Thursday, April 12, 2018

Civil procedure -- Dismissal -- It was an abuse of discretion to dismiss all of plaintiff's claims with prejudice without providing an opportunity to amend complaint despite court's assurances that plaintiff would be given opportunity to amend

43 Fla. L. Weekly D731a


Civil procedure -- Dismissal -- It was an abuse of discretion to dismiss all of plaintiff's claims with prejudice without providing an opportunity to amend complaint despite court's assurances that plaintiff would be given opportunity to amend -- Appeals -- Appellate court lacks jurisdiction of appeal of dismissal of some claims against one defendant where there are related claims pending in trial court
IF SIX WERE NINE, LLC, etc., Appellant, vs. LINCOLN ROAD III, LLC, etc., et al., Appellees. 3rd District. Case Nos. 3D16-2614; 3D17-895. L.T. Case No. 16-6454. April 4, 2018. Appeals from the Circuit Court for Miami-Dade County, Rosa I. Rodriguez, Judge. Counsel: Bond, Schoeneck & King, PLLC, and Matthew M. Jackson and Eric J. Vasquez (Naples), for appellant. Tobin & Reyes, P.A., and Ricardo A. Reyes and Sacha A. Boegem (Boca Raton), for appellees.
(Before ROTHENBERG, C.J., and SALTER and SCALES, JJ.)

(ROTHENBERG, C.J.) In this commercial lease dispute, If Six Were Nine, LLC, etc. (“the plaintiff”) appeals the trial court's order dismissing all of the plaintiff's claims against Lincoln Road III, LLC, etc. (“Lincoln Road”) and Terranova Corporation (“Terranova”) and dismissing some of the plaintiff's claims against PPF LRIII Portfolio, LLC (“PPF”). We dismiss the appeal for lack of jurisdiction as to PPF because there are related claims against PPF pending in the case below that have not yet been adjudicated. See Almacenes El Globo De Quito, S.A. v. Dalbeta L.C., 181 So. 3d 559, 561-62 (Fla. 3d DCA 2015).

However, we find that the trial court abused its discretion when it entered an order dismissing with prejudice all of the plaintiff's claims against Lincoln Road and Terranova because the plaintiff was given, in effect, no opportunity to amend its complaint to allege additional facts or other causes of action, despite the trial court's assurances that the plaintiff would have an opportunity to amend. See Vorbeck v. Betancourt, 107 So. 3d 1142, 1147 (Fla. 3d DCA 2012) (“Where a party may be able to allege additional facts to support its cause of action or to support another cause of action based on a different legal theory, dismissal with prejudice is an abuse of discretion.”) (quoting Kapley v. Borchers, 714 So. 2d 1217, 1218 (Fla. 2d DCA 1998)); Al-Hakim v. Holder, 787 So. 2d 939, 942 (Fla. 2d DCA 2001) (stating that “dismissal with prejudice is a severe sanction and one which was not warranted when Al-Hakim had not been given an opportunity to amend his petition”).

The plaintiff amended its complaint once as a matter of right before any responsive pleading had been filed. Thus, the trial court's ruling on the defendants' motion to dismiss was the first time the sufficiency of the operative complaint had been tested. See Hawkins v. Crosby, 910 So. 2d 424, 425 (Fla. 4th DCA 2005) (stating that even if the plaintiff amended his complaint once as a matter of right pursuant to Florida Rule of Civil Procedure 1.190(a), he should have been given another opportunity to amend because he had not abused the privilege). Under these circumstances, it was an abuse of discretion to preclude the plaintiff from amending its complaint.1 Accordingly, we reverse the trial court's order dismissing the plaintiff's claims against Lincoln Road and Terranova and remand for further proceedings consistent with this opinion.
Dismissed in part, reversed in part.
__________________
1We express no opinion as to the merits of the plaintiff's claims or any potential defenses the defendants may have pursuant to the contracts in this case.

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Attorney's fees -- Proposal for settlement -- Trial court erred in awarding attorney's fees pursuant to proposal for settlement because proposal was a joint proposal which did not apportion liability between the two offerors -- Exception to requirement that joint proposal be apportioned when offerors' liability is solely derivative was inapplicable where claims against offerors were direct claims, and not derivative claims

43 Fla. L. Weekly D778a


Attorney's fees -- Proposal for settlement -- Trial court erred in awarding attorney's fees pursuant to proposal for settlement because proposal was a joint proposal which did not apportion liability between the two offerors -- Exception to requirement that joint proposal be apportioned when offerors' liability is solely derivative was inapplicable where claims against offerors were direct claims, and not derivative claims
ARVIN PELTZ, Appellant, vs. TRUST HOSPITALITY INTERNATIONAL, LLC, et al., Appellees. 3rd District. Case No. 3D17-428. L.T. Case No. 13-23409. April 11, 2018. An Appeal from the Circuit Court for Miami-Dade County, William Thomas and Lisa S. Walsh, Judges. Counsel: Arvin Peltz, in proper person. Leto | Bassuk, and Larry Bassuk and Brian L. Elstein, for appellees.
(Before SUAREZ, SCALES and LINDSEY, JJ.)

(SCALES, J.) Appellant, plaintiff below, Arvin Peltz seeks review of a judgment awarding attorney's fees to appellees, defendants below, Trust Hospitality, LLC (“Hospitality”) and Trust Hospitality International, LLC (“International”)1 based on appellees' joint proposal for settlement served on Peltz. We reverse, because appellees' joint proposal did not apportion liability between the two offerors as required by Florida Rule of Civil Procedure 1.442(c)(3).

I. RELEVANT FACTS AND PROCEDURAL BACKGROUND

Peltz, an attorney, sued appellees along with an additional defendant, Tecton Management Services Company, LLC (“Tecton”), seeking approximately $94,000 in legal fees for services Peltz performed for Tecton. Peltz's claims against Tecton were based on open account, account stated, and breach of oral contract. Peltz claimed that appellees were liable for Tecton's obligations based on theories of breach of oral contract, unjust enrichment, and quantum meruit. In the latter claims, Peltz asserted that appellees “[a]ssumed control over the day to day operations of TECTON” and that appellees directly and unjustly benefited from Peltz's legal work for Tecton.

Pursuant to rule 1.442 and section 768.69 of the Florida Statutes, appellees served on Peltz a single, joint proposal for settlement, offering to pay Peltz $10,001 in full settlement of Peltz's claims against appellees. Appellees' proposal, though, did not apportion between them the amount of the proposal attributable to each offeror. Peltz rejected the proposal.

The trial court ultimately entered a final summary judgment in appellees' favor,2 and appellees then sought to recover their attorney's fees against Peltz based on their proposal for settlement. The trial court entered the judgment on appeal, awarding appellees fees and costs in the amount of $52,760. Peltz timely appeals this judgment.

II. ANALYSIS3

Section 768.79 of the Florida Statutes provides the substantive basis for the recovery of attorney's fees as a sanction for one party's rejection of another party's settlement proposal; and, rule 1.442 provides the procedural framework to implement the statute's substantive requirements. See Kuhadja v. Borden Dairy Co. of Ala., LLC., 202 So. 3d 391, 395 (Fla. 2016). Rule 1.442(c)(3)4 -- requiring, inter alia, that all joint proposals state the amount and terms attributable to each offeror -- implements section 768.79(2)(b)'s requirement that all settlement offers “[n]ame the party making it and the party to whom it is being made.” Because the fee-shifting provisions of section 768.79 and rule 1.442 are in derogation of the common law rule that each party pay its own fees, the statute and rule are strictly construed. Kuhadja, 202 So. 3d at 394. A proposal for settlement not strictly conforming to rule 1.442(c)(3)'s apportionment requirement is unenforceable. See Willis Shaw Express, Inc. v. Hilyer Sod, Inc., 849 So. 2d 276, 279 (Fla. 2003) (holding that in order for a section 768.79 settlement offer to be valid, “an offer from multiple plaintiffs must apportion the offer among the plaintiffs” as provided by rule 1.442(c)(3)).

