THE MARSHAL: P LEASE R IS E . L ADIE S AND GENTLEMEN, THE F LO RIDA SUPREME COU RT . P LEASE BE SEATE D.

CHIEF JUS TI CE : GOOD MORNING. NEXT CASE ON THE C OU RT 'S D OCKET I S T OB IN V ER SU S M ICHIGA N M UT UAL INS UR AN CE C OMPA NY . M R. L YNCH?

GOOD MORNING, YOUR HONORS A ND MAY I T PLE ASE THE COURT . MY NAME I S C HR IS L YN CH A ND I'M W ITH THE FIR M OF HUN TE R , WIL LIAMS AND LYN CH A ND W E'RE O UT OF COR AL G ABLE S , F LORI DA.

CHIEF JUSTICE: I D ON'TK NOW IF OUR ORD ER SET TING T HIS FOR ORA L A RG UMEN T S PECI FI CALLY R EF ER RE D TO O UR C ONCERN A BO UT T HE NAMED INSUR ED. D ID I T?

I T DID NOT .

CH IE F JUSTICE: THAT IS OUR INITI AL C ON CERN WAS W HA T I S T HE POS IT ION O F B OTH O F THE L IT IGAN TS O N W HE THER THE - - WHE TH ER THE IR N AM E I NSURED, C LASS ONE O R CLA SS T WO NAM ED INS URED ?

I A M G OING T O G ET D IRECTL Y TO T HA T I SSUE A ND THAT IS T HE CERTIFI ED Q UESTION FROM THE 1 1T H C IRCU IT D OES T HE P OLIC Y P RO VIDE COVERAGE AND WHA T IS THE EXTENT OF THA T C OVER AG E. O UR POS IT ION I S T HA T U NQUE ST IONABLEY THE P OLICY P ROVIDE S COV ER AG E B ECAU SE W HE N THI S CAR RI ER ISS UE D T HIS POL IC Y COV ER ING THE R ETAI L L EASE V EH ICLE S F OR M OTOR VEHIC LE LIA BI LITY I N F LORIDA , T HERE WAS A N U NDIS PUTED WHAT W E B EL IEVETO BE A N U ND IS PUTE D F AI LU RE T O SATISFY T HE REQ UI RE MENT OF FLORIDA O N U NI NS URED M OTORISTS .

WHEN YOU SAY I T I SSUE D THE POLIC Y F OR R ETAI L L ES SE E , WHA T YO U ARE - - I S W HA T Y OU ARE REF ER RING T O T HE D ESIGNATION IN T HE I NS URED BLA NK O N THE POL IC Y THA T S AYS LEA SE , A NY P ER SO N WHO HAS L EASE D A VEH IC LE? I MEA N , Y OU R ARG UMEN T I S BAS ICALLY WHA T THE THIRD DIS TR IC T HELD , C OR RECT?

NO, YO UR HON OR. W E FILED T HE SE C ASES U ND ER THA T C AS E , AND T HA T C AS E , T HIS I S A P OLIC Y U NL IK E A NY THING YOU HAV E P RO BABL Y E VER SEEN , I 'V E E VE R S EE N. T HERE I S SLO PP Y UND ER WRIT IN G HERE. THAT'S WHY WE ARE H ERE .

JUSTI CE : PER EZ I S W HA T J USTI CE WELLS ASKED Y OU I S THAT T HE Y HEL D THA T B ECAU SE O F THE I TE M O NE NAM ED INS URED T HA T YOU ARE E NTIT LE D, T HE P EO PL E INJ UR ED W ERE ENT IT LED T O BEN EF IT S A ND THE N HER E , I T S EE MS A S THOUGH THE F EDER AL J UDGE A GR EE D WITH THA T BUT THE N REF ORMED THA T P ROVI SION ; IS THA T A FAI R S TA TEME NT ?

YES, WHE N W E F IL ED B ASED O N THE P EREZ C AS E THE Y ANS WERED SAY IN G THEY ARE G OING TO R EF OR M T HE P OLIC Y B UT THEY WERE IN A C ATCH -2 2 S ITUATION BECAUSE O F AN E ND ORSE MENT TO THE POL IC Y W AS A ND T HE Y A RGUE D T HIS I S A STA ND-A LO NE E ND OR SE MENT . E VEN IF THE Y W IN O N THE P ERSONA L ORAL P OLIC Y SUPPLEMENT WHICH THE DISTRICT COURT J UD GE F OUND AS A MAT TE R OF F AC T DI D NOT C OVER A S NAM ED INS URED THE RET AI L L ESSE ES O R THE O CCUPAN TS A ND DID NOT C OV ER A S C OV ER ED VEH ICLE S THE R ETAI L L EA SE D VEH IC LE S THE Y STI LL HAD TO DEAL WITH T HE ARG UMENT , W EL L , I F S TAND-A LONE END OR SEME NT W HICH UND IS PUTEDL Y C OVER ED T HE R ES AL E LEA SE D V EH IC LE S THE RE WAS N O C OMPL IA NC E W IT H THE STATUTE AND THAT'S WHERE T HE D ISTR IC T COU RT - -.

JUSTI CE : T HAT'S WHERE YOU GET INT O T HI S WHE TH ER T HAT' S A N E XCES S INS UR AN CE P OLIC Y , BUT L ET'S S TICK W IT H W HA T - - WHE RE THE THI RD D ISTR IC T WAS , B ECAUSE I 'M CON CERN ED ABO UT WHE THER UND ER WHA T THE THI RD D ISTRIC T HEL D A ND W HE THER I T I S Y OU R P OSIT IO N T HA T A NY ON E W HO LEA SED A V EH IC LE F RO M F ORD MO TO R COM PANY W AS A C LASS O NE INS URED R EGAR DL ES S O F WHA T I T S AID I N THE LEASE T HA T T HEY LEA SE D T HE V EHIC LE ; IS THA T Y OU R P OSIT IO N?

T HA T'S W HAT THE T HIRD D ISTRICT HELD.

J USTICE: T HAT Y OU R POSITION?

O UR P OS ITIO N I S T HA T I F THE P OL IC Y W AS R EFOR ME D WE DID N'T APP EA L T HA T FAC T F INDI NG FROM THE DIS TR IC T C OU RT JUDGE BEC AU SE W E FEL T IT WAS I RREL EVAN T. WE MOV ED F OR SUM A R JUD GMEN T AND WE DIDN'T T HINK T HE RE WAS A TRIABLE ISS UE B EC AUSE THE RE W AS W IT H R ESPE CT T O T HE END OR SE ME NT --.

J US TI CE: LET'S G O BAC K TO THE FIRST QUESTION. WHAT CREATED T HI S A S JUD GE W ELLS H AS O UT LINE D I S THA T Y OUR POS IT IO N , W AS I T NOT , T HAT UND ER I TE M O NE A NY LEA SED , A NY P ERSO N T O W HO M A N AUTOM OBILE H AD BEE N LEASE D WAS INSURED. YOU WOULDN'T H AVE THE REF OR M A SIAN IF T HA T WE RE N OT T HE P OSITION. YOU ARE JUMPING T HE FIR ST P ART S O WHAT YOU A RE C ONCEDING THAT T HE C OU RT REF ORME D I T?

AS A FAC TUAL F IN DI NG T HA T WAS COUNT O NE O F T HE COMPLAINT.

JUSTICE: YOU ARE SAY ING YOU W ERE BUT THE J UDGE H AS E NTERED T HI S FACTU AL D ETERMI NA TION O F REF OR M AT IO N S O NO W THE O NL Y R EASO N T HA T R EFORM AT IO N W AS N EE DE D B ECAUSE OF T HE N AM E AND N OW Y OU A RE T AKIN G T HE N EX T S TE P AS R EF ORME D THI S I S W HA T Y OUR POSIT ION I S.

