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Amerisure Insurance Co. v. State Farm


MARSHAL: PLEASE BE SEATED.

CHIEF JUSTICE: OKAY. THE LAST CASE ON THE DOCKET FOR THIS MORNING, IS A CASE ENTITLED AMERISURE INSURANCE COMPANY VERSUS STATE FARM MUTUAL INSURANCE COMPANY. SO WE HAVE GOT INSURANCE COMPANY VERSUS INSURANCE COMPANY. SOMETHING WE DON'T SEE TOO OFTEN, SO PARTIES READY? YOU MAY PROCEED.

MAY IT PLEASE THE COURT. COUNSEL. MY NAME IS MITCH ESPAT, AND IT IS INDEED A GREAT PLEASURE TO STAND HERE BEFORE THIS COURT TODAY, REPRESENTING AMERISURE INSURANCE COMPANY, AN APPEAL CERTIFIED BY THE SECOND DISTRICT COURT OF APPEALS AS A RESULT OF CONFLICT BETWEEN THE SECOND DISTRICT COURT OF APPEAL, THE FIFTH DISTRICT COURT OF APPEAL, THE THIRD DISTRICT COURT OF APPEAL, AND MOST RECENTLY THE FIRST DISTRICT COURT OF APPEAL.

IT IS REALLY THE THIRD DISTRICT --

YES, YOUR HONOR, IT VIOLATES EQUAL PROTECTION BECAUSE IT CLASSIFIES COMMERCIAL VEHICLES AND THE INSURERS.

IS THERE ANY ISSUE HERE, WITH REFERENCE TO THE FACT THAT THE STATUTE DOES MAKE THAT PROVISION, THAT IS THAT IT DOES DISTINGUISH BETWEEN COMMERCIAL AND PERSONAL POLICIES? DO YOU AGREE ON THE FACE OF THE STATUTE?

INDEED, THE STATUTE DOES DISTINGUISH BETWEEN COMMERCIAL VEHICLE OWNERS AND THEIR INSURERS, AS WELL AS PRIVATE INSURERS.

SO THE ONLY ISSUE WE HAVE, IS THE CONSTITUTIONAL ISSUE?

THERE ARE SEVERAL CONSTITUTIONAL ISSUES, YOUR HONOR, BUT, YES, THE CONFLICT ARISES OUT OF AN EQUAL PROTECTION DISAGREEMENT BETWEEN THE CIRCUITS.

WHAT CONSTITUTIONAL ISSUES WERE RAISED BELOW?

THE ISSUE THAT WAS RAISED BELOW IS EQUAL PROTECTION.

IS THAT THE ONLY CONSTITUTIONAL ISSUE THAT WAS RAISED BELOW?

IT IS MY UNDERSTANDING THAT, AT THE TRIAL LEVEL, THAT IS CORRECT.

ALL RIGHT. WOULD YOU GO AHEAD, THEN, AND ADDRESS THAT ISSUE.

CERTAINLY. WITH REGARDS TO THE STATUTE, EQUAL PROTECTION, WE BELIEVE AT LEAST ON BEHALF OF AMERISURE, BELIEVE THAT IT IS VIOLATED, BECAUSE IT CREATES AN ARBITRARY DISTINCTION BETWEEN COMMERCIAL VEHICLE OWNERS AND COMMERCIAL INSURERS, WITHOUT A REASONABLE BASIS FOR DOING SO.

SO UNDER THE STATUTE, WHENEVER THERE, LET ME SEE IF I UNDERSTAND WHAT THE STATUTE SAYS, FIRST OF ALL. IF THERE IS A COMMERCIAL VEHICLE INVOLVED AND THERE IS THE PAYMENT OF PIP, THEN, BY SOMEONE OTHER THAN THE COMMERCIAL VEHICLE CARRIER, THAT INSURER CAN GET THEIR MONEY BACK FROM THE COMMERCIAL CARRIER IN ALL SITUATIONS.

I BELIEVE IT SPECIFIES THAT A PRIVATE PIP INSURER WOULD GET THAT RIGHT OF REIMBURSEMENT. THAT'S CORRECT, YOUR HONOR.

BECAUSE IN PIP GENERALLY, EVEN THOUGH SOMEBODY IS AN OCCUPANT OF THE VEHICLE, THEY, THEMSELVES, OWN A VEHICLE, YOU LOOK, FIRST, TO THAT PIP, YOUR OWN PIP INSURER.

THAT WOULD BE CORRECT, YOUR HONOR.

SO THIS IS ALL THAT THE LEGISLATURE IS DOING, IS REORDERING, THEN, IN A CASE WHERE SOMEBODY IS AN OCCUPANT OF A COMMERCIAL VEHICLE, THAT IN EFFECT, THEY ARE REALLY SAYING YOU LOOK TO THE COMMERCIAL VEHICLE FIRST. I MEAN, EVEN THOUGH IT IS SORT OF A ROUNDABOUT WAY, YOU GO TO YOUR OWN INSURER, BUT THEN THAT INSURER CAN GET MONEY BACK FROM THE COMMERCIAL CARRIER, CORRECT?

THAT'S CORRECT.

AND WHY ISN'T THAT, I GUESS WITH THAT SCHEME IN MIND, WHY ISN'T THAT REASONABLE, AS FAR AS THERE IS LESS LIKELY THAT SOMEONE THAT IS OCCUPYING A COMMERCIAL VEHICLE MAY LIKELY HAVE THEIR OWN INSURANCE, BUT YET THEY REQUIRE PIP INSURANCE TO BE CARRIED BY COMMERCIAL VEHICLES, SO MAYBE THOSE, THAT SOURCE IS BEING UNDERUTILIZED BECAUSE OF THE WAY THAT INSURANCE WORKS IN THIS STATE, SO WHY ISN'T IT A REASONABLE REALLOCATION OF SPREADING THE RISK?

I BELIEVE IT IS UNREASONABLE, SIMPLY BECAUSE WHEN YOU LOOK AT THE EQUAL PROTECTION CLASSIFICATION, AND HONESTLY, ON ITS FACE I BELIEVE THAT I WOULD LOSE CREDIBILITY WITH THIS COURT AND OTHERS, IF I SAID THAT DIDN'T INCLUDE REASONABLE ISSUES, BUT THE DISTINCTION BETWEEN COMMERCIAL AND PRIVATE, IT, THEN, LEADS TO AN INFRINGEMENT, IF YOU WILL, OF COURT ACCESS, BECAUSE --

WHAT ABOUT THE ANSWER TO THE QUESTION THAT THE CHIEF HAS POSED TO YOU, THAT IS WHY ISN'T IT JUST AS REASONABLE WHERE THERE ARE TWO POLICIES IN EFFECT, AS OPPOSED TO HAVING THE PERSONAL POLICY BE PRIMARY THAT, IN EFFECT, THIS MAKES THE COMMERCIAL POLICY BE PRIMARY. WHY ISN'T IT JUST AS REASONABLE, IF YOU HAVE GOT TWO POLICIES THAT COVER THE SAME SITUATION, TO HAVE THE COMMERCIAL POLICY BE PRIMARY, JUST AS IT WOULD HAVE BEEN TO HAVE THE PERSONAL POLICY BE PRIMARY? WHY WOULDN'T IT BE JUST AS REASONABLE TO HAVE THE COMMERCIAL POLICY BE PRIMARY? DO YOU AGREE THAT IS REALLY THE EFFECT?