Peltz argues that appellees' joint proposal was invalid, and therefore unenforceable, because the proposal did not apportion the $10,001 settlement offer between Hospitality and International, the proposal's co-offerors, as required by rule 1.442(c)(3). Citing to rule 1.442(c)(4)'s5 exception to rule 1.442(c)(3)'s apportionment requirement, appellees argue that apportionment in their joint proposal was unnecessary because any liability they may have had for Tecton's debt was solely derivative,6 by operation of law.

Appellees, though, misapprehend rule 1.442(c)(4)'s exception to rule 1.442(c)(3)'s apportionment requirement. In this case, the exception would apply only if Peltz had alleged that appellees/co-offerors' liability was exclusively derivative in nature, i.e., their liability for Tecton's debt arose by operation of law, rather than as a result of any act or omission of the offerors.7 As recognized by rule 1.442(c)(4), apportionment between the co-offerors would be unnecessary in such a case because, from the liability and damages standpoint of the appellant/offeree, the co-offerors would be legally indistinguishable. Cf. Grobman, 863 So. 2d at 1235 (“The vicariously liable party is responsible to the plaintiff to the same extent as the primary actor; both are jointly liable for all of the harm that the primary actor has caused.”).

Peltz's claims against appellees, though, are direct claims; Peltz alleged that appellees directly benefited from Peltz's legal work, and that appellees' actions directly induced Peltz to continue performing legal work for the benefit of Tecton and appellees. In our de novo review of Peltz's Amended Complaint, we could not find any allegations suggesting that appellees were solely derivatively liable for Tecton's obligations, as required to implicate rule 1.442(c)(4)'s exception. Indeed, appellees prevailed in this case because they were not responsible, derivatively or otherwise, for Peltz's claims against Tecton. In fact, Peltz may still recover a judgment against Tecton, despite Peltz's claims against appellees having been dismissed. Thus, appellees' very success in this litigation severely undercuts their argument that rule 1.442(c)(4)'s apportionment exception applies to their joint settlement proposal.

Finally, appellees suggest that, because the damages Peltz sought against them are not entirely distinct from the damages Peltz still seeks to recover from Tecton, any liability of appellees to Peltz would be derivative, thereby implicating rule 1.442(c)(4)'s exception to apportionment. We find this argument unpersuasive. As succinctly stated by our sister court, “[t]he focus of the exception contained in rule 1.442(c)(4) is not whether a party is liable for the full amount of damages, but rather, it is whether the claims against the party are direct claims or solely claims of vicarious or other forms of indirect liability.” Saterbo v. Markuson, 210 So. 3d 135, 138 (Fla. 2d DCA 2016) (footnote omitted). Irrespective of the extent of appellees' liability, Peltz's claims against appellees were direct claims that did not implicate rule 1.442(c)(4)'s exception to the apportionment requirement.


CONCLUSION

Peltz's claims against appellees were direct claims, based on those appellees' actions, and were not derivative claims. Therefore, rule 1.442(c)(4)'s exception to rule 1.442(c)(3)'s apportionment requirement is inapplicable. Because appellees' proposal for settlement did not apportion the offer between the co-offerors, the proposal is unenforceable. We therefore reverse the trial court's attorney's fee judgment for appellees.
Reversed.
__________________
1Collectively, we refer to Hospitality and International herein as “appellees.”

2A different panel of this Court affirmed the final summary judgment on appeal. See Peltz v. Trust Hospitality, LLC, 3D16-2136 (Fla. 3d DCA Feb. 7, 2018).

3In determining whether a proposal for settlement comports with rule 1.442 and section 768.69, we employ a de novo standard of review. See Miami-Dade Cty. v. Ferrer, 943 So. 2d 288, 290 (Fla. 3d DCA 2006).

4Rule 1.442(c)(3) provides that “[a] proposal may be made by or to any party or parties and by or to any combination of parties properly identified in the proposal. A joint proposal shall state the amount and terms attributable to each party.”

5Rule 1.442(c)(4) reads, in its entirety, as follows:

Notwithstanding subdivision (c)(3), when a party is alleged to be solely vicariously, constructively, derivatively, or technically liable, whether by operation of law or by contract, a joint proposal made by or served on such a party need not state the apportionment or contribution as to that party. Acceptance by any party shall be without prejudice to rights of contribution or indemnity.
6“Cases of derivative liability . . . ‘involve wrongful conduct by both the person who is derivatively liable and the actor whose wrongful conduct was the direct cause of injury to another.' ” Grobman v. Posey, 863 So. 2d 1230, 1235-36 (Fla. 4th DCA 2003) (quoting William D. Underwood & Michael D. Morrison, Apportioning Responsibility in Cases Involving Claims of Vicarious, Derivative, or Statutory Liability for Harm Directly Caused by the Conduct of Another, 55 Baylor L. Rev. 617, 619 (2003)). “Derivative liability is similar to vicarious liability in that (1) there is no cause of action unless the directly liable tortfeasor commits a tort and (2) the derivatively liable party is liable for all of the harm that such a tortfeasor has caused.” Id. at 1236.

7By way of example, a vehicle's owner, despite no active negligence, is, by operation of law, liable for the torts of a driver permissively using the owner's vehicle. See Richbell v. Toussaint, 221 So. 3d 764, 768 (Fla. 4th DCA 2017). Thus, when an injured plaintiff sues both the owner and operator of a negligently driven vehicle, the owner and operator may, pursuant to rule 1.442(c)(4)'s exception, serve the plaintiff with a single, joint, un-apportioned settlement offer. See Miley v. Nash, 171 So. 3d 145, 149-50 (Fla. 2d DCA 2015).

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Thursday, April 5, 2018

Civil procedure -- Dismissal -- It was an abuse of discretion to dismiss all of plaintiff's claims with prejudice without providing an opportunity to amend complaint despite court's assurances that plaintiff would be given opportunity to amend

43 Fla. L. Weekly D731a


Civil procedure -- Dismissal -- It was an abuse of discretion to dismiss all of plaintiff's claims with prejudice without providing an opportunity to amend complaint despite court's assurances that plaintiff would be given opportunity to amend -- Appeals -- Appellate court lacks jurisdiction of appeal of dismissal of some claims against one defendant where there are related claims pending in trial court

IF SIX WERE NINE, LLC, etc., Appellant, vs. LINCOLN ROAD III, LLC, etc., et al., Appellees. 3rd District. Case Nos. 3D16-2614; 3D17-895. L.T. Case No. 16-6454. April 4, 2018. Appeals from the Circuit Court for Miami-Dade County, Rosa I. Rodriguez, Judge. Counsel: Bond, Schoeneck & King, PLLC, and Matthew M. Jackson and Eric J. Vasquez (Naples), for appellant. Tobin & Reyes, P.A., and Ricardo A. Reyes and Sacha A. Boegem (Boca Raton), for appellees.
(Before ROTHENBERG, C.J., and SALTER and SCALES, JJ.)