YES. THE Y C AN NO T B ECAU SE L ET'S SAY U NDER THE M AI N B OD Y O F THE P OLICY WHICH THE COU RT , D ISTRICT COU RT FOU ND D ID NOT R ECOVER R ETAI L L EASE D V EHIC LES B UT THE N T HE Y ADD ED T HIS E ND ORSE MENT T O T HE P OLIC Y AT S OM E POINT I N T IM E WHICH DOE S C OVER THE R ET AI L L EASE TO V EH ICLE S AND WHE N T HEY ADD ED THA T A ND I SS UE D T HAT POL IC Y A S B OT H P RINC IP ALS I ND ICATED AT T RIAL T HE Y NEV ER OFF ER ED U M C OVERAG E. THE D ISTRICT C OURT WAS C ORRECT IN R EF OR MI NG THE P OLIC Y .

CHIEF JUS TICE: YOU WAN T T O G O O N T O R EFOR M AT IO N. W E'RE S TILL O N CLA SS ONE , C LASS T WO T WO . Y OU SAY THE N ARRO W I SSUE B EFORE T HI S C OURT I S WHE THER THEY WER E PER MI SSIV E O CCUPAN TS OF THE VEH ICLE UNDER THE LIABI LI TY INSURANCE ARE E NTIT LE D T O U M BEC AUSE OF THE F AILU RE TO COM PLY WITH THE R EQUI RE MENT S , A ND Y OU TAK E THE F AI LURE T O COM PLY WITH T HE R EQ UIREME NT S AS BEI NG THE P RIMA RY I SSUE , B UT I S Y OU R , AGA IN , ARE YOU CHA NG IN G Y OU R P OSIT IO N O R HAS YOU R P OSIT IO N ALW AYS B EEN D ESPI TE W HA T Y OU A RE S AYING I N T HE R EPLY B RI EF T HAT T HE Y A RE CLA SS O NE I NSUREDS?

THEY ARE C LA SS T WO I NSURED S UNDER THE E NDORSE MENT COVERING THE R ETAIL L EA SE . THEY ARE O CC UPAN TS O F THE C OVER ED V EH ICLE . A S S UC H BECAUSE OF T HE F AILU RE TO C OMPL Y WIT H THE S TATUTE THE Y A RE ENT ITLE D T O T HE C OVER AG E .

CH IEF JUS TI CE: T HESE WERE N OT LES SEES , E AC H O F T HE M W ERE OCC UPANTS ?

THEY WERE ALL OCC UP ANTS . T HE T OB IN BLF A ND THE H UN TE R B LF WER E L ES SEES , A ND T HE M ACKA Y 'S W ER E S IM PL Y P ASSENG ERS.

CHIEF JUSTICE: D OESN'TTHAT MAKE A DIFFE RENC E WHETHER T HEY ARE L ESSE ES O R O CCUPANTS ?

C LASS O NE S ARE NAM ED I NSUREDS , CLA SS TWO 'S ARE J UST OCC UP ANTS FRO M THE U SERS O F A V EHIC LE WHI CH I S I NSURED F OR U M C OVER AG E A ND T HIS POLIC Y , B ECAUSE OF THE F AILURE T O COM PL Y W ITH T HE S TATUTE I S D EE ME D T O PRO VI DE T HE UM C OVER AG E. N OW, WE P LE D I N T HE A LTER NATIVE. THAT'S WHY WE PLED COU NT ONE A FTER T HEY A NS WERE D T HE I NITIAL COMPL AINT W E P LE D S OLEL Y I NI TIAL LY B AS ED O N T HE P EREZ DECIS IO N A ND W HEN THEY ANSWERE D T HEY IND IC AT ED THEY ARE GOING T O SEEK R EFORMA TION AND T HA T' S W HERE WE HAD THEM IN THE CAT CH -22.

J USTICE : I T HI NK THA T T HE PROBLEM THAT THIS WHO LE T HING H AS , THE R EASO N I'M H AVIN G T ROUB LE WITH I T A T LEAST I S B ECAU SE THE F AC T T HA T T HE O NL Y REA SO N T HE D ISTR ICT C OURT J UDGE WEN T T O R EFORM AT IO N W AS BEC AU SE T HE DIS TRICT C OURT J UD GE WAS C ONFRON TED WITH THE P EREZ C ASE . C ORRECT ?

YES.

JUSTICE: AND IF THE P ER EZ C ASE I S H EL D T O B E W RO NG T HEN T HESE PEO PL E W OULD NOT B E THE R EVER SE O F THE P ER EZ C ASE WOU LD B E T HA T THE SE P EOPLE WERE N OT C LA SS ONE I NSURED S UND ER T HE N YOU W OULD HAV E T O DEAL W ITH T HE E NDORSE MENT, I U ND ERSTAND THAT.

YES.

JUSTICE: THE E ND ORSE MENT BEING A CON TI NG EN T LIA BILITY S ITUATION . B UT THAT' S T HE REA SO N T HA T I A M C ON CE RNED , B EC AUSE I T H ARDLY MAK ES , I M EA N I 'M R EA LLY H AVING A HARD T IM E U NDERSTANDI NG T HE R EA SO NI NG O F THE P EREZ CAS E T HA T W OU LD M AKE EVERY L ESSE E O F A FOR D MOTOR C OM PANY C AR A C LASS O NE INS UR ED . MEANING IF THEY W ER E P EDESTR IANS S OM EWHE RE T HA T T HEY WOU LD B E C OVER ED B Y U M C OVERAGE.

THAT'S THE ARG UMENT THEY MADE AND THEY C ONVI NC ED THE DISTR IC T COURT , B UT T HE N T HE J UDGE W EN T O N T O T HE A LTERNA TIVE ARGUMENT AND HE W AS F LA T O UT W RO NG . HE S AI D THE UM S TA TU TE D ID NOT A PPLY TO T HE E NDOR SE MENT W HICH AS A RESULT OF THE A RGUMEN T T HE Y M AD E I S A S TAND -ALONE E ND OR SE MENT. IT D OE SN'T M ODIF Y THE U NDERLYING PER SO NAL POL IC Y S UPPLEMENT B ECAUSE T HEY CONVINCED THE C OURT THAT THAT HAS NOTHING TO D O W IT H R ETAIL L EA SE D V EHIC LE S. S O UND ER OUR S ECON D ARG UM EN T , T HE DIS TR IC T C OU RT WAS FLA T O UT WRONG A ND H E S AI D T HA T T HE U NINS UR ED M OTOR IS T S TATU TE DOES NOT APP LY T O T HI S P OLIC Y , AND THE P RECEDENT S AY S I T A PPLI ES T O EVE RY POLIC Y I SS UE D IN F LORIDA . WE THEN GO T O OUR A LTERNA TIVE A RGUM EN T B ECAU SE T HERE WAS A N U NDIS PU TE D A RGUMENT T O O FFER U M O N T HA T E NDOR SEMENT. THERE W AS NO REF OR ME D REJ ECTION UND ER M ULLI S , T HERE A RE T WO T YPES O F I NS URED S A ND O UR P LA INTI FF S ARE I NSUR ED 'S OCC UP ANTS .

JUS TICE : T O W HO M W ER E T HE Y SUP PO SE D T O O FFER T HE U M?

FOR D , T HE N AM E INS UR ED I S T HE ONLY O NE T HA T N EE DS T O R EJEC T IT. T HE F ORD REP RESE NTAT IV E T ESTIFIED AT TRI AL T HA T THE ISS UE O F U M C OV ER AG E UND ER THAT E ND OR SE MENT WAS N EVER D ISCUSS ED AND N EVER O FF ERED.

JUS TICE: SO IF THEY W ER E SUP POSE D T O OFFER I T T O F OR D , W HY W OULD SOM EB OD Y W HO I S A N O CCUPANT O F THE V EHIC LE N OT T HE INS UR ED H AV E S TA ND IN G T O R AISE T HE ISS UE T HA T U NINS URED M OT ORIST C OVER AG E WAS N OT OFFER ED ?

