Court Opinion

ID: 2811922
Source: CourtListenerOpinion
Date Created: 2015-06-25 16:01:17.283388+00
Date Added: 2024-06-11T11:28:00.955722
License: Public Domain

Case: 14-13478    Date Filed: 06/25/2015   Page: 1 of 23

                                                                       [PUBLISH]

              IN THE UNITED STATES COURT OF APPEALS

                       FOR THE ELEVENTH CIRCUIT
                         ________________________

                               No. 14-13478
                             Argument Calendar
                         ________________________

                  D.C. Docket No. 3:13-cv-00143-MCR-CJK

JAMES R. ALLEN,
DIANE Z. ALLEN,
MATTHEW J. SCHALL,
JUDITH A. SCHALL,
Husband and Wife Individually and as Representatives
of Others Similarly Situated,

                                                Plaintiffs – Appellants,

                                    versus

USAA CASUALTY INSURANCE COMPANY,
A Texas Corporation,

                                                Defendant,

UNITED SERVICES AUTOMOBILE ASSOCIATION,
A Texas Reciprocal Inter-Insurance Exchange
and Unincorporated Association,

                                                Defendant – Appellee.
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                           ________________________

                   Appeal from the United States District Court
                       for the Northern District of Florida
                         ________________________

                                  (June 25, 2015)

Before ED CARNES, Chief Judge, JILL PRYOR and BLACK, Circuit Judges.

BLACK, Circuit Judge:

      After James R. Allen and Diane Z. Allen (collectively, the Allens) purchased

building ordinance and law (BOL) insurance from United Services Automobile

Association (USAA) covering 50% of their home’s value, they suffered no losses

triggering payment. Now the Allens seek to recover a portion of their premium

payments because they assert they would have elected to pay for BOL insurance

covering only 25% of their home’s value. Nonetheless, their position is that had

they actually suffered a loss, they would have been entitled to 50% of their home’s

value, not 25%. The Allens appeal the district court’s dismissal of their complaint,

arguing Florida Statutes § 627.7011(2) entitles them to a refund of the difference in

premiums USAA would have charged for 25% rather than 50% BOL coverage.

      We agree with the district court that the plain language of § 627.7011(2)

does not require an insurer to obtain a policyholder’s written consent on a form

approved by the Florida Office of Insurance Regulation (Regulation Office) before

issuing BOL coverage greater than 25%. Additionally, Florida Statutes

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§ 627.418(1) bars the Allens’ suit because the only remedy available for providing

extra insurance coverage is to enforce the contract as written. The Allens freely

contracted to buy 50% coverage, that is exactly what they received, and no legal

basis exists for reducing their premium payments. We therefore affirm. 1

                                        I. BACKGROUND

         The Allens are a married couple who have resided in Pensacola, Florida

since 2000. Since 2002, the Allens have obtained homeowner’s insurance

coverage from USAA. These policies have included BOL coverage.

         Building ordinances can significantly raise the cost of repairing or replacing

a damaged structure. These costs are not covered by standard property insurance,

which typically covers only the cost of restoring the building to its original

condition. BOL coverage fills this gap by paying for the cost of complying with

building codes or other legal requirements when repairing or replacing a structure

after a covered loss. For example, assume a house is built with single-pane

windows. Thereafter, the local government enacts a rule requiring double-pane

windows, and a window subsequently breaks. The primary insurance coverage

pays the cost to replace a single-pane window, and BOL coverage pays the

additional cost required to upgrade to the double-pane window. BOL coverage is

stated as a percentage of the primary dwelling coverage. Thus, an insurance policy

         1
             We deny the Allens’ motion to certify state law questions to the Florida Supreme
Court.
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for a $100,000 home with 25% BOL coverage provides $25,000 to pay for

upgrades required by law.

      From March 3, 2002 to March 3, 2006, the Allens’ policies included 25%

BOL coverage. Since March 3, 2006, the Allens’ policies have included 50% BOL

coverage. The policies effective from 2006 to 2013 contain a page titled “Building

Ordinance or Law Coverage – Florida,” which specifies each policy includes 50%

BOL coverage.

      Neither this nor any other page is an approved Regulation Office form

pursuant to Florida Statutes § 627.7011(2). Section 627.7011(2) mandates that

“[t]he rejection or selection of alternative coverage shall be made on a form

approved by the [Regulation] [O]ffice.” According to Florida Administrative Code

Rule 69O-167.011, insurers can comply with § 627.7011(2)’s form requirement in

two ways. First, the insurer may obtain the policyholder’s written consent on Form

OIR-1148, which is available on request from the Regulation Office. Fla. Admin.

Code r. 69O-167.011(3). Second, the insurer may obtain the policyholder’s written

consent on the insurer’s own form that has been submitted to and approved by the

Regulation Office. Id. The Allens never consented to 50% BOL coverage on

Form OIR-1148. Nor did they consent to 50% BOL coverage on USAA’s own

form that could have been submitted to and approved by the Regulation Office.

Thus, it is undisputed the Allens never gave written consent to 50% BOL coverage

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on an approved Regulation Office form. Instead, they contracted to purchase 50%

BOL coverage on USAA’s non-approved form.

       The Allens filed a proposed class action complaint in the Northern District

of Florida alleging USAA violated § 627.7011(2) by providing 50% BOL coverage

without the Allens’ written consent on a form approved by the Regulation Office.