(ROTHENBERG, C.J.) In this commercial lease dispute, If Six Were Nine, LLC, etc. (“the plaintiff”) appeals the trial court's order dismissing all of the plaintiff's claims against Lincoln Road III, LLC, etc. (“Lincoln Road”) and Terranova Corporation (“Terranova”) and dismissing some of the plaintiff's claims against PPF LRIII Portfolio, LLC (“PPF”). We dismiss the appeal for lack of jurisdiction as to PPF because there are related claims against PPF pending in the case below that have not yet been adjudicated. See Almacenes El Globo De Quito, S.A. v. Dalbeta L.C., 181 So. 3d 559, 561-62 (Fla. 3d DCA 2015).

However, we find that the trial court abused its discretion when it entered an order dismissing with prejudice all of the plaintiff's claims against Lincoln Road and Terranova because the plaintiff was given, in effect, no opportunity to amend its complaint to allege additional facts or other causes of action, despite the trial court's assurances that the plaintiff would have an opportunity to amend. See Vorbeck v. Betancourt, 107 So. 3d 1142, 1147 (Fla. 3d DCA 2012) (“Where a party may be able to allege additional facts to support its cause of action or to support another cause of action based on a different legal theory, dismissal with prejudice is an abuse of discretion.”) (quoting Kapley v. Borchers, 714 So. 2d 1217, 1218 (Fla. 2d DCA 1998)); Al-Hakim v. Holder, 787 So. 2d 939, 942 (Fla. 2d DCA 2001) (stating that “dismissal with prejudice is a severe sanction and one which was not warranted when Al-Hakim had not been given an opportunity to amend his petition”).
The plaintiff amended its complaint once as a matter of right before any responsive pleading had been filed. Thus, the trial court's ruling on the defendants' motion to dismiss was the first time the sufficiency of the operative complaint had been tested. See Hawkins v. Crosby, 910 So. 2d 424, 425 (Fla. 4th DCA 2005) (stating that even if the plaintiff amended his complaint once as a matter of right pursuant to Florida Rule of Civil Procedure 1.190(a), he should have been given another opportunity to amend because he had not abused the privilege). Under these circumstances, it was an abuse of discretion to preclude the plaintiff from amending its complaint.1 Accordingly, we reverse the trial court's order dismissing the plaintiff's claims against Lincoln Road and Terranova and remand for further proceedings consistent with this opinion.
Dismissed in part, reversed in part.
__________________
1We express no opinion as to the merits of the plaintiff's claims or any potential defenses the defendants may have pursuant to the contracts in this case.

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Civil procedure -- New trial -- Trial court did not abuse discretion by awarding plaintiff new trial based upon defendant's violation of order in limine, improper closing argument, and determination that jury's award of zero damages for future pain and suffering was contrary to manifest weight of evidence


43 Fla. L. Weekly D731b

Civil procedure -- New trial -- Trial court did not abuse discretion by awarding plaintiff new trial based upon defendant's violation of order in limine, improper closing argument, and determination that jury's award of zero damages for future pain and suffering was contrary to manifest weight of evidence

ESCA INVESTMENT, INC., Appellant, vs. ALEJANDRO TARRAZA, Appellee. 3rd District. Case No. 3D17-39. L.T. Case No. 14-8415. April 4, 2018. An Appeal from the Circuit Court for Miami-Dade County, Rodney Smith, Judge. Counsel: Quintairos, Prieto, Wood & Boyer, P.A., and Thomas A. Valdez (Tampa), David Tarlow (Fort Lauderdale) and Michael Wood (Fort Lauderdale), for appellant. Kawel PLLC, and Andrew Paul Kawel, for appellee.
(Before EMAS, FERNANDEZ and LUCK, JJ.)

(PER CURIAM.) ESCA Investment, Inc., the defendant below, appeals from the trial court's order granting a new trial upon motion filed by Alejandro Tarraza, plaintiff below. The trial court granted the motion for new trial based upon the individual and cumulative effect of defendant's violation of an order in limine, improper closing argument (properly preserved by defendant's contemporaneous objection), and a determination that the jury's award of zero damages for future pain and suffering was contrary to the manifest weight of the evidence.

Upon our consideration of the trial court's careful and detailed seven-page order, and our own review of the record upon which the trial court based its determinations, we find no abuse of discretion. See Brown v. Estate of Stuckey, 749 So. 2d 490, 497-98 (Fla. 1999) (holding: “When reviewing the order granting a new trial, an appellate court must recognize the broad discretionary authority of the trial judge and apply the reasonableness test to determine whether the trial judge committed an abuse of discretion”); Castlewood Intern. Corp. v. LaFleur, 322 So. 2d 520, 522 (Fla. 1975) (observing: “Since at least 1962, it has been the law of Florida that a trial court's discretion to grant a new trial is ‘of such firmness that it would not be disturbed except on clear showing of abuse . . . .' Cloud v. Fallis, 110 So. 2d 669, 672 (Fla. 1959). A heavy burden rests on appellants who seek to overturn such a ruling, and any abuse of discretion must be patent from the record”); Ryan v. Atlantic Fertilizer & Chem, Co., 515 So. 2d 324, 327 (Fla. 3d DCA 1987) (holding that the burden is on appellant “to clearly or plainly show that there was a gross or palpable abuse of discretion” in trial court's granting new trial).
Affirmed.
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Attorney's fees -- Contingency fee contract signed by party's mother while he was in a coma was not an enforceable agreement where party had not executed a power of attorney, had not been declared legally incompetent, and had not been appointed a legal guardian -- Trial court erred in finding that party ratified the agreement after he recovered from coma -- Trial court erred in awarding attorney fees pursuant to contingency fee agreement, but court may award fees on a quantum meruit basis


43 Fla. L. Weekly D701a

Attorney's fees -- Contingency fee contract signed by party's mother while he was in a coma was not an enforceable agreement where party had not executed a power of attorney, had not been declared legally incompetent, and had not been appointed a legal guardian -- Trial court erred in finding that party ratified the agreement after he recovered from coma -- Trial court erred in awarding attorney fees pursuant to contingency fee agreement, but court may award fees on a quantum meruit basis

WILLIAM O'MALLEY, Appellant, v. BRIAN FREEMAN, ESQ., and THE FREEMAN LAW FIRM, P.A., Appellees. 4th District. Case No. 4D17-1500. April 4, 2018. Appeal from the Circuit Court for the Fifteenth Judicial Circuit, Palm Beach County; David E. French, Judge; L.T. Case No. 50-2010-CA-003492 XXXX MB AJ. Counsel: Steven R. Browning and Xavier T. Saunders of Spohrer & Dodd, P.L., Jacksonville, for appellant. Marjorie Gadarian Graham of Marjorie Gadarian Graham, P.A., Palm Beach Gardens, for appellees.

(PER CURIAM.) Appellant William O'Malley appeals an order awarding Appellees Brian Freeman and the Freeman law firm $83,379.47 in attorney's fees and costs for work performed by Freeman as attorney for Appellant on a contingency fee basis. We reverse the award because the trial court erred in finding the parties had an enforceable agreement. However, as services were performed by Freeman and a benefit was received by Appellant, the trial court may award Freeman fees and costs on a quantum meruit basis. As such, we remand this issue to the trial court, with the measure of fees to be calculated utilizing the analysis discussed in Searcy, Denney, Scarola, Barnhart & Shipley, P.A. v. Poletz, 652 So. 2d 366 (Fla. 1995).

Background

Appellant was in a car wreck leaving him in a coma for months. During this period, his mother signed a personal injury contingency fee contract as “personal representative of the estate of William O'Malley.” However, Appellant had not executed a power of attorney, had not been declared legally incompetent, and had not been appointed a legal guardian. Soon after waking, he signed a document giving his mother power of attorney. Appellant's mother later testified that he was “totally incapacitated at that time.”

