . . . a motor vehicle . . .
2. Any other person while “occupying” “your covered
auto.”
“Insured” in the uninsured motorist section of the auto supplement is defined
similarly to the medical payment section as:
1. You or any “family member.”
2. Any other person “occupying” “your covered auto.”
In addition to primary coverage, the auto supplement contains the following
language, providing “contingent loss and excess auto liability coverage” to the
“Named Insured” and excluding such excess liability coverage “to lessees” as
follows:
This policy, however, shall provide contingent loss and
excess auto liability coverages for autos included in the
following programs:
a. Red Carpet Lease . . .
but only as respects the liability of the Named Insured.
No coverage is provided to lessees, agents, or permissive
users.3
3
The auto supplement defines “contingent loss” as:
liability of the Named Insured that results in the payment of a
claim when:
i. the lessee’s underlying primary insurance limit is
inadequate, or
ii. the lessee’s insurer denies coverage.
6
Although reciting what we believe to be certain provisions at issue in this appeal,
we point out that the Michigan Mutual policy, including the entire auto supplement,
is in the record.4
II. PROCEDURAL BACKGROUND
A. Summary Judgment Motions
Tobin, Hunter, and the personal representative of the Mackays’ estate filed
suits against Michigan Mutual seeking uninsured/underinsured motorist
(“UM/UIM”) coverage under the auto supplement to the Michigan Mutual policy
issued to Ford.5 It is the plaintiffs’ position that this auto supplement is broad
enough to cover them as well, and in fact must cover them under Florida law.
In ruling on certain summary judgment motions, the district court concluded
that Florida law governs the interpretation of the policy. The court further
acknowledged that a Florida intermediate appellate decision in Perez v. Michigan
Mutual Ins. Co., 723 So. 2d 849 (Fla. Dist. Ct. App. 1999), held that a retail lessee
of Ford was covered by the same Michigan Mutual policy at issue here.
4
For example, see the exhibit to plaintiff Hunter’s “Amended Class Action Complaint”
filed on December 10, 1999.
5
Plaintiffs Tobin and Hunter filed separate lawsuits in federal district court, and the
Mackays’ lawsuit, filed in state court, was removed by Michigan Mutual to federal court.
Before the bench trial in federal court, the three cases were ultimately consolidated before the
same district court judge. The district court’s subject matter jurisdiction is based on diversity of
citizenship, 28 U.S.C. § 1332.
7
The Florida court in Perez emphasized that Item 1 of the auto supplement
lists the “Named Insured” as “Ford Motor Company, its U.S. Subsidiaries and any
person to whom an automobile has been assigned, leased or loaned.” (Emphasis
added.) From this language, the Perez court concluded that retail lessees were
insureds and thus entitled to coverage as persons to whom the automobile was
leased.6
The federal district court, however, disagreed with the Perez decision for
several reasons. First, the district court noted that Item 2 (following Item 1 on the
same Declarations sheet) entitled “description of auto,” in effect limits the coverage
to certain vehicles and expressly directs the reader to “See Endorsement Number
FO RD 04.” In turn, Endorsement Number FO RD 04 to the auto supplement
defines “your covered auto” under that supplement as only autos with certain tag
designations, as follows:
Any auto which has been designated with the following
6
The Florida intermediate appellate court in Perez held as follows:
The personal auto policy section, insures “Ford Motor Company, its
subsidiaries and any person to whom an automobile has been assigned to, leased or
loaned.” (emphasis added). Therefore under this section, Perez, as a person to whom
an automobile was leased to, is an insured. The UM provision provides that
Michigan Mutual is obligated to pay damages which an “insured is legally entitled
to recover from the owner or operator of a [sic] uninsured motor vehicle.” (emphasis
added). Coverage under the UM section is provided to the [sic] “[t]he named insured
shown in the declarations.” Additionally, since the same language applies to the
medical payments endorsement, Perez is covered under both provisions.
