               NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING
                      MOTION AND, IF FILED, DETERMINED


                                             IN THE DISTRICT COURT OF APPEAL

                                             OF FLORIDA

                                             SECOND DISTRICT


PROGRESSIVE AMERICAN                         )
INSURANCE COMPANY,                           )
                                             )
             Appellant,                      )
                                             )
v.                                           )       Case No. 2D18-1651
                                             )
NANCY N. PAWELCZYK,                          )
                                             )
             Appellee.                       )
                                             )

Opinion filed May 15, 2019.

Appeal from the Circuit Court for Pinellas
County; Thomas H. Minkoff, Judge.

Stuart J. Freeman of Freeman, Goldis &
Cash, P.A., Saint Petersburg, for
Appellant.

Robert W. Hitchens of Hitchens &
Hitchens, P.A., Saint Petersburg, for
Appellee.


ATKINSON, Judge.


             Progressive American Insurance Company (Progressive) appeals the

entry of a final summary judgment in favor of Nancy N. Pawelczyk, a passenger in a

rental vehicle driven by her sister, Donna Anderson, who was insured under a policy
issued by Progressive. Ms. Pawelczyk was injured in an accident involving an

uninsured/underinsured motor vehicle (UM). Because the rental vehicle was not a

"covered auto," as defined in the UM section of the policy, Ms. Pawelczyk is not an

"insured person" covered by her sister's policy. As a result, we must reverse.

              Ms. Pawelczyk's sister was driving a rental vehicle while her Jeep, which

was listed on the declarations page of her policy with Progressive, was getting a new

transmission. After Progressive settled her sister's claim, Ms. Pawelczyk filed a

declaratory-judgment action against Progressive seeking a determination that coverage

under her sister's policy extended to her.

              The policy permits recovery of damages due to bodily injury sustained by

an "insured person" caused by an accident involving an uninsured motor vehicle.

Insured person is defined under the UM portion of the policy in pertinent part as the

named insured, a relative,1 or any person occupying, but not operating, a covered auto.

A "covered auto" means: (a) any auto or trailer shown on the declarations page, (b) any

additional auto, (c) any replacement auto, or (d) any trailer owned by the named

insured.

              On appeal, Ms. Pawelczyk argues that the rental vehicle was a "covered

auto" because it meets the definition under the policy, thereby making her an "insured

person" entitled to coverage. We disagree.




              1A  relative under the policy is defined as a person who resides in the
same household as the named insured and is related "by blood, marriage, or adoption,"
including "a ward, stepchild, or foster child." It is undisputed that Ms. Pawelczyk did not
reside in her sister's household when the accident occurred.
                                             -2-
              To be a "covered auto," the rental vehicle must be either an additional or a

replacement auto. A replacement auto means "an auto that permanently replaces an

auto shown on the declarations page." Because the rental vehicle was not a permanent

replacement for the Jeep, in order to be a "covered auto" the rental car would need to fit

the definition of an "additional auto."

              The policy provides the following definition for an additional auto:

              [A]n auto you become the actual or beneficial owner of
              during the policy period that does not permanently replace
              an auto shown on the declarations page if:
                      a. we insure all other autos you own;
                      b. the additional auto is not covered by any other
                      insurance policy;
                      c. you notify us within 30 days of becoming the owner
                      of the additional auto; and
                      d. you pay any additional premium due.

              An additional auto will have the broadest coverage we
              provide for any auto shown on the declarations page. If you
              ask us to insure an additional auto more than 30 days after
              you become the actual or beneficial owner, any coverage we
              provide will begin at the time you request coverage.

              Ms. Pawelczyk contends that her sister was the beneficial owner of the

rental vehicle because she had dominion and control over the vehicle. This argument

proves too much. It would permit UM coverage for bodily injuries suffered by every

passenger in any vehicle driven by a named insured, effectively destroying the long-

standing distinction between class I and class II insureds.2 It also erroneously equates


              2"[C]lass I insureds are named insureds and resident relatives of named
insureds." Travelers Ins. Co. v. Warren, 678 So. 2d 324, 326 n.2 (Fla. 1996). "[C]lass II
insureds are lawful occupants of the insured vehicle who are not named insureds or
resident relatives of named insureds." Id. Because these class II insureds do not pay
                                            -3-
vehicle rental, which is a purely possessory interest, with vehicle ownership—which

confers a broader property interest, including the right to encumber or sell the vehicle.

Cf. Christensen v. Bowen, 140 So. 3d 498, 506 (Fla. 2014) (finding joint titleholder of a

vehicle was a beneficial owner because he "had a legal right to encumber, sell, or take

possession of the vehicle").

              While a beneficial owner is necessarily something less than a person with

fee ownership, it requires something more than a mere right of possession. See, e.g.,

Aurbach v. Gallina, 753 So. 2d 60, 66 (Fla. 2000) ("[T]he concept of beneficial

ownership in Florida law has not been an expansive one that extends to hold vicariously

liable anyone with a theoretical right to control a motor vehicle."); Demosthenes v.

Girard, 955 So. 2d 1189, 1191 (Fla. 3d DCA 2007) ("[W]hen Better Homes contracted in

2002 to sell the unit at issue to Girard, and certainly when it accepted payment for that

unit and issued the first, albeit defective, warranty deed to him, Girard became the

beneficial or equitable owner of the unit."); State Farm Mut. Auto. Ins. Co. v. Hartzog,

917 So. 2d 363, 365 (Fla. 1st DCA 2005) ("The mere fact that the seller retains title until

after the full purchase price is paid is not enough to prove that the seller and purchaser

did not intend to transfer beneficial ownership immediately."); B. W. B. Corp. v.

Muscare, 349 So. 2d 183, 184 (Fla. 3d DCA 1977) ("A contract to sell real property has

long been held to establish the vendee as the beneficial owner of the property, with the

vendor retaining only naked legal title in trust for the vendee as security for the latter's

performance." (citing In re Estate of Sweet, 254 So. 2d 562, 563 (Fla. 2d DCA 1971))).




for UM coverage, they "are essentially third[-]party beneficiaries to the named insureds'
policy." Id.
                                             -4-
Because Ms. Pawelczyk's sister did not have any ownership interest in the rental

vehicle, she was not a beneficial owner. As a result, the vehicle was not a "covered

vehicle," and Ms. Pawelczyk is not an "insured person" entitled to coverage under her

sister's policy.

               Reversed and remanded.



VILLANTI and LUCAS, JJ., Concur.




                                          -5-