Freeman claimed that he had several phone conversations with Appellant and that Appellant knew Freeman had filed suit on his behalf. Appellant later terminated the representation without explanation. Freeman never claimed to have shown the fee agreement to Appellant or otherwise attempted to have him ratify it.

The trial court found that Appellant ratified the fee agreement signed by his mother and that the “times and fees submitted by Freeman [we]re fair and reasonable for like services within the community.” The trial court made an oral ruling as well, noting that Freeman's work “probably would have been of great benefit if there had been better communication but under the circumstances it's unjust for someone . . . to work on a case and . . . get discharged without any real explanation.” The court awarded the sum Freeman sought, minus the work performed after his discharge.

Analysis

To the extent that a trial court's order on attorney's fees is based on an interpretation of the law, we have de novo review. Ferere v. Shure, 65 So. 3d 1141, 1144 (Fla. 4th DCA 2011). Otherwise, particularly with respect to the amount of the award, the standard of review is abuse of discretion. Hinkley v. Gould, Cooksey, Fennell, O'Neill, Marine, Carter & Hafner, P.A., 971 So. 2d 955, 956 (Fla. 5th DCA 2007).

Every lawyer who accepts a retainer or enters into an agreement, express or implied, for compensation for services rendered or to be rendered in any action, claim, or proceeding whereby the lawyer's compensation is to be dependent or contingent in whole or in part upon the successful prosecution or settlement thereof shall do so only where such fee arrangement is reduced to a written contract, signed by the client, and by a lawyer for the lawyer or for the law firm representing the client. No lawyer or firm may participate in the fee without the consent of the client in writing. Each participating lawyer or law firm shall sign the contract with the client and shall agree to assume joint legal responsibility to the client for the performance of the services in question as if each were partners of the other lawyer or law firm involved. The client shall be furnished with a copy of the signed contract and any subsequent notices or consents. All provisions of this rule shall apply to such fee contracts.

R. Regulating Fla. Bar 4-1.5(f)(2) (emphases added).

The trial court erred in finding that Appellant ratified the contingent fee agreement. There was no testimony -- let alone competent substantial evidence -- that he saw the written contingent fee agreement, nor that he signed it, as required by the Bar Rule. Contingent fee agreements that do not comply with the regulations are “void as against the public interest.” Chandris, S.A. v. Yanakakis, 668 So. 2d 180, 181 (Fla. 1995); see also Bakos v. Bakos, 950 So. 2d 1257, 1259-60 (Fla. 2d DCA 2007) (noting that a void contract cannot be ratified).

Even if the agreement at issue here was merely voidable, Appellant did not ratify the agreement. Any finding below of ratification by Appellant's post-coma communications with Freeman was erroneous. A promise to honor a contingent fee contract after competency is restored may suffice for ratification, but the promise must be “positive and explicit. . . . A mere acknowledgment is not sufficient.” Lee v. Thompson, 168 So. 848, 850 (Fla. 1936). Freeman has not argued that Appellant was ever given a copy of the Personal Injury Contingency Fee Contract or had its terms explained to him, let alone signed an agreement with Freeman providing for retroactive application. In fact, there is no evidence that Appellant had knowledge of the details of the contingent fee agreement signed by his mother. Thus, there is no basis to conclude that Appellant ratified the fee agreement.

Nevertheless, even without a valid agreement, Freeman could still recover on a quantum meruit basis. See Chandris, 668 So. 2d at 186 n.4; Lackey v. Bridgestone/Firestone, Inc., 855 So. 2d 1186, 1188 (Fla. 3d 2003) (citing footnote four in Chandris for the proposition that “[u]nder Florida law, an attorney who has no contingent fee agreement with a client is only entitled to recover on a quantum meruit basis.”). On remand, in calculating the proper amount of fees for work performed by Freeman prior to being discharged, the trial court must consider “the totality of the circumstances surrounding the professional relationship,” taking “into account the actual value of the services to the client.” Poletz, 652 So. 2d at 369 (first quoting Rosenberg v. Levin, 409 So. 2d 1016, 1022 (Fla. 1982)); see also Santini v. Cleveland Clinic Fla., 65 So. 3d 22, 33 (Fla. 4th DCA 2011) (holding “the trial court erred as a matter of law by failing to consider the totality of the circumstances present in this case, instead considering only the time reasonably expended and the reasonable hourly rate for the services.” (quoting Poletz, 652 So. 2d at 369)).

The court must consider any other factors surrounding the professional relationship that would assist the court in fashioning an award that is fair to both the attorney and client. For example, the fee agreement itself, the reason the attorney was discharged, actions taken by the attorney or client before or after discharge, and the benefit actually conferred on the client may be relevant to that determination. The determination as to which factors are relevant in a given case, the weight to be given each factor and the ultimate determination as to the amount to be awarded are matters within the sound discretion of the trial court.

Poletz, 652 So. 2d at 369 (footnote omitted).

Among the factors that the trial court should take into account in this case are: (1) the lack of a ratified fee agreement; (2) the circumstances under which Freeman commenced legal services on behalf of Appellant, with an agreement signed by the mother of an incapacitated adult who had not signed a power of attorney agreement, and for whom time was of the essence in commencing a legal claim; and (3) the initial miscommunication between Freeman and Appellant's second set of attorneys as to the time and services expended by Freeman prior to his discharge, resulting in the new attorneys duplicating work that Freeman had already completed in the case. These factors are not exclusive and are in addition to consideration of the actual value of the services to the client.

Conclusion

As set forth above, we reverse with respect to the trial court's determination that the fee agreement signed by Freeman and Appellant's mother had been ratified by Appellant. We remand for the trial court to conduct a Poletz “totality of the circumstances” analysis in determining Freeman's entitlement to a quantum meruit award and the specific calculation of such an award.
Reversed and remanded. (LEVINE, CONNER and FORST, JJ., concur.)

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Thursday, March 29, 2018

Insurance – Underinsured motorist coverage - Car driven by driver listed in named driver exclusion - Driver exclusion unenforceable as against public policy



OPINION

JUSTICE THOMAS delivered the judgment of the court, with opinion.

*1 ¶ 1 Plaintiff Phoungeun Thounsavath sought underinsured motorist coverage from defendant, State Farm Mutual Automobile Insurance Company (State Farm), stemming from an automobile accident that occurred while she was a passenger in a vehicle driven by Clinton Evans. State Farm denied plaintiff's claim for underinsured motorist coverage based upon a driver exclusion endorsement in plaintiff's automobile liability insurance policies with State Farm. The driver exclusion endorsement named Clinton Evans as an excluded driver.

¶ 2 Both parties filed complaints for declaratory judgment. On cross-motions for summary judgment, the trial court granted summary judgment in favor of plaintiff. The appellate court affirmed. 2017 IL App (1st) 161334, 415 Ill.Dec. 319, 82 N.E.3d 523. This court allowed State Farm's petition for leave to appeal. Ill. S. Ct. R. 315 (eff. July 1, 2017).
¶ 3 BACKGROUND

¶ 4 State Farm issued two policies of motor vehicle insurance to plaintiff. One policy insured a 1998 Pontiac Grand Am, and one policy insured a 2004 Pontiac GTO. Each policy provided liability, uninsured motorist, and underinsured motorist coverage in the amounts of $100,000 per person and $300,000 per accident. Both policies contained a “Driver Exclusion Endorsement” that excluded Clinton M. Evans. Driver exclusion endorsements are also referred to as named driver exclusions. Specifically, the driver exclusion endorsement provided:

“IT IS AGREED WE SHALL NOT BE LIABLE AND NO LIABILITY OR OBLIGATION OF ANY KIND SHALL ATTACH TO US FOR BODILY INJURY, LOSS OR DAMAGE UNDER ANY OF THE COVERAGES OF THIS POLICY WHILE ANY MOTOR VEHICLE IS OPERATED BY: CLINTON M. EVANS.” (Emphases in original.)

