No payoff for parsing policy
On February 18, 2011, John Cernogorsky, an employee of The Green Companies, was injured when struck by an automobile while he was walking in front of The Green Companies’ offices on the way into the building. The car that struck him was driven by an underinsured motorist. After Cernogorsky demanded and received payment up to the $100,000 policy limits of the motorist who struck him, he rejected the $10,000 UM policy limits of his own insurer and sought UM coverage under The Green Companies’ policy with Zurich American Insurance Company.
On August 24, 2011, alleging that he was injured as a pedestrian while in the course and scope of his employment with The Green Companies, Cernogorsky sued Zurich for $1,000,000 in UM benefits. The basis of Cernogorsky’s claim was that: (1) he was a covered individual under The Green Companies’ policy because the policy covered autos not owned by The Green Companies, which according to Cernogorsky included vehicles owned by employees; and, (2) the policy provided primary coverage that included UM coverage that extended to him because The Green Companies had failed to execute a UM coverage waiver as required by Florida statute.
In response, Zurich argued that Cernogorsky was not entitled to UM benefits because: (1) he was not a named insured under The Green Companies’ policy; (2) the subject policy was not a primary liability auto policy, but an excess liability policy, and thus was not governed by the aforementioned statute, but by a statute that does not require a written rejection of UM benefits; and (3) Cernogorsky was a pedestrian at the time of the accident, so he could not recover UM benefits under the policy even had such coverage been provided.
Both Cernogorsky and Zurich moved for summary judgment. Both motions were denied, and the matter was set for trial solely on the coverage issue. A jury rendered a verdict in Cernogorsky’s favor, determining that coverage existed. Zurich’s renewed motions for a directed verdict, for judgment notwithstanding the verdict, and for a new trial were denied. Zurich appealed.
On appeal, the court noted that because neither a factual dispute nor an ambiguity was demonstrated to exist, the coverage issue should have been decided by the trial court based on the record, for several reasons.
First, Cernogorsky was not a named insured under the Zurich policy as he claimed. The policy was a package policy that provided $1,000,000 in commercial general liability coverage to The Green Companies for “covered autos.” This term, as defined in the policy, encompassed either “hired autos” or “nonowned autos.” By definition, a “hired auto” was a vehicle leased, hired, rented, or borrowed by The Green Companies. No such autos were involved in this matter. A “nonowned auto” as defined by the policy included autos owned by employees, but only while they are being used for company business or “personal affairs” of The Green Companies.
Like “hired autos,” no “nonowned” autos were involved in the incident that caused Cernogorsky’s injury. In fact, his vehicle was not involved in the incident at all. In short, no “covered autos” were involved in the matter, thereby refuting Cernogorsky’s claim that he was an insured under the policy.
The only insured under the policy was The Green Companies. Other portions of the policy also expressly excluded employees while using their own autos from the definition of the term “insured.”
With respect to the policy’s liability coverage, the court noted that the relevant provisions confirmed that Cernogorsky was not an insured. The court noted further that the policy was not a primary liability policy subject to the waiver of UM coverage mandate imposed by statute as Cernogorsky claimed. Because the policy was an excess policy, there was no need for The Green Companies to execute a written waiver or rejection of UM coverage as required by the statute.
Because Cernogorsky was neither an insured under the policy nor otherwise eligible to recover benefits thereunder, the court reversed the trial court’s judgment and remanded the case for entry of judgment in Zurich’s favor.
Zurich American Insurance Company vs. Cernogorsky-District Court of Appeal of Florida, Third District-February 22, 2017-No. 3D16–689.