T HA T'S T HE C OU RT C AS E A ND T HE COU RT I T HINK S AY S THA T A LL C LA SS TWO INS UR ED S ARE E NTITLE D T O R AISE T HA T ARGUMENT FOR THE REASON BEING THAT MOST OF THE T IM E T HE N AM ED I NS URED A ND I N Q UIRK THERE W AS A P OLIC Y , A LS O , T HE NAM E O F THE P OLIC Y I S A COR PORA TI ON A ND I F YOU ARE G OING TO A FF OR D ANY P RO TECTION A S DIC TATE D B Y M ULLIS Y OU MUS T GIV E THE M THE OPPOR TU NITY T O R EJECT THE COVERAGE. T HE COV ERAGE I N C LASS T WO A L OT IS M AD E T O D O A BOUT T HE FAC T T HAT OUR P EO PL E A RE G ETTING FRE E C OV ER AGE. C LASS T WO I NSUR ED S , T HE COVERAGE IS ALWAY S GRATU ITOUS. Y OU DON'T PAY F OR I T.

JUS TICE : I GUE SS I 'M S TILL T RYIN G T O U NDER ST AN D H OW T HE SE PLA INTI FF S A RE C LASS T WO I NSUR ED . H OW DO Y OU G ET T O T HE P OINT W HERE Y OU SAY T HE Y ARE C LASS T WO I NS URED S? WE R EFOR ME D THE CON TR AC T , A ND S O W E K NO W T HE Y AR E NOT C LASS O NE I NSUR EDS , C OR RECT ?

Y ES .

JUSTICE: SO HOW D O T HE Y G ET T O B E C LA SS TWO I NSUREDS?

THE POL IC Y WAS R EFOR ME D F OR THE -- L IM IT ED T O THE T HREE T YP ES OF VEH IC LE S O R AT L EAST T O F OR D EMP LO YEES B UT THE N Y OU HAV E THE E NDORSE MENT W HICH DOE S PROVIDE COVERAGE T O R ET AI L L EASE D V EH ICLE S.

JUSTICE: AND T HE N THA T I S WHI CH S ECTION?

E XCUSE ME?

JUSTICE: WHICH SEC TI ON O F T HIS POL IC Y ARE Y OU G OI NG ON? ARE YOU O N THE S EC TION 5 T HAT SAYS E NDOR SE MENT E XCLUSIONS?

YES, A ND I F Y OU REA D DOW N AT THE BOTTOM I T S AY S I T P ROVIDE S LIA BI LI TY I NS URAN CE , A MOT OR VEH IC LE L IABI LITY POLICY SUBJECT TO THE U M S TATUTE. IF THERE IS A F AILU RE T O C OMPL Y WI TH T HE S TA TUTE COVER AGE IS M AN DA TE D B Y L AW A ND UND ER M ULLI S , WHI CH I S T HE F OU RT H C IRCU IT - -.

J USTI CE: HOW D O YOU GET T O O R HOW D O Y OU INT ER PR ET T HE PART O F T HE P OLIC Y T HA T SAYS THIS P OL IC Y HOW EV ER S HALL PROVI DE CON TING EN T L OS S I N EXC ES S BUT O NL Y A S R ESPECT S T HE LIA BILI TY O F N AMED I NSUR ED S ?

THE P OL IC Y A ND T HAT' S ONE O F THE A RG UM ENTS THEY M AKE IT WOULD O NL Y P ROVI DE L IABILI TY C OVER AG E U NL ES S T HE L ESSE E 'S C OV ER AG E WAS D ENIED. IT WOULD O NL Y P ROVI DE L IABILI TY INSURANCE TO T HE L ESSOR. H OWEVER - -.

JUSTICE: THAT SEEMS TO B E , WHAT PART O F T HA T S AY S T HA T T HESE P LA INTI FF S FIT U ND ER T HAT? THAT'S WHAT I AM HAV IN G A HAR D TIM E GET TI NG T O. HOW D O THE SE P LAIN TI FF S FIT UND ER T HI S S EC TION O F THE POL ICY ?

THE POL IC Y I S R EFOR ME D T O P ROVI DE U M COV ER AG E MAN DA TE D . T HEY AR E NOT ENT IT LE D UND ER T HAT POLIC Y LAN GUAGE F OR LIA BILITY COVERAGE AND I DON'T THINK CLASS T WO I NSUREDS , T HE T ES T FOR W HETHER C LA SS T WO INSUR ED S ARE ENTITLED T O U M TUR NS O N W HETHER T HE Y H AV E LIA BI LI TY P OLICY U NDER THE LIA BILI TY C OVERAG E UNDER T HE L IA BILI TY POL ICY AND T HERE IS N O C AS E THAT SAYS T HAT. A ND MUL L IS SET S FOR TH T HE P ARAMET ERS U M C OVER AG E M ANDATE D AS A RESULT OF THE F AILURE T O C OM PL Y W ITH THE STATUTE IS T HE R ECIP ROCA L . I T PARAL LE LS C OVER AG E R EQUIRED TO B E PRO VIDE D UNDER T HE F IN ANCI AL R ESPO NS IBILITY S TATU TE , T HE S TATUTE OBL IGAT ES C OV ER AG E O N B EH ALF O F THE OWN ER O F T HE V EHICLE AND ALL P ER MISS IVE USE RS A ND T HAT' S W HY MUL L IS S ET S FOR TH THE T WO C ATEG OR IE S O F INS UR ED S C LASS ONE , C LA SS TWO . THA T L AN GUAG E THA T IS THE R ECIPROCAL O F T HE F INAN CI AL R ESPO NSIB ILITY S TATU TE H AS B EE N E NF ORCE D , R EA FFIR ME D A S R ECENTL Y A S T HE 2 002 B Y F LORES, IN T HE F LO RE S C AS E B Y THI S C OU RT C ITED O VE R AND O VER A GAIN T HE RE I S U NI FO RM C OVERAGE. IT DOESN'T MATTER. YOU CAN'T E XC LUDE C OV ERAG E T O A C LA SS T WO I NS URED B Y A RG UING , W EL L , H E IS NOT C OVERED UNDER T HE LIA BILI TY POR TION BECAUSE T HA T W OULD C OMPL ET ELY U ND ERMI NE THE M ULLIS D EC IS ION.

JUSTICE : MAY BE T HI S I S A N A PP ROPRIATE TIME THEN FOR M E TO SAY S OM ETIMES W E G ET C ERTIFI ED Q UEST IONS A ND FRO M T HE C IRCU IT C OURT O F A PPEA LS A ND SOM ET IM ES O UR R EA CTIO N TO THOSE A RE , W EL L , THE Y ARE J UST ASK IN G U S T O D EC ID E A P ARTICU LAR C AS E , A ND I M US T S AY MY I NITI AL R EA CTIO N T O T HE C ERTIFI CA TION S HER E WER E , Y OU K NO W , WIL L Y OU L OO K A T T HIS AND , Y OU K NOW , TEL L U S W HETHER , Y OU KNO W , W HETH ER T HERE I S C OVER AGE , AND J USTI CE WEL LS A SKED YOU S OM E Q UESTIONS ABOUT A D ISTR IC T COURT OF A PP EA L C AS E THA T I U NDER STOO D YOUR R ESPONSE TO THAT TO SAY Y OU ARE NOT R EALLY C HALL EN GI NG T HA T CAS E . Y OU R POS IT IO NS IN T HI S CAS E AREN'T DEP EN DENT O N THE C ORRECTNESS O F T HE R ULIN G I N T HAT CASE. CAN YOU A RT ICULAT E F OR M E A T L EAST ALL W E ARE S UPPO SE D T O D EAL WIT H H ER E ARE I SSUE S O F LAW , AL L R IG HT , N OT , Y OU K NO W , A F AC T Q UEST IO NS LIK E R EFOR M ATIO N AND T HESE OTH ER T HINGS. W HAT WOULD YOU SAY I S T HE E SSENTIAL I SS UE O F L AW THA T T HE CIR CUIT COU RT O F APP EAL I S A SK IN G U S T O A NSWE R F OR T HEM THA T HAS N' T B EE N A NSWE RED U ND ER F LO RIDA LAW Y ET? C OULD YOU ART IC ULAT E THA T F OR ME?