Perez, 723 So. 2d at 850 (footnote omitted).
8
tag letters:
L - Leased Vehicles
E - Executive Vehicles
S - Sales Vehicles
It is undisputed that these tag numbers (L, E, and S) are issued to Ford employees
or retirees who lease vehicles and that none of plaintiffs’ vehicles has these tag
numbers because plaintiffs’ vehicles are in the Red Carpet lease program, a retail
lease program. Secondly, the district court noted that the contingent loss-excess
liability provision specifically stated that no coverage is provided to lessees under
the Red Carpet Lease program, as follows:
This policy, however, shall provide contingent loss and
excess auto liability coverages for autos included in the
following programs:
a. Red Carpet Lease. . . .
but only as respects the liability of the Named Insured.
No coverage is provided to lessees, agents, or permissive
users.
Thirdly, the district court examined two unpublished state court decisions that
concluded that Ford’s retail lessees were not covered under this same Michigan
Mutual policy. Negron v. Michigan Mut. Ins. Co., No. 3:00 CV 1004 (D. Conn.
July 16, 2001); Massachusetts Bay Ins. Co. v. Amerisure Cos., No. 99-3361 (D.N.J.
Dec. 12, 2000). The Negron court noted that, while “a superficial reading of only
the Personal Auto Policy Supplement might include the [plaintiffs] in the category
of named insured, . . . the endorsements and more specific language of the policy
9
make it clear that the [plaintiffs] and their vehicle are not insured under the
Michigan Mutual policy.” Negron, at *12. The district court concluded that the
Negron and Massachusetts Bay decisions read the policy as a whole and were far
better reasoned than Perez.
Although disagreeing with Perez, the district court then acknowledged that
“[a] federal court applying state law is bound to adhere to decisions of the state’s
intermediate appellate courts absent some persuasive indication that the state’s
highest court would decide the issue otherwise.” In doing so, the district court
relied on these decisions. See Galindo v. ARI Mut. Ins. Co., 203 F.3d 771, 775
(11th Cir. 2000) (stating that “[a]bsent a decision by the highest state court or
persuasive indication that it would decide the issue differently, federal courts follow
decisions of intermediate appellate courts in applying state law”); Doyle v.
Volkswagenwerk Aktiengelellschaft, 81 F.3d 139, 143 (11th Cir. 1996) (finding
“persuasive data” that the Supreme Court of Georgia may not follow the
intermediate appellate decision and certifying the question to Supreme Court of
Georgia); Silverberg v. Paine, Webber, Jackson & Curtis, Inc., 710 F.2d 678, 690
(11th Cir. 1983) (noting that a “federal court applying state law is bound to adhere
to decisions of the state’s intermediate appellate courts absent some persuasive
10
indication that the state’s highest court would decide the issue otherwise”).7
The district court further noted that “the Supreme Court of Florida has held
that decisions of district courts of appeal represent the law of Florida unless they are
overruled by the Supreme Court of Florida.” See Pardo v. State, 596 So.2d 665,
666 (Fla. 1992). Because the Florida Supreme Court had not ruled on this issue,
nor had any other Florida intermediate appellate court except Perez, the district
court then sought to “determine whether there is any ‘persuasive authority’ that the
Florida Supreme Court would decide this issue differently than the court in Perez.”
The district court determined that it is probable but not likely that the Florida
Supreme Court could, by looking to the whole auto supplement, decide the issue
differently than the Perez court. However, the district court ultimately concluded
that Florida case law did not provide a “persuasive indication” that the Florida
7
Other decisions of this Court have applied the same “persuasive indication” standard.
