SIXTH DISTRICT COURT OF APPEAL STATE OF FLORIDA _____________________________
Case No. 6D23-399 Lower Tribunal No. 21-CA-000533 _____________________________
ROSEMARY ARWAY,
Appellant, v.
PROGRESSIVE AMERICAN INSURANCE COMPANY,
Appellee. _____________________________
Appeal from the Circuit Court for Lee County. Keith R. Kyle, Judge.
March 1, 2024
GANNAM, J.
Rosemary Arway appeals the entry of summary judgment for Progressive
American Insurance Company.1 The trial court entered summary judgment against
Arway on the ground that her claim for underinsured motorist (UM) benefits under
an insurance policy issued by Progressive was time barred by a five-year statute of
limitations running from the date of Arway’s collision with an underinsured, third-
1 This case was transferred from the Second District Court of Appeal to this Court on January 1, 2023. party tortfeasor. Progressive’s insurance contract with Arway, however, under the
holding in Woodall v. Travelers Indemnity Co., 699 So. 2d 1361 (Fla. 1997), tolled
the statute of limitations until the tortfeasor’s bodily injury (BI) liability insurance
benefits were fully paid to Arway. Accordingly, Arway timely filed her UM claim
against Progressive, and we reverse and remand for further proceedings.
I.
On August 25, 2015, Arway was seriously injured in an automobile collision
with an underinsured motorist. At the time of the collision, Arway was covered
under a Florida automobile insurance policy issued by Progressive, which included
UM benefits coverage. The UM coverage section of the policy (Part III) included an
exhaustion provision, conditioning Progressive’s payment of UM benefits on the
payment of all BI liability benefits by the underinsured motorist’s insurer:
[Progressive] will pay for damages . . . that an insured person is legally entitled to recover from the owner or operator of an uninsured motor vehicle[2] because of bodily injury: 1. sustained by an insured person; 2. caused by an accident; and 3. arising out of the ownership maintenance, or use of an uninsured motor vehicle.
[Progressive] will pay under this Part III only after the limits of liability under all applicable bodily injury liability bonds and policies have been exhausted by payment of judgments or settlements.
2 The term “uninsured motor vehicle” is defined in the policy to include an underinsured motor vehicle.
2 (Emphases removed.) And the policy’s “General Provisions” section (Part VII)
included a no-action provision, conditioning suit against Progressive on compliance
with all policy terms:
[Progressive] may not be sued unless there is full compliance with all the terms of this policy.
On November 27, 2018, in accordance with the policy, Arway notified
Progressive that the underinsured motorist’s insurer had tendered its BI coverage
limits of $50,000 to settle Arway’s claims against the motorist, and Arway requested
that Progressive approve the settlement and release of Arway’s claims against the
motorist. On December 26, 2018 (three years, four months after the collision),
Progressive approved the settlement and offered to pay Arway $1,000 to resolve her
claim for UM benefits under the Progressive policy. Arway and Progressive traded
several additional demands and counteroffers, and on December 21, 2020 (five
years, four months after the collision), Arway demanded $150,000 from Progressive
to resolve her UM claim. On January 15, 2021, Progressive denied Arway’s UM
claim on the ground that the statute of limitations had run on August 25, 2020—five
years after Arway’s collision with the underinsured motorist.
On January 25, 2021, Arway sued Progressive for breach of the policy’s UM
provisions. The trial court held Arway’s UM claim time barred and entered final
summary judgment for Progressive on March 15, 2022. Arway timely appealed the
judgment.
3 II.
A.
Whether Arway’s UM claim was barred by the applicable statute of
limitations is a question of law we review de novo. See Maki v. NCP Bayou 2, LLC,
368 So. 3d 1081, 1084 (Fla. 6th DCA 2023); see also Fiddlesticks Country Club,
Inc. v. Shaw, 363 So. 3d 1177, 1181 (Fla. 6th DCA 2023) (“Because this presents a
purely legal issue, we review the order granting summary judgment de novo.”).
B.
