Opinion ID: 1819614
Heading Depth: 1
Heading Rank: 3

Heading: the pending case and the certified question

Text: The district court in this case misstated the test for applying the public policy exception. By using a test we have specifically rejected, the court broadened the public policy exception far beyond its narrow purpose. The district court erroneously stated that [t]he public policy exception [to the lex loci contractus rule] is properly invoked when Florida bears a significant connection to the insurance coverage.  892 So.2d at 1110 (footnote omitted) (emphasis added). Applying this test to the named insureds, the court considered various factors, such as the length of their stay in their Florida home every year and that their car was garaged in Florida at the time of the accident. The court concluded that the insureds had a significant degree of permanency and that their continuing permanent contacts with Indiana do not defeat the permanence of their Florida winter residency. Id. at 1112. The court held that when there is a significant degree of permanency in the insured's sojourn in Florida, then the insured may invoke Florida's public policy to invalidate an exclusionary clause in an out-of-state insurance contract provided that the insurance company is on reasonable notice that the risk of the policy is centered in Florida at the time of the accident. Id. The district court did acknowledge our decision in Sturiano rejecting the mostsignificant-relationships test. Id. at 1110-11 & n. 3. In reaching its holding, however, the court nevertheless relied on our discussion of that test in Gillen and the apparent application of that test in several district court cases decided before Sturiano. See Safeco Ins. Co. of Am. v. Ware, 424 So.2d 907, 908 (Fla. 4th DCA 1982) (affirming the trial court's determination that Florida `ha[d] a significant relationship' to the insurance contract at issue); Petrik v. N.H. Ins. Co., 379 So.2d 1287, 1290 (Fla. 1st DCA 1979) (noting that [t]he State of Florida had significant contacts with the automobile liability policy which justified an interpretation of it under Florida law); Johnson v. Auto-Owners Ins. Co., 289 So.2d 748, 749-50 (Fla. 1st DCA 1974) (finding that Florida had ample contacts with the insured to apply the law of Florida). Applying a significant connection test, the district court analyzed several facts to determine whether Florida bore a significant connection to the insurance coverage. Thus, the court essentially applied the most-significant-relationships test under another name. As a result, even though the Hodges were permanent residents of Indiana, the court focused on their extended but temporary winter stay in Florida and found it significantly permanent. See Roach, 892 So.2d at 1112. Our decisions in Gillen, Sturiano, and Strochak make clear both that this state applies the lex loci rule to conflict-of-law issues involving contracts, and that the public policy exception to that rule is narrow and does not apply unless it is necessary to protect Florida's own citizens. See Gillen, 300 So.2d at 7; Herron, 110 So. at 542. Gillen rested on the fact that the insureds in that case moved to Florida and that they indeed were establishing themselves as permanent residents. 300 So.2d at 6-7. We emphasized that the insurer had acknowledged the insureds' change of domicile from New Hampshire to Florida and asserted our substantial interest of Florida in protecting its citizens. Id. at 7. Thus, because the insureds were Florida residents and because they notified the insurer of their change of domicile, we determined it necessary to assert Florida's paramount interest in protecting its own from inequitable insurance arrangements. Id. Our decision in Strochak, too, was based on the insured's permanent move to Florida and the insurer's issuance of the policy here. In this case, the Hodges were permanent residents of Indiana with automobile insurance purchased in Indiana from a State Farm agent in Indiana. The difference between the facts in Gillen and Strochak, on the one hand, and those in Sturiano and this case, on the other, is that in Gillen and Strochak the insureds were permanent residents of Florida, and the insurer knew it. Cf. Reinish v. Clark, 765 So.2d 197, 208 (Fla. 1st DCA 2000) (holding that the Florida homestead exemption's limited application to a home constituting the permanent residence was not unconstitutional as to nonresidents and stating that [i]rrespective of the state of residency of their owners, secondary residences do not trigger the same public policy concerns and are not entitled to the same protection as permanent Florida residences). Because the insureds in this case were not permanent residents of Florida, the public policy exception to the lex loci rule does not apply. We noted above that the public policy exception to the lex loci rule requires both the involvement of a Florida citizen in need of protection and the existence of a paramount Florida public policy. Our answer to the certified question, holding that the public policy exception applies only when permanent residents are involved, renders it unnecessary to consider whether the Indiana law regarding recovery of underinsurance claims, which conflicts with the corresponding Florida statute, violates a paramount public policy of Florida.