I BELIEVE THAT'S CORRECT, YOUR HONOR.

WHY ISN'T IT JUST AS REASONABLE FOR THE LEGISLATURE TO MAKE THE COMMERCIAL POLICY PRIMARY, AS OPPOSED TO THE PRIVATE POLICY?

THE COMMERCIAL OWNER HAS ALREADY OBTAINED WORKERS COMPENSATION COVERAGE, WHICH IS DIRECTED TO COVER SOMEONE WHO IS INJURED IN THE COURSE OF THEIR EMPLOYMENT.

WHAT DOES THIS HAVE TO DO WITH THIS PIP SITUATION, WHERE YOU HAVE GOT TWO POLICIES, AND EVERYBODY AGREES THEY COVER THIS SITUATION, AND ALL THE LEGISLATION REALLY DOES IN EFFECT, IS MAKE THE COMMERCIAL POLICY PRIMARY?

BECAUSE I DON'T BELIEVE THAT THE COMMERCIAL CARRIER WOULD, IS INVOLVED IN INSURING THE PRIVATE INDIVIDUAL WHO, ALL OF A SUDDEN, BECOMES INVOLVED IN AN ACCIDENT, EITHER AS A PASSENGER OR A DRIVER.

WHAT DO YOU MEAN "ALL OF A SUDDEN? IF SOMEONE IS OCCUPYING THIS COMMERCIAL VEHICLE, THIS COVERAGE, THERE IS JUST AS MUCH EXPECTATION THAT AN ACCIDENT WOULD HAPPEN AS OPPOSED TO A PERSONAL SITUATION. I AM HAVING TROUBLE WITH SOMEHOW YOU SAYING THAT THERE IS A CONSTITUTIONAL VIOLATION, WHEN THE LEGISLATURE REALLY HAS A CHOICE TO MAKE, NOW, WITH TWO POLICIES AND ONE PRIMARY, AS YOU ACKNOWLEDGE, AND WHAT IS UNREASONABLE ABOUT MAKING IT BE PRIMARY? YOU DIVIDE IT UP OR SOMETHING LIKE THAT. WHY ISN'T IT JUST AS REASONABLE TO HAVE THE COMMERCIAL POLICY BE PRIMARY?

I DON'T BELIEVE IT IS A COMMERCIAL INSURER, TAKING ASSUMPTION OF THE RISK. PIP IS SAID TO FOLLOW THE PERSON, AND WHEN A PRIVATE INSURER INSURES AN INDIVIDUAL, IT FOLLOWS THAT INDIVIDUAL.

W HEN A P RI VA TE INS URER SURES AN I NDIVIDUA L , T HE Y ARE INS URING A N I ND IV IDUA L AND IF THAT INDIVIDUAL IS IN A COMMERCIAL VEHICLE AND I S INV OLVED IN A C RA SH THEY ARE LOOKING TO THEIR P IP CAR RI ER FIRST AND I THINK EVEN THE INSURANCE POLICIES ADD RE SS PRIORITY OF COVERAGE AND WHEN YOU GET INTO T HE LANGUAGE OF WHO I S PRIMARY AND WHO ISN'T B UT WHEN Y OU DEAL WITH A MANDA TE ABO UT I F YOU WILL HAVE THE LEGISLA TURE THAT SAYS YOU, MR. COMMERCIAL OWNER, OR Y OU MR. COMMERCIAL INSURANCE CARRIER , ARE NOW G OING T O HAVE TO R EI MB URSE A P RI VA TE PIP CARRIER FOR BEN EF IT S PAID THEN IT SAYS TO THE EXTENT OF ANY BENEFIT S P AI D. NOT REASONABLE, NOT NEC ESSARY .

THAT' S N OT REA LL Y PART O F THE EQUAL P RO TE CTIO N ARGUMEN T, IS IT? THAT'S A W HOLE S EP ARATE ISSUE, YOU KNOW, ON THE CONSTITUTIONAL SIDE, IS IT NOT?

I BELIEVE

WHAT D OE S T HAT HAVE T O D O WITH THIS E QU AL - - WHE THER ONE IS PRIMARY O R T HE O THER ?

IT M AY NOT HAV E TO D O DIRECTLY WITH WHO IS PRI MA RY OR WHO ISN'T BUT IT I S I NTERTWINED WITH THE CLASSIFICATION THAT VIOLATE S EQUAL PROTECTION AND I DON'T NOT UNLIKE T HIS C OU RT'S DECISION IN THE P IN NA CL E DELTA CASE WHERE M AN NE D TERROR ARBITRATION I MP OSED ON A MED ICAL PROVIDER WHO RECEIVED AN ASSIGNMENT FROM THE INS URED WAS F OU ND T O B E AN ARBITRARY A ND U NREASONABLE C LASSIF IC AT IO N BECAUSE THEY HAD ACCESS TO THE C OURTS TO C HALLENGE T HE CLAIM , D ETER MI NI NG ON W HO OWNS THE C LA IM W HE THER THE INSURED OWNS THE CLAIM OR WHETHER THE PROVIDER O WN S THE C LA IM B Y A SS IG NM EN T. WHAT DID THE SEC ON D A ND THE 5TH AND THE 1ST SAY ABOUT THERE BEING S OM E REASONABLE BASIS FOR T HI S LEGISLATION?

THEY ALL FEL T T HA T T HE LEGISLATURE S AT IS FI ED T HE REASONABLE BASIS TEST.

NO, BUT W HA T D ID T HEY SAY? DID THEY SPECULATE I N TER MS OF THE L EGIS LATI VE P OL IC Y FOR THAT?

YES, YOUR HONOR , T HE Y FELT THAT T HE L EGIS LA TU RE COULD D O T HIS I N CON JU NC TI ON WITH TRYING TO K EEP DOW N INSURANCE PREMIUM : .

AND WHA T E VIDE NC E DID Y OU PRESENT CONTRARY TO THAT TO THE T RIAL COURT O R OTHER WI SE?

I D ON 'T B EL IEVE ANY - - I WAS NOT TRIAL COU NS EL . AT THE DISTRICT LEVEL , HOWEVER , WE R ELIE D O N T HE TROP CAN A CAS E OUT O F T HE TRO PI CANA C AS E OUT OF T HE 3RD DISTRICT WHICH I UNDERSTAND THAT IS A SHORT OPINION THAT ESSENTIALLY HELD THERE WAS A N A RBIT RA RY AND UNREASONABLE CLASSIFICATION AND T HAT'S WHY IT HAD VIOLA TE D E QU AL PROTECTION.

THE QUE STIO N W AS WHA T D ID TRIAL COUNSEL PRESENT, WHAT EVIDENCE DID TRIAL C OUNSEL PRESENT TO THE TRI AL C OURT THAT W AS C ON TR AR Y T O T HE F ACT THAT THIS W AS A R ATIONALE C LA SSIF ICAT IO N TO DISTINGUISH BETWEEN A COMMERCIAL VEHICLES AND OTHER VEHICLES?

I'M N OT S UR E T RI AL COUNSEL, THERE WAS A NY DISCOVERY DONE. I THINK

WAS T HE RE AN E VI DENTIA RY HEARING ON THIS?