I D ON 'T THI NK T HE RE A RE ANY. I T HI NK THI S - - I 'M K IN D O F SUR PRISED T HAT W E G OT T HI S F AR . I T HINK E VE RY C AS E W HERE T HERE I S A FAI LURE T O COM PL Y W ITH THE STA TUTE AS THE RE I S H ERE U NDIS PU TE D T HE REMED Y I S S IM PLE , YOU H AV E C OVERAG E M ANDATED B Y M ULLI S AND T HE S TATUTE AND THA T C OVER AG E I S C OVERAG E F OR C LASS O NE INS URED S , C LA SS TWO INS UREDS.

JUSTICE: THAT'S WHERE Y OU ARE S AYING THE PRE EX IS TI NG LAW IS CLEARLY O N YOU R SIDE , YOU K NO W , B UT D O YOU SEE A N I SSUE O F LAW H ER E THA T W E A RE B EI NG ASK ED T O ADDRE SS ?

I T HINK THE Y T RY T O F ORMU LATE THE Q UESTION O F , W ELL , AS A LAS T RES OR T THE Y S AY WHETH ER A CLA SS - - S OMEONE CAN Q UALI FY A S A C LA SS TWO I NSUR ED I RRESPE CTIVE OF W HE THER T HERE I S L IABI LITY COV ERAG E AVA ILAB LE U NDER THE P OLIC Y T O THA T I NS URED A ND I BEL IE VE M ULLI S ADD RE SSES T HAT AND I C AN R EA D THE ONE S ENTENCE H OLDI NG O F M UL LIS. M ULLI S S AY S I T IS N OT T HE P OLIC Y I N Q UEST IO N . I T I S P OL IC Y MUS T SAT ISFY T HE F LO RI DA FIN ANCI AL R ESPONS IBILITY STATUTE AND T HAT I S COV ERAG E FO R THE O WNER A ND ALL P ER MI SS IV E U SERS. YOU C ANNO T D EV IATE FRO M THAT. IF YOU DO YOU W IL L UND ERMI NE M ULLI S B ECAUSE I T W AN TS S TANDAR DIZED , UNI FORM C OVERAGE FOR THE PROTECTION OF THE M OT ORIN G PUB LI C A ND A S J UDGE P AR IE NT E QUO TE D S ALLIS I N THE FLO RES CASE , T HE SCO PE O F THE C OVER AGE IS N OT A MAT TE R O F C ONTEMP LATION FOR T HE P ARTIES IN WRI TING T HE POL ICY. IT IS A C REAT UR E O F S TA TU TE .

J US TICE : C OULD W E G O T HROUGH THIS A ND W E A RE USING ALL OF T HI S N IC E L AN GUAGE AND STU FF LET 'S SEE I F W E CAN P EE L THI S ONI ON D OWN. L ET M E R EC IT E T O Y OU WHA T I T A PPEA RS A ND Y OU TEL L M E WHERE IT IS WRO NG . I T A PPEA RS T HA T THI S P OLIC Y W AS ISS UED WIT H I TE M O NE CERTA IN N AMED I NS URED S , AND T HAT G IV ES Y OU C ER TAIN S TATU S UNDER F LORI DA L AW , A ND THE T RIAL JUD GE H ER E A T T HE D IS TR IC T C OURT L EV EL F OLLO WED P EREZ A ND SAI D , Y ES , I T HINK T HA T' S WHA T I T I S. B UT THE N THE JUD GE WEN T O NE S TEP F UR THER A ND DID A REF ORM ATIO N ; IS T HA T C ORRECT?

YES, A BS OL UT EL Y .

J USTI CE : THEN I T HINK Y OU SAID THAT THE R EFOR M ATIO N W AS UNDER T HE THR EE C ATEGOR IES, L EA SE D VEH IC LES, E XECUTIVE VEH ICLES , SAL ES V EHICLES.

AND N AM ED I NSUR ED .

J US TI CE : W HY WOU LD T HERE BE A R EFOR M ATIO N B ECAU SE T HIS IS A LREADY IN THE E NDORSEMENT , W HY WOULD YOU C OURT NEE D T O R EF OR M I F I T IS I N T HE END OR SE MENT ? S O I UND ER STOOD W HA T THE T RIAL J UDGE D ID WAS T O R EFORM O NLY T HE N AM ED I NSURED , AND THE N O UR N EX T S TE P IS , WELL , L ET'S T HE N TAK E A L OO K A ND S EE WHETH ER THE O THER I NS URAN CE CLA US E O R CON TI NG EN T I NSUR AN CE C LAUSE GIV ES T HESE F OL KS SOME BEN EFIT S. N OW, WHA T' S W RO NG WIT H T HA T A NALYSIS?

THAT'S C OR RECT . I T D OE S B ECAUSE IT I S A M OT OR V EH IC LE L IA BI LI TY P OLICY U NQ UEST IONA BL Y THE END ORSE MENT UNQ UE STIO NABLY INS URES T HE LEA SE VEH IC LE T HEY WER E IN. SIN CE THE Y WERE I N T HO SE C ARS AND T HE RE W AS A FAI LURE T O O FF ER U M WIT H R ESPE CT T O T HA T .

JUS TICE : L ET M E A SK YOU A Q UE STION, T HOUGH. IT APPEARS THA T R EALL Y T HE R ETAI L V EHIC LE S WE RE N OT L ISTED A S COV ERED V EH IC LE S I N T HI S P OL IC Y , W ER E THE Y?

PER EZ H EL D THA T TH EY W ERE.

JUSTICE: W EL L , PER EZ HEL D T HE NAM ED I NSUR ED . S O WE'VE GOT A N AMED INSURED. I'M LOOKING TO S EE I F W E C AN F IND WHER E THE R ETAI L VEH ICLE S.

I THINK THE DIS TRIC T COURT JUDGE H ELD T HAT TH EY W ERE N OT , L W HE RE I T S AY S , H E H EL D THA T T HO SE O NL Y R EFERRE D TO VEH ICLE S L EASE D T O FOR D E MP LOYE ES .

JUSTI CE: S O W E D ON'T H AVE A COVERED VEHICLE. WE HAVE A NAMED INSURED B UT NOT A C OVER ED VEH ICLE S O THEN THE QUESTION B EC OM ES A FTER R EFOR M AT IO N I F Y OU C HANGE THE N AM ED I NS URED T O R EFLE CT WHATEVER IT IS , THE N WE HAVE TO A NALY ZE THE P OLICY A S A PER SO N T O W HO M L EASE I S NOT I N T HE EQU ATIO N B UT W E L OO K A T I T F RO M N AMED I NSUR ED P RO VI SION AS A MEND ED THERE A ND THE N Y OUR A RGUMEN TS THA T F LO W A FT ER T HAT. ISN'T THAT REALLY WHERE WE ARE?

YES .

J USTICE: I MEA N D O THE P AR TIES A GREE T HA T' S WHE RE W E ARE ?

IT I S U NUSU AL B EC AUSE T HE Y ATTAC H A S A N END OR SEMENT TO A P OLIC Y SOMETHING WHICH THEY DIDN'T WAN T T O BE A FF ECTE D B Y. T HERE I S U M C OV ER AG E UND ER T HE MAI N B ODY OF THE P OL ICY. W HY W OU LD Y OU END OR SE T HE R ETAIL LEA SE D VEH IC LE S T O T HAT POL ICY? T HEY S HO UL D H AV E LIS TE D T HE CAR RIERS DUE T O THE L ONG-TE RM L ES SOR. THA T W AS N OT D ON E HER E. S LOPPY U NDER WRIT IN G B UT T HE Y HAVE TO LIVE WIT H T HAT.

JUSTICE: DIDN'T THE R EFOR M AT IO N R EA LL Y C UR E A LL O F THA T B EC AU SE T HEN FOR D MOTO R C OM PANY R EALL Y BEC AM E T HE N AM ED INS URED ?