¶ 5 On June 17, 2012, plaintiff was a passenger in a 2007 Hyundai automobile that was owned and operated by Clinton Evans when Evans's vehicle was involved in an accident with another automobile. Plaintiff was injured in the accident. Plaintiff made a claim for damages against Clinton Evans for her personal injuries. Evans's insurer, American Access Insurance Company, paid plaintiff's claim in the amount of $20,000, the policy limit. Plaintiff then filed a claim for underinsured motorist coverage with State Farm for the June 17, 2012, accident. State Farm denied plaintiff's claim based upon the driver exclusion endorsement.

¶ 6 Plaintiff subsequently filed a complaint for declaratory judgment in the circuit court of Cook County, seeking a declaration that she was entitled to underinsured motorist coverage under her State Farm policies. Plaintiff alleged that she purchased automobile insurance policies from State Farm that included underinsured motor vehicle coverage for bodily injury. Plaintiff noted that she was involved in a motor vehicle accident while a passenger in a vehicle owned by Clinton Evans and sustained over $30,000 in medical bills related to the accident. Clinton Evans was at fault for the accident, and his insurer tendered the full policy limits of $20,000 to plaintiff. Plaintiff then sought to recover pursuant to the underinsured motorist coverage of her State Farm policies, but State Farm denied the claim, citing the named driver exclusion stating that Clinton Evans was an excluded driver. Plaintiff asserted that section 143a–2 of the Illinois Insurance Code (215 ILCS 5/143a–2 (West 2012) ) required all policies of insurance to provide underinsured motorist coverage to the named insured, so that State Farm's denial of plaintiff's underinsured motorist coverage violated the statute, as well as Illinois public policy. Plaintiff therefore sought a declaration that State Farm must provide her with underinsured motorist coverage under her State Farm policies.

*2 ¶ 7 State Farm filed an answer to plaintiff's complaint for declaratory judgment, denying that section 143a–2 of the Insurance Code required all policies of insurance to provide underinsured motorist coverage to the named insured. State Farm also filed a counterclaim for declaratory judgment, noting that it had issued two policies of automobile insurance to plaintiff. Both policies contained a driver exclusion endorsement, signed by plaintiff, which excluded coverage for bodily injury, loss, or damage under the policies while any motor vehicle is operated by Clinton Evans. State Farm denied that either of plaintiff's automobile insurance policies provided underinsured motorist coverage for the June 17, 2012, accident because all coverages were excluded while Clinton Evans operated any motor vehicle. State Farm sought a declaratory judgment in its favor declaring that there was no underinsured motorist coverage available to plaintiff under either policy for the June 17, 2012, accident, that State Farm had no duty to arbitrate any claim for underinsured motorist coverage made by plaintiff under either policy, and that there was no coverage of any kind available to plaintiff under either policy for the accident of June 17, 2012.

¶ 8 The circuit court ordered both parties to file cross-motions for summary judgment. State Farm filed a motion for summary judgment, arguing that the driver exclusion endorsement in both automobile policies issued to plaintiff did not violate the Insurance Code or the public policy of the state of Illinois. The circuit court denied State Farm's motion for summary judgment. Plaintiff then filed her motion for summary judgment, which the circuit court granted.

¶ 9 State Farm appealed, arguing that its driver exclusion endorsement did not violate section 143a–2 of the Insurance Code or Illinois public policy. The appellate court affirmed the circuit court. 2017 IL App (1st) 161334, 415 Ill.Dec. 319, 82 N.E.3d 523.

¶ 10 The appellate court noted that, under section 7–601(a) of the Illinois Safety and Family Financial Responsibility Law (Financial Responsibility Law) (625 ILCS 5/7–601(a) (West 2012) ), a part of the Illinois Vehicle Code (Vehicle Code), no one may operate a motor vehicle or allow a vehicle to be operated without obtaining sufficient insurance. 2017 IL App (1st) 161334, ¶ 16, 415 Ill.Dec. 319, 82 N.E.3d 523. In addition, sections 143a and 143a–2 of the Insurance Code (215 ILCS 5/143a, 143a–2 (West 2012) ) require automobile liability insurance policies to include uninsured and underinsured motorist coverage. 2017 IL App (1st) 161334, ¶ 17, 415 Ill.Dec. 319, 82 N.E.3d 523. The appellate court acknowledged that, in general, named driver exclusions in automobile liability insurance policies are permitted in Illinois. Id. ¶ 22. However, the cases cited by State Farm in support of its named driver exclusion were distinguishable, as the named driver exclusions in those cases were enforced as to parties other than the named insured. Id. ¶ 23.

¶ 11 The appellate court stated that the issue in this case was whether the named driver exclusion violated Illinois's mandatory insurance requirements and public policy where the exclusion barred coverage for the named insured. Although none of the cases cited by either party addressed that precise issue, the appellate court found the analysis in American Access Casualty Co. v. Reyes, 2013 IL 115601, 376 Ill.Dec. 812, 1 N.E.3d 524, to be instructive.

¶ 12 The issue in Reyes was whether an automobile liability policy could exclude the only named insured and owner of the vehicle without violating public policy. Reyes noted that the plain and unambiguous language of section 7–317(b)(2) of the Vehicle Code (625 ILCS 5/7–317(b)(2) (West 2010) ) mandated that an automobile liability policy cover the “person named therein.” Reyes, 2013 IL 115601, ¶ 11, 376 Ill.Dec. 812, 1 N.E.3d 524. Because Reyes was the only person “named therein,” Reyes could not be excluded from coverage through a contractual provision. Id.

¶ 13 Similar to Reyes, the appellate court held that a named driver exclusion in an insured's automobile liability insurance policy that bars liability, uninsured, or underinsured coverage for the named insured violates Illinois's mandatory insurance requirements and Illinois public policy. 2017 IL App (1st) 161334, ¶ 34, 415 Ill.Dec. 319, 82 N.E.3d 523. Accordingly, the appellate court held that the named driver exclusion endorsements in plaintiff's automobile liability policies with State Farm were not enforceable against plaintiff, the named insured.

¶ 14 ANALYSIS

*3 1¶ 15 As noted, this case was decided based upon the parties' motions for summary judgment. Summary judgment motions are governed by section 2–1005 of the Code of Civil Procedure (735 ILCS 5/2–1005 (West 2012) ). Pursuant to section 2–1005, summary judgment should be granted only where the pleadings, depositions, admissions, and affidavits on file, when viewed in the light most favorable to the nonmoving party, show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. Id. The construction of the terms of an insurance policy and whether the insurance policy comports with statutory requirements present questions of law that are properly decided on a motion for summary judgment. Schultz v. Illinois Farmers Insurance Co., 237 Ill.2d 391, 399, 341 Ill.Dec. 429, 930 N.E.2d 943 (2010).

23¶ 16 The granting of a summary judgment motion is subject to de novo review. Id. at 399–400, 341 Ill.Dec. 429, 930 N.E.2d 943. In addition, the determination of whether a provision in a contract, insurance policy, or other agreement is invalid because it violates public policy also presents a question of law, which is reviewed de novoPhoenix Insurance Co. v. Rosen, 242 Ill.2d 48, 54, 350 Ill.Dec. 847, 949 N.E.2d 639 (2011).