See McMahan v. Toto, 311 F.3d 1077, 1080 (11th Cir. 2002) (noting that the fact that a federal
court may decide the issue differently is not a “persuasive indication that the Florida Supreme
Court would agree with us and not with one of its own intermediate appellate courts, which
presumably knows more about Florida law” and rescinding portions of a prior decision that
applied the Florida offer of judgment statute in a manner contrary to a subsequent decision by a
Florida intermediate appellate court); Miller ex rel. Meier v. Sun Int’l Hotels, Ltd., 288 F.3d
1264, 1271 (11th Cir. 2002) (reversing district court interpretation of the Florida long arm statute
that rejected the decision of a Florida intermediate appellate court where the district court
indicated that “[b]ecause it is not a decision of the Florida Supreme Court, [the appellate court
decision] does not constitute binding authority” on the issue of Florida law); King v. Guardian
Life Ins. Co., 686 F.2d 894, 898 (11th Cir. 1982) (following Georgia intermediate appellate court
interpretation of state statute as it pertains to policy lapse and noting rule that “[in] the absence
of a decision from the state’s highest court, we must adhere to the decisions of the state’s
intermediate appellate courts unless there is some persuasive indication that the state’s highest
court would decide the issue otherwise” (internal quotation marks and citation omitted)).
11
Supreme Court would decide the issue differently.8 In this regard, the district court
concluded:
In sum, although I disagree with the decision in Perez,
and believe that the Third District failed to apply certain
well-established principles of contract interpretation, I
find no “persuasive authority” that the Supreme Court of
Florida would decide this issue differently. I am,
therefore, bound by the Third District’s decision.
Unfortunately, I lack the power to certify this issue to the
Supreme Court of Florida, unlike the Eleventh Circuit.
Perhaps, if there is an appeal, the parties will have the
opportunity to truly discern the stance of Florida’s
highest court on whether Ford’s insurance policy applies
to retail lessees.
While following Perez in interpreting the actual policy language, the district court
also examined Ford’s alternative argument that the auto supplement of the
Michigan Mutual policy, as construed in Perez, failed to demonstrate the
contracting parties’ intentions and should be reformed.9 The district court
subsequently conducted a bench trial in all three (now consolidated) cases solely on
8
The Florida cases that the district court examined involve the general principle that a
court looks to the whole agreement when interpreting a contract, and not just to one particular
provision in isolation. See Excelsior Ins. Co. v. Pomona Park & Package Store, 369 So.2d 938,
941 (Fla. 1979); see also Lalow v. Codomo, 101 So.2d 390, 393 (Fla. 1958); United States
Rubber Prods., Inc. v. Clark, 200 So. 385, 388 (Fla. 1941); Blackshear Mfg. Co. v. Fralick, 102
So. 753, 754 (Fla. 1925); Bituminous Cas. Corp. v. Lewis Crane Serv., Inc., 173 So.2d 715, 717
(Fla. Dist. Ct. App. 1965).
9
At the summary judgment stage, the district court did not address the plaintiffs’
alternative argument that Florida Stat. § 627.727 required that the Michigan Mutual policy be
construed to provide coverage notwithstanding the parties’ intentions because Michigan Mutual
failed to permit Ford to make a knowing rejection of uninsured motorist coverage for the retail
leased vehicles owned by Ford.
12
the issue of reformation of the policy.
B. Bench Trial as to Reformation Issue
At the conclusion of the bench trial, the district court issued findings of fact
and conclusions of law. The district court found that the two persons directly
responsible for drafting the policy, Dan Sobczynski of Ford and Martin Taft of
Michigan Mutual, both unequivocally testified that it was their intent not to provide
coverage to retail lessees and that the auto supplement was meant to provide
coverage only to certain vehicles leased or loaned to current and former Ford
employees. The district court found their testimony to be credible and convincing,
and concluded that Michigan Mutual satisfied its burden of introducing clear and
convincing evidence that the contracting parties, Ford and Michigan Mutual, did not
intend for the policy to provide any coverage to retail lessees. Accordingly, the
district court reformed the policy between Michigan Mutual and Ford to exclude
any medical payment and uninsured motorist coverage to retail lessees.
