[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FILED
FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
________________________ ELEVENTH CIRCUIT
FEB 02, 2009
No. 08-13247 THOMAS K. KAHN
________________________ CLERK
D. C. Docket No. 06-00336-CV-OC-10-GRJ
JOHN RANDO,
GAIL RANDO,
Plaintiffs-Appellants,
versus
GOVERNMENT EMPLOYEES INSURANCE COMPANY,
Defendant-Appellee.
________________________
Appeal from the United States District Court
for the Middle District of Florida
_________________________
(February 2, 2009)
Before HULL, WILSON and HILL, Circuit Judges.
HULL, Circuit Judge:
In this diversity case, Appellants John and Gail Rando (the “Randos”)
challenge the district court’s grant of summary judgment to Appellee Government
Employees Insurance Company (“GEICO”) on the Randos’ automobile insurance
claims against GEICO. After review and oral argument, we certify the
determinative issue in this case to the Florida Supreme Court as outlined below.
I. BACKGROUND
In October 2004, the Randos moved from Delaware to Florida. Before the
move, the Randos and their daughter Laura Rando had a single automobile
insurance policy issued by GEICO. The policy covered three cars and listed John
and Gail Rando as the named insureds. When the Randos moved to Florida, Laura
Rando remained in Delaware, where she has continued to reside.
On October 12, 2004, John Rando contacted GEICO and requested that the
policy be changed to reflect the fact that two of the cars would now be kept (i.e.,
garaged) and driven in Florida. The third car, a 1996 Honda driven primarily by
Laura Rando, still would be garaged and driven in Delaware. On October 15,
2004, GEICO changed the policy to a Florida-rated policy covering two cars, and
changed the garage location and mailing address to the Randos’ new address in
Florida. We refer to this policy as the “Florida Policy.”
At the same time, GEICO created a new Delaware-rated policy, to which we
refer as the “Delaware Policy,” for the 1996 Honda driven by Laura Rando in
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Delaware. As with the Florida Policy, the Delaware Policy identified John and
Gail Rando as named insureds. The Delaware Policy listed Laura Rando as the
principal operator of the 1996 Honda, and reflected that the car would remain
garaged in Delaware. The Delaware Policy was executed and delivered in Florida.
The Delaware Policy provided uninsured/underinsured motorist coverage for
bodily injury to John and Gail Rando for up to $300,000 for each person/each
occurrence. The Delaware Policy also contained a section entitled “Limit of
Liability” that provided, among other things, that the limits of separate policies
may not be combined, stating:
When [uninsured/underinsured motorist] coverage is afforded to two
or more autos under this policy, the limits of liability shall apply
separately to each auto as stated in the declarations. But these limits
may not be combined so as to increase the stated coverage for the auto
involved in the accident.
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.
(Emphasis added.) This provision is known as an “anti-stacking” provision
because it prevents coverages for different vehicles or from separate policies from
being “stacked”–i.e., added–together.1
1
“Stacking is a judicial creation, based on the common sense notion that an insured
should be entitled to get what is paid for. Thus, if the insured pays separate premiums for
uninsured motorist protection on separate vehicles, the insured should get the benefit of coverage
for each individual premium paid.” United Servs. Auto. Ass’n v. Roth, 744 So. 2d 1227, 1229
(Fla. Dist. Ct. App. 1999) (citation omitted).
3
On August 4, 2005, in Marion County, Florida, John Rando was seriously
injured in an automobile crash caused by an underinsured driver. John Rando’s
injuries include severe permanent brain damage that prevents him from ever
working in the future. The Randos reached a $10,000 settlement with the
underinsured driver, and GEICO paid the Randos $600,000 in underinsured
motorist benefits pursuant to the Florida Policy ($300,000 for each of the two
vehicles insured under the policy).2
The Randos demanded that GEICO also pay them as the named insureds
under the underinsured motorist provisions of the Delaware Policy. GEICO
refused, citing the Delaware Policy’s anti-stacking provision. The Randos sued
GEICO in Florida state court, seeking a declaration of coverage and damages for
breach of GEICO’s duties under the Delaware Policy.