The trial court correctly determined that Arway’s UM claim is governed by
the five-year statute of limitations for actions on written contracts under
section 95.11(2)(b), Florida Statutes, running from the date of Arway’s collision
with the underinsured motorist. See Woodall v. Travelers Indem. Co., 699 So. 2d
1361, 1362–63, 1362 n.2 (Fla. 1997). But the trial court erred in holding Arway’s
UM claim time barred because, under Woodall, the exhaustion and no-action
provisions of the Progressive policy tolled the statute of limitations until the
underinsured motorist’s BI liability insurance benefits were fully paid to Arway. See
699 So. 2d at 1363–65.
Under general contract principles, a cause of action for breach accrues, and
the statute of limitations begins to run, when an action can be brought on the contract.
See State Farm Mut. Auto. Ins. Co. v. Lee, 678 So. 2d 818, 821 (Fla. 1996). And we
4 interpret insurance contracts according to their plain language. See Auto-Owners Ins.
v. Anderson, 756 So. 2d 29, 34 (Fla. 2000). Under the plain language of Arway’s
policy, exhaustion of the tortfeasor’s BI liability limits by payment to Arway,
whether by judgment or settlement, is a condition precedent to Progressive’s
obligation to pay UM benefits to Arway. Moreover, under the no-action provision
of the policy, any action by Arway against Progressive is conditioned on “full
compliance with all the terms of th[e] policy.” Thus, under general contract
principles and the policy’s plain language, Arway’s cause of action against
Progressive for breach of its UM payment obligations could not accrue, and the
statute of limitations could not begin to run, until after payment of the tortfeasor’s
BI liability limits to Arway by judgment or settlement.
For UM claims, however, the accrual rule is different:
The cause of action for [a UM claim] arises on the date of the accident with an uninsured/underinsured motorist since the right of action stems from the plaintiff’s right of action against the tortfeasor. The statute of limitations thus begins to run on the date of the accident rather than on the date of compliance with the conditions precedent contained in the insuring agreement.
State Farm Mut. Auto. Ins. Co. v. Kilbreath, 419 So. 2d 632, 633 (Fla. 1982). So,
how can we reconcile this holding with the exhaustion and no-action provisions in
Arway’s UM policy? The supreme court provided the answer in Woodall, where it
considered cognate provisions in a Travelers insurance policy. The court held, “the
5 effect of the no-action and exhaustion clauses was to toll the statute of limitations
until the insured settled its claim against the tortfeasor’s liability carrier.” 699 So. 2d
at 1364–65.
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SIXTH DISTRICT COURT OF APPEAL STATE OF FLORIDA _____________________________
Case No. 6D23-399 Lower Tribunal No. 21-CA-000533 _____________________________
ROSEMARY ARWAY,
Appellant, v.
PROGRESSIVE AMERICAN INSURANCE COMPANY,
Appellee. _____________________________
Appeal from the Circuit Court for Lee County. Keith R. Kyle, Judge.
March 1, 2024
GANNAM, J.
Rosemary Arway appeals the entry of summary judgment for Progressive
American Insurance Company.1 The trial court entered summary judgment against
Arway on the ground that her claim for underinsured motorist (UM) benefits under
an insurance policy issued by Progressive was time barred by a five-year statute of
limitations running from the date of Arway’s collision with an underinsured, third-
1 This case was transferred from the Second District Court of Appeal to this Court on January 1, 2023. party tortfeasor. Progressive’s insurance contract with Arway, however, under the
holding in Woodall v. Travelers Indemnity Co., 699 So. 2d 1361 (Fla. 1997), tolled
the statute of limitations until the tortfeasor’s bodily injury (BI) liability insurance
benefits were fully paid to Arway. Accordingly, Arway timely filed her UM claim
against Progressive, and we reverse and remand for further proceedings.
I.
On August 25, 2015, Arway was seriously injured in an automobile collision
with an underinsured motorist. At the time of the collision, Arway was covered
under a Florida automobile insurance policy issued by Progressive, which included
UM benefits coverage. The UM coverage section of the policy (Part III) included an
exhaustion provision, conditioning Progressive’s payment of UM benefits on the
payment of all BI liability benefits by the underinsured motorist’s insurer:
[Progressive] will pay for damages . . . that an insured person is legally entitled to recover from the owner or operator of an uninsured motor vehicle[2] because of bodily injury: 1. sustained by an insured person; 2. caused by an accident; and 3. arising out of the ownership maintenance, or use of an uninsured motor vehicle.
