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Defense Digest

Take a Closer Look: The Precise Language of an Out-of-State Coverage Provision Leads To Varying Results

Defense Digest, Vol. 30, No. 1, March 2024

March 1, 2024

by Noah E. Blake

Key Points:

  • Where the language in an insurance contract is plain and unambiguous, the courts must interpret the terms of the contract according to their plain meaning as written.
  • Florida Statute §627.733 only requires a nonresident owner of a vehicle to maintain PIP coverage after they have been within Florida for more than 90 days of the preceding 365 days. 
  • Due to Florida’s presence requirement under Fla. Stat. §627.733 for nonresidents, an out-of-state coverage provision that only applies to unconditional out-of-state compulsory insurance laws will not provide PIP benefits in Florida.

The recent ruling by the Fourth District Court of Appeal in T.I.O. Medical Intervention LLC a/a/o Mary Faison v. Liberty Mutual Fire Insurance Company, 373 So. 3d 341 (Fla. 4th DCA 2023) serves as a reminder to pay very close attention to the exact wording in insurance policy provisions. This case involved an insured that maintained a Georgia-based insurance policy but was involved in an accident in Florida. The insured was treated in Florida, and the plaintiff, a medical provider, submitted medical bills to the defendant insurer for reimbursement under Florida Personal Injury Protection (PIP) benefits. 

The insurer argued that the Georgia policy did not provide for Florida PIP benefits per the policy language. At the county court level, the insurer was granted summary judgment because the court found that the “clear and unambiguous” language of the Georgia policy did not provide for Florida PIP benefits. The plaintiff appealed.

On appeal, the Fourth District analyzed the specific out-of-state coverage provision. Specifically, the court noted, “Where the language in an insurance contract is plain and unambiguous, a court must interpret the policy in accordance with the plain meaning so as to give effect to the policy as written.” Wash. Nat’l Ins. Corp. v. Ruderman, 117 So.3d 943, 948 (Fla. 2013). Looking first to the subject out-of-state coverage provision, the Georgia policy stated: 

If an auto accident to which this policy applies occurs in any state or province other than the one in which ‘your covered auto’ is principally garaged, we will interpret your policy for that accident as follows:
If the state or province has:
…
A compulsory insurance or similar law requiring a nonresident to maintain insurance whenever the nonresident uses a vehicle in that state or province, your policy will provide at least the required minimum amounts and types of coverage. 

The Fourth District then looked to the presence requirement under Fla. Stat. §627.733(2) which governs PIP coverage for nonresidents:

Every nonresident owner or registrant of a motor vehicle which, whether operated or not, has been physically present within this state for more than 90 days during the preceding 365 days shall thereafter maintain security as defined by subsection (3)…

Fla. Stat. §627.733(2).

In comparing the policy provision and the relevant Florida statute, the Fourth District concluded that the Georgia policy did not provide for Florida PIP benefits. Specifically, the court noted that the Georgia policy would only provide out-of-state coverage if the state’s compulsory insurance laws require a nonresident to have insurance “whenever” they use a vehicle. Florida law does not require a nonresident owner of a vehicle to maintain PIP coverage every time they drive, only when they have been in Florida for 90 out of the last 365 days.
 
The plaintiffs did not present any evidence that the insured met the nonresident presence requirement under Fla. Stat. §627.733(2), but the Fourth District stated that it would make no difference to the court’s conclusion since Florida law does not “unconditionally require” nonresidents to have PIP coverage when they drive in Florida as considered by the policy.

The Fourth District contrasted the Georgia policy language with out-of-state coverage provisions interpreted by the Fifth and Second District Court of Appeals. In Meyer v. Hutchinson, 861 So.2d 1185, 1186-87 (Fla. 5th DCA 2003) and Jiminez v. Faccone, 98 So.3d 621 (Fla. 2d DCA 2012), the Fifth and Second Districts analyzed an out-of-state coverage provision of an insurance policy which stated:

If an insured is in another state or Canada and, as a nonresident, becomes subject to its motor vehicle compulsory insurance, financial responsibility, or similar law:

This policy will be interpreted to give the coverage required by the law… 

The Fourth District distinguished the policy provisions interpreted by the Fifth and Second Districts from the Georgia policy provision on the basis that the former policy provision would allow coverage for nonresidents who “became subject” to Florida’s PIP statute by virtue of maintaining presence in Florida for 90 days. In comparison, the Georgia policy provision does not include the same language that would afford coverage to nonresidents who maintain presence in Florida for 90 days pursuant to Fla. Stat. §627.733(2). Therefore, the Fourth District held that the Georgia policy did not provide for Florida PIP benefits, and the lower court’s entry of summary judgment in favor of the insurer was affirmed.

