Case Name: STATE of Florida, DEPARTMENT OF INSURANCE, Appellant, v. KEYS TITLE AND ABSTRACT CO., INC., a Florida corporation, Appellee
Court: Florida District Court of Appeal
Jurisdiction: Florida
Decision Date: 1999-09-09
Citations: 741 So. 2d 599
Docket Number: No. 98-2368
Parties: STATE of Florida, DEPARTMENT OF INSURANCE, Appellant, v. KEYS TITLE AND ABSTRACT CO., INC., a Florida corporation, Appellee.
Judges: DAVIS, J., concurs. BENTON, J., dissents with opinion.
Reporter: Southern Reporter, Second Series
Volume: 741
Pages: 599–606

Head Matter:
STATE of Florida, DEPARTMENT OF INSURANCE, Appellant, v. KEYS TITLE AND ABSTRACT CO., INC., a Florida corporation, Appellee.
No. 98-2368.
District Court of Appeal of Florida, First District.
Sept. 9, 1999.
Rehearing Denied Oct. 7, 1999.
Michael H. Davidson, Fla. Dept, of Insurance, Tallahassee, for Appellant.
Alfred L. Frith of Bogin, Munns & Munns, Orlando, for Appellee.
Mark A. Brown, Robert Pass and Adam S. Tannenbaum of Carlton, Fields, Ward, Emmanuel, Smith & Cutler, P.A., Tampa, for Amicus Curiae Attorney’s Title Insurance Fund, Inc.

Opinion:
PADOVANO, J.
This is an appeal from a final judgment declaring a state statute unconstitutional on its face. The trial court held that section 627.782(8), Florida Statutes violates the right to equal protection of the law because it imposes a burden on non-lawyer title insurance agents that is not also imposed on lawyers who sell title insurance. We conclude the legislature had a rational basis to limit the application of section 627.782(8) to non-lawyer title insurance agents. Therefore, we reverse the trial court's decision and uphold the validity of the statute.
Title insurance can be sold in Florida either by a title insurance agent who is licensed by the Department of Insurance or by a lawyer who is a member in good standing of the Florida Bar. In either case, the title insurance premium rates are regulated by the Department of Insurance under Chapter 627, Florida Statutes. Section 627.782(8) authorizes the Department to promulgate a rule requiring its licensees to provide relevant information for use in setting title insurance rates. The statute provides that:
[t]he department may, by rule, require licensees under this part to annually submit statistical information, including loss and expense data, as the department determines to be necessary to analyze risk premium and related title services rates, retention rates, and the condition of the title insurance industry.
Based on this authority, the Department adopted rule 4-186.013, Florida Administrative Code, which requires all licensees under Chapter 626 to provide statistical data for use in setting rates.
On its face, section 627.782(8) makes no distinction between lawyers and non-lawyers. It applies to all title insurance agents who are licensees of the Department of Insurance. However, section 626.8417(4)(a), Florida Statutes provides that lawyers who are members in good standing of the Florida Bar are exempt from the licensure requirements of Chapter 626. Because lawyers are not "licensees" of the Department of Insurance, they are not subject to the Department's reporting requirements authorized by section 627 .782(8) and required by rule 4-186.013.
Keys Title and Abstract Co., Inc., initiated an action for declaratory relief against the Department of Insurance on July 31,1996, to challenge the constitutionality of section 627.782(8). One of the arguments Keys advanced in the trial court was that the statute violates the constitutional guarantee of equal protection of the law. On this point, Keys maintained that the statute makes an arbitrary distinction between non-lawyer title insurance agents and lawyers who sell title insurance. The trial court agreed and rendered a final judgment on June 4, 1998, declaring the statute unconstitutional as a violation of the right to equal protection of the law. The Department filed a timely appeal to review the judgment.
We begin with the applicable standard of review. A trial court decision on the constitutionality of a statute is reviewed by the de novo standard, because it presents a pure issue of law. The appellate court is not required to defer to the judgment of the trial court. Although trial court decisions are presumed to be correct, there is also a presumption in the law that a statute is constitutionally valid. In re Estate of Caldwell 247 So.2d 1 (Fla.1971); Libertarian Party of Florida v. Smith, 660 So.2d 807 (Fla. 1st DCA 1995). Florida appellate courts have resolved these conflicting presumptions by deferring to the legislature. When a trial court has declared a statute unconstitutional, the reviewing court must begin the process of appellate review with a presumption that the statute is valid. See Ocala Breeders' Sales Company, Inc. v. Florida Gaming Centers Inc., 731 So.2d 21, 24 Fla. L. Weekly D627 (Fla. 1st DCA 1999); State v. Slaughter, 574 So.2d 218 (Fla. 1st DCA 1991).
The state must afford all persons equal protection of the law, but this requirement does not deprive the legislature of all power of classification. See Personnel Adm'r of Massachusetts v. Feeney, 442 U.S. 256, 99 S.Ct. 2282, 60 L.Ed.2d 870 (1979); Massachusetts Bd. of Retirement v. Murgia, 427 U.S. 307, 96 S.Ct. 2562, 49 L.Ed.2d 520 (1976). The issue is not whether the statute distinguishes one class of persons from another. Here, as in many other cases, the statute plainly does make such a distinction. The question the court must answer is whether the distinction is one that is proper, given the purpose of the statute.
