FL Supreme Court disagrees with State Farm’s interpretation of its car insurance policy

Leesburg Florida car accident lawyer discusses the Florida Supreme Court’s recent opinion where it disagrees with State Farm’s interpretation of the medical exam requirement in its car insurance policy.

www.floridasupremecourt.org

In this case, Robin Curran, was injured in a car accident and later developed a condition called Reflex Sympathetic Dystrophy (RSD) or Complex Regional Pain Syndrome Type I (CRPS).  The hallmark of RSD is significant pain called allodynia, skin, hair, nail and sweat gland changes in the affected area. The problem with RSD is that there is no one diagnostic test to diagnose the condition and it’s pretty much a diagnosis of exclusion.

The insurance company for the person who caused the accident offered to pay its insurance policy limits. Once this was sorted out, Curran made a claim to State Farm under the uninsured motorist provision of its insurance policy.  In response, State Farm requested that Curran be examined by a doctor of its choosing, Joseph Uricchio, who is a well known orthopedic surgeon in the Orlando area. A dispute developed between State Farm and Curran’s attorney so the attorney filed suit against State Farm for the uninsured motorist benefits. To learn more about uninsured motorist benefits click here.

Once the lawsuit was filed, Curran’s attorney told State Farm that his client would see Dr. Uricchio for the exam, but State Farm decided to take the position that Curran breached the insurance contract, and because of her actions, she was no longer eligible for uninsured motorist benefits. Sometime before trial, Dr. Uricchio evaluated Curran. The case eventually went to trial and the jury awarded Curran millions of bucks, which is way more than her $100 grand in uninsured motorist benefits.

First Level Appeal

As you can guess, State Farm didn’t like the result so it appealed the case to the Fifth District Court of Appeal, which handles appeals from the Orlando area. The Fifth did not buy State Farm’s argument and found in favor of Curran but certified a question of great public importance asking the Florida Supreme Court to rule on this question:

WHEN AN INSURED BREACHES A [COMPULSORY MEDICAL EXAMINATION] PROVISION IN AN UNINSURED MOTORIST CONTRACT, (IN THE ABSENCE OF CONTRACTUAL LANGUAGE SPECIFYING THE CONSEQUENCES OF THE BREACH) DOES THE INSURED FORFEIT BENEFITS UNDER THE CONTRACT WITHOUT REGARD TO PREJUDICE, OR DOES THE PREJUDICE ANALYSIS DESCRIBED IN BANKERS INSURANCE CO. V. MACIAS, 475 So. 2d 1216, 1218 (Fla. 1985), APPLY? IF PREJUDICE MUST BE CONSIDERED, WHO BEARS THE BURDEN OF PLEADING AND PROVING THAT ISSUE?

The Florida Supreme Court

The Supreme Court took jurisdiction of the case and ruled on the issue.  The opinion is lengthy but here are my observations, the take-a-ways, and the rule of law.

Dr. Uricchio

First from the outset, it should be noted that State Farm decided not to call Dr. Urrichio at trial in this matter. So from this action, Dr. Uricchio’s opinion was probably favorable to Curran.  Dr. Uricchio has performed a number of examinations for insurance defense lawyers over the years but for RSD/CRPS he is usually on the other side of the coin.

Uninsured Motorist Benefits

The Court started its opinion out explaining the purpose of uninsured motorist benefits as follows:

Uninsured motorist coverage is intended to protect persons who are legally entitled to recover damages for injuries caused by owners or operators of uninsured or underinsured motor vehicles. In addition, we have stressed that the statute is not designed “for the benefit of insurance companies or motorists who cause damage to others.” Indeed, section 627.727 was intended to place the injured party in the same position as he or she would have been had the tortfeasor been insured.

Submitting To The Requested Medical Exam

A claim for uninsured motorist benefits is a contractual claim and the State Farm policy did have a clause in it saying that the insured had to submit to an exam. State Farm took the position that the clause was a “condition precedent” to filing a lawsuit. In other words, the injured person couldn’t file a lawsuit until she complied with all the terms of the policy.

The Court found that the medical exam provision was a “condition subsequent”.  The Court set out the definition of “condition subsequent”:

A condition subsequent presupposes an absolute obligation under the policy and provides that the policy will become void, or its operation defeated or suspended, or the insurer relieved wholly or partially from liability, upon the happening of some event or the doing or omission of some act.

Prejudice

Because the medical exam term of the contract was a condition subsequent, State Farm had the burden of showing that it was prejudiced by Curran’s failure to attend the exam.  In this case, State Farm couldn’t show prejudice because Curran’s lawyer asked State Farm if it wanted the exam right after the lawsuit was filed and State Farm declined.  Also, Dr. Uricchio eventually evaluated Curran and State Farm didn’t even call Dr. Uricchio at trial.

This case shows how a simple car accident case can become quite complex.  This case has been pending for about 7 years, and it isn’t done, because now Curran is going to have to file a bad faith claim against State Farm to see if she can collect the millions of dollars above her $100,000 uninsured motorist benefit.

If you have any questions about uninsured motorist coverage or a Stuart Florida car accident, give me a call.