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World Finance Group, LLC v. Progressive Select Insurance Co.

Florida Court of Appeals, Third District

January 15, 2020

World Finance Group, LLC, Appellant,
v.
Progressive Select Insurance Company, etc., et al., Appellees.

         Not final until disposition of timely filed motion for rehearing.

          An Appeal from the Circuit Court for Miami-Dade County Lower Tribunal No. 14-22334, Mavel Ruiz, Judge.

          Marcus Law Center, LLC, and Alan K. Marcus and Nicholas M. Vicente; Xander Law Group, P.A., and Wayne R. Atkins and Matthew J. Troccoli, for appellant.

          Kubicki Draper, and Valerie A. Dondero, for appellee Progressive Select Insurance Company.

          Before LOGUE, SCALES and GORDO, JJ.

          SCALES, J.

         After a Ferrari sports car sustained extensive damage in an accident, the car's owners submitted a claim to Progressive Select Insurance Company ("Progressive"), the appellee and defendant below. Progressive issued a settlement check to its insured, but Progressive did not include the car's lienholder, World Finance Group, LLC, the appellant and plaintiff below ("World Finance"), as a co-payee on the check or otherwise protect World Finance's interests. After the Ferrari's owners did not use the insurance proceeds to repair the car, World Finance sued Progressive, alleging that Progressive breached its duty to World Finance under the insurance policy. Because we conclude that the policy expressly required Progressive to protect the interest of the lienholder, we reverse the trial court's final summary judgment in favor of Progressive and remand for entry of judgment in favor of World Finance.

         I. Facts

         Having arranged for financing by World Finance, in 2014, JG Auto, LLC purchased a 2011 Ferrari 458 Italia[1] from a Miami, Florida dealer. Allegedly without the knowledge of World Finance, JG Auto transferred ownership to Joan and Yenly Calvo. The Calvos obtained an automobile insurance policy on the Ferrari from Progressive. The declarations page of the policy named World Finance as the vehicle's lienholder. In March 2014, the Ferrari sustained extensive damage in an accident, although this damage amounted to something less than a total loss. Progressive issued a settlement check to the Calvos in the amount of $149, 000. The Calvos did not use the insurance proceeds to repair the Ferrari or to pay off the car loan, apparently keeping these funds for themselves. The settlement check did not name either World Finance or a repair shop as co-payee. The Loss Payable Clause of the subject insurance policy provides as follows:

Payment under this Part IV for a loss to a covered auto will be made according to your interest and the interest of any lienholder shown on the declarations page or designated by you. At our option, payment may be made both jointly, or to either separately. Either way, we will protect the interest of both. However, if the covered auto is not a total loss, we may make payment to you and the repairer of the auto. (Emphases in original removed.)

         Progressive rejected World Finance's demands for payment, asserting that Progressive had satisfied its obligations under the policy by making payment directly to its insureds, the Calvos. Claiming intended third-party beneficiary status under Progressive's policy with the Calvos, [2] World Finance sued Progressive for breach of contract and breach of the implied covenant of good faith and fair dealing.[3] Both parties agreed that the dispositive issue was one of contract interpretation, and therefore, they filed cross motions for summary judgment. On June 12, 2018, the trial court heard both motions.

         In granting summary judgment for Progressive (and denying World Finance's summary judgment motion), the trial court read the first sentence of the Loss Payable Clause, above, to mean that only when the "covered auto" is a total loss and not capable of repair is Progressive required to protect the lienholder's interest in payment of the settlement check.

         World Finance appeals both the trial court's August 3, 2018 final summary judgment for Progressive and the trial court's denial of its summary judgment motion.

         II. ...


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