THIS WAS C RO SS M OTIO NS FOR SUMMARY JUDGMENT AND THERE WAS A S TIPULA TE D S ET OF FAC TS B ETWEEN U ND ER LYIN G COUNSEL F OR S TATE F AR M A ND F OR A MERISURE.

SO BASICALLY I T WAS BAS ED ON THE LANGUAGE O F THE STATUTE AND CASE LAW?

THAT'S CORRECT AND I BELIEVE THE COURT IN PARAGRAPH 2 AND I BEL IE VE I T IS PAGE 52 S TA TE S A S A M ATTER OF LAW, A LL B ENEF IT S , %% -- ppIRRESPECTIVE OF WHE THER T HEY WERE REASONABLE OR NOT ARE TO BE P AI D B Y A ME RISURE , WHICH , A GAIN , BEC AUSE Y OU ARE C LASS IF YING A P RI VATE PIP CAR RI ER D OE S HAVE T HE RIGHT TO CHALLENGE A N I NSURED'S CLAIM IN COURT ..

ISN'T THAT A DUE PRO CE SS CLAIM REALLY? IN OTHER WORDS, THAT'S NOT PART OF T HE E QU AL P ROTE CT IO N ANALYSIS, IS IT?

WELL, I THINK I N A S EN SE IT I S , J US TICE P ARIE NT E. I THINK IF YOU LOOK A T W HAT IS HAPPENING HERE , YOU H AV E A S IT UA TI ON W HERE P RIVA TE PIP CARRIER C AN DEF EN D ITSELF AGAINST T HE I NS URED IN A C OU RT HO US E , B E I T A NECESSITY , R EASONA BL EN ES S , AMOUNT, WHAT HAVE YOU . BY VIRTUE OF THE CLASSIFICATION A COMMERCIAL C ARRIER CAN NOT D EFEN D ITSELF.

HOW IS THAT N ECES SA RILY TRUE? THAT IS, WE D ON'T HAVE I N THIS CASE T HAT CLA IM R EA LLY BEING ADDRESSED IN T HE COURTS, DO WE? WE DON'T HAVE THAT B EING ADDRESSED AT THE TRIAL C OURT LEVEL OR THAT B EI NG ADDRESSED AT THE A PP ELLATE LEV EL BEFORE IT CAME T O U S . SO , Y OU KNO W , Y OU H AV E R AISED IT AS A C OLLA TE RA L ISS UE HERE O R A S A NO THER ISSUE ASKING US TO DEAL W IT H IT, BUT YOU HAVE ASK ED U S FORTHRIGHTLY AS YOU WER E C ANDID AND WE APP RECIATED IN THE B EGINNING WIT H R EF ER EN CE TO THE STA ND AR D , Y OU K NO W, FOR A C OURT TO A PP LY TO THI S , B UT THAT I S A SEP AR AT E ISS UE , AS YOU RAISED I T A S A SEPARATE ISSUE, IS IT N OT?

I ND EED IT IS V IEWE D M OS T OF THE TIME AS A SEPAR AT E ISSUE, BUT I THINK BY VIRTU E OF THE C LASS IF ICAT ION BEI NG MADE, A COMMERCIA L C AR RIER HAS NO RECOURSE B Y THE DISTRICT LANGUAGE OF THE STATUTE TO CHALLENGE REASONABL EN ESS.

WAS THA T ARG UM EN T M ADE REGARDLESS OF HOW I T WAS COUCHED, EITHER E QUAL PROTECTION GROUNDS OR DUE PROCESS?WAS THAT SPECIFIC ARGUMENT MADE TO THE TRI AL COURT?

I DO N OT BELIEVE SO , BECAUSE THERE IS NO RECORD OF THE SUMMARY J UD GMEN T PROCEEDINGS. AT THE LEVEL BELOW , A ND I D O R ECOGNIZE A LS O , THA T NON E O F T HE DIS TR ICT C OU RT S , B E I T O N STATE FARM' S S ID E O R AMERISURE'S SIDE HAVE ADDRESSED THOSE ISSUES.

IT SEEMS T O M E T HE O NLY ISSUE RAISED IS THE S IM PL E CLASSIFICATION ISSUE, THAT IS , A N I SSUE , A GAIN , FORTHRIGHTLY DISCUSSED HERE AS T HE S TATU TE P ROVIDE S. NO WH ER E D O W E S EE IN A NY O F THE PROCEEDINGS BEFORE THE CASE ARRIVES H ERE , A NY ADD RESS OF THI S I SS UE ABO UT , WELL, WE'RE ALS O FOR EC LO SE D FROM MAKING A D EF ENSE A S T O THE R EASO NABLENESS OR NECESSITY OF THE ACTUAL , YOU KNOW, M EDICAL E XP ENSES O R WHATEVER THAT ARE I NV OLVE D HERE. IS THAT CORRECT?

THAT IS CORRECT. I MEAN, T HERE W AS N O STRAIGHTFORWARD FREE STANDING CLAIM AS FAR AS I'M CONCERNED OR THAT I 'M AWARE OF THAT V IO LA TE D C OU RT ACCESS BY ITSELF.

WELL, N EITHER WAS T HE RE A CLAIM NOT F RE ES TAND ING , CONNECTED TO THE EQUAL PROTECTION. IN OTHER WORDS, W E S EE N O APPEARANCE OF THIS ISSUE , EITHER, IN C ONNE CTIO N W ITH THE EQUAL PROTE CT IO N ARGUMENT, DO WE?

WELL , M Y B RIEF S S PE LLED OUT T HE FACT THAT I T WAS AMERISURE'S POSITION THAT SOME OF THESE , ALT HO UGH T HEY COULD HAVE BEEN R AI SE D O N A FREESTANDING BASE I S ARE INTERTWINED WITH THE EQU AL P ROTECTION ANALYSIS.

BUT WHEN YOU STARTED OUT YOUR ARGUMENT AND YOU SAID THAT AMERISURE WAS ORDERED TO PAY ALL OF T HESE E XPEN SE S , CORRECT?

INDEED , YOUR H ONOR.

AND AT T HE POINT W HEN THE JUDGE DID THAT , D ID %%-- ppAMERISURE MAKE A N ARG UM EN T THAT S AI D , W AI T , SOM E O F THE SE MAY NOT B E R EA SONABL E EXPENSES COULD WE A T LEA ST DECIDE THAT, HAVE A HEARING ON THAT OR SOM ET HING T O THA T EFFECT?

BASED O N T HE LANGUAGE IN THE JUDGE'S O RD ER A S A MATTER OF LAW, AMERI SURE I S LIABLE FOR ALL , I DO NOT BELIEVE THAT IT COULD H AVE BEEN MADE. NOW, WHETHER IT WAS MAD E O R NOT, I CAN NOT REPRESENT TO THE COURT ONE WAY OR THE OTHER, BECAUSE Q UI TE F RANKLY THERE W AS NO T RANS CR IP T O F THE SUMMARY J UDGMENT.

REG AR DLESS OF ANY TRA N WHAT T RA NS CR IPT W HAT ABOUT THE RESPONSE FOR MOTION FOR SUMMARY J UDGMENT , ANY OF THOSE, WAS T HE RE ARGUMENT MADE THERE?

I DO NOT BELIEVE T RI AL COUNSEL RAISED THAT SPECIFICALLY, YOUR HONOR.