GEICO removed the action to federal district court and, after discovery, the
parties filed cross-motions for summary judgment. The district court granted
GEICO’s summary judgment motion and denied the Randos’ motion.3
The district court acknowledged that Florida law applies to interpret the
Delaware Policy because it was executed in Florida and the lex loci contractus
2
Presumably, the Florida Policy did not have an anti-stacking provision.
3
The parties agreed as to the amount of damages, should coverage exist. Thus, the only
issue is coverage.
4
doctrine applies. The district court also concluded that Florida law permits
insureds, like John and Gail Rando, to recover uninsured or underinsured motorist
benefits under two or more separate policies for the same accident and injuries.
However, the district court concluded that such coverage stacking was not
permitted here because: (1) the Delaware Policy’s anti-stacking provision
prohibited it; and (2) the Delaware Policy’s anti-stacking provision was valid and
enforceable under Florida law. The Randos appealed, raising a single issue:
whether the anti-stacking provision in the Delaware Policy is enforceable under
Florida law.4
II. CHOICE OF LAW
Our review begins with choice of law – specifically, whether Florida or
Delaware law applies to the Delaware Policy. “In determining which law applies,
a federal district court sitting in diversity must apply the choice of law rules of the
forum state.” McGow v. McCurry, 412 F.3d 1207, 1217 (11th Cir. 2005). Hence,
we apply Florida’s choice-of-law rules.
With regard to insurance contracts, Florida follows the “lex loci contractus”
choice-of-law rule, which “provides that the law of the jurisdiction where the
4
We review de novo the district court’s disposition of the parties’ summary judgment
motions. HR Acquisition I Corp. v. Twin City Fire Ins. Co., 547 F.3d 1309, 1313-14 (11th Cir.
2008).
5
contract was executed 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). Lex loci contractus is, in general, an
“inflexible,” bright-line rule that exists “to ensure stability in contract
arrangements.” Id. at 1164.5
We turn to the key issue in the case: whether the Delaware Policy’s anti-
stacking provision is enforceable under Florida law. We set forth the relevant
statutes and the Florida cases interpreting them. We then outline the parties’
contentions and state the certified question.
III. FLORIDA STATUTES
A. Section 627.0851
In 1961, the Florida legislature enacted Florida Statutes § 627.0851, which
governed the provision of uninsured motorist (“UM”) insurance coverage in
Florida.6 Section 627.0851 provided that insurance companies that “delivered or
issued for delivery” automobile liability policies in Florida for cars “registered or
5
Florida recognizes an exception to the lex loci contractus rule where a provision
contained in an insurance policy executed outside Florida violates a paramount Florida public
policy. However, the parties agree the Delaware Policy was executed in Florida and Florida law
applies.
6
Because Florida law defines “uninsured motor vehicle” to include those which are
“underinsured” (i.e., insured for less than the damages suffered by a person legally entitled to
recover), see Fla. Stat. § 627.727(3)(b), we likewise discuss uninsured and underinsured
scenarios under the common rubric of uninsured motorist coverage.
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principally garaged” in Florida shall provide uninsured motorist coverage, stating:
No automobile liability insurance, covering liability arising out of
the ownership, maintenance, or use of any motor vehicle, shall be
delivered or issued for delivery in this state with respect to any
motor vehicle registered or principally garaged in this state unless
coverage is provided therein or supplemental thereto . . . for the
protection of persons insured thereunder who are legally entitled to
recover damages from owners or operators of uninsured motor
vehicles because of bodily injury, sickness or disease, including death,
arising therefrom; provided, however, that the coverage required
under this section shall not be applicable where any insured named in
the policy shall reject the coverage.
Fla. Stat. § 627.0851(1) (1961). Section 627.0851 was later re-codified at Florida
Statutes § 627.727. Section 627.0851 did not contain any provision addressing the
stacking of UM coverage for different vehicles or policies.
Two Florida Supreme Court decisions, however, ruled on § 627.0851 vis-a-
vis anti-stacking clauses in automobile policies. In Sellers v. United States Fidelity
& Guaranty Co., 185 So. 2d 689, 690 (Fla. 1966), the Florida Supreme Court
concluded that § 627.0851 invalidated an insurance policy’s anti-stacking
provision that permitted the insurer to deny UM coverage if the insured had other
similar UM insurance available to him. The Florida Supreme Court noted that §
627.0851 provided statutory requirements as to UM coverage, and reasoned:
There appears no latitude in the statute for an insurer limiting its
liability through “other insurance”; “excess-escape” or “pro rata”
clauses . . . . If the statute is to be meaningful and controlling in
respect to the nature and extent of the coverage . . . , all inconsistent
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clauses in the policy . . . must be judicially rejected.
