Opinion ID: 1920397
Heading Depth: 2
Heading Rank: 3

Heading: Interpretation of Section 626.906(4), Florida Statutes (2005)

Text: Among Florida's district courts, only the Second District in this case and the Third District in Winterthur have specifically construed subsection (4) of section 626.906 to determine whether this subsection is available to nonresidents. [7] In Winterthur, the insured, who was a resident of Peru, obtained a medical insurance policy in Florida from Winterthur International, Ltd. (Winterthur). 559 So.2d at 1214-15. Winterthur was a Bermuda corporation that was not authorized to do business in Florida. See id. at 1215. The insured asserted that Florida courts had personal jurisdiction over Winterthur under section 626.906. See id. Winterthur argued, however, that section 626.906 is available only to an insured who is a Florida resident, and that Winterthur had not performed any acts that would bring it within the reach of the statute. See id. The Third District rejected the assertion that as a matter of law section 626.906(4) is limited to Florida residents, and held that subsection 626.906(4) is available to a nonresident insured. 559 So.2d at 1215. The Third District observed that unlike subsections (1) through (3) of section 626.906, subsection (4) does not contain either an express or implied residency limitation. See id. at 1215. The Third District noted that subsection (4) uses the term transaction of insurance to describe acts which subject an unauthorized foreign insurer to service of process and personal jurisdiction under the UIPL. See id. The Third District observed that the term transact with respect to insurance is statutorily defined in section 624.10 to include certain enumerated acts, but stated that this definition is not limited, expressly or by implication, to transactions involving Florida residents. Id. The Third District concluded therefore that no basis appears on which such a limitation should be implied in section 626.906(4). Id. On motion for rehearing, the Third District acknowledged that the protection of Florida residents is one of the objectives of the UIPL, but explained that this objective is not its sole purpose. See id. at 1216-17. Rather, the Third District determined that the UIPL has a broader statutory purpose in that it was enacted to subject unauthorized foreign insurers to the jurisdiction of Florida courts in suits brought by or on behalf of insureds or beneficiaries arising out of the insurer's business transactions in this state. See id. at 1217. The Third District concluded that applying section 626.906(4) to nonresidents is consistent with this broader purpose. See id. Directly contrary to Winterthur, the Second District in this case held that subsection (4) of section 626.906 is available only to Florida residents. Borden, 884 So.2d at 238. The Second District reasoned that the Legislature has expressly stated that section 626.906 (as a whole) was meant to protect Florida residents. Id. at 236. In disagreeing with Winterthur's interpretation of section 626.906(4), the Second District explained that [s]ubsections (1)-(3) place a residency limitation on the very activities that are encompassed within section 624.10's definition of `transact.' Id. at 238. The Second District concluded that to construe subsection (4) to include, without limitation, the same activities subject to the residency limitation of subsections (1)-(3) is to render subsections (1)-(3) meaningless. Id. Further, the Second District noted that subsequent to Winterthur, the Third District in Hassneh Insurance Co. of Israel, Ltd. v. Plastigone Technologies, Inc., 623 So.2d 1223, 1225 (Fla. 3d DCA 1993), explicitly stated that section 626.906 applies only to insurers that issue policies `held by Florida residents. (quoting Bookman ). In Hassneh, the Third District failed to refer to or distinguish its previous decision in Winterthur.