FOR T HOSE T HR EE T YPES O F V EHICLES A ND ALS O THE RE I S A N AMED INSUR ED F OR THE R ETAI L VEH IC LES.

JUSTICE: AND IF THEY ARE THE N AMED I NSUR ED S T HE N W HATEVER IS O FFER ED O R REJ ECTE D BY T HEM I S I N THE IR C ONTR OL , I S I T N OT ?

Y ES .

JUSTI CE : I T SEE MS T O M E YOU ARE NOW G OI NG T O STE P THREE , STE P O NE I S WHO I S THE NAMED INSUR ED . STEP TWO IS THE R EF OR M AT ION A ND NOW S TE P THR EE I S I'V E GOT YOU A NYWA Y B ECAU SE THE Y H AD T O OFFER THE I NSUR AN CE C OM PANY HAD T O OFFER F OR D T O W HOM I T W AS PRO VIDING T HE I NSURAN CE , THE OPT IO N T O TAK E O R D ECLI NE UNI NSUR ED M OTORIST C OVERAGE AND BECAUSE T HEY DIDN' T O FFER THA T T O FOR D , THE RE FORE , N OW EVE RY BODY I S I NSUR ED EVE N T HE PERSO N O CC UP YI NG T HE V EHICLE ?

Y ES . THA T'S OUR POS ITIO N.

CHIEF JUS TICE: A ND W IT H THAT YOU ARE OUT OF TIM E. T HANK YOU.

THANK YOU, YOUR H ON OR .

MA Y I T P LEASE T HE C OURT , I 'M S TE PH EN H ARBU RG HER E O N B EHALF O F MIC HIGA N MUT UA L I NSURAN CE COMPANY.

CHIEF JUSTICE: WOULD YOU FOLLOW UP WITH J USTI CE A NSTEAD'S Q UESTION? T HE COURT H AS M ORE A ND MOR E SEEN AND WE'RE V ERY P OLIT E BECAUSE IT IS THE 1 1T H C IRCUIT B UT S EEMS THE O NL Y Q UESTIONS THAT ARE E VE R CER TI FI ED T O T HI S C OU RT I NVOLVE I NS UR ANCE A ND S OMETIM ES VER Y C AS E S PECI FI C I SSUE S. WHAT IS I T , WHAT QUE STIO N O F LAW ARE WE SUP POSE D T O B E H ELPING T HE 1 1TH C IRCU IT D EC IDE THA T HAS NOT YET B EE N D ECIDED UND ER FLO RIDA LAW?

YOUR HONOR, I WOU LD P OINT OUT T HA T N EITH ER S ID E W OULD W ERE TH E 1 1T H C IRCU IT A SKIN G F OR CER TI FI CATI ON . B OTH S ID ES ' P OS IT IO N T HA T IT SHOULD NOT BE.

CHIEF JUSTICE: AT LEASTWE AGREE ON ONE THI NG .

I BEL IE VE , YOUR H ON OR , G IVEN T HE H IS TO RY O F T HI S CASE WHICH MANY OF THE J USTI CES HAV E C OMME NTED O N , T HAT W HA T W AS C ON CERN IN G J UDGE B AR KE TT , A F OR ME R MEMBE R OF T HI S C OURT WAS THE RE WAS S OM E BRO AD ISS UE T HA T SHE WAS J US T CON CE RNED ABOUT AND SHE S OMEH OW F EL T T HAT THI S COU RT N EE DE D T O HELP HER. I DON'T THINK S HE W AS C ORRECT . I DON'T THINK THERE I S A F UNDA MENT AL LEGAL ISSUE. I T HINK WHAT H AP PENED HER E WAS THE PEREZ COU RT I NTER PR ETED T HE POLICY IN A WAY THA T W E BEL IE VE FUL LY W RONG. S IM PLY LOOKE D A T ITE M O NE, T HE NAM ED I NSUR ED , AND I GNOR ED ITE M TWO , THE V EH ICLE , A ND S O WHE N T HE Y SAW THE W OR D - -.

JUSTI CE: WOULD YOU TEL L US WHAT FLO RI DA C ASES SAY T HA T Y OU AME ND W HO A N AM ED I NSURED I S B Y CHA NGIN G C OVERED VEHIC LE S? THERE I S NO FLORI DA C AS E THAT GOES I N THA T D IR ECTI ON , S O T HAT' S THE R EA SO N W E E ND U P I N T HI S P OSTU RE .

I T HI NK W HA T HAP PE NE D I N PEREZ I S T HE Y S IMPL Y , T HE Y D IDN'T REA D T HE P OL ICY A S A W HOLE .

J US TICE : WELL , YOU A LW AY S READ WHO A N AM ED INS UR ED I S B Y WHO T HE N AMED INS UR ED I S.

YE S , BUT W HE N I T S AI D L ESSE ES , AND I T HINK W HA T HAPPENED, YOUR HONOR, I S THEY DID. T HEY FOC US ED O N THA T AND W HA T T HE N H APPE NED W HE N W E GOT TO THE DIS TR IC T COU RT WAS WE S AI D IF T HA T' S HOW Y OU ARE R EA DI NG I T T HAT' S N OT W HAT T HE T WO P ARTI ES, M ICHIGA N MUT UA L A ND FOR D S AY. W E R EF OR ME D I T W HICH W AS A R EASONA BLE THING T O D O I F T HE P OLIC Y D OE SN'T MEE T THE I NTENT OF THE PARTIES. WE HAD TO ESTABLISH T HAT B Y CLEAR A ND CONVINCIN G EVIDENCE. W E PUT THAT EVIDENCE ON A ND IT IS N OT I N D IS PUTE . IT WASN'T I N D ISPU TE I N FRONT OF THE 1 1T H C IR CUIT . > > JUSTI CE: BUT Y OU W OU LDN'T HAVE NEEDED R EFOR M ATIO N U NDER ONE O F Y OU R A RG UM ENTS B UT I T WAS G RA NT ED S O I T WAS C ORRECT UNDER ONE O F THE A RG UM ENTS, Y OU A RE ASS ER TING , AND IT WAS N' T E VE N N EC ES SARY UNDER THE O THER?

THAT'S RIG HT .

JUSTICE : W E FIN D OURSELVES IN A POS T R EF OR M AT IO N S ITUATI ON?

YES, AND THE DIS TR IC T C OURT WAN TE D T O S AY PER EZ WAS W RO NG B UT THE Y FEL T C OMPELLED T O F OLLO W T HA T.

J US TICE: W OULD Y OU ADDRESS THE POST R EFOR MATI ON N OW?

E XC USE M E ME?

JUS TI CE : YOU R OPP OS ITIO N SAYS THAT HE IS ENT ITLE D T O C ERTAIN BEN EF IT S POS T R EFOR MA TION BY L OO K IN G A T SOM E O F T HE SE CLA US ES .

AFTER W E ARG UE D T HE W HOLE R EFOR M AT IO N I SS UE , M R. LYN CH WAS IN PER EZ A ND H E W AS T RYING T O ADV AN CE P ER EZ I N T HESE C AS ES THE Y T HE N S WI TCHE D TO A DIF FERE NT ARGUMENT AND SAID, OKAY, WE ARE NOT NAMED I NS URED BUT LET'S GO TO END ORSE ME NT ONE .

J USTICE: T HA T'S AFTER THE REF OR M ATIO N.

THEY HAD N O C HOIC E.

JUSTI CE: S O T HAT'S W HERE WE ARE.