Id. Thus, the Florida Supreme Court stated, “the statute does not limit an insured
only to one $10,000 recovery under said coverage where his loss for bodily injury
is greater than $10,000 and he is the beneficiary of more than one policy issued
under § 627.0851.” Id. at 692.
Eight years after Sellers, the Florida Supreme Court again considered
§ 627.0851 and a UM “other insurance” clause, this time in the choice-of-law
context. Gillen v. United Servs. Auto. Ass’n, 300 So. 2d 3 (Fla. 1974). In Gillen,
the plaintiffs Gillens lived in New Hampshire, where they took out two automobile
insurance policies with defendant USAA to cover their two cars in New
Hampshire. 300 So. 2d at 4-5. Both New Hampshire policies provided $10,000
UM coverage. Id. The Gillens moved to Florida, notified USAA of the move, and
replaced one of their cars with a new one. USAA canceled the one New
Hampshire policy covering the sold car and issued a new policy to the Gillens in
Florida to cover their new car. Id. at 5. Later, the Gillens were in a serious auto
accident caused by an uninsured driver. USAA paid the UM limit on the new
Florida policy but not on the New Hampshire policy on the Gillens’ other car,
relying on an other insurance clause in the New Hampshire policy. Id. The
Gillens sued, seeking recovery on both policies and asserting that the other
8
insurance clause in the New Hampshire policy was contrary to Florida’s public
policy, as enunciated in Sellers. Id. They prevailed in the trial court, but the
District Court of Appeal reversed, concluding that the New Hampshire policy
should be governed by New Hampshire law because it was issued and delivered
there. Id. The Gillens appealed to the Florida Supreme Court.
The Florida Supreme Court initially discussed Sellers and stated that it saw
“no reason to alter our position on the subject of ‘other insurance’ clauses.” Id. at
5-6. USAA argued that New Hampshire law applied under the rule of lex loci
contractus. The Gillens argued that the court should abandon the lex loci
contractus rule in favor of the choice of law approach enunciated in § 188 of the
Restatement (Second) of Conflict of Laws (1969), which “requires application of
the law of the state having the most significant relationship to the transaction.”
Gillen, 300 So. 2d at 6. The Gillens maintained that Florida had the most
significant relationship to the New Hampshire policy at the time of the accident.
Id. at 6-7.
The Florida Supreme Court concluded that it was not necessary to consider
whether to adopt the “most significant relationship” choice-of-law test because, in
any event, Florida law governed the New Hampshire policy through operation of
the public policy exception to the lex loci contractus rule. Id. The Florida
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Supreme Court reasoned:
New Hampshire has a policy permitting “other insurance” clauses as a
means of avoiding liability. This policy is grounded in general on
freedom of contract principles, to the extent there is no conflict with
relevant state statutory authority. The New Hampshire [Supreme]
[C]ourt seemed to indicate that the main purpose of their statute was
to provide protection only up to the minimum statutory limits.
Florida’s statute has no similarly restricted purpose and, in fact, has
been interpreted in Sellers . . . to implicitly forbid “other insurance”
clauses. . . . Here, the substantial interest of Florida in protecting its
citizens from the use of “other insurance” clauses rises to a level
above New Hampshire’s interest in permitting them. Public policy
requires this Court to assert Florida’s paramount interest in protecting
its own from inequitable insurance arrangements.
Id. at 7 (citations omitted).
In Gillen, USAA argued that the language of § 627.0851(1) did not apply
because § 627.0851(1) referred to insurance “delivered or issued for delivery in
[Florida]” and the New Hampshire policy was issued and delivered in New
Hampshire. Id. at 6. The Florida Supreme Court rejected USAA’s argument,
stating:
While it is true that the Legislature in its language [of § 627.0851(1)]
thus limited the application of the statute, there is no indication that
the Legislature necessarily meant to exclude cases such as the one sub
judice. Given the rationale behind this Court’s decision in Sellers,
supra, this is, that the public policy of this State requires the
elimination of “other insurance” provisions, there is no reason to limit
its scope in a situation such as the present one.