The district court also rejected the plaintiffs’ alternative argument that was
based on Florida statute § 627.727. The plaintiffs contended (1) that § 627.727
requires that all insureds make a knowing rejection of uninsured motorist coverage;
(2) that Ford never rejected uninsured motorist coverage for its vehicles in its retail
lease program; and thus (3) that Florida law forbade Michigan Mutual from denying
13
uninsured motorist coverage to the plaintiffs.
Rejecting this alternative argument, the district court reasoned that once the
policy is reformed so as not to cover the plaintiffs as insureds, there is no liability
coverage for vehicles in the lease program or for the retail lessees, and therefore no
underlying offer of coverage to the plaintiffs that must include uninsured motorist
coverage. The district court, however, did not specifically address the plaintiffs’
contention that because Michigan Mutual failed to offer uninsured motorist
coverage to Ford for vehicles in its retail lease program, the policy could not be
reformed to exclude coverage from plaintiffs in their capacity as occupants of Ford
owned but leased vehicles.
IV. STANDARD OF REVIEW
This Court reviews the district court’s findings of fact for clear error. United
States v. Puche, 350 F.3d 1137, 1153 (11th Cir. 2003). Interpretation of a contract
is a question of law that we review de novo. Bragg v. Bill Heard Chevrolet, Inc.,
374 F.3d 1060, 1065 (11th Cir. 2004). Likewise, the proper interpretation of a
statute is a question of law that we review de novo. Adams v. Florida Power Corp.,
255 F.3d 1322, 1324 (11th Cir. 2001).
V. DISCUSSION
A. Unsettled Legal Questions of Florida Law
14
The parties agree that Florida law controls all issues in this appeal. Further,
the facts relevant to this appeal are basically undisputed. The parties do not even
challenge the fact findings made by the district court after the bench trial. Rather,
the appeal presents purely legal questions of Florida law regarding the interpretation
of the Michigan Mutual policy, whether that policy may be reformed, and the
proper construction and application of § 627.727, Florida’s uninsured motorist
statute.
Where there is doubt in the interpretation of state law, a federal court may
certify the question to the state supreme court to avoid making unnecessary Erie
guesses and to offer the state court the opportunity to interpret or change existing
law. See Alltel Communs., Inc. v. City of Macon, 345 F.3d 1219, 1225 (11th Cir.
2003); CSX Transp., Inc. v. City of Garden City, 325 F.3d 1236, 1239 (11th Cir.
2003); Mosher v. Speedstar Div. of AMCA Int’l, Inc., 52 F.3d 913, 916-17 (11th
Cir. 1995). While there may not be a “persuasive indication” that the Florida
Supreme Court would decide this case differently than Perez, there is some doubt in
Florida law about the interpretation of the policy language, especially given that the
Perez court focused on only Item 1 of the Declarations sheet and did not discuss
Item 2 on that same Declarations sheet or other relevant parts of the auto
supplement. Additionally, these cases present difficult and apparently novel issues
15
under Florida law.
Accordingly, because this appeal depends on resolution of questions of
unsettled Florida law and will affect many other cases, we have determined that
issues in this case should be certified to the Florida Supreme Court.
B. Certification to the Florida Supreme Court
CERTIFICATION FROM THE UNITED STATES COURT OF APPEALS FOR
THE ELEVENTH CIRCUIT TO THE SUPREME COURT OF FLORIDA,
PURSUANT TO ARTICLE V, SECTION 3(B)(6) OF THE FLORIDA
CONSTITUTION.
TO THE SUPREME COURT OF FLORIDA AND ITS HONORABLE JUSTICES:
We certify the following questions to the Supreme Court of Florida for
determination under Florida law:
(1) DOES THE DEFENDANT MICHIGAN MUTUAL HAVE ANY LIABILITY
TO THE PLAINTIFFS UNDER THE POLICY IN QUESTION, AND, IF SO,
WHAT IS THE EXTENT OF THAT LIABILITY?
