Washington National Insurance Corp. v. Ruderman

Sydell Ruderman, Sylvia Powers, and other Floridians (plaintiffs) purchased limited-liability-home-health-care-coverage insurance policies issued by a predecessor of Washington National Insurance Corporation (defendant). The policies covered certain home-health-care expenses and had maximum benefit amounts per occurrence and over the lifetime of the policies. The policies had automatic-benefit-increase provisions that annually increased the maximum benefits available to insureds if certain conditions were met. Ruderman, Powers, and the other insureds filed a class-action suit in federal district court in Florida, questioning whether the automatic-benefit-increase provision applied to the maximum per-occurrence amount, the maximum-lifetime-benefit amount, or both. Applying the provision to both amounts provided the greatest coverage for the insureds. Washington National sought to use extrinsic evidence to show that the provision only applied to the maximum-lifetime-benefit amount. The district court found that the provision was ambiguous regarding whether the automatic increase applied to both amounts and that the law was not settled in the circuit regarding how the ambiguity should be resolved. On appeal to the United States Court of Appeals for the Eleventh Circuit, the court certified three questions to the Florida Supreme Court: (1) whether the policy’s automatic-benefit-increase provision was ambiguous; (2) whether, if the provision was ambiguous, the court should consider extrinsic evidence to resolve the ambiguity; and (3) whether the provision applied to both the per-occurrence amount and the maximum-lifetime-benefit amount.