WOULD YOU A DDRESS T HI S PART OF THE C LASSIF IC ATIO N I W OULD A LS O A SK M IS S GAL LAGHER TO ATD Z T HIS A S WELL. WHEN AD DR ES S THIS A S WELL. WHEN YOU THINK COMMERCIAL , BIGGS, AND THEN W ORIN G WOR KERS' C OM P D OE S C OM E T O THE F OR EFRO NT , ALT HO UG H I N NOT ALL CIR CU MSTANCES BUT I WOULD VENTURE TO SAY THE MAJORITY OF THE CAS ES I T WILL BE IN THE COURSE A ND SCOPE OF E MPLOYM EN T B EC AU SE THAT'S WHAT C OMMERCIAL VEHICLES ARE USED FOR SO WE HAVE THI S I NT ERPL AY O F PRIVATE INSURANCE VERSUS A COMP SYSTEM , SO IN THI S CLASSIFICATION PROCESS COULD YOU HELP ME UND ERSTAND WHETHER STATUTES OR B Y OPERATION, FOR E XA MPLE , I F IT IS PAID A S PAR T O F A C OMP CLAIM T HERE I S A COM P LIE N , NO SET O FFS A ND THE F ULL CLAIM IS MADE FROM T HE PAR TY RES PONSIBLE AND THEN THE CARRIER IS REIMBURSED. IF YOU ALLOC ATE T HAT T O P IP THERE IS A SET OFF AND T HE RE IS NO RECOVERY SO THERE I S AN INTERPLAY B ET WE EN COM P AND WHEN YOU START %%-- ppCLASSIFYING SO CAN YOU HELP ME RESOL VE H OW DOE S T HI S PLAY OUT ON T HE GROUND A ND HOW DOES THAT IMPACT ANY CLASSIFICATIONS THAT WE MAY GO THROUGH?

WELL , CERTAINLY , I T HI NK FROM THE PERSPECTIVE A ND LET'S LEAVE THE COM MERCIAL INSURER OUT OF IT FOR THE TIME BEING. THE COMMERCIAL OWNER OBVIOUSLY BUY S COM P INSURANCE OR HE O R S HE SHOULD. YOU THEN GET I NT O A N ACCIDENT, AND THE I NS URED U NDER T HE PIP P OL IC Y CAN ELECT TO G O PIP A VENU E , O R C AN E LE CT T O G O W OR K C OM P AVENUE. IF HE OR SHE E LECT S TO G O PIP AVENUE AT SOME P OI NT I N TIME THAT PIP CARRIER I S GOING TO LOOK TO THE WORKERS' COM PENSATION CARRIER F OR REI MBUR SE ME NT . THE PROBLEM I S THA T I F Y OU H AVE THE P IP C ARRIER G OING BACK AGAINST THE COMP CARRIER OR AGAINST THE COMMERCIAL OWNER INDIVIDUALLY, MEANING T HE BUSINESS, OR AGAINST T HE COMMERCIAL OWNERS INS UR ER , YOU A RE NOW A P IP C AR RIER THAT IS GET TING $10,0 00 O R WHA TEVER T HE AMO UN T M AY BE BACK. I T HINK IT I S A S LI PPER Y SLOPE WHEN YOU LOOK AT IT FROM THE COLLATERA L S OU RCE END OF IT. AS YOU INDIC AT ED A P IP CARRIER, THE P IP B EN EFIT S ARE USUALLY COLLATERALS OR SET-OFF S. WHAT IF I N OUR C ASE O R A NY OF THE CASES AT THE D IS TRIC T LEVEL T HE NAMED INS URED UNDER THE P IP POLICY , T HE PRIVATE PIP POLICY MADE A U M CLAIM? STATE FAR M I N T HA T W OU LD N OT ONLY GET A SET OFF F OR BENEFITS PAID BUT I T WOU LD ALSO HAVE IN ITS P OC KE T $10,000 THAT IT E IT HE R G OT FROM THE COMP CARRIER , THE COMMERCIAL OWNER OR THE COMMERC IAL INSURER.

AREN'T YOU G OING F AR AFIELD FROM THE ISSUES WE HAVE HERE? IN FACT , R EALL Y I SN'T A C OMMERCIAL O WN ER , B UT ARE BEN EFITED BY THE FACT T HAT THEY HAVE BOT H W OR K E S COMPENSATION WORKERS' COMPENSATION AND P IP BEC AUSE THERE IS NOT GOING TO BE A DUPLICATION OF BENEFITS. THAT IS , THAT T HE O RDIN ARY CLAIM IS GOING T O INVOL VE SOMEBODY THA T I F THE Y ARE O PERATING A C OMME RC IA L VEHICLE IN THE COURSE OF BUSINESS, IT IS GOING T O B E COVERED BY W ORKE RS' COMPENSATION AND SO THE COMMERCIAL OWNER REALLY IS GOING TO BENEFIT BY T HE F AC T THAT THEY HAVE BOT H P IP COVERAGE AND W OR KERS ' COMPENSATION COVERAGE BECAUSE THERE WILL B E S OME OFFSET BETWEEN T HO SE TWO O F A LIABILITY T HAT THE COMMERCIAL PEOPLE HAVE A NYWAY.

WELL, I THI NK , A ND T HA T' S WHAT I THINK THE A MERI CA N FREIGHT DECISION OUT O F SECOND BCA O N WHI CH T HE DEALERS IN THE 5TH R ELIE D UPON AND THE ISSUE THERE REALLY IS IS IT IS DUPLICATING IT BECAUSE IF A C OMMERCIAL OWNER HAS W OR K COMP COV ERAG E , N OW THE Y A RE HAVING TO PAY AN E XTRA $ 10,000.

ARE THEY? IN OTHER WORDS, ARE YOU SAYING THAT T HE COM ME RC IAL CARRIER IS GOING TO H AV E T O BOTH PAY T HI S B ILL , O KA Y , WITH THE P IP COVER AG E , A ND THEY ARE GOING TO HAVE T O PAY IT WITH THE WORKERS' COMP A ND S O THA T T HE I NJUR ED EMPLOYEE GETS P AID T WICE ; IS THAT WHAT YOU ARE SAYING?

I'M SAYING THAT THE AMERICAN

LET ME STOP YOU RIG HT THERE. ARE YOU SAYING THA T T HE INJURED EMPLOYE E IN T HE O RDINARY CASE IS G OING T O GET PAID D UPLI CA TE B ENEF IT S , THEY ARE ENTITLE D TO DUPLICATE B ENEFITS?

ONLY IF THEY MAKE A P IP CLAIM AS WELL , BECAUSE THEN UNDER THE A ME RI CAN F REIGHT DECISION , T HE C OM ME RC IA L OWNER HAS TO R EI MB URSE T HE PRIVATE PIP CARRIER.

SO YOU ARE SAYING THEY ARE GOING TO GET DUP LI CA TE BENEFITS, THEY ARE GOING TO GET WORKERS' COMP REIMBURSEMENT FOR THIS B IL L AND P IP R EIMB UR SE ME NT F ROM THIS BILL AND IN ESSENCE FROM THE SAME S OURCE , T HE EMPLOYER?

WELL

ARE YOU MAKING THAT CLA IM ? I WANT YOU T O B E F OR TH RI GH T WITH US HERE.

I'M TRYING TO UND ERSTAND THE QUESTION BEING ASKED.