In light of this case, it is recommended that insurance companies review the out-of-state coverage provisions in their respective policies. As shown by this case, these provisions need to be carefully constructed so as not to afford coverage when it is not intended. They are easy to overlook, but every word is vital since courts interpret these policy provisions by their plain meaning. That is why it is important to look closely at each provision and make sure the clear meaning of the provision is what is intended. 

*Noah is an associate in our Tampa, Florida, office. He can be reached at (813) 898-1817 or NEBlake@mdwcg.com. 


 

Defense Digest, Vol. 30, No. 1, March 2024, is prepared by Marshall Dennehey to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. ATTORNEY ADVERTISING pursuant to New York RPC 7.1. © 2024 Marshall Dennehey. All Rights Reserved. This article may not be reprinted without the express written permission of our firm. For reprints, contact tamontemuro@mdwcg.com.

Firm Highlights

Thought Leadership

Two Tracks, No Preclusion: Ohio Supreme Court Preserves Separate Damages Claims After Chapter 2506 Appeals

The Supreme Court of Ohio has clarified that an administrative appeal under Ohio Revised Code Chapter 2506 does not bar a separate action for damages and declaratory relief that could not have been pursued in the administrative appeal. The Ohio Supreme Court considered Sheetz, Inc. v. Centerville (2026-Ohio-3531) as a result of a certified question from the Southern District of Ohio. The question was whether Sheetz, the gas station/convenience store brand, was barred from seeking damages in a separate action since damages were not sought in their administrative appeal. Ultimately, the Ohio Supreme Court ruled that res judicata does not bar a separate action for damages after ruling on an administrative appeal because R.C. Chapter 2506 is limited to judicial review and cannot grant affirmative relief. The case arose after Centerville’s city council rejected a site plan proposed by Sheetz, Inc. that had received unanimous approval from the City’s planning commission. Sheetz filed an administrative appeal pursuant to R.C. 2506 in the Montgomery County Court of Common Pleas, and two months later filed a complaint for damages and declaratory relief under 42 USC § 1983 as a takings action with the city, city council, and other objectors as improper takings and a violation of due process, as well as interference with business and contractual relationship. The city and city council removed the § 1983 action for damages to federal court. Montgomery County Court of Common Pleas reversed the city council’s denial, and allowed the Sheetz project to move forward. Upon that ruling, the federal court issued a show-cause order questioning whether the § 1983 action was barred by the doctrine of res judicata via claim preclusion (which includes all theories of recovery).  Sheetz argued that Ohio courts of common pleas do not have authority to award damages or declaratory relief as party of the R.C. Ch. 2506 appeal, therefore res judicata could not be triggered to apply to the § 1983 action. Additionally, Sheetz moved to certify the issue to the Ohio Supreme Court, citing differing results between the second and sixth districts on this same issue. Centerville approached the question, not from a claim preclusion standpoint, but from the holding in Grava v. Parkman, Twp which states that a final judgment rendered on the merits bars all subsequent action based on the same transaction or occurrence.  In yet another approach, an objector argued that claim preclusion was satisfied because Sheetz could have raised its damages claims in the administrative appeal – Sheetz disagrees. In their analysis, the Supreme Court of Ohio broke down the elements of a claim preclusion analysis: 1) a prior final, valid decision on the merits by a court of competent jurisdiction; (2) a second action involving the same parties, or their privies, as the first; (3) a second action raising claims that were or could have been litigated in the first action; and (4) a second action arising out of the transaction or occurrence that was the subject matter of the previous action. The Court held that R.C. Ch. 2506 does not permit a party to argue damages as R.C. Ch. 2506 limits the common pleas jurisdiction as if it were sitting on appeal, and therefore can only affirm, reverse, vacate, or modify the appealed order, or can remand the case to the administrative body. Further, the Court held that Grava’s conclusion that a final judgment precludes additional litigation for different relief is inapplicable under this fact pattern because it was meant only to apply to those matters in which the plaintiff brings the exact same case twice, but for new relief. The Court found Grava was inapplicable because Sheetz could have requested damages or declaratory relief in the R.C. 2506 appeal. Therefore, Grava would be nothing more than dicta if it even did apply. Going further, the Ohio Supreme Court disavowed Sixth Circuit precedent which, in reliance on Grava and other district court decisions, permitted an owner to seeking relief under 42 U.S.C. § 1983 alongside an administrative appeal. See Moore v Hiram Twp., 988 F.3d 353 (6th Cir.2021). The Ohio Supreme Court found that the Sixth Circuit had disregarded a critical decision in Community Concerned Citizens, Inc. v. Union Twp. Bd. of Zoning Appeals, 1993-Ohio-115, which clearly held that a R.C. Ch. 2506 appeal cannot be combined with a complaint seeking other claims for relief. Id. at ¶ 11. To that end, the Ohio Supreme Court has determined that the decisions Moore relied on (outside of Grava) are no longer good law, and that Moore was wrongly decided. The decision draws a clear procedural boundary: Chapter 2506 provides judicial review of an administrative decision, not a forum for independent claims seeking affirmative relief. Although Grava may place claims arising from a single transaction within the potential scope of claim preclusion, those claims are not barred unless the complete claim-preclusion test is satisfied. Because Sheetz could not have pursued damages or declaratory relief in its Chapter 2506 appeal, the separate action was not precluded. The remaining question for practitioners looking to apply or defend against this exception is when does the statute of limitations begin to run on damages and declaratory relief claims related to an administrative decision on appeal? A takings action in federal court has a 2-year statute of limitations, or as a state claim, 4 years (like the other tortious claims raised therein). Correlating this case with others, an administrative appeal will not likely toll the statute of limitations on claims based on a final decision by a municipal authority. Therefore, practitioners should look for these cases to be brought simultaneously.

