SHELITHEA HALLUMS and SAMUEL CASTILLO, individually and as representatives of a class of similarly situated persons, Plaintiffs - Appellants,
INFINITY INSURANCE COMPANY, INFINITY AUTO INSURANCE COMPANY, and JPMORGAN CHASE BANK, N.A., Defendants - Appellees.
from the United States District Court for the Southern
District of Florida D.C. Docket No. 1:16-cv-24507-FAM
WILLIAM PRYOR, MARTIN, and SUTTON, [*] Circuit Judges.
MARTIN, CIRCUIT JUDGE:
Hallums and Samuel Castillo purchased vehicle insurance which
they say is illusory because it insures no risk for which the
insured can be liable. They brought a putative class action
seeking damages and a declaration that this insurance product
is not valid. The District Court held that the insurance
product is not illusory and granted summary judgment to the
defendants. After oral argument and thorough consideration,
we agree and affirm the judgment of the District Court.
Insurance Company is an Indiana corporation that sells
insurance products throughout Florida. Its principal place of
business is in Alabama. Infinity Insurance Company, directly
and through subsidiaries, provides personal automobile
insurance, primarily targeted to "urban" and
Hispanic drivers in Arizona, California, Florida, and Texas.
Infinity Auto Insurance Company-an Ohio corporation that
sells insurance products throughout Florida, with its
principal place of business in Alabama-is one such
subsidiary. We refer to the companies together as
Hallums, a citizen of Florida, leased a 2016 BMW X6 from
South Motors BMW, which assigned the lease to Financial
Services Vehicle Trust. Mr. Castillo leased a 2017 Land Rover
Discovery Sport from Land Rover North Dade, LLC, which
assigned the lease to JP Morgan Chase Bank, N.A. Both leases
required the plaintiffs to maintain liability insurance with
limits of $100, 000 for bodily injuries per person, $300, 000
for bodily injuries per accident, and $50, 000 for property
damage per accident (commonly referred to as "100/300/50
limits"). Failure to comply with this requirement could
result in termination of the lease and repossession of the
independent insurance agents, Ms. Hallums and Mr. Castillo
separately applied for insurance with Infinity in 2016.
Instead of applying for policies with 100/300/50 limits for
all insured, the plaintiffs applied for policies with lower
limits for themselves but 100/300/50 limits covering only the
lessors. The lessors accepted the product as fulfilling the
requirements of the plaintiffs' leases.
product that provides 100/300/50 limits for the
plaintiffs' lessors is Infinity's Lessor Liability
Endorsement (the "Endorsement"). The Endorsement
reads as follows:
This additional coverage will apply to damages your lessor
becomes legally obligated to pay that arise from and are
legally related to a loss covered under your policy. The
coverage provided by this endorsement . . . is available only
to indemnify your lessor pursuant to the terms listed herein.
App. of Appellants, Vol. I, Doc. 5-2 at p.9. Once selected,
the Endorsement was incorporated into the broader insurance
policy purchased by the plaintiffs. The Florida Office of
Insurance ("OIR") has approved the form of
Infinity's Endorsement in Florida, as well as its rate
for each policy type. The OIR also approved the formula that
Infinity uses to calculate its rates. Neither plaintiff has
made any claim against their Infinity policies.
federal statute, known as the Graves Amendment, bars claims
of vicarious liability against vehicle lessors. See
49 U.S.C. § 30106(a). The Graves Amendment does not bar
claims of negligence or criminal ...