Id. The Florida Supreme Court concluded that USAA (1) knew of the Gillens’
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move and that coverage under both policies would be shifted to Florida, and (2)
collected premiums on both policies but claimed it was liable under only one.
Under these facts, the Florida Supreme Court concluded that “[t]here is nothing in
law or equity which should aid an insurance company in so one-sided an
arrangement.” Id. The Florida Supreme Court added that the insureds had moved
from New Hampshire and “were in the process of establishing themselves as
permanent residents of this State, and as such are proper subjects of this Court’s
protection from injustice or injury.” Id. Thus, the Florida Supreme Court reversed
the District Court of Appeal’s decision and instructed that court to affirm the
judgment of the trial court. Id. at 7.
B. Section 627.4132
In 1976, the Florida legislature enacted Florida Statutes § 627.4132, which
prohibited stacking of insurance coverages. It stated:
If an insured or named insured is protected by any type of motor
vehicle insurance policy for liability, personal injury protection, or
other coverage, the policy shall provide that the insured or named
insured is protected only to the extent of the coverage he has on the
vehicle involved in the accident. However, if none of the insured’s or
named insured’s vehicles is involved in the accident, coverage is
available only to the extent of coverage on any one of the vehicles
with applicable coverage. Coverage of any other vehicles shall not be
added to or stacked upon that coverage. This section shall not apply
to reduce the coverage available by reason of insurance policies
insuring different named insureds.
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Fla. Stat. § 627.4132 (1976). However, in 1980 the legislature amended
§ 627.4132 to state that the statute did not apply to UM coverage. Id. (1980).
One Florida appellate court concluded that, in passing the 1980 amendment,
the legislature intended to “revert back to the pre-1976, judicially-declared public
policy favoring stacking of uninsured motorist coverage” instead of simply
removing the statutory prohibition of stacking UM coverage and “leav[ing] the
matter of whether or not to stack to the contracting parties.” Auto-Owners Ins. Co.
v. Prough, 463 So. 2d 1184, 1185-86 (Fla. Dist. Ct. App. 1985). Thus, the Florida
appellate court in Prough concluded that an anti-stacking provision was “against
public policy and [was] not enforceable.” Id. at 1186.7
C. Section 627.727
In 1987, the Florida legislature amended Florida Statutes § 627.727 (the
successor to § 627.0851) to add a provision (subsection (9)) permitting insurers in
some circumstances to prohibit UM coverage stacking. Subsection (1) of
§ 627.727 remains virtually the same as its predecessor, § 627.0851(1), construed
7
There were no choice-of-law issues in Prough; thus, the Florida court’s conclusion
rested not upon the public policy exception to the lex loci contractus rule, but upon the familiar
rule of contract law that “[a]greements in violation of public policy are void.” Local No. 234 of
United Ass’n of Journeymen & Apprentices of Plumbing & Pipefitting Indus. v. Henley &
Beckwith, Inc., 66 So. 2d 818, 823 (Fla. 1953). The standard for the “against public policy”
doctrine differs from that of the public policy exception because, among other things, the public
policy exception requires a paramount or fundamental Florida public policy. See Roach, 945 So.
2d at 1165; Mazzoni Farms, Inc. v. E.I. DuPont de Nemours & Co., 761 So. 2d 306, 311-12 (Fla.
2000).
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by the Florida Supreme Court in Sellers and Gillen. Section 627.727(1) provides
that:
No motor vehicle liability insurance policy which provides bodily
injury liability coverage shall be delivered or issued for delivery in
this state with respect to any specifically insured or identified
motor vehicle registered or principally garaged in this state unless
uninsured motor vehicle coverage is provided therein or supplemental
thereto for the protection of persons insured thereunder who are
legally entitled to recover damages from owners or operators of
uninsured motor vehicles because of bodily injury, sickness, or
disease, including death, resulting therefrom. However, the coverage
required under this section is not applicable when, or to the extent
that, an insured named in the policy makes a written rejection of the
coverage on behalf of all insureds under the policy.