THE QUE STIO N I S S IMPLY WHETHER OR NOT AN EMPLOYEE THAT'S INJURED IN A COMMERCIAL VEHICLE DURING THE COURSE OF E MP LO YMEN T A ND IS ENTITLED T O W ORKERS ' COMPENSATION, ALSO I S ENTIT LED TO PIP B EN EF IT S , I S ENTITLED TO C OLLE CT B OT H AND %%-- ppTHAT THAT'S THE LAW ? IS THAT W HAT YOU ARE SAYIN G?

NO.

I DIDN'T T HINK S O .

WE WANT YOU T O B E M IN DFUL THAT YOU ARE WAY INTO Y OU R REBUTTAL.

OKAY .

IN OTHER WORDS THIS MIGHT BE A GOOD TIME T O P AUSE.

I WIL L , B UT I W IL L ANS WE R YOUR DID I A NS WE R YOUR QUESTION, JUSTICE L EWIS ?

YES .

ALL RIGHT.

GOOD MORNING.MAY IT PLEASE THE COURT. MY NAME IS BETSY G AL LA GH ER WITH COLE , S COTT AND KIS SA NE AND I REPRESENT THE RESPONDENT, STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY. THE APPLICATION OF SEC TION 627.7405, W ITHOUT R EG ARD TO FAULT DOES NOT VIOLATE T HE EQUAL PRO TECT IO N CLA US E.

HOW DID THIS P ROVISION GET IN THERE? CAN YOU JUST GIVE US A HIS TORICAL BASIS? IS IT IN T HE RE F RO M T HE BEGINNING OF THE PIP N O FAULT STATUTE?

NO , IT WAS N'T. IT CAME INT O B EI NG A T TH E SAME TIME THA T C OM ME RCIA L MOTOR V EHICLES WERE REQ UIRED TO CARRY PIP.

SO I S T HERE ANY L EDGE S LATE IF HISTO RY A BOUT - - LEGISLATIVE HISTORY ABOUT WHAT WAS IN THE MINDS OF THE LEGISLATURE OR A T RA DE -O FF FOR THE COMMERC IAL INS URER S OF COMMERCIAL VEHICLE S THA T HAVE THIS S CHEME W AS GOING TO WORK?

WELL, I THINK THA T THE STATUTE ITS ELF , 7 40 5 , EXPLAINS HOW IT WAS E XP EC TE D TO WORK.

BUT AS FAR A S T HE IDEA THAT M AY BE W ER E T HE P RE MI UM S GOING TO BE L ESS BECAUSE IT WAS U NDERSTOOD THEY W OULD BE GETTING BACK A CER TA IN A MOUNT OF THE MONEY THA T W AS PAID OUT OR , Y OU KNO W , S O FORTH, HOWEVER?

I THINK THAT T HE - - I THINK

PRE MI UM S W ITH ST AT E FAR M.

I THINK WHAT IS C RI TI CA L ABOUT THIS IS T HA T THE STATUTE WAS , I THI NK , E VE N ACTED T O G IVE - - ENA CTED T O GIVE BALANCE TO T HE R IS KS THAT WERE BOR N BY T HE P RIVATE INSURER.

WHEN P IP FIRST S TA RT ED THE COMMERCIAL VEHICLE DID NOT HAV E A R EQUI RE MENT T O CARRY PIP.

YOU'RE ABSOLUTELY CORRECT.

OKAY. AND THEN T HERE C AM E A LO NG I N ABOUT '79 , A L EG IS LATIVE P ROVISION THAT CHANG ED T HA T REQUIREMENT SO T HA T T HE W HOLE - - T HERE W AS , I N FAC T , A S HI FT I N I NC IDEN T O F WHE RE THIS WAS GOI NG T O F AL L F RO M T HE PRI VA TE T O T HE COMMERCIAL VEHICLE. I MEAN, THAT WAS A L EGISLATIVE DECISION THAT WAS MADE AT THAT TIME. ISN'T THAT THE WAY IT WORKED?

CORRECT, AND I THINK I T WAS E NACT ED TO G IV E S OM E B ALANCE TO THE R IS KS B Y T HE PRIVATE PASSENG ER I NS URER , B ECAUSE WITHOUT THAT S TA TUTE , THE INSURERS O F T HE PRI VA TE PASSENGER VEHICLES WERE BEARING THE E NTIRE RISK.

WELL, THERE ALSO MAY B E SOME CIRCUMSTANCES WHERE SOMEBODY WAS NOT IN T HE COURSE AND SCOPE O F EMPLOYMENT BUT WAS IN A COMMERCIAL VEHICLE. DID NOT OWN THE IR O WN VEHICLE AND SO THEY WOULD NOT HAVE HAD P IP BEN EFIT S A T ALL.

CORRECT. ABSOLUTELY.

IT WOULD R EM ED Y THA T SITUATION AS WELL.

A BS OLUTELY .

IS THERE ANY L EG ISLA TI VE HISTORY, THOUGH, TO SHO W THESE POSSIBLE REASONS FOR ENACT ING ?

NONE THA T I AM A WARE O F AND NONE THAT A RE CER TA IN LY PART OF T HE REC OR D H ERE. I CAN S AY T HA T W IT H R EGARD TO THE ISSUE OF P LAIN TI FF REQUEST ING T HI S COU RT T O WRITE IN A FAU LT R EQUI RE MENT , THAT THAT IS I S T OTALLY CONTRARY TO THE WOR DI NG O F 6 27.731 W HICH SPE CIFI CA LL Y SAYS THAT B ENEF IT S U ND ER THESE S TATUTES , THE SE STATUTES THAT APPLI ED T O NO- FAULT COVERAGE, ARE T O BE PROVIDED WIT HO UT REG AR D T O FAULT.

CAN I JUS T AGAIN TRY TO UNDER STAND THE SEQUENCE? YOU'VE GOT '79 A S JUS TI CE B ELL POINTS OUT A ND T HE N B Y '84 THEY ARE SAYING THIS IS UNCONSTITUTIONAL?

CORRECT.

SO FOR 2 0 YEARS I N T HE 3RD DISTRICT THIS PROVISION HASN'T BEEN IN FORCE?

CORRECT.

THERE HAS B EE N N O LEGISLATIVE, NOTHING E LS E HAP PENED I N T HE LEG ISLA TU RE ?

NO.

YOU HAVE F OU R OTH ER DISTRICTS WHERE IT HAS BEEN ENFORCED?

THREE OTHERS WHERE IT H AS BEEN ENFORCED.

WHAT ABOUT THE 5TH?

THE 4TH D IS TR ICT H ASN' T ADDRESSED IT. THE DEA LERS CASE C AM E OUT O F THE 5TH DISTRICT IN 198 9 , FIV E YEARS AFT ER THE 3RD DISTRICT DECISION.

AND IT HAS B EEN E NFOR CE D THERE?

YES, A ND THE N A ME RISU RE CHOSE TO FOLLOW THE DEA LERS DECISION AN D I THINK SINCE THE BRIEFING IN THIS CASE

IT MUST NOT HAV E CAT ASTROPHIC EFFECTS E IT HER WAY IF IT HAS BEE N L EF T T O SORT OF RIDE ALONG F OR 2 0 YEARS. I MEAN, I DON'T KNO W. WE DON'T HAVE IT I N T HI S RECORD ABOUT HOW M UCH WE A RE REALLY TALKING ABOUT AS FAR AS ACTUAL D OLLARS THAT A RE , Y OU KNOW , A T ISSUE HERE.