456789¶ 17 An insurance policy is a contract, so the rules applicable to contract interpretation govern the interpretation of an insurance policy. Founders Insurance Co. v. Munoz, 237 Ill.2d 424, 433, 341 Ill.Dec. 485, 930 N.E.2d 999 (2010). A court's primary function is to ascertain and give effect to the intention of the parties, as expressed in the policy language. Id. If the insurance policy terms are clear and unambiguous, they must be enforced as written, unless doing so would violate public policy. Schultz, 237 Ill.2d at 400, 341 Ill.Dec. 429, 930 N.E.2d 943. The public policy of this state is reflected in its constitution, statutes, and judicial decisions. Id. If the terms of an insurance contract conflict with a statute, those terms are void and unenforceable. Id. Terms of an insurance policy also cannot circumvent the underlying purpose of a statute in force at the time the policy is issued. Id.

10¶ 18 With some exceptions not at issue in this case, section 7–601(a) of the Financial Responsibility Law requires liability insurance coverage for all motor vehicles designed to be used on a public highway. 625 ILCS 5/7–601(a) (West 2012). The liability insurance policy must provide certain minimum liability amounts. Those amounts, both currently and at the time of the accident at issue in this case, are $20,000 for bodily injury or death to one person as a result of any one accident, $40,000 for bodily injury or death of all persons as a result of any one accident, and $15,000 for damage to the property of others as the result of any one accident. See Id. §§ 7–203, 7–317(b)(3). The liability insurance policy must also comply with specific coverage requirements, insuring not only the persons named in the policy but also “any other person using or responsible for the use” of the subject vehicle with the express or implied permission of the insured. Id. § 7–317(b)(2). The main purpose of the mandatory liability insurance requirement is to protect the public by securing payment of their damages. Reyes, 2013 IL 115601, ¶ 8, 376 Ill.Dec. 812, 1 N.E.3d 524.

11¶ 19 In addition to motor vehicle liability insurance coverage, the Insurance Code requires automobile liability insurance policies to also include uninsured motorist coverage. 215 ILCS 5/143a (West 2012). If the limits for the insured's liability coverage exceed the minimum amounts required by law, the uninsured motorist provisions must provide the same higher coverage amounts unless the excess amount is specifically rejected by the insured. Id. § 143a–2(1). The uninsured motorist coverage must extend to all who are insured under the policy's liability provisions. Schultz, 237 Ill.2d at 403, 341 Ill.Dec. 429, 930 N.E.2d 943.

*4 12¶ 20 If the insured's uninsured motorist coverage limit exceeds the minimum liability limit required by the Financial Responsibility Law, the policy must also include underinsured motorist coverage in an amount equal to the uninsured motorist coverage. 215 ILCS 5/143a–2(4) (West 2012). As with uninsured motorist coverage, the underinsured motorist coverage must extend to all those who are insured under the policy's liability provisions. Schultz, 237 Ill.2d at 401, 341 Ill.Dec. 429, 930 N.E.2d 943. In contrast to the uninsured motorist provision, the underinsured motorist provision does not include a right of rejection.
¶ 21 As noted, in this case plaintiff was injured in an automobile accident while a passenger in Clinton Evans's automobile. Plaintiff sought to recover underinsured motorist benefits pursuant to her automobile liability policies with State Farm because the policy limits in Clinton Evans's automobile liability insurance policy were not sufficient to compensate plaintiff for her injuries. As in the lower courts, State Farm claims that plaintiff is not entitled to recover under her policies because Clinton Evans was excluded from coverage under the driver exclusion endorsement in plaintiff's policies. State Farm argues that named driver exclusions are permitted in Illinois and that plaintiff knew when she signed the driver exclusion endorsements in her policies that State Farm would not pay any liability of any kind, under any coverage, when Clinton Evans operated any automobile. Accordingly, State Farm maintains that plaintiff is not entitled to recover underinsured benefits under her policies with State Farm.

13¶ 22 State Farm is correct that, in general, named driver exclusions are permitted in Illinois. Reyes, 2013 IL 115601, ¶ 15, 376 Ill.Dec. 812, 1 N.E.3d 524. We also agree with State Farm that it was entitled to identify Clinton Evans as an individual for whom it would not provide insurance coverage. However, Clinton Evans is not seeking insurance coverage from State Farm under plaintiff's policies. It is plaintiff who is attempting to collect under her policies with State Farm.

¶ 23 In finding that the exclusion in this case was unenforceable against plaintiff, the appellate court found the Reyes decision to be instructive. State Farm distinguishes this case from Reyes on the basis that the exclusion in Reyes was directed at the sole named insured and owner, an exclusion which conflicted with the plain language of section 7–317(b)(2) of the Financial Responsibility Law. In contrast to Reyes, plaintiff in this case, the sole named insured and owner, was not excluded from liability coverage for her operation of any vehicle. State Farm also notes that Reyes dealt only with liability coverage, while plaintiff's claim here is for underinsured motorist coverage. Finally, State Farm observes that Reyes did not hold that a named driver exclusion per se violates the Financial Responsibility Law. Accordingly, State Farm argues that the appellate court erred in relying on Reyes to find the driver exclusion endorsement in this case unenforceable.

¶ 24 State Farm's focus in distinguishing Reyes is misplaced. The appellate court discussed Reyes because it found the analysis in Reyesinstructive. That analysis addressed whether an exclusion directed to a mandatory statutory provision was enforceable. Whether an exclusion directed to a mandatory statutory provision is enforceable is also at issue in this case, albeit in the context of underinsured motorist coverage rather than liability coverage.

1415¶ 25 The main purpose of the mandatory liability insurance requirement is “to protect the public by securing payment of their damages.” Progressive Universal Insurance Co. of Illinois v. Liberty Mutual Fire Insurance Co., 215 Ill.2d 121, 129, 293 Ill.Dec. 677, 828 N.E.2d 1175 (2005). To further that end, the legislature requires uninsured motorist coverage to place the policyholder in substantially the same position he would occupy if the tortfeasor had the minimum liability insurance required by the Financial Responsibility Law. Rosen, 242 Ill.2d at 57, 350 Ill.Dec. 847, 949 N.E.2d 639. Thus, while mandatory liability insurance attempts to ensure that all drivers carry at least $20,000 of bodily injury coverage, mandatory uninsured motorist coverage protects a driver who has complied with the liability coverage requirement when she is injured by a driver who has not. Id. at 68, 350 Ill.Dec. 847, 949 N.E.2d 639. Moreover, the legislative purpose of underinsured motorist coverage is the same as that of uninsured motorist coverage, which is “ ‘to place the insured in the same position he would have occupied if the tortfeasor had carried adequate insurance.’ ” Id. at 57, 350 Ill.Dec. 847, 949 N.E.2d 639 (quoting Sulser v. Country Mutual Insurance Co., 147 Ill.2d 548, 555, 169 Ill.Dec. 254, 591 N.E.2d 427 (1992) ). If the tortfeasor is insured, but for an amount less than the claimant has bargained for and paid for with her own insurer, mandatory underinsured motorist coverage in an amount equal to her uninsured motorist coverage ensures that the claimant will still be compensated up to the limits of her own uninsured motorist policy. Id. at 69, 350 Ill.Dec. 847, 949 N.E.2d 639.

*5 16¶ 26 Therefore, under Illinois law, liability, uninsured motorist, and underinsured motorist coverage are “ ‘inextricably linked.’ ” Id. at 58, 350 Ill.Dec. 847, 949 N.E.2d 639 (quoting Schultz, 237 Ill.2d at 404, 341 Ill.Dec. 429, 930 N.E.2d 943). Liability, uninsured motorist, and underinsured motorist coverages all “serve the same underlying public policy: ensuring adequate compensation for damages and injuries sustained in motor vehicle accidents.” Id.