S O NOW WE A RE L OO KI NG AT E NDORSEMENT ONE W HICH CAN B E F OUND ON P AG E 4 OF P LAINTI FF'S A PPEN DI X O NE A ND T HAT P ROVI DE S A N ADD IT IONA L C OVER AGE BUT IT ONL Y A PP LIES I T T O FOR D FOR ITS LIA BI LITY , P OT ENTI AL LIABILITY AS T HE O WNER OF A LEA SE D VEH IC LE . T HE L ESSO R IS O FF ER D EE ME D T O B E T HE O WN ER . U NDER FLO RI DA LAW, THE RE I S A FIN AN CIAL RES PO NSIB IL IT Y LAW WHICH M AK ES THE LES SE E O F THI S T YPE O F L EA SE D V EHICLE THE OWNER . A ND WHA T P LAIN TI FF S W ER E T RYING TO D O HER E I S T O SAY W E O WN T HE V EH ICLE BUT W HICH O RDINARIL Y WOULD MAKE YOU C LA SS ONE BUT W E CAN 'T B E CLA SS O NE S O N OW W E W AN T T O D ESCRIB E O UR SE LVES A S O CCUP ANTS AND WE W LO OE F I T - - BELI EVE I T I S I MP RO PE R FOR SOMEONE WHO I S T HE OWN ER O F THE V EHICLE T O S TEP BAC K A ND S AY N OW I W AN T T O B E A N OCCUPANT IN MY OWN V EH ICLE .

J USTICE: THEY A RE S AYING THEY ARE ENTITLED T O B ENEFITS BECAUSE T HIS P OLICY DOES PROVIDE SOME TYP E O F CON TING ENT LOS S O R E XC ES S COV ERAGE. ISN'T THAT WHAT THE ARG UM ENT IS?

THAT' S T HEIR A RGUMENT.

JUSTICE: S O T HE REFO RE I T IS A N E XCESS O R O TH ER I NSURANCE CLAUSE THAT THEY A RE A TTEM PT IN G T O A SSER T T O ASS ERT THE IR F UNDA ME NT AL R IGHTS.

YES, SIR.

JUSTICE: A ND Y OU D IS AG REE WITH THAT?

I DIS AG RE E T HA T THEY ARE E NTITLED TO IT. I D ON'T DIS AGRE E THAT'S W HA T THEY ARE TRYING TO DO.

JUSTICE: A ND T HE LEG AL R EASO NING IS?

THE L EG AL R EASO NI NG , I S TWO -FOL D , YO UR HONOR. FIRST THERE IS A SIM PL E S TATUTO RY A RGUMENT. T HE Y FOCUS O N THE S TATU TE 6 27.7 27 , S UB SECT IO N 1 W HI CH A PPLIES T O PRI MA RY , THE P ROBL EM IS THI S I SN'T A P RIMARY POLIC Y. IF YOU LOO K A T I T O N I TS FAC E I T TES S IS A AN E XC ES S P OL ICY. T HAT LEADS YOU T O 7 27 SUB SECTIO N 2. T HAT SECTION W AS P UT I N T O L ESSE N T HE REQ UI RE MENT O F T HE WAIVER.

JUSTICE: BUT THEIR ARGUMENT IS THAT T HI S I S A CTUA LLY AS I UND ER ST AND THE A RGUMEN T , C OR RECT M E I F I 'M W RONG , B UT I S T HA T THI S IS N OT W HA T WOU LD B E A STA ND AR D U MBRELL A E XCES S POL ICY. THI S IS A Z ER O D OLLA R POL IC Y IN SOFAR A S F OR D MOTO R C OMPANY I S C ON CERN ED . F ORD MO TO R COM PA NY THE N I F Y OU D IS AG RE E WIT H THA T S AY S T HAT FO RD MOTOR C OMPA NY H AS A RIG HT O F R EJ ECTI ON O F U M C OVERAG E U ND ER M ULLI S , AND U NDER T HE U M C OV ERAG E AND T HAT F OR D MO TO R C OM PANY W AS N OT OFF ERED THE OPP OR TUNI TY TO REJ EC T I T. I SN'T T HA T THE IR A RGUM ENT?

I BELIEVE I T IS , YO UR HONOR , AND THE P RO BL EM, T HOUGH, I S THE Y A RE FOC US IN G O N T HE STR IC TE R REQ UIRE MENT S UNDER SUB SE CTIO N 1 WHI CH A PPLY T O PRI MARY P OL IC Y WHI CH R EQ UI RE K NOWI NG R EJEC TI ON AND A W RITT EN R EJECTION. S UBSECT IO N 2 F OR EXC ES S P OLICIE S E STAB LI SHES A M UCH L OW ER B AR A S T HI S COU RT REC OGNI ZE D THI S S TROC HA K . > > JUSTICE : H OW I S T HI S A N E XCES S POLICY I F , I N FAC T , T HE L ESSE E H AS N O I NS URAN CE A ND T HE F ORD MO TO R COM PA NY H AS L IA BILI TY FRO M D OLLA R O NE ?

YOUR HONOR, I B ELIE VE THE A NSWER T O THA T Q UESTION IS FOU ND S IMPL Y O N THE FAC E O F T HE E ND OR SEME NT THAT W E ARE L OOKING A T . AGA IN PAG E 4 O F T HE EXH IB IT W HICH I S E ND ORSE MENT N UM BE R ONE IT SAYS THI S POLICY, HOWEVER , S HALL P ROVI DE C ONTI NGENT L OS S I N E XCES S A UTO L IABI LI TY COVERAGE AND THEN IF Y OU LOOK AT THE D EFINITIO N O F C ON TING EN T L OS S WHA T I T S AY S I S T HE L ESSE E'S UND ERLY IN G PRI MARY I NSURANCE LIMIT I S I NADE QUATE. T HAT' S W HA T E XC ES S POL IC IE S DO, THE Y SIT O N TOP O F A N U NDERLYING P RIMA RY P OL ICY. T HAT'S WHAT THI S IS. T HAT M AK ES I T A N EXC ESS P OLICY . P LAINTIFF S MAKE A N ARG UMENT IT HAS TO B E A N U MBRE LL A P OLICY BUT T HE S TATUTE J US T SAYS PRIMA RY O R N ONPR IMAR Y. T HE V ER Y LAN GU AG E O F T HE P OLICY M AK ES I T CLE AR T HA T I S A N E XC ES S POL ICY. I T HINK THA T' S WHA T W E W OULD R ELY O N. T HE I NSUR ANCE C OMPANY W HEN THEY ISSUED IT AND F OR D W HEN THEY BOUGHT IT , PUT I N THE P HRAS E EXC ES S POL IC Y .

J US TI CE : AND T HE S TATUTE FOR EXCESS POLICY S AYS THAT THE INSURANCE COM PA NY H AS T O M AKE A VAIL AB LE CER TA IN COVERAGES?

THAT'S RIGHT.

JUSTICE: S O YOUR ARG UMENT I S WE MADE IT AVA IL ABLE I F THEY WANTED IT W E H AD I T BUT WE DID N'T H AV E T O A FFIRMA TIVELY O FFER IT?

WE D ID N' T H AV E T O - - YOU D ON'T HAV E TO S HO W A R EJECTION AND W E BEL IE VE T HERE I S MO RE THA N S UBST ANTIAL C OM PLIA NC E WIT H THAT ADD O NE WAY T O SEE T HA T I S T O S IM PL Y G O B AC K T O T HE DEC LARATI ON S P AG E WHI CH S TARTED THIS OFF. T HAT W AS WHE RE T HE N AMED I NSURED PRO VI SION A PP EA RS O N P AG E 1 O F E XHIB IT 1 , W HI CH R EFERRE D T O AS T HE D ECLA RA TION S P AG E AND I N FAC T I N T HI S O VERA LL P OLIC Y W HERE FOR D W ANTE D UM C OVERAG E, FOR E XAMPLE, FOR I TS E XECU TIVE S , UND ER T HE P OLICY WH O ARE T HE NAM ED INS UR ED S , I T GOT IT. S O THE RE I S N O QUE ST IO N I N T HE NEG OTIA TI ON OF THI S P OLIC Y T HE RE W AS U M COV ER AG E WHE RE THEY WANTED I T AND R EJEC TION W HERE THEY DID N' T AND U NDER S UBSECT IO N 2 I T D OESN 'T H AVE T O B E A WRI TT EN R EJECTION. Y OU J US T HAV E T O B E C ONVINC ED T HEY K NE W ABOUT I T AND W E BELIEVE I T I S C LE AR FROM THE FACE OF THE P OLIC Y B EYOND THA T F AC T T HA T T HI S W AS N EG OTIA TE D O N B EH AL F O F B Y D AN IE L S IM PSON W HO I S T HEIR D IREC TO R O F C ORPO RA TE I NSURANCE AND T HERE I S L ITTLE DOUBT THAT HE W AS A WARE O F T HE AVA ILAB ILITY O F UM COVERAG E. IN FACT, HE T ES TI FIED T O THAT ABOUT THE VAR IOUS LAW S T HAT A PPLY I N DIF FERE NT S TATES ABOUT THE U M COV ER AG E .