Thought Leadership

Pennsylvania Supreme Court to Review Whether Legal Malpractice Claims May Be Recast as Breach of Contract Claims

The Pennsylvania Supreme Court recently granted allowance of appeal to consider whether a plaintiff may pursue a breach of contract claim against an attorney based on allegations that the attorney failed to provide competent legal services. The issue is significant in professional liability litigation because it concerns whether a plaintiff may avoid the statute of limitations applicable to professional negligence claims by characterizing the alleged misconduct as a breach of contract. Antoine Poteat retained attorneys Gary Asteak and Nino V. Tinari to represent him in a criminal matter. After his conviction was subsequently overturned through a Post Conviction Relief Act proceeding, Poteat filed suit against his former attorneys alleging that they breached their retainer agreements by failing to provide competent legal services. The attorneys argued that the claims sounded in professional negligence, rather than breach of contract, and were therefore time-barred. The trial court dismissed Poteat’s complaint, but the Superior Court, sitting en banc, reversed. The Superior Court held that the gist-of-the-action doctrine did not bar Poteat’s breach of contract claim because the alleged failure to provide competent legal services could constitute a breach of the parties’ agreement. The Court further held that a legal-services agreement contains an implied duty requiring an attorney to provide competent legal services, even where the agreement does not contain an express provision requiring such services. The Pennsylvania Supreme Court granted review in July 2026 and will consider whether the Superior Court’s decision conflicts with Pennsylvania precedent distinguishing contract and tort claims, including Bruno v. Erie Insurance Co. The Supreme Court will also address whether a plaintiff may maintain a breach of contract claim based on an implied duty to provide competent legal services without identifying a specific contractual provision that was breached. The Supreme Court’s decision could have significant implications for professional liability litigation in Pennsylvania, particularly where plaintiffs seek to characterize claims arising from alleged professional negligence as contractual claims.

Thought Leadership

The Search-Incident-to-Arrest Doctrine Does Not License Strip Searches

In Beatty v. Gardner, No. 25-2860 (3d Cir. Sept. 16, 2026), Kyle Beatty sued police officers Clinton Gardner and Calvin Irvin under 42 U.S.C. § 1983 after they stopped, arrested, and searched him three times during a drug investigation in Williamsport, Pennsylvania. The officers initially smelled marijuana coming from the car in which Beatty was sitting and observed marijuana residue, giving them probable cause to arrest him. Beatty consented to the first pat-down, and the second search was conducted incident to his lawful arrest; neither search uncovered weapons or contraband. The officers then transported Beatty to the police station solely to strip-search him, but the strip search also revealed nothing. The District Court granted the officers summary judgment, concluding that the initial stop, arrest, and first two searches were reasonable and that qualified immunity protected the officers from liability for the strip search. The Third Circuit affirmed, but held that the strip search itself violated the Fourth Amendment. The court concluded that the search-incident-to-arrest doctrine does not automatically permit officers to strip-search an arrestee outside the jail or prison setting. Because strip searches are highly intrusive and the traditional justifications for searches incident to arrest (officer safety and preservation of evidence) did not justify the search of Beatty, the officers generally needed either the arrestee’s consent, exigent circumstances, or a warrant supported by probable cause to believe that a search beneath the clothing would reveal weapons, contraband, or evidence. Here, the officers had none of those justifications. Nevertheless, the court held that qualified immunity barred damages liability because, at the time of the search, the right against a warrantless strip search of an arrestee outside the institutional setting was not clearly established by Supreme Court or Third Circuit precedent. The court likewise upheld qualified immunity on Beatty’s First Amendment retaliation claim and affirmed summary judgment for the officers.