17¶ 27 The court in State Farm Mutual Automobile Insurance Co. v. Villicana, 181 Ill.2d 436, 444–45, 230 Ill.Dec. 30, 692 N.E.2d 1196 (1998), recognized that “[b]oth the underinsured and uninsured motor vehicle provisions contemplate that consumers will select the total ‘package’ of coverage, i.e., liability, uninsured and underinsured, in amounts they themselves deem adequate for their own protection.” (Emphasis in original.) Thus, underinsured motorist coverage protects the insured from the risk that a negligent driver of another vehicle “(i) will cause injury to the insured * * * and (ii) will have inadequate liability coverage to compensate the injuries caused by his or her negligence.” Id. at 445, 230 Ill.Dec. 30, 692 N.E.2d 1196. Underinsured motorist coverage guarantees the protection of an injured insured against the possibility that a tortfeasor, over whom the insured has no control, purchases inadequate amounts of liability coverage. Id.

¶ 28 That is exactly the situation in the instant case. Plaintiff purchased liability, uninsured motorist, and underinsured motorist coverage in an amount she deemed adequate for her own protection. Plaintiff had no control over the amount of liability insurance coverage that Clinton Evans purchased for his own vehicle. The liability insurance coverage that Clinton Evans purchased for his own vehicle was inadequate, so plaintiff sought the protection of the underinsured motorist coverage that she purchased from State Farm.

¶ 29 State Farm argues, however, that because plaintiff signed the driver exclusion endorsement naming Clinton Evans, plaintiff was precluded from recovering underinsured motorist coverage for an accident where Clinton Evans was the tortfeasor. State Farm claims that plaintiff was free to make her own contract with State Farm and chose to sign a contract with a driver exclusion endorsement naming Clinton Evans. State Farm also argues that plaintiff did have control over Evans and his decision to purchase minimal liability coverage because plaintiff had control over her choice to ride as a passenger in Evans's vehicle or in any vehicle operated by Evans.

1819¶ 30 An insurance policy is a contract, but the terms of an insurance contract must comport with the statutory requirements in effect when the policy is issued. Schultz, 237 Ill.2d at 408, 341 Ill.Dec. 429, 930 N.E.2d 943. Insurers have no right to depart from valid statutory requirements in their policies. Id. Therefore, the fact that plaintiff signed the driver exclusion endorsement is not dispositive. We must determine whether that exclusion is consistent with the relevant statutes and underlying purpose of the statutes.

2021¶ 31 Neither the statute nor the case law places any restriction on the right of the parties to an insurance contract to agree on which persons are to be the “insureds” under an automobile insurance policy. Heritage Insurance Co. of America v. Phelan, 59 Ill.2d 389, 395, 321 N.E.2d 257 (1974). However, once a person qualifies as an insured for purposes of the policy's bodily injury liability provisions, she must be treated as an insured for purposes of uninsured and underinsured motorist coverage as well. Schultz, 237 Ill.2d at 404, 341 Ill.Dec. 429, 930 N.E.2d 943. Consequently, just as the governing statutes prohibit an insurance company from directly or indirectly denying uninsured motorist coverage to someone who qualifies as an insured for purposes of liability coverage, the statutes prohibit companies from directly or indirectly denying underinsured coverage to such a person when the basic liability coverage exceeds the statutory minimum. Id.

*6 ¶ 32 In this case, State Farm and plaintiff agreed that Clinton Evans was not an “insured” under plaintiff's automobile liability insurance policies. However, the parties agreed that plaintiff was an insured. Once plaintiff was designated an “insured” under her policies with State Farm, then, State Farm was prohibited from either directly or indirectly denying her underinsured motorist coverage.

22¶ 33 Section 143a of the Insurance Code is plain and unambiguous in mandating that each policy must contain the specified uninsured coverage. Squire v. Economy Fire & Casualty Co., 69 Ill.2d 167, 176, 13 Ill.Dec. 17, 370 N.E.2d 1044 (1977)Squire recognized that the public policy of this state concerning uninsured motorist coverage is that no automobile liability insurance policy shall be issued unless coverage is provided therein against damages caused by uninsured motorists. Id. The “statutory coverage is mandatory, and it may not be whittled away by an unduly restrictive definition.” (Internal quotation marks omitted.) Barnes v. Powell, 49 Ill.2d 449, 453, 275 N.E.2d 377 (1971). In addition, section 143a–2 of the Insurance Code is plain and unambiguous in mandating that where uninsured motorist coverage in a policy exceeds the limits set forth in section 7–203 of the Financial Responsibility Law (625 ILCS 5/7–203 (West 2012) ), each policy must include underinsured motorist coverage in an amount equal to the total amount of uninsured motorist coverage. 215 ILCS 5/143a–2(4) (West 2012).

23¶ 34 In this case, plaintiff and State Farm contracted for liability insurance in the amounts of $100,000 per person and $300,000 per accident, which exceeded the minimum statutory limits. Pursuant to section 143a of the Insurance Code, State Farm was required to include uninsured motorist coverage in those amounts in plaintiff's policies unless plaintiff specifically rejected the higher coverage amounts. Plaintiff did not reject the higher coverage amounts. Accordingly, section 143a–2 required plaintiff's policies to also include underinsured motorist coverage in amounts equal to her uninsured motorist coverage. The uninsured and underinsured amounts are mandated by statute.

¶ 35 Because the underinsured motorist coverage was mandated by statute, State Farm's driver exclusion endorsement could not exclude that coverage through a contractual provision. Under the facts of this case, application of the driver exclusion to bar plaintiff, the named insured, from recovering underinsured motorist coverage pursuant to her policies with State Farm violates section 143a–2(4) and, therefore, public policy.

¶ 36 In so holding, we note that the cases cited by State Farm in support of its position are distinguishable from the instant case. For example, in Phelan, 59 Ill.2d 389, 321 N.E.2d 257, the court held that the excluded driver was not an insured under his father's policy, so that the excluded driver could not collect uninsured motorist coverage pursuant to that policy. Phelan would be controlling if it was Evans, the excluded driver, seeking to recover under plaintiff's policies with State Farm. Phelan, however, is inapposite under the facts of this case. Here, it is the named insured, and not the excluded driver, who is seeking underinsured motorist coverage.

¶ 37 State Farm also relies on Rockford Mutual Insurance Co. v. Economy Fire & Casualty Co., 217 Ill.App. 3d 181, 160 Ill.Dec. 187, 576 N.E.2d 1141 (1991). In that case, a passenger was killed while riding in a vehicle driven by an excluded driver. When the insurer of the vehicle driven by the excluded driver denied coverage for the death of the passenger based upon the named driver exclusion, the mother of the passenger sought uninsured motorist benefits pursuant to her own automobile insurance policy. The mother's insurer filed a complaint for declaratory judgment, claiming that, to the extent the named driver exclusion barred uninsured motorist coverage with respect to the passenger, the exclusion violated the public policy of section 143a and was unenforceable and void. Id. at 183–84, 160 Ill.Dec. 187, 576 N.E.2d 1141.

*7 ¶ 38 The appellate court disagreed, noting that if a passenger is injured while riding in an uninsured vehicle, the passenger must look to his own policy for recovery under its uninsured motorist provision. Id. at 187, 160 Ill.Dec. 187, 576 N.E.2d 1141. The court explained that it did not violate public policy to recognize the named driver exclusion endorsement, which rendered an otherwise insured vehicle uninsured, because the intention and purpose of section 143a was to provide recovery for insureds under their own uninsured motorist provisions. Id.

