Opinion ID: 2719924
Heading Depth: 2
Heading Rank: 1

Heading: Florida Insurance Law

Text: “Because federal jurisdiction over this matter is based on diversity, Florida law governs the determination of the issues on this appeal.” State Farm Fire & Cas. Co. v. Steinberg, 393 F.3d 1226, 1230 (11th Cir. 2004). The pivotal question here is whether the statutory definition of “structural damage” contained in § 627.706(2)(k) applies to the phrase “structural damage” in the Sheltons’ policy. We outline the relevant Florida law and then apply it to this case. 2 Although Liberty Mutual seemed to contest some of these findings, it ultimately stipulated for purposes of the Sheltons’ motion for summary judgment that (1) the Sheltons’ home exhibited minor cosmetic damage caused by sinkhole activity and (2) the “total amount [the Sheltons] may claim under the policy for damages for the cost to repair the minor physical (cosmetic) damage exhibited by insured dwelling caused by sinkhole activity and the cost for work to remediate subsurface conditions is $ 129,000.24.” 3 “We review a district court’s summary judgment decision de novo, applying the same legal standards as those that governed the district court.” Lodge v. Kondaur Capital Corp., 750 F.3d 1263, 1268 n.6 (11th Cir. 2014). Summary judgment is appropriate where “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). 7 Case: 13-15371 Date Filed: 08/21/2014 Page: 8 of 12 “It is fundamental that the laws of Florida are a part of every Florida contract.” Dep’t. of Ins., State of Fla. v. Teachers Ins. Co., 404 So. 2d 735, 741 (Fla. 1981). “[A]ll existing applicable or relevant and valid statutes, . . . at the time a contract is made become a part of it and must be read into it just as if an express provision to that effect were inserted therein, except where the contract discloses a contrary intention.” Northbrook Prop. & Cas. Ins. Co. v. R & J Crane Serv., Inc., 765 So. 2d 836, 839 (Fla. Dist. Ct. App. 2000) (quotation marks omitted); Gordon v. State, 608 So. 2d 800, 802 (Fla. 1992) (“Valid laws in effect at the time a contract is made enter into and become part of the contract as if expressly incorporated into the contract.”). Accordingly, a “statute in effect at the time an insurance contract is executed governs substantive issues arising in connection with that contract.” Hassen v. State Farm Mut. Auto. Ins. Co., 674 So. 2d 106, 108 (Fla. 1996); Lumbermens Mut. Cas. Co. v. Ceballos, 440 So. 2d 612, 613 (Fla. Dist. Ct. App. 1983) (“It is well settled in Florida that the statute in effect at the time the insurance contract is executed governs any issues arising under that contract.”). Also, “‘the renewal of a contract of insurance constitutes the making of a new contract for the purpose of incorporating into the policy changes in the statutes regulating insurance contracts.’” Bell Care Nurses Registry, Inc. v. Cont’l Cas. Co., 25 So. 3d 13, 15 (Fla. Dist. Ct. App. 2009) (quoting Metro. Prop. & Liab. Ins. Co. v. Gray, 446 So. 8 Case: 13-15371 Date Filed: 08/21/2014 Page: 9 of 12 2d 216, 218 (Fla. Dist. Ct. App. 1984)); May v. State Farm Mut. Auto. Ins. Co., 430 So. 2d 999, 1001 (Fla. Dist. Ct. App. 1983) (“It is the law in this state that a contract of annually renewable insurance forms a new contract at each renewal for the purpose of incorporating into the contract the statutory provisions enacted after the creation of the original contract relationship.” (quotation marks omitted)). Applying Florida law here, we must conclude that the statutory definition of “structural damage” contained in § 627.706(2)(k) governs the construction of the phrase “structural damage” in the Sheltons’ policy. The Florida legislature expressly stated that the statutory definition applies when the term “structural damage” is “used in connection with any policy providing coverage . . . for sinkhole losses.” Fla. Stat. § 627.706(2)(k) (emphasis added). There is no dispute here that the statutory definition of “structural damage” in § 627.706(2)(k) was in effect when the Sheltons’ policy was renewed in July 2011. Thus, under Florida law, the statutory definition of “structural damage” is a part of the Sheltons’ policy. We recognize that the Sheltons’ policy does not reference or contain the statutory definition of “structural damage.” But, under Florida law, the statutory definition “must be read into [the Sheltons’ policy] just as if an express provision to that effect were inserted therein . . . .” Northbrook Prop. & Cas. Ins. Co., 765 So. 2d at 839 (quotation marks omitted). 9 Case: 13-15371 Date Filed: 08/21/2014 Page: 10 of 12 Similarly, it is of little moment that Liberty Mutual and the Sheltons could have agreed to a different and broader definition of “structural damage” than the one provided in § 627.706(2)(k). See, e.g., Green v. Life & Health of Am., 704 So. 2d 1386, 1391 (Fla. 1998) (holding that an insurer can agree to a different standard than the rigid statutory standard when the insurer “chose to draft and incorporate a different . . . standard in its application”). Liberty Mutual’s policy, however, did not incorporate a different definition of “structural damage.” Under Florida law, the absence of an alternative definition means that the statutory definition fills the gap. There is no indication in the policy that the parties intended to depart from the statutory definition. See Northbrook Prop. & Cas. Ins. Co., 765 So. 2d at 839 (providing that all relevant and existing statutes become part of a contract, “except where the contract discloses a contrary intention” (quotation marks omitted)).