State Farm issued a policy to Hery Alvarez, whose mother, Josefa Alvarez, was in an accident while a passenger in her son’s car. Hery Alvarez and Josefa Alvarez lived in the same household, and Josefa Alvarez sought treatment at Millennium Diagnostic under her son’s PIP policy. She assigned her benefits to Millennium. She did not have vehicle insurance or her own PIP policy.
State Farm denied payment to Millennium. State Farm argued that the mother was the registered owner of a Ford Expedition and therefore should have had PIP through her own policy. She did not have insurance coverage on the Expedition, which was operable. She had leased the vehicle for her daughter, who had bad credit.
In the trial court, Millennium argued that Josefa Alvarez’s daughter, Ana Alvarez, was actually the beneficial owner of the Expedition. The trial court agreed and entered Summary Judgment, finding that the daughter was the beneficial owner of the Expedition. State Farm appealed the decision to the 11th Circuit Court of Appeals.
Florida §627.733, requires that every owner or registrant of a motor vehicle in FL is required to maintain motor vehicle insurance securing PIP benefits. An owner is a person who holds legal title to a motor vehicle. An owner of a registered, operable motor vehicle who fails to have PIP security in effect at the time of an accident shall have no immunity from tort liability, but shall be personally liable. Thus, if Josefa Alvarez is not the legal owner of the vehicle—beneficial ownership having passed to her daughter—she would not be required to have PIP coverage on the Expedition and could seek treatment under her son’s policy.
The trial court found that Ana Alvarez was the beneficial owner of the vehicle. Relying on State Farm v. Hartzog, 917 So. 2d 363, 364-65 (Fla. 1st DCA 2005), the court concluded that the name on the title is not the “litmus test” for determining ownership for insurance purposes. In Hartzog, Barbara Hartzog agreed to purchase a vehicle from Donnie Welch. Welch kept title in his name and maintained the insurance policy on the vehicle. When Hartzog was involved in an accident shortly after the purchase agreement was entered into, the 1st District Appellate Court concluded that Hartzog was the beneficial owner because Welch no longer owned the vehicle, pursuant to the purchase agreement, and Hartzog continued to make payments to Welch. The “overt acts” of Hartzog—having exclusive possession and control of the vehicle—were said to be key factors in determining beneficial ownership of a vehicle.
The appellate court in this case distinguished Hartzog. Here, no purchase agreement existed between Josefa Alvarez and her daughter, Ana Alvarez. In fact, there could not be because the lessor, not Josefa Alvarez, owned the Expedition, and Josefa did not have the right to transfer the title. Additionally, the court found that Josefa’s subjective intent to gift the vehicle to her daughter was insufficient to contradict her legal interest in the vehicle.
Thus concluding that Ana did not have beneficial ownership of the vehicle and that Josefa held legal title, the Appellate Court ordered that summary judgment be reversed, and the case remanded to the trial court. On December 5, 2013, the 3rd DCA denied a petition for writ of certiorari by Millennium.
Millennium Diagnostic v. State Farm, No. 3D13-0423 (3rd DCA 2013).
State Farm v. Millennium Diagnostic, No. 11-102 (Fla. 11th Cir. Ct. App. Div.).