¶ 39 State Farm cites Rockford Mutual in support of its claim that enforcing its named driver exclusion does not violate the public policy of section 143a–2. Rockford Mutual, however, actually supports plaintiff's position in this case. As discussed, Rockford Mutual held that if a passenger is injured while riding in an uninsured vehicle, the passenger must look to his own policy for recovery under its uninsured motorist provision. Id. Like section 143a concerning uninsured motorist coverage, the intention and purpose of section 143a–2 is to provide recovery for insureds under their own underinsured motorist provisions. Here, plaintiff was injured while a passenger in a vehicle that was underinsured. Plaintiff therefore sought recovery under her own policy under its underinsured motorist provision.

¶ 40 State Farm also claims that the decisions in Villicana, 181 Ill.2d 436, 230 Ill.Dec. 30, 692 N.E.2d 1196, and Fuoss v. Auto Owners (Mutual) Insurance Co., 118 Ill.2d 430, 114 Ill.Dec. 113, 516 N.E.2d 268 (1987), support its argument that policy exclusions do not become unenforceable merely because the named insured is the person seeking the coverage. Those decisions, however, also are inapposite.

¶ 41 In Villicana, the insured had two separate policies insuring two vehicles, one of which had higher policy limits than the other. The insured's daughter was injured while riding as a passenger in the vehicle insured with lower limits. Because the damages incurred by the insured's daughter exceeded the amounts she recovered from the driver of her father's car and from the liability policy on that car, she filed a claim for underinsured benefits pursuant to the policy insuring her father's other vehicle. That policy contained a “family car exclusion.” The family car exclusion prevented an automobile, which is furnished for the regular use of the insured, the insured's spouse, or any relative who lives with the insured, from being deemed an underinsured motor vehicle. The issue before the court was whether an underinsurance policy could exclude benefits to a family member who is injured in a different family automobile. Villicana, 181 Ill.2d at 438–41, 230 Ill.Dec. 30, 692 N.E.2d 1196.

¶ 42 Villicana held that, under the circumstances of the case, the exclusion could be enforced. Id. at 441, 230 Ill.Dec. 30, 692 N.E.2d 1196. The court noted that the underinsured motorist statute was enacted to afford consumers the means with which they could protect themselves from the choices of other drivers over whom they had no control. In the case before it, the amount of liability and underinsured coverage selected for the vehicle involved in the accident was within the control of the insured, who chose lower limits for that vehicle than for his other vehicle. Id. at 446–47, 230 Ill.Dec. 30, 692 N.E.2d 1196.

¶ 43 Here, in contrast, plaintiff had no control over the amount of liability insurance purchased by Clinton Evans for his own vehicle. As plaintiff observes, the law allows State Farm to refuse liability coverage to Clinton Evans, and once Evans was named as an excluded driver in plaintiff's policies, plaintiff was obligated to make sure that Evans did not drive her vehicles. The accident in this case did not occur while Evans was driving one of plaintiff's vehicles. The accident occurred when plaintiff was riding as a passenger in Evans's vehicle.

*8 ¶ 44 The named driver exclusion did not prevent Clinton Evans from driving his own, separately insured vehicle. The Financial Responsibility Law required Evans to obtain liability insurance in at least minimum liability amounts, which he did. Although State Farm argues that plaintiff had control over choosing whether to ride as a passenger in Clinton Evans's vehicle, we do not read the underinsured motorist statute as requiring an insured to determine a driver's limits of liability coverage before riding in his vehicle in order to recover underinsurance benefits.

¶ 45 Fuoss also is distinguishable from this case. The insured in that case purchased liability coverage in the amounts of $25,000 per person and $50,000 per accident and uninsured motorist coverage in the amount of $15,000 per person and $30,000 per accident. The insurer, however, failed to offer the insured underinsured motorist coverage.1 The insured was injured in an automobile accident and settled with the tortfeasor for $100,000, the maximum amount payable under the tortfeasor's liability policy. The insured then sued his insurer, asking the court to reform his original insurance policy to include sufficient amounts of underinsured motorist coverage to compensate him for all the damages from the accident, which he claimed exceeded the $100,000 that he recovered from the tortfeasor. Fuoss, 118 Ill.2d at 431–32, 114 Ill.Dec. 113, 516 N.E.2d 268.

¶ 46 The Fuoss court noted that section 143a–2(4) provided that an insured may elect to purchase limits of underinsured motorist coverage in an amount up to the uninsured motorist coverage on the insured vehicle, which under the insured's policy was $15,000 per person and $30,000 per accident. Id. at 433–34, 114 Ill.Dec. 113, 516 N.E.2d 268. Even if the insured's policy was reformed to increase his uninsured motorist coverage to the amount of his bodily injury liability limits, and thereby also increase his underinsured motorist coverage, that amount would be $25,000 per person and $50,000 per accident, less than the $100,000 that the insured received from the tortfeasor. Id.The court found the insured's claim that he would have purchased a sufficient amount of underinsurance to cover his loss, had the insurance been offered, was too speculative. Id. The court stated that permitting the insured to choose underinsured motorist coverage after the fact, in an amount greater than he originally selected for bodily injury liability coverage, would be “ ‘repugnant to our system of justice’ ” because the insured would be providing more protection for himself than he was willing to extend to the general public. Id. at 435, 114 Ill.Dec. 113, 516 N.E.2d 268 (quoting Fuoss v. Auto Owners (Mutual) Insurance Co., 148 Ill.App.3d 526, 535, 101 Ill.Dec. 951, 499 N.E.2d 539 (1986) ).

¶ 47 State Farm suggests that plaintiff in this case is attempting to secure more protection for herself than she was willing to extend to the general public when she agreed to and signed the named driver exclusion. This is incorrect. The accident in this case happened while Clinton Evans was driving his own vehicle, insured under his own policy. If a member of the general public was injured in an accident with Clinton Evans, he or she could recover from Evans under Evans's liability policy. If that individual's underinsured motorist policy provided higher limits than Evans's liability policy, they could seek underinsured motorist coverage under their policy, as plaintiff is doing in this case. A member of the general public has the same right as plaintiff to obtain higher limits of underinsured motorist coverage from their insurer.

*9 ¶ 48 None of the cases cited by State Farm support its claim that the driver exclusion endorsement in plaintiff's policies could deny plaintiff underinsured motorist coverage under the facts of this case. Section 143a mandates that every automobile liability insurance policy provide uninsured motorist coverage in at least the minimal amounts required under the Vehicle Code. If the insured's uninsured motorist coverage limit exceeds the minimum liability limit required by the Financial Responsibility Law, as plaintiff's did, section 143a–2 mandates that the policy also include underinsured motorist coverage in an amount equal to the uninsured motorist coverage. Because section 143a–2 mandated that plaintiff's policy include underinsured motorist coverage, excluding plaintiff from underinsured motorist coverage through a contractual provision violates section 143a–2 and, therefore, public policy, under the facts of this case. The driver exclusion endorsement in plaintiff's policies with State Farm was not enforceable to exclude underinsured motorist coverage to plaintiff for the June 17, 2012, accident. Accordingly, the appellate court properly affirmed the trial court's order granting summary judgment in favor of plaintiff on her complaint for declaratory judgment.

¶ 49 CONCLUSION

¶ 50 For all the foregoing reasons, we affirm the judgment of the appellate court, which affirmed the trial court's order denying State Farm's motion for summary judgment and granting plaintiff's motion for summary judgment.

¶ 51 Appellate court judgment affirmed.

Chief Justice Karmeier and Justices FreemanKilbrideGarmanBurke, and Theis concurred in the judgment and opinion.