I DON'T THINK IT HAS BEEN A BIG BURNING I SS UE I F THAT'S WHAT T HE C OURT I S ASKING. IT IS A S EU ME RING I SS UE , MAYBE, I DON'T T HINK B UR NI NG WOULD BE WHAT I W OU LD CATEGORIZE THIS AS.

IN EFFECT, O F C OU RS E , THE COURT HAS HELD THAT THE FAC T THAT THERE I S SO MUC H I N EQUALITY IN TREAT MENT DOES NOT RENDER A STA TU TE %%-- ppUNCON STITUTIONAL UNDER EQUAL PROTECTION GROUNDS AND ANOTHER THING I WANTED TO POINT OUT I WANTED T O G O BACK TO THE FACT THAT , YOU KNOW, W IT HO UT T HE S TA TUTE YOU WOULD HAVE H AD W ITHO UT THESE C HANGES THE I NSURER S OF PRIVATE PASSE NG ER VEHICLES ASSUMING THAT A PERSON INVOLVED IN THE ACCIDENT DID HAVE A P RIVA TE HAVE A P OLIC Y , A PRI VA TE POLICY, T HAT T HE Y WOU LD H AV E HAD TO BEA R THE E NT IR E R IS K IN E XP OS UR E INC ID EN TS A S A RESULT OF THE PRIOR IT IES O F COVERAGE ESTABLISHED UNDER 627.734.

THEY DID THAT , A NY WAY, I F IT IS T WO D IFFERE NT PRI VA TE PASSENGER VEHICLES.

IT IS NOT LIKE THEY ARE GETTING OFF THE HOOK.

THE Y STILL HAV E T O A FFOR D BEN EFITS I N BOT H S IT UA TI ONS.

ISN'T THAT THE FUNDAMENTAL SCHEME , THO UG H , OF THE PIP COVERAGE AND DOESN'T THIS P ROVI SI ON REALLY SKEW THAT F UN DAME NT AL SCHEME? DOESN'T IT R EALL Y C HANG E I T COMPLETELY?

NO, WHAT I T DOE S I S I T P ROVIDES BALANCE, B EC AU SE OTHERWISE DOES IT MAKE S ENSE THAT THE INSURER OF A PRIVATE PASSENGER V EH ICLE  NOT EVEN I NVOLVED I N A N A CCIDENT BEAR THE ENT IR E RISK AND EXPOSURE OF L OSSE S FROM AN A CCIDENT INVOLVING A COMMERCIAL VEHICLE? THAT DOESN'T SEEM TO MAKE ANY SENSE TO M E .

W HA T DO YOU M EA N N OT E VE N INVOLVED IN AN ACCIDENT WHEN THEY ARE ON NOTICE THA T THEIR INSURANCE FOL LOWS THE PERSON, CORRECT ?

CORRECT.

AND THAT'S THE FUNDAMENTAL SCHEME ANDTHAT'S WHY I SAY, DOE SN 'T T HIS REALLY S KE W THE E NTIR E SCHEME OR CON CE PT T HA T W AS F IRST E NA CTED I N ' 79 O R %%-- ppWHENEVER? IN OTHER WORDS, THAT NOW IT IS N OT F OLLO WI NG T HE PER SO N OR HAVING THE O VE RL AY O F ANOTHER POLICY THAT'S OUT THERE, R EA LL Y F OLLO WING N OW THE VEHICLE AS OPPOSED T O THE PERSON?

WELL , JUSTICE A NS TE AD, I F YOU ARE ASK IN G M E D ID THI S CHANGE THINGS, ABSOLUTELY.

WE'RE TRYING TO FIGURE OUT WHY IT CHANG ED T HI NGS AND AS JUSTICE LEW IS H AD BROUGHT UP IN THE E ARLI ER QUESTIONING AND IT IS SOMETHING THAT I DON'T KNOW IF THERE IS CERTAINLY NOTHING IN THE R EC OR D T HA T MAYBE THE EXISTENCE O F WORKERS' COMPENSATION SOMEHOW H AS A LTER ED THE WHOLE THING SO THAT THI S WAS A REASON FOR T HE REALLOCATION OF THE, YOU KNOW, THE WAY T HA T R EIMBURSEMENT WOULD O CCUR. DO YOU HAVE ANY WAY O F ASSISTING US ON THAT?

NO , I CAN A NS WE R O NE QUESTION THAT THE C OURT ASKED EARLIER AND THAT I S WHETHER OR NOT THERE IS DOUBLE RECOVERY AND THERE IS NO DOUBLE RECOVERY BECAUSE I THINK UNDER T HE COM O VER SU S SAFECO CASE, THE SUPREME COURT BAKELY SAID W HEN Y OU HAVE WOR KERS ' C OM PENS AT IO N COV ERAGE COV ERAG E SOM E O F THE B EN EF IT S THA T P IP COVERAGE CARRIES AND I THINK BOTH C OVER S 60% O F L OS T W AGES THA T BASIC AL LY THE PERSON, THE P ROVI DER THAT YOU GO TO FIR ST IS R ESPONSIBLE, SO F OR EXA MP LE LET'S SAY T HE INJ UR ED P ER SO N GOES TO THE COMP C AR RI ER FIRST , HIS PIP C AR RI ER D OE S G ET A C REDIT FOR THAT. THERE IS NO D OUBL E P AY ME NT TO THE EMPLOYE E A S A RES UL T OF THOSE CLA IMS. THERE IS C ERTAINLY N O D OU BL E RECOVERY.

IN THAT SITUATION T HERE WOULD BE NO E VE N I F THERE IS A C RE DI T T HE N T HE INS UR ER O F T HE PRI VATE INS URAN CE AUT OMOBILE INSURANCE WOULDN'T GO B AC K A GAIN ST T HE COMMERCIAL PIP PART?

N O . IT IS A CRE DIT AND THERE WOULD BE A REDUCTION IN T HE BENEFITS THAT WERE OWD U ND ER THE P ER SONA L P OLIC Y.

ARE T HERE O THER S TATE S THAT HAVE A SCHEME L IK E THIS?

NOT THAT I'M AWARE OF. AS A MATTER OF FACT, MOST OF THE STATES ARE GETTING AWA Y FROM N O- FAUL T C OV ERAG E ENTIRELY TO TELL YOU THETRUTH AND WHEN T HI S WHO LE NO- FAULT SCHEME WAS ENA CT ED MOST STATES WERE IN T HE PROCESS OR HAD ALREADY ENACTED THEM OR WERE IN THE PROCESS OF EEN E NA CTIN G THEM. NOW A LOT O F S TATES ARE RETREATING FROM T HIS KIND OF COVERAGE.

BUT YOU ARE NOT AWARE OF ANY OTHER STATES THAT H AV E THIS PERSONAL COVERAGE RESOLVED THIS WAY?

NO , BUT I C ER TA INLY BELIEVE THAT , A GA IN , T HE FACT THAT WE M AY HAV E ORIGINALLY WANTED TO MAKE A N %%-- ppINDIVIDUAL'S POLICY PRIMARY AND RESPO NS IBLE FOR T HA T , DOES NOT MEAN THAT T HERE W AS ANYTHING WRONG WITH THE L EGISLATURE E NACT IN G A STATUTE WHICH T RIED TO ATTEMPT TO PUT SOME B ALANCE INTO IT AND ALLOC AT E SOME O F THE R ISK.