[Progressive] will pay under this Part III only after the limits of liability under all applicable bodily injury liability bonds and policies have been exhausted by payment of judgments or settlements.
2 The term “uninsured motor vehicle” is defined in the policy to include an underinsured motor vehicle.
2 (Emphases removed.) And the policy’s “General Provisions” section (Part VII)
included a no-action provision, conditioning suit against Progressive on compliance
with all policy terms:
[Progressive] may not be sued unless there is full compliance with all the terms of this policy.
On November 27, 2018, in accordance with the policy, Arway notified
Progressive that the underinsured motorist’s insurer had tendered its BI coverage
limits of $50,000 to settle Arway’s claims against the motorist, and Arway requested
that Progressive approve the settlement and release of Arway’s claims against the
motorist. On December 26, 2018 (three years, four months after the collision),
Progressive approved the settlement and offered to pay Arway $1,000 to resolve her
claim for UM benefits under the Progressive policy. Arway and Progressive traded
several additional demands and counteroffers, and on December 21, 2020 (five
years, four months after the collision), Arway demanded $150,000 from Progressive
to resolve her UM claim. On January 15, 2021, Progressive denied Arway’s UM
claim on the ground that the statute of limitations had run on August 25, 2020—five
years after Arway’s collision with the underinsured motorist.
On January 25, 2021, Arway sued Progressive for breach of the policy’s UM
provisions. The trial court held Arway’s UM claim time barred and entered final
summary judgment for Progressive on March 15, 2022. Arway timely appealed the
judgment.
3 II.
A.
Whether Arway’s UM claim was barred by the applicable statute of
limitations is a question of law we review de novo. See Maki v. NCP Bayou 2, LLC,
368 So. 3d 1081, 1084 (Fla. 6th DCA 2023); see also Fiddlesticks Country Club,
Inc. v. Shaw, 363 So. 3d 1177, 1181 (Fla. 6th DCA 2023) (“Because this presents a
purely legal issue, we review the order granting summary judgment de novo.”).
B.
The trial court correctly determined that Arway’s UM claim is governed by
the five-year statute of limitations for actions on written contracts under
section 95.11(2)(b), Florida Statutes, running from the date of Arway’s collision
with the underinsured motorist. See Woodall v. Travelers Indem. Co., 699 So. 2d
1361, 1362–63, 1362 n.2 (Fla. 1997). But the trial court erred in holding Arway’s
UM claim time barred because, under Woodall, the exhaustion and no-action
provisions of the Progressive policy tolled the statute of limitations until the
underinsured motorist’s BI liability insurance benefits were fully paid to Arway. See
699 So. 2d at 1363–65.
Under general contract principles, a cause of action for breach accrues, and
the statute of limitations begins to run, when an action can be brought on the contract.
See State Farm Mut. Auto. Ins. Co. v. Lee, 678 So. 2d 818, 821 (Fla. 1996). And we
4 interpret insurance contracts according to their plain language. See Auto-Owners Ins.
v. Anderson, 756 So. 2d 29, 34 (Fla. 2000). Under the plain language of Arway’s
policy, exhaustion of the tortfeasor’s BI liability limits by payment to Arway,
whether by judgment or settlement, is a condition precedent to Progressive’s
obligation to pay UM benefits to Arway. Moreover, under the no-action provision
of the policy, any action by Arway against Progressive is conditioned on “full
compliance with all the terms of th[e] policy.” Thus, under general contract
principles and the policy’s plain language, Arway’s cause of action against
Progressive for breach of its UM payment obligations could not accrue, and the
statute of limitations could not begin to run, until after payment of the tortfeasor’s
BI liability limits to Arway by judgment or settlement.
