Appeals Courts Issue Rulings in Complex Auto Insurance Cases
Recent decisions from appellate courts in Florida and North Carolina have clarified aspects of uninsured motorist (UM) coverage, addressing the scope of coverage for electric scooters and the practice of “stacking” policies to maximize benefits. These cases highlight nuanced issues in insurance law, particularly the interpretation of policy language versus statutory definitions and the application of coverage limits in multi-vehicle accident scenarios.
State Farm Liable for Scooter Accident, Appeals Court Says
The 11th Circuit Court of Appeals reversed a lower court’s decision, ruling that State Farm must provide uninsured motorist coverage for injuries sustained in an accident involving an electric motor scooter.
The case stemmed from an incident on July 11, 2019, in Brevard County, Florida. Anna Bevilacqua Sprangler was driving a 2015 Nissan Altima when she collided with a Razor Pocket Mod scooter. The scooter driver, Edward Allen Leveque, was killed in the accident, and Sprangler sustained injuries. She sought UM benefits from State Farm, but the insurer denied the claim, arguing the scooter did not qualify as a “motor vehicle” under Florida law. State Farm filed suit in the US District Court for the Middle District of Florida, seeking a declaratory judgment that the policy didn’t cover the accident because the scooter wasn’t a motor vehicle.
District Court Judge Paul Byron sided with State Farm, granting summary judgment based on the scooter’s exclusion from the state’s definition of “uninsured motor vehicle.” The 11th Circuit panel, however, found the statutory definition irrelevant. The appeals court stated that the Florida UM statute provides a minimum amount of coverage required, but insurers can offer more comprehensive protection.
State Farm’s policy offered UM benefits for incidents involving “land motor vehicles,” without a specific definition of the term. The appellate court determined that the ordinary meaning of “land motor vehicle” encompasses electric scooters. The court also noted the policy explicitly extended coverage to vehicles designed for off-road use.
The panel said the Razor Pocket Mod has a 250-watt electric motor powered by two 12-volt batteries.
The appeals court opinion stated, “Because State Farm has not defined the term ‘uninsured motor vehicle’ in a way that fails to comply with the FRL or UM statute, we see no reason to redefine a policy term by incorporating a statutory definition.” The panel reversed the trial court’s decision, indicating that State Farm is liable for the claim.
North Carolina Court Permits ‘Stacking’ of UIM Policies
In a separate case concerning underinsured motorist coverage, the North Carolina Court of Appeals allowed an injured claimant to combine policy limits from two different policies, a practice known as “stacking,” to prove that their injuries were inadequately covered. The court’s decision affirmed a Wake County Superior Court ruling against North Carolina Farm Bureau Mutual Insurance Co.
The collision, which took place in Rockingham County in 2020, injured multiple people, including Kyrie Mebane. The at-fault driver, covered by a Farm Bureau policy, had liability limits of $50,000 per person and $100,000 per accident. This policy would have split the per-accident limit between six passengers, leaving Mebane with only $5,000.
Mebane also held a policy, provided by Farm Bureau and written for his mother, which included underinsured motorist (UIM) coverage of $50,000 per person and $100,000 per accident. The insurer initially offered Mebane $45,000, which equaled his mother’s UIM benefit reduced by payments made via the at-fault driver’s policy. Farm Bureau maintained that Mebane was not eligible for the UIM coverage of the at-fault driver, stating that his UIM coverage was limited to $50,000, matching the at-fault driver’s liability limits. The insurer maintained that Mebane was only due compensation from his mother’s policy.
Mebane’s attorneys argued that the UIM benefits should be considered in tandem, claiming Mebane was owed $95,000—the original $45,000 plus the $50,000 per-person limit from the at-fault driver’s UIM coverage. The correct calculation and comparison to determine the underinsured status, according to Mebane’s lawyers, was the combination of the UIM coverage of the at-fault driver with Alisha Mebane’s UIM coverage versus the liability limits of the at-fault driver. By this calculation, the vehicle was deemed underinsured, a position the court supported.
The court determined that the circumstances fell under an exception involving situations where the claimant’s individual payment after liability payments to other claimants fell below the claimant’s own UIM limits.
These decisions provide significant insights into the complexities of insurance law and offer clarity on how courts are interpreting policy language in evolving scenarios.