WHAT ABOUT T HE SE OTHER ISSUES?

TO COM MERCIAL C ARRI ERS.

WHAT ABO UT THESE OTHER ISSUES THAT YOUR O PPON EN T HAS RAISED? THAT IS WHETHER OR NOT THEY HAVE A RIGHT T O C ON TEST THE REASONNESS OR N EC ESSI TY O F T HE C HA RG ES O NCE T HE P ERSONAL CARRI ER S P AID T HEM AND NOW IS ASKING FOR REIMB URSEMENT?

OKAY. FIRST OF A LL , T HE I NS URER O F THE I 'V E GOT T WO STR ON G ARGUMENTS. I THINK I HAV E T HR EE S TR ON G ARGUMENTS TO OPPOSE HIM O N THAT, GETTING BEY OND T HE FACT THAT THOSE ISSUES AR E NOT PART OF THIS C ERTIFI ED QUESTION BUT OF C OURS E T HI S COURT CAN DO WHATEVER IT WANTS TO IN REACHING THOSE ISSUES OR NOT . YOU CAN DO WHATEVER Y OU WANT TO .

M Y F IRST O NE IS Y OU DON 'T HAVE TO D O THI S . I DO WAN T T O A SK

DOESN'T I T HAV E T O B E RAISED BELOW FOR U S T O CONSIDER IT?

I DON'T THINK THEY A RE STANDING HERE B ECAUSE THE PLAINTIFF IN THI S C AS E , DI D NOT RAISE A NY P IP D EFEN SE S AT THE TRIAL COURT.

EVEN REGARDLESS OF STANDING AND I KNOW T HA T' S A %%-- ppSEPARATE DISPO SITIVE I SSUE , BUT THEY HAVE TO HAVE R AISE D AN ISSUE IN THE TRIAL COU RT GIVEN , GIV IN G T HE T RIAL COURT AN OPPORTUNITY TO RULE ON THE ISSUE B EF OR E A N APPELLATE COURT CAN RULE ON IT, RIGHT?

I WOULD AGR EE GEN ERALLY WITH THAT.I THINK THE RE MIGHT BE I N EXCEPTIONS IN THE A REA WHEN YOU ARE DEALING WITH T HE C ONSTITUTIONAL TI OF STATUTES BUT - - CONSTITUTIONALITY OF STATUTES BUT I THINK BY THE MERE FACT THAT THEY DID NOT RAISE THESE DEFENSES THEY DON'T HAVE STANDING TO SHOW THAT THE Y THE MS EL VE S , THA T THEIR ACC ESS TO T HE COURT S WERE BLOCKED IN ANY WAY.

YOU ARE TELLING US , THOUGH, ARE YOU NOT, THAT THE RECORD IN THI S C ASE DO ES NOT R EF LE CT T HA T AME RI SURE S AID , ALL RIGHT , J UD GE , N OW THAT Y OU A RE H OL DI NG U S RESPONSIBLE, AT LEAST GIVE US A N OPP ORTU NI TY T O DETERMINE WHETHER OR NOT THESE CHARGES W ER E REA SONABLE OR NECESSARY?

THAT ISSUE WAS NOT RAISED.

OKAY.

AND I A LS O W AN T T O P OI NT OUT THAT

BECAUSE YOU S AI D T HR EE REASONS. I JUST WANT TO KNOW , N OT BEING RAISED WAS ONE OF T HE THREE.

YES.

WHAT ARE YOUR OTHER?

SO N O S TA ND ING.

WE LOOK AT I T M OR E , N OT BEING R AISED I S REA LL Y N O STA NDING.

LET US LO OK AT T HE MERITS. FIRST THE STA TUTE DOES NOT PROVIDE THAT A COMMERCIAL CARRIER CAN'T RAISE THESE DEFENSES. THERE IS NOTHING IN THIS STATUTE THAT SAYS A COMMERCIAL CARRIER CANNOT RAISE THESE D EFENSES IF IT IS APPROACHED B Y T HE PERSONAL CARRIER F OR R EIMBURSEMENT.

W E H AV E A PRACT IC AL MATTER. UNDER THIS STATUTE, H OW DOE S STATE FARM ACTUA LLY G ET MONEY F ROM AMERISURE? DO T HE Y FIL E A L AW SUIT ? IS THERE SOM E KIN D O F W AY YOU WOULD W RITE THE M A LETTER, ASK FOR REIMBURSEMENT?

MOST OF THE TIME THEY JUST WRITE A LETTER AND THERE IS NO L IT IG AT IO N OVER IT. THEY WRITE A LETTER TO THE M BUT I WANT TO TELL YOU SOMETHING.

AND THEN IN THE 3RD DISTRICT THEY WRITE A L ET TER AND THEY SAY, TOO BAD , RIGHT?

RIGHT.

I D O W ANT TO SAY THA T T HE I NSURER OF THE C OM MERC IAL VEHICLE AND THE OWNER OF THE COMMERCIAL VEHICLE AREALWAYS PUT ON NOTIC E O F THESE CLAIMS R IGHT F ROM T HE START. THEY ARE ALWAYS ON NOTIC E O F THE F ACT THAT T HE RE WAS A N ACCIDENT SO IF THEY W ANTED TO COME FORWARD AND S AY , OKAY, WE ARE G OI NG T O B E PRIMARILY RES PONSIBLE. WE'LL TAKE CARE OF THE CLA IM RIGHT NOW AND WE'RE RAI SI NG THESE DEFENSES SO , NUMBER ONE, THEY ARE PUT O N N OT ICE JUST AS M UC H A S T HE CAR RI ER FOR THE P ERSO NA L A UT OM OBIL E?

BUT A S TH EY WERE S MA RT ABOUT IT THEY WOULD TAK E I T ON AS A COMP CLA IM B EC AUSE THEY WOULD THEN H AV E R EB Y HIM YOURS ELFMENT FROM T HE TORT-FEASOR BEC AUSE THEY HAVE A C OM P CLA IM FOR E VERYTHING THEY PAID OUT WHICH THEY WOULD N OT HAVE IF THEY TREATED IT AS A PIP CLAIM.

THIS WOULD NOT B E IF I T INVOLVED COURSE AND SCOPE.

> IT IS HOW YOU DO I T ON THE GROUND. NOT A MATTER OF THE STATUTE. THERE ARE GOING TO BE W AYS YOU CAN DEAL W IT H T HI S.

AND I DO WAN T T O TELL Y OU THAT STATE FARM AND IN T ALKING TO THE PERSO N AT STATE FARM HE SAYS, YOU KNOW , OF COURSE STATE F ARM REPRESENTS, WHAT, 50% O F THE STATE, SO VER Y O FTEN WHE N THESE CASES COME I N T HE Y A RE REPRESE NTING, THEY HAVE THE INSURANCE O N BOTH T HE PERSONAL AUTOMOBILE AND ON THE COMMERCIAL AND THEY SAY THEY JUST TURN IT OVER TO THE COMMERCIAL.

SO I GUE SS THA T WAS THE QUESTION I HAD , S O ST AT E FARM IN TERMS O F R EALL Y WHOSE INTEREST, IT I S ST AT E FARM'S POSITION HERE , NOT JUST AS THE I NSUR ER F OR THE PRIVATE PASSENGER VEHICLE BUT ALSO F OR THE C OM MERC IA L VEHICLE THAT THIS IS JUST A FAIR ALLOCATION?