For UM claims, however, the accrual rule is different:
The cause of action for [a UM claim] arises on the date of the accident with an uninsured/underinsured motorist since the right of action stems from the plaintiff’s right of action against the tortfeasor. The statute of limitations thus begins to run on the date of the accident rather than on the date of compliance with the conditions precedent contained in the insuring agreement.
State Farm Mut. Auto. Ins. Co. v. Kilbreath, 419 So. 2d 632, 633 (Fla. 1982). So,
how can we reconcile this holding with the exhaustion and no-action provisions in
Arway’s UM policy? The supreme court provided the answer in Woodall, where it
considered cognate provisions in a Travelers insurance policy. The court held, “the
5 effect of the no-action and exhaustion clauses was to toll the statute of limitations
until the insured settled its claim against the tortfeasor’s liability carrier.” 699 So. 2d
at 1364–65.
The exhaustion and no-action provisions in the Woodall Travelers policy are
functionally identical to the provisions in Arway’s Progressive policy. The Travelers
exhaustion provision provided, in pertinent part:
[Travelers] will pay damages that the insured is legally entitled to recover from the owner or operator of an uninsured motor vehicle because of bodily injury suffered by the insured and caused by accident. Liability for such damages must arise out of the ownership, maintenance or use of the uninsured motor vehicle.
[Travelers] will make payment under this coverage only after the limits of liability have been used up under all applicable bodily injury liability bonds or policies.
699 So. 2d at 1364 (cleaned up). The Travelers no-action provision provided:
Legal action may not be brought against [Travelers] under any coverage provided under this policy, unless the insured has fully complied with all the provisions of the policy.
Id. (cleaned up). Analyzing this language under the date-of-collision accrual rule for
UM claims, the Woodall court held, “the language of the Travelers policy had the
effect of tolling the statute of limitations until such time as the [insureds] received
payment from [the tortfeasor’s] liability carrier.” Id.
6 The Woodall court, however, also upheld another aspect of the special accrual
rule for UM claims, explaining, “it is well established that an injured party may
directly pursue a claim against its [UM] carrier, without having to first resolve the
claim against the tortfeasor’s liability carrier.” Id. at 1363. Thus, an insured “need
not run the risk of having the statute of limitations run while waiting for the
tortfeasor’s liability carrier to respond.” Id. Given this rule, Travelers argued its own
policy provisions, requiring its insureds to wait on payment by the tortfeasor’s
liability carrier, were void as against public policy. Id. at 1364. But the supreme
court was “singularly unimpressed” with the argument “that an insurer may include
a provision in its policy and later claim that the insured cannot rely on the terms of
that provision because the provision was invalid,” concluding, “Travelers cannot
disavow the provisions of its own policy.” Id.
III.
The exhaustion and no-action provisions of Arway’s Progressive policy are
functionally identical to the Woodall Travelers policy. Thus, Woodall requires us to
hold that the exhaustion and no-action provisions of Arway’s Progressive policy
effectively tolled the statute of limitations until Arway received payment from the
tortfeasor’s BI liability carrier. Woodall also counsels that Arway could have sued
Progressive without waiting for payment from the liability carrier, but she was not
required to because the statute of limitations was tolled until the liability carrier paid.
7 Arway sued Progressive less than two years after Progressive approved
Arway’s settlement with the tortfeasor’s liability carrier, which was well within the
applicable five-year statute of limitations as tolled by the policy language.
Accordingly, we reverse the trial court’s summary judgment against Arway and
remand for proceedings consistent with this opinion.
REVERSED and REMANDED.
TRAVER, C.J., and STARGEL, J., concur.
Alexander L. Brockmeyer, Thomas E. Shepard, and Gregory L. Evans, of Boyle, Leonard & Anderson, P.A., Fort Myers, for Appellant.
Kansas R. Gooden, of Boyd & Jenerette, P.A., Miami, and Matthew D. Cavender, of Boyd & Jenerette, P.A., Jacksonville, for Appellee.
NOT FINAL UNTIL TIME EXPIRES TO FILE MOTION FOR REHEARING AND DISPOSITION THEREOF IF TIMELY FILED