In answering the above questions, the Florida Supreme Court may deem the
following issues relevant:
16
(A)WHETHER PLAINTIFFS HUNTER, ROBIN AND MACKAY, WHO
LEASED VEHICLES FROM FORD UNDER A RETAIL LEASE PROGRAM,
ARE INSURED FOR OR ENTITLED TO UM/UIM COVERAGE UNDER THE
AUTO SUPPLEMENT TO DEFENDANT MICHIGAN MUTUAL’S POLICY
FOR ANY INJURIES SUSTAINED AS DRIVERS OR OCCUPANTS AS A
RESULT OF THE NEGLIGENCE OF AN UNINSURED/UNDERINSURED
MOTORIST?
(B) IF PLAINTIFFS ARE INSURED FOR OR ENTITLED TO ANY SUCH
UM/UIM COVERAGE UNDER THE AUTO SUPPLEMENT, IS THAT
COVERAGE PRIMARY COVERAGE, EXCESS COVERAGE OR BOTH?
(C) IF PLAINTIFFS ARE INSURED FOR OR ENTITLED TO ANY SUCH
UM/UIM COVERAGE UNDER THE AUTO SUPPLEMENT, WHETHER THE
AUTO SUPPLEMENT OF DEFENDANT MICHIGAN MUTUAL’S POLICY
MAY BE REFORMED TO REFLECT THE CONTRACTING PARTIES’ (FORD
AND MICHIGAN MUTUAL’S ) UNDISPUTED INTENTIONS NOT TO
PURCHASE OR PROVIDE SUCH UM/UIM COVERAGE IN THE AUTO
SUPPLEMENT?
17
(D) WHETHER DEFENDANT MICHIGAN MUTUAL IN ISSUING PRIMARY
COVERAGE UNDER THE AUTO SUPPLEMENT OF THE POLICY WAS
SUBJECT TO AND OBLIGATED TO COMPLY WITH THE REQUIREMENTS
IN FLA. STAT. § 627.727, AND IF SO, WHETHER AS TO PRIMARY
COVERAGE THAT STATUTE APPLIES ONLY TO FORD OR TO THE
PLAINTIFFS OR TO BOTH? FURTHER, IF APPLICABLE, DID DEFENDANT
MICHIGAN MUTUAL COMPLY WITH FLA. STAT. § 627.727 AND, IF NOT,
WHAT IS THE RESULT OF FAILURE TO COMPLY WITH SUCH
STATUTORY REQUIREMENTS?
(E) WHETHER DEFENDANT MICHIGAN MUTUAL IN ISSUING THE
EXCESS COVERAGE UNDER THE AUTO SUPPLEMENT OF THE POLICY
WAS SUBJECT TO AND OBLIGATED TO COMPLY WITH THE
REQUIREMENTS IN FLA. STAT. § 627.727, AND IF SO, WHETHER AS TO
EXCESS COVERAGE THAT STATUTE APPLIES ONLY TO FORD OR TO
THE PLAINTIFFS OR TO BOTH? FURTHER, IF APPLICABLE, DID
DEFENDANT MICHIGAN MUTUAL COMPLY WITH FLA. STAT. § 627.727,
AND, IF NOT, WHAT IS THE RESULT OF FAILURE TO COMPLY WITH
SUCH STATUTORY REQUIREMENTS?
18
In certifying these questions, we do not restrict the Florida Supreme Court’s
consideration of the issues presented. “‘This latitude extends to the Supreme
Court’s restatement of the issue or issues and the manner in which the answers are
given.’” Simmons v. Sonyika, 2004 WL 3015741, *6 (11th Cir. Dec. 30, 2004)
(quoting Washburn v. Rabun, 755 F.2d 1404, 1406 (11th Cir. 1985)). To assist the
Florida Supreme Court in considering the certified questions, the record in this case
and the parties’ briefs shall be transmitted to the Court.
QUESTIONS CERTIFIED.
19