CHIE F J US TICE : S O THE R EFOR MATION T HEOR Y , I F I T IS D EEMED TO B E E XCES S INSURANCE AND THEN THE REQUIREMENT IS A LOWER R EQUIRE ME NT , WHA T IS T HE S IGNIFICANCE O F A NY I SS UE O F R EFOR M AT IO N , ANY F AC T-BA SE D ISSUE?

I THINK, YOUR H ON OR , O NE OF THE REASONS AND YOU STA RTED W HY DID T HE 1 1T H C IRCUIT C ERTI FY IT. I BEL IEVE T HA T J UD GE BAR K ET T I N PAR TI CULA R A ND T HE P AN EL A S A W HO LE W ER E CON CE RN ED - -.

CHIEF JUSTICE: IT MIGHTNOT H AVE BEEN JUD GE B AR KETT ?

I T HINK T HE Y W ER E C ONCERN ED A F EDER AL C OU RT REF ORMING A C ONTR AC T T O G ET A ROUND ESS EN TIAL LY W HA T T HE P EREZ C OU RT DID . I T HINK T HEY W ERE T RO UBLED BY THAT AND T HE Y W ANTE D THI S COURT T O WEIGH I N B UT THE Y AR E NOT R AI SING THA T ISS UE .

JUS TICE : BECAUSE T HE Y A RE A CCEP TING. WE ARE TO T HE P OI NT T O ACCEPT THE REF ORMA TION W AS DONE.

I THINK THERE W AS FUN DAMENTAL LY A C ONCERN BY THE FEDERAL C OURT O F ARE W E A LLOW ED . WE KNOW WE ARE BOU ND BY T HE S TATE COURT D ECISION. WE HAVE TO FOL LO W T HEIR LAW. I THINK T HERE IS A F UNDA ME NTAL CON CERN O F DOE S R EFOR MATI ON A PPLY.

JUS TICE: S O W E NEE D T O ANSWER THAT Q UESTION.

I D ON 'T T HINK S O B ECAU SE THE PLA IN TI FFS A REN'T C HALL ENGING.

JUSTICE: T HAT'S THE ISS UE A ND THE N THERE ARE F ACTS A ND IT IS A F AC TUAL SIT UA TI ON S O IT IS WIT HIN T HE B ROAD ER C ONCEPT O F W HETHER THERE IS COV ERAG E C ERTAINLY.

IF THEY WANTE D T O G O A S A C LASS O NE COV ER AG E WHI CH T HEY S AI D T HE Y AR E N OT DOING.

JUSTICE: BECAUSE OF T HE R EFORM AT IO N.

THE Y AR E NOT CHA LL EN GING THE V ALID IT Y O F T HE R EFORMA TION.

JUSTICE: T HAT WAS DON E J UDICIALLY , T HO UGH?

YES , A ND I T HINK T HE C OURT C OU LD S AY TO THE 11T H C IRCUIT IN R ES PONSE TO Q UESTION C, YES , I T I S P ERMISS IBLE TO R EFOR M A C ONTRAC T WHERE IT I S C LE AR B Y CLEAR A ND C ONVI NCIN G E VIDENCE THA T THE INT EN T O F T HE PARTI ES IS N OT MET B Y T HE I NT ERPR ETAT IO N OF THA T CONTRACT. WHETHER THAT I NTER PR ETAT IO N IS BY A PARTY O R A C OU RT I T SHO ULDN 'T MATTER. R EFORM A SIAN I S T HE A PPROPR IA TE R EMED Y .

J US TI CE : B UT T HE N O NCE W E GO F UR TH ER O NCE W E HAV E THE R EFORMA TI ON W HE RE D OE S T HA T LEA D US?

THAT LEA DS YOU T O THE S ECOND A RGUMENT , YOUR HON OR, W HICH IS A BRO ADER P OLIC Y A RGUM ENT WHICH I S THE SE P EOPL E OWN THE VEH ICLE . W E BEL IEVE THA T B EYON D THE S TATUTE , E VE N IF Y OU W ER E T O D ISAGRE E W ITH O UR S TA TUTORY T HEORY , T HA T T HERE SHO UL D B E - - Y OU S HOUL DN'T P ER MI T S OMEONE W HO I S AN O WN ER I N T HEIR O WN V EHIC LE T O C LAIM T HAT THEY ARE J US T A N O CCUPANT . T HAT I S C ONTR AR Y T O P OL IC Y B ECAUSE WHAT Y OU END U P D OING IS O RDIN AR IL Y U NINSURED MOT OR IS T I S TO P ROTECT T HE INN OC EN T I NSUR ED A GAINST THE B AD D ECIS IO N O F S OME O THER D RI VER. H ERE THE SE L ES SEES A S T HE O WNER S OF T HE V EH IC LE O F T HEIR O WN S TATU TO RY O BLIG ATIO N TO O BT AI N I NSURANCE F OR LIA BI LITY C OVERAGE. WITH THAT COM ES THE O PPORTUNITY U NDER 6 27 .727 .1 TO O BTAI N U M C OVER AG E. I N FACT , T HERE I S A S TRON G POLICY THAT THEY GET I T F OR W HATEVER R EASO N THEY ARE N OW C LAIM ING THEY DID N' T GET ENOUGH. IN OTHER WORDS, THEY ARESEEKING TO USE THE U M S TATU TE T O P ROTE CT T HEMS EL VES FRO M THE IR O WN B AD DEC IS IO N NOT TO G ET C OVER AGE. NOT THE BAD D EC IS ION OF T HE T HIRD -P ARTY DRIVER WHO INJURED THEM.

JUSTICE: THE THING T HAT SEEMS TO C ON V O L UT THI S IS I F - - C ON VO LUTE THI S I S O NC E T HE P OLIC Y , T HEIR V EHIC LE S ARE N'T E VEN C OVER ED ?

Y ES , YOUR H ONOR , E XC EP T FOR THE N AR ROW E ND ORSE ME NT . BUT THA T EXP LI CI T LY S AYS.

JUSTICE: T HE N AR RO W E NDORSE MENT I S O NLY C ONTING EN T LOS S O R EXC ESS. THA T'S L IK E USI NG T HE OTH ER I NSURAN CE C LAUSE T O TRY T O CHANGE THE NAMED VEHICLE . Y OU C AN 'T USE THE C OV ERED V EHICLE T O C HANG E T HE N AM ED I NSURED. H OW CAN YOU USE T HE O TH ER I NSURANCE C LAUS E T O C HA NG E THE V EHICLES INSURED ? I MEAN, THA T' S --

YOU R H ONOR , THA T' S W HY W E THINK IT IS I MPRO PE R WHA T THEY ARE TRY IN G T O DO.

J USTI CE : I 'M T RYIN G TO UNDERSTAND YOUR ARG UMENT YOU'RE GOING MUCH FURTHER AND IT IS A M UC H S IM PL ER A NS WER T O T HI S I T S EE MS.

I THI NK , YOUR H ONOR , I T C ERTAINLY I S A N A PP RO PR IATE WAY TO LOOK A T T HI S HAV IN G BEEN EXCLUDED IN THE O NE C ONTEXT, T HERE I S N OTHI NG I N THE P OLICY THAT BRING S THE M B AC K I N.

JUSTI CE : F OR A VEH IC LE O R A S A N AMED I NSUR ED , EIT HE R O NE ?