An equal protection challenge to a statute that does not involve a fundamental right or suspect classification is evaluated by the rational relationship test. See Hodel v. Indiana, 452 U.S. 314, 101 S.Ct. 2376, 69 L.Ed.2d 40 (1981); Idaho Dept. of Employment v. Smith, 434 U.S. 100, 98 S.Ct. 327, 54 L.Ed.2d 324 (1977); State v. Bales, 343 So.2d 9 (Fla.1977). According to this test, the court must uphold the statute if the classification bears a rational relationship to a legitimate governmental objective. See Pennell v. City of San Jose, 485 U.S. 1, 108 S.Ct. 849, 99 L.Ed.2d 1 (1988). Our analysis in this case is governed by the rational relationship test, because section 627.782(8) does not impair a fundamental right or affect a suspect class of persons.
A proper application of the rational relationship requires consideration of two related but distinct issues. The court must determine (1) whether the statute serves a legitimate governmental purpose and (2) whether it was reasonable for the legislators to believe that the challenged classification would promote that purpose. See Western and Southern Life Ins. Co. v. State Bd. of Equalization of California, 451 U.S. 648, 101 S.Ct. 2070, 68 L.Ed.2d 514 (1981); Minnesota v. Clover Leaf Creamery Co., 449 U.S. 456, 101 S.Ct. 715, 66 L.Ed.2d 659 (1981). In the present case, there can be no doubt that the statute serves a legitimate purpose. It enables the Department of Insurance to make informed decisions regarding the premium rates for title insurance. The more difficult question we must address here is whether the legislators had reason to believe that the classification imposed by the operation of the statute would promote the legislative objective.
The rational relationship test does not focus on the wisdom of a particular legislative classification. Instead, the court must examine the potential reasons for treating one class of persons differently from another. As the Florida Supreme Court explained, a statute meets the rational relationship test if "any state of facts can reasonably be conceived that will sustain the classification attempted by the Legislature." See North Ridge General Hospital v. City of Oakland Park, 374 So.2d 461, 464 (Fla.1979), citing Lewis v. Mathis, 345 So.2d 1066, 1068 (Fla.1977); see also Gallagher v. Motors Insurance Corporation, 605 So.2d 62, 69 (Fla.1992)(holding that an equal protection challenge must be rejected if there is a "plausible reason" for the classification). It would be proper to sustain an equal protection challenge to a statute only if "the Legislature could not have had any reasonable ground for believing that there were public considerations justifying the particular classification and distinction made." North Ridge General Hospital, 374 So.2d at 465. This definition of the test imposes a heavy burden on the party challenging a statute on equal protection grounds.
Keys Title and Abstract argues that the Legislature had no reason to exclude lawyers from the reporting requirements of section 627.782(8), because the statute does not address a matter pertaining to the regulation of attorneys. We agree that the statute relates only to the setting of title insurance rates, an issue of equal importance to all title insurance agents, whether they are regulated by the Department of Insurance or the Florida Bar. Likewise, we acknowledge that there are similarities between non-lawyer title insurance agents and lawyers who sell title insurance. All title insurance agents must charge the same premium rates and they all perform the same general function. Moreover, the protection afforded by a title insurance policy is the same whether the policy was issued by a non-lawyer title insurance agent licensed by the Department or by a member of the Florida Bar.
Despite these similarities, however, we conclude that the legislature had valid reasons to exclude lawyers from the reporting requirement. One such reason is that the inclusion of lawyers would make the reporting requirement much more difficult to enforce. If all members of the Florida Bar were included in the class of persons required to report statistical data, the Department of Insurance would be forced to devise a method of identifying those Bar members who are selling title insurance. This would be very difficult, as only a fraction of the total number of Florida lawyers are engaged in title insurance work. Even if the Department could identify the lawyers who are selling title insurance policies, it could not impose any disciplinary measure against those within that subclass who fail to comply with the reporting requirements. The authority to regulate attorneys is reserved for the Florida Supreme Court under Article V, section 15 of the Florida Constitution. In contrast, the class of non-lawyer title insurance agents consists entirely of persons who are selling title insurance, and all of them are subject to discipline by the Department of Insurance.
Another reason for excluding lawyers from the reporting requirement is that the information they could provide would not be as accurate as the information submitted by non-lawyer title insurance agents. Some lawyers may be engaged exclusively in the practice of writing title insurance policies, but it is fair to assume that many others are selling title insurance polices as a part of a broader practice that includes other kinds of legal work. The expenses incurred by lawyers who are selling title insurance as a part of a general practice or even as part of a real estate practice would not accurately predict the necessary rate for title insurance premiums. This problem of apportioning expenses does not exist, however, with respect to non-lawyer title insurance agents. They are all engaged exclusively in the business of writing title insurance policies. Consequently, the expense data they could provide to the Department of Insurance would be a more accurate indicator of the appropriate premium rates.
In our view, section 627.782(8) is rationally related to a valid governmental purpose, and the classification in the law is reasonably designed to achieve that purpose. For these reasons, we conclude that the statute does not violate the right to equal protection of the law. We reverse the decision of the trial court and uphold the validity of the statute.
Reversed.
DAVIS, J., concurs. BENTON, J., dissents with opinion.
. Keys Title and Abstract also maintained that the statute violates the state constitutional right to privacy. This point was rejected by the trial court and is raised here in a cross appeal. We find the privacy argument to be without merit.