Eric O. Silvin v. GEICO General Insurance Company, et al.

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
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No. 12-14430
Non-Argument Calendar
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D.C. Docket No. 1:11-cv-24128-JAL
ERIC O. SILVIN,
Plaintiff - Appellant,
versus
GEICO GENERAL INSURANCE COMPANY,
GEICO INDEMNITY COMPANY,
GEICO CASUALTY COMPANY,
Defendants - Appellees.
________________________
Appeal from the United States District Court
for the Southern District of Florida
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(April 23, 2013)
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Before CARNES, BARKETT and MARTIN, Circuit Judges.
PER CURIAM:
Eric O. Silvin brought a class action lawsuit against Geico General
Insurance Company, Geico Indemnity Insurance Company, and Geico Casualty
Company (collectively Geico), asserting that Geico violated the terms of its
insurance policy through its practice of undercompensating auto insurance claims.
Specifically, Silvin contested Geico’s use of a “betterment adjustment,” which
reduces the amount that Geico pays to a policy-holder when the repairs increase
the value of his vehicle. Silvin argued that the insurance policy did not allow for
such an adjustment. The district court granted Geico’s motion to dismiss, finding
that Silvin failed to state a claim under Federal Rule of Civil Procedure 12(b)(6)
because the insurance contract allows for a betterment adjustment.
On appeal, Silven argues that the contract does not permit a betterment
charge when the vehicle is repaired. He alternatively argues that the policy
language is ambiguous, and should be interpreted in his favor. Geico responds that
the district court properly interpreted the unambiguous terms of the contract. After
careful consideration, we affirm the district court’s dismissal of Silven’s amended
complaint.
I.
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We review a district court’s dismissal under Federal Rule of Civil Procedure
12(b)(6) de novo, viewing the allegations in the complaint as true and construing
them in the light most favorable to the plaintiff. Hill v. White, 321 F.3d 1334,
1335 (11th Cir. 2003). “To survive dismissal, the complaint’s allegations must
plausibly suggest that the plaintiff has a right to relief, raising that possibility
above a speculative level; if they do not, the plaintiff’s complaint should be
dismissed.” James River Ins. Co. v. Ground Down Eng’g, Inc., 540 F.3d 1270,
1274 (11th Cir. 2008) (quotation marks omitted).
“The interpretation of provisions in an insurance contract is a question of
law reviewed de novo.” Id. In this diversity action brought in Florida, we apply
Florida law because it is the substantive law of the forum state. See id. at 1274 n.1.
“Under Florida law, insurance contracts are construed according to their plain
meaning. Ambiguities in policy language are construed against the insurer in favor
of coverage.” Id. at 1274 (quotation marks and citations omitted).
II.
The insurance policy allows Geico to cover auto damage by either paying
for the damage, or repairing or replacing the damaged parts. Here, Geico opted to
repair Silvin’s damaged car. Because Silvin’s engine was replaced with a newer
one, which increased the value of the car by $5,160.50, Geico deducted that
amount from the total it paid Silvin. Silvin argues that this charge was improper
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because a betterment charge may only be applied when Geico pays for the damage,
not when Geico repairs or replaces damaged parts.
To support his argument, Silvin points to the “Limit of Liability” section of
the contract, which contains six enumerated paragraphs. Paragraph one provides
that Geico’s liability is limited to “the actual cash value of the property at the time
of the loss.” The policy defines “actual cash value” as “the replacement cost of the
auto or property less depreciation or betterment,” meaning the term includes a
betterment charge. Paragraph two explains, among other things, that Geico’s
liability “[w]ill not exceed the [cost] to repair or replace the property.” Paragraph
two does not refer to a betterment charge or “actual cash value.” Accordingly,
Silvin argues that Geico may apply a betterment charge when it pays for the
damage, as provided for in paragraph one, but not when Geico repairs or replaces
the damaged property, as provided for in paragraph two. Silvin urges that we read
paragraphs one and two disjunctively, and conclude that Geico replaced his
damaged engine under paragraph two, but could only have applied a betterment
charge under paragraph one.
In assessing Silvin’s claims, we “begin by looking to the language of the
policy.” Travelers Indem. Co. v. PCR Inc., 889 So. 2d 779, 785 (Fla. 2004). The
policy language reveals that Silvin’s argument is unpersuasive for three primary
reasons.
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First, a review of the plain language contained in the “Limit of Liability”
section does not suggest that the provisions should be read disjunctively. Unlike
other clauses separated by an “or” in the same section, the paragraphs under the
“Limit of Liability” heading are not separated by the word “or.” Reading these
provisions as if they were separated by the word “or,” as Silvin urges, would
ignore the Florida Supreme Court’s admonition that we may not “rewrite contracts,
[or] add meaning that is not present.” Taurus Holdings, Inc. v. U.S. Fid. & Guar.
Co., 913 So. 2d 528, 532 (Fla. 2005) (quotation marks omitted).
Moreover, the six paragraphs describe varied liability limitations, including
limits for personal effects, coverage of multiple and third-party trailers, and custom
parts. It would be unreasonable to construe these as mutually exclusive provisions,
rather than a list of liability limitations, especially when a claim could easily
involve more than one of these provisions. We consider that “[c]ontract provisions
must be construed in conjunction with one another so as to give reasonable
meaning and effect to all of the provisions,” Shaw v. Premier Health & Fitness
Ctr., Inc., 937 So. 2d 1204, 1205 (Fla. 1st DCA 2006), and conclude that the terms
in the paragraphs are conjunctive and should not be read as mutually exclusive.
Second, Silvin’s argument that paragraph one does not cover property
replacement is contrary to the policy language. The term “actual cash value” as
found in paragraph one is defined as including “the replacement cost of the . . .
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property less . . . betterment.” Substituting the term “actual cash value” with its
definition shows that the language in paragraph one contemplates the replacement
cost of property. Exhibit B to Silvin’s amended complaint shows that his engine
was replaced, so Geico did not violate the terms of paragraph one when it limited
its liability to “the replacement cost of the . . . property less . . . betterment.”
Third, Silvin’s argument that paragraph two is the exclusive provision
addressing the replacement cost of property is unavailing. As set out above,
paragraph one addresses the cost of property replacement, and the paragraphs are
not disjunctive or mutually exclusive. Silvin’s argument that Geico may not apply
a betterment charge for replacements because paragraph two does not contain the
term “betterment” or “actual cash value” is also unpersuasive. The policy defines
the term “betterment” as “the improvement of the auto or property to a value
greater than its pre-loss condition.” The policy explains that “actual cash value”
calculates the replacement cost of property. It would violate the plain meaning of
those terms to conclude that they could not be applied to the replacement of
property. See Taurus Holdings, Inc., 913 So. 2d at 532 (“[I]nsurance contracts are
[to be] construed according to their plain meaning.”).
Because we find Silvin’s suggested interpretation to be unreasonable, we
also reject his argument that the policy language is ambiguous. Cf. James River
Ins. Co., 540 F.3d at 1274 (“A contract provision is considered ambiguous if the
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relevant policy language is susceptible to more than one reasonable interpretation .
. . .” (quoting Taurus Holdings, Inc., 913 So. 2d at 532)).
For these reasons, we conclude that the insurance policy allows for a
betterment charge and we affirm the district court’s dismissal.
AFFIRMED.
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