Fla. Stat. § 627.727(1) (emphasis added). However, the amendment added
subsection 9 to § 627.727, which allows policies to prohibit stacking if the
insurance company satisfies certain requirements:
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 . . . .
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. . . . Any insurer
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who provides coverage which includes the limitations provided in this
subsection shall file revised premium rates . . . [which] shall . . .
reflect a reduction in the uninsured motorist coverage premium of at
least 20 percent for policies with such limitations. . . .
Fla. Stat. § 627.727(9). Specifically, the insurer must satisfy the statutory
requirements of notice to the insured, knowing acceptance by the insured, and
filing of revised premium rates in order for an anti-stacking provision to be valid.
Gov’t Employees Ins. Co. v. Douglas, 654 So. 2d 118, 120-21 (Fla. 1995). The
parties agree that GEICO did not send notice to the Randos or satisfy the
requirements of § 627.727(9). Accordingly, the issue becomes whether GEICO’s
anti-stacking provision is enforceable under Florida law.
IV. CONTENTIONS OF THE PARTIES
The parties dispute the nature and extent of Florida’s public policy regarding
the stacking of UM coverage.
The Randos argue that: (1) Florida’s pro-stacking policy is judicially
created and protects residents of Florida who pay insurance premiums for UM
coverage; (2) Florida’s pro-stacking public policy prohibits anti-stacking clauses in
UM policies unless the notice and other requirements in § 627.727(9) are met; (3)
Florida’s pro-stacking policy does not depend upon the satisfaction of the two
conditions in Florida Statutes § 627.727(1) as to where the policy is delivered or
the car garaged but depends only upon the payment of separate premiums by
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Florida residents; (4) the Florida Supreme Court in Gillen applied Florida’s pro-
stacking public policy to a New Hampshire insurance policy that was issued and
delivered in New Hampshire even though it did not meet one of the conditions in §
627.727(1); and (5) the state where the policy is delivered and the state where the
insureds reside are more important than the location of the vehicle, because under
Florida law “uninsured motorist coverage is personal to an insured” and “does not
attach to a specific vehicle.” Hines v. Wausau Underwriters Ins. Co., 408 So. 2d
772, 774 (Fla. Dist. Ct. App. 1982); see Coleman v. Fla. Ins. Guar. Ass’n, 517 So.
2d 686, 689 (Fla. 1988) (“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.”).
GEICO, on the other hand, contends that (1) Florida’s “pro-stacking doctrine
was preempted in 1987 by the Legislature’s amendment to Section 627.727 adding
subsection (9) to the uninsured motorist statute”; (2) the pre-1987 case law cited by
the Randos is inapplicable insofar as it invalidates anti-stacking (i.e., “other
insurance”) clauses on public policy grounds; (3) Florida’s public policy
concerning uninsured motorist coverage cannot be broader than the statute on
15
which it is based; (4) Florida’s pro-stacking policy extends only to policies that are
“delivered or issued for delivery” in Florida with respect to vehicles that are
“registered or principally garaged” in Florida as set forth in § 627.727(1); (5) the
pro-stacking doctrines in Sellers and Gillen are no longer applicable to policies of
uninsured motorist insurance that contain anti-stacking provisions; (6) other than
those vehicles referenced in § 627.727(1), Florida has no public policy that
disfavors anti-stacking provisions in insurance policies issued and delivered in
Florida; and (7) the Randos fail to cite any post-1987 case law applying the pro-
stacking doctrine.
V. CERTIFICATION
Because this appeal depends on resolution of unsettled Florida law, we
certify the following question to the Supreme Court of Florida:
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
POLICY MAY NOT BE COMBINED WITH UNINSURED MOTORIST
COVERAGE PROVIDED BY A SEPARATE AUTOMOBILE POLICY ALSO
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ISSUED BY THE INSURER TO THE NAMED INSUREDS IN FLORIDA.
The phrasing used in this certified question should not restrict the Supreme
Court of Florida’s consideration of the problem posed by this case. This extends to
the Supreme Court of Florida’s restatement of the issues and the manner in which
the answer is given. In order to assist the Supreme Court of Florida’s
consideration of the case, the entire record, along with the briefs of the parties,
shall be transmitted to the Supreme Court of Florida.
QUESTION CERTIFIED.
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