ABSOLUTELY. THIS IS A F AI R ALL OC AT IO N , AND

IS THERE , AGA IN , T HERE IS NOTHING , THO UG H , T HAT S AY S H ABITS EFFECT P REMI UMS , WHETHER PREMIUM S W ER E REDUCED BY PRIVATE INS UR ER S WHEN THE COM MERCIAL PIP W AS REQUIRED?

I THINK THAT'S T HE COU RT IN DEALE RS HI P A ND I N AMERI SURE, I BELIEVE I N BOT H C OURTS THEY POI NTED O UT THA T HAS TO BE THE NECES SA RY RESULT IS THAT THERE IS. I F T HE P ER SONA L AUT OM OBILE CARRIER IS PAYING OUT L ES S OBVIOUSLY THA T H AS TO R ESUL T IN A REDUCTION OF P REMI UM.

SO DID YOU GET T HR OUGH THAT AGAIN?

OR AN I NCREASE I N P RO FI TS , AS THE CASE MAY BE. ONE OR THE OTHER.

YOU SAID , THOUGH , I F WE WERE TO R EACH THI S I SS UE THAT AS TO THE M ER IT S TH AT YOU ACT UALLY SAY T HA T NOTHING DOES P REVENT T HE M FROM RAISING DEFENSE S S UC H AS THE AMOUNTS P AID O UT W ER E NOT REASONABLE?

THERE IS N OTHING IN THE STATUTE. I MEAN, LIKE F OR E XAMPLE WHEN Y OU H AV E A , Y OU K NO W , A THIRD PARTY CLA IM AGA IN ST SOMEBODY, IND EM NITY O R S O F ORTH T HEY C AN R AI SE ALL O F THE DEFENSES BUT THE Y C AN RAISE ALL OF THE DEFENSES. THERE I S N OTHI NG H ER E T O STOP THAT.

THAT WOULD P RE VENT A N INSURER FROM PAYING OUT %%-- pp$10,000 WITHOUT LOOKING AT IT AND TRYING TO GET I T BACK?

THAT WOULD B E , Y ES , Y OU KNOW, HEY , WE CAN GET I T BACK. YOU KNOW, A BS OL UT EL Y T HE OTHER SIDE HAS TO H AV E A DEFENSE B ECAUSE NOW H AVE REGARD TO THE NEW PRO VI SIONS IN THE N O -F AULT S TA TU TE , I F , N O EXAMPLE, A P RO VI DER DOESN'T MAKE A CLAIM W ITHI N A CERTAIN PERIOD OF TIM E THEY ARE P RE CL UD ED F RO M MAKING THE CLAIM AND WOULD IT MAKE SEN SE THA T A COMMERCIAL VEHICLE, THE INSURER OF A C OMME RC IA L VEHICLE OR THE OWNER O F A COMMERCIAL VEHICLE COULD NOT RAISE THIS DEFENSE ? NO, THAT DOES N OT M AK E A NY SENSE AND WE ARE OBLIGATED TO C ONST RUE S TA TUTE S SO THAT THEY D O MEE T C ON ST IT UTIO NAL MUSTER AND THERE I S N OTHI NG I N THIS S TATUTE THAT SAYS THEY ARE NOT ENTITLED TO RAISE THOSE DEFENSES.

WHAT'S YOU R THI RD R EA SO N?

DIDN'T I COVER ALL T HREE OF THEM?

I'M JUST C URIO US W HE N Y OU SAID YOU HAD THREE R EA SO NS .

MY F IRST ONE W AS THA T FIR ST OF ALL T HE STA TU TE ALLOWS THE M R EIMB URSE ME NT . THE SECOND ONE IS , I S T HA T THE FACT THAT T HE COMME RCIA L VEHICLE EVEN IF THA T WAS T HE CASE, THE C AR RI ER , C OMMERCIAL VEHICLE CARRIER IS ALREADY PUT ON NOTICE AND THEY CAN HIDE THEIR HEAD I N THE SAND IF THEY WANT T O , O R BUT THEY ARE PUT O N N OT ICE OF IT RIGHT FROM THE S TA RT . SO THEY COULD HAV E COM E IN AND JUMPED IN AND S AID WE' RE THE COMMERCIAL CARRIER , WE ARE GOING TO TAKE OVER THIS. AND WE'RE RAISING THESE DEFENSES. SO THERE IS NOTHING THAT STOPS THEM FROM DOING IT AND THEY ARE PUT ON N OTICE W ITH THOSE IN EVERY CASE AND T HE N THE THIRD ONE WAS THE STANDING ISSUE, S O U NLES S THE COURT HAS ANY OTH ER QUESTIONS I DO REA LL Y F EE L THAT THE EQU AL PRO TE CT ION CLAUSES OF THE FLORIDA CONSTITUTION AND THE U .S. CONSTITUTION ARE NOT VIOLATED . T HEY A RE C ERTAIN LY REASONABLE, R ATIO NALE BAS IS FOR THE CLASSIFICATION I N T HIS CASE. IT SPREADS THE LOS S BET WEEN THE TWO, RATHER THAN MAKING THE PERSONAL AUTO INS URER HAVE T O B EA R T HE E NTIR E LOS S , WHICH IS T HEN PAS SE D O N T O THE I NDIVIDUALS O NL Y. SO I WOULD R ES PE CT FU LL Y REQUEST THIS COURT TO APPROVE THE DECISION OF THE 2ND DIS TRICT COURT O F APPEALS.

THANK YOU . REBUTTAL ? HALF A MINUTE.

THANK YOU. BRIEFLY, THE S TA TUTE EXPRESSLY STATES THAT T HE P RIVATE PASSENGER OF THE %%-- ppMOTOR VEHICLE INSURER S HALL HAVE TO THE EXTENT OF A NY P ERSONAL ENTER PRO TE CTIO N BENEFITS PAID. IT DOESN'T SAY A NYTH ING ABOUT REASONABLE OR NECESSARY OR ANY OTHER DEFENSES AND IN C ONJUNCTION WITH THAT PARAGRAPH 2 OF THE ACTUAL ORDER IN THE TRIAL CASE SAYS PLAINTIFF, WHICH WAS I NC IDEN TA LLY S TA TE F ARM , NOT AMERISURE, AS A MATTER OF LAW, IS E NTIT LE D T O R EIMBURSEMENT OF ALL M ON IE S PAID TO ITS INS UR ED S O I D O BELIE VE THERE IS A N ISSUE THERE AND THE COMPROMISE IS TO KEEP THIS STATUTE AND RULE T HA T A S U NCONSTITUTIONAL, I BELIEVE THIS COURT IS IN POWER TO BE ABLE TO KEEP THE P ORTION THAT'S CONST ITUTIONAL AND REDACT THE PORTION THAT ISN'T AND I WOULD ASK THE COURT TO LOOK INTO THAT ISSUE CERTAINLY IF IT FINDS THAT THERE IS NO F AULT .

THANK YOU TO B OTH O F Y OU FOR YOUR ASSISTANCE ON T HI S CAS E , A ND W IT H T HAT , WE W IL L BE IN R EC ES S U NT IL 9 :0 0 TOMOR ROW M OR NI NG .

P LEAS E RIS E .