THAT'S R IGHT. THAT'S AN APPROPRIATE WAY T O LOOK AT IT. Y OUR HON OR S , I REA LIZE THI S I S A C OM PL ICAT ED C AS E. I F T HERE A RE Q UEST IONS AND I K NOW THERE MIG HT B E I W OU LD B E HAPPY T O A NSWER T HEM. I F N OT --. > > CHIEF J USTICE: DO YOUTHINK IN ANSWERING T HI S THA T W E HAV E T O T AK E ISSUE W ITH THE PEREZ D ECIS IO N?

I D ON'T B EL IEVE S O , YO UR H ONOR, BECAUSE THE PLA IN TIFFS ARE N'T CHALLENGING THAT PART OF TH E D ECISION . W E B ELIEVE P EREZ I S W RONG A ND W HI LE W E C ERTA INLY WOU LD WEL COME YOU T O SAY T HA T W E THINK PEREZ IS WRO NG I D ON'T T HINK T HA T I S A N ECES SA RY , THAT IT IS NECESSARY FOR T HE COURT TO DO THAT.

J USTICE : Y OU A GREE T HE O NLY A RGUM ENT THEY ARE MAKING HERE IS STE P T HR EE ?

YES.

JUSTICE: SO T HE Q UE STIO N THEN SHOULD MOR E P RO PE RL Y B E M AYBE PHR AS ED I S T HA T A CCEPTING REF OR MATI ON O F T HIS POLICY A S R EFOR ME D W HETHER THERE I S A NY C OVERAGE?

THAT'S C ORRECT. I THINK THA T I S A PRO PE R Q UESTIO N.

JUSTICE: BUT T HAT'S N OT GOING TO REACH THE U NI TE D STA TES C IRCU IT C OURT 'S CON CERN W IT H R EFOR M AT ION T HEN.

I T ISN'T , YOUR HON OR , BUT I THINK IN THI S C OURT LOO KING AT THE POL IC Y D ETER MINES U NDER F LORIDA LAW THERE IS NO C OV ERAGE FOR T HESE L ESSE ES T HE N I T HINK THA T ANS WERS T HEIR QUE ST ION.

CHIE F JUSTICE: E XCEPT THAT IT IS NOT THE A PPROPRIATE USE OF C ERTI FI ED QUE ST IONS. YOU ARE SAYING GO T O S TE P 3 W HICH IS K IN D O F A MIX ED Q UESTIO N OF F AC T O R LAW WHE N R EALL Y N ORMA LL Y W E' RE ANS WERING S TE P ONE T HE L EGAL I SSUE S INVOLVE D , AND I THI NK THA T' S W HA T FRA NKLY WHY W E D ECID ED T O H AV E ORA L A RGUMENT IS T O TRY T O F IGUR E O UT W HERE , W HY W E W ER E O R W ERE NOT A SK ED T O DEC ID E O R S HOULD O R SH OULD N OT D ECID E THE FIRST A ND SEC ON D S TEPS .

I T HINK , YOUR HON OR , I F YOU LOOKE D A T THE W AY THE 1 1TH C IRCU IT S EN T THI S T HE Y A SKED ONE Q UE STION, A ND T HE N THEY HAD F IV E SUB PA RTS. W HICH THE Y S UGGE STED M IGHT H ELP T HE COU RT . I THINK THE RE M AY H AV E B EE N S OME CON FU SION AS T O W HA T WOULD ACTUALL Y HELP THI S COURT I N RES OL VING T HE Q UESTION.

CHIEF JUSTICE: HELP THAT COURT OR THIS COURT.

I THINK T HERE I S CONFUSION ON THAT COURT, YOUR HONOR , CER TAIN LY N OT ON T HIS COURT . I THI NK YOUR HON OR S ARE F OCUSIN G A ND I THI NK F RANK LY T HE Y J US T WER E UNC OMFO RT AB LE WITH THIS. I WIL L S AY HAV IN G S PENT S OM E TIME WIT H F LO RIDA UNI NSUR ED M OTORIS T LAW I T IS N OT A LWAYS EASY T O UND ER STAND. T HERE IS C OM PL EXIT Y T O I T AND I THINK THE Y W ER E U NCOMFO RTABLE WADING I NT O THA T COM PL EXIT Y A ND P ER HAPS I F Y OU P UL L A S TRIN G HER E YOU G ET A RES UL T H ERE AND I T HINK THEY W ERE N ERVI NG A BOUT WAD IN G INT O THA T. I CAN S EE T HA T .

J US TI CE : WAS T HI S S TE P THREE ARGUMENT M ADE I N THE C IR CUIT COURT OF APPEAL?

IT WAS , YOUR HON OR . A ND FOR W HA TEVE R R EASO N T HE Y I T HINK WER E S O F OCUS ED O N T HE REF ORM AT IO N ISS UE T HE Y W RA PPED I T ALL UP.

JUS TICE: I DID N' T S EE T HAT THE O PI NION R EA LLY DISCUSSED W HAT WE A RE F OCUSING O N HERE I N ORA L A RGUM ENT.

THERE IS ONE A RE A W HE RE I T HINK I T DOE S , YOUR HON OR , IF YOU LOOK A T QUE STIO N E.

J USTI CE : WEL L , T HE Q UESTION, Y ES , BUT T HE IR D ISCUSSION OF L AW A ND E VERYTH ING THEY SEEM TO B E F OCUS IN G ON WHA T THE DISTRICT COURT F OC USED O N I N P EREZ AND I S PER EZ RIGHT O R W RONG, D OES IT APP LY A ND I F I T DOES APP LY CAN I T B E R EFORME D , HERE'S T HE TESTIMONY BACK AND FORTH, AND THEN W E'RE GOING TO A SK T HESE QUE STIONS. T HEY D IDN'T S EEM T O F OC US O N THE ARGUMENT THA T M R. L YN CH I S M AKIN G NOW , H EY , E VE N ASS UMIN G R EF OR M AT IO N YOU HAD T HE O BL IGAT IO N U ND ER T HE S TATUTE T O OFF ER THI S C OVERAGE AN D YOU DID N' T AND THEREFORE I'M COVERED.

I THINK IF T HE Y H AD T HE Y WOU LD HAV E REA LI ZE D P LA INTIFF 'S ARGUMENT WAS UNDER THE WRONG S ECTION , U NDER SEC TION 1 AND N OT S ECTION 2 AND T HE RECOR D I S C LEAR T HA T M ICHI GA N MUT UA L M ET I TS OBL IGAT IONS U NDER S ECTION 2 . THERE I S THE BROAD ER Q UEST ION UNDER A NY E VENT W HE N YOU J US T L OO K AT THE P OLICY ONCE T HEY A RE R EFORME D O UT A ND N OT C HALLENGING THAT WHAT I S LEFT OF IT . I F T HERE A RE N O FUR TH ER QUE STIONS, YOUR HONOR, I WOULD ASK THA T T HE C OURT I N R ESPONDIN G TO T HE 11T H C IRCUIT SAY THE RE I S N O COVER AG E FOR T HE M U NDER T HE POLICY. THANK YOU.

CHIEF JUSTICE: T HANK YOUVERY MUCH . I 'M AFR AI D Y OU'V E U SE D U P A LL O F Y OU R T IM E A ND UNL ES S ANY OF THE MEMBERS OF THE PAN EL FEE L THA T Y OU W AN T A NYTH ING F UR THER.

JUSTICE: W AS C OUNS EL C ORRECT T HA T N EITHER O F Y OU W ANTED C ERTI FI CA TI ON HER E , NEITHER OF Y OU S OU GH T C ERTIFI CA TION?

YES.

J USTI CE : T HA T' S A LL .

CH IEF JUSTICE: THANK YOU VERY MUCH. THE COURT WILL BE IN R ECES S U NTIL 9:0 0 A.M . TOM OR RO W M ORNING .

TH E M AR SHAL : P LEASE RIS E . ,, ,, ,, ,, ,, ,,