The time period encompassed by the complaint includes USAA policies issued

since April 1, 2008. The Allens sought a declaratory judgment, permanent

injunction, and damages for breach of contract measured by the difference in the

premiums that USAA would have charged for 25% rather than 50% BOL

coverage.

       Pursuant to Federal Rule of Civil Procedure 12(b)(6), USAA moved to

dismiss the complaint for failure to state a claim. The district court stayed

discovery and class certification pending adjudication of the motion to dismiss. 2

After a hearing, the district court entered an order dismissing the complaint. The

district court held § 627.7011(2) does not require an insurance provider to obtain

       2
           While the motion to dismiss was pending, Matthew J. Schall and Judith A. Schall
(collectively, the Schalls), a married couple residing in Pensacola, Florida, filed a separate suit
raising nearly identical claims against USAA Casualty Insurance Company, a wholly owned
subsidiary of United Services Automobile Association. The district court consolidated the Allen
and Schall cases and stayed the Schall case pending the resolution of the motion to dismiss. In
light of this procedural history, our analysis applies uniformly to the Allens and Schalls, on the
one hand, and USAA and USAA Casualty Insurance Company, on the other. Where this opinion
refers to the Allens, the reference includes the Allens and the Schalls. Where this opinion refers
to USAA, the reference includes United Services Automobile Association and USAA Casualty
Insurance Company.
                                                5
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the policyholder’s written selection on an approved Regulation Office form before

issuing a policy with more than 25% BOL coverage. The Allens timely filed a

notice of appeal.

                            II. STANDARD OF REVIEW

      We review de novo a Rule 12(b)(6) dismissal for failure to state a claim and

construe the factual allegations in the complaint in the light most favorable to the

plaintiff. Lord Abbett Mun. Income Fund, Inc. v. Tyson, 671 F.3d 1203, 1206

(11th Cir. 2012). This Court ordinarily does not consider anything beyond the face

of the complaint and documents attached thereto when analyzing a motion to

dismiss. Brooks v. Blue Cross & Blue Shield of Fla., Inc., 116 F.3d 1364, 1368–69

(11th Cir. 1997). However, where a document—such as an insurance policy—is

central to the plaintiff’s claim, its contents are not in dispute, and the defendant

attaches the document to its motion to dismiss, this Court may consider that

document as well. Fin. Sec. Assurance, Inc. v. Stephens, Inc., 500 F.3d 1276, 1284

(11th Cir. 2007).

      Under Rule 12(b)(6), dismissal is proper when, “on the basis of a dispositive

issue of law, no construction of the factual allegations will support the cause of

action.” Marshall Cnty. Bd. of Educ. v. Marshall Cnty. Gas Dist., 992 F.2d 1171,

1174 (11th Cir. 1993). This Court may affirm for any reason supported by the

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record, even if not relied upon by the district court. United States v. $121,100.00

in U.S. Currency, 999 F.2d 1503, 1507 (11th Cir. 1993).

                                    III. DISCUSSION

      The Allens signed USAA’s contract for 50% BOL coverage. They did not,

however, give written consent to this coverage on an approved Regulation Office

form. The question before us is whether USAA violated Florida Statutes

§ 627.7011(2) by providing 50% BOL coverage without the Allens’ written

consent on a form approved by the Regulation Office. To answer this question, we

begin by interpreting § 627.7011(2). We then examine whether, even assuming

USAA violated § 627.7011(2), the Allens’ complaint should be dismissed pursuant

to Florida Statutes § 627.418(1).

A. Florida Statutes § 627.7011(2)

      Both parties agree an insurer must obtain a policyholder’s written consent on

a form approved by the Regulation Office before issuing less than 25% BOL

coverage. The Allens argue the district court erred in concluding Florida Statutes

§ 627.7011(2) does not require a policyholder’s written consent on an approved

Regulation Office form before issuing BOL coverage greater than 25%.

According to the Allens, when the Florida Legislature enacted § 627.7011(2), it

sought to ensure homeowners were sufficiently, but not excessively, insured.

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      To accomplish this objective, the Allens assert, § 627.7011(2) sets 25% as

the default BOL coverage, then requires the policyholder’s written consent on an

approved form to depart upward or downward from this 25% level. The

Legislature crafted this requirement to protect owners of relatively new homes

from paying for unnecessary insurance. If a home were built within the past two

years, for example, BOL coverage would be virtually useless because the home is

likely in compliance with the most recent building codes.

      In response, USAA argues § 627.7011(2) does not require an insurer to

obtain a policyholder’s written consent on a form approved by the Regulation

Office before issuing BOL coverage greater than 25%. According to USAA,

§ 627.7011(2) is a gap-filling rule that applies only when the insured has refused

BOL coverage altogether and imposes no restrictions on how a homeowner

acquires extra BOL insurance.

      1. Statutory text

      We analyze Florida Statutes § 627.7011(2) in accordance with Florida law

because a federal district court sitting in diversity applies the substantive law of the

state in which it sits. Esfeld v. Costa Crociere, S.P.A., 289 F.3d 1300, 1306 (11th

Cir. 2002). When construing a statute, we strive to effectuate the Legislature’s

intent. Borden v. East–European Ins. Co., 921 So. 2d 587, 595 (Fla. 2006). To

discover this intent, we first examine the statute’s plain language. See Atwater v.

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Kortum, 95 So. 3d 85, 90 (Fla. 2012). “[W]ords or phrases in a statute must be

construed in accordance with their common and ordinary meaning.” Donato v.

Am. Tel. & Tel. Co., 767 So. 2d 1146, 1154 (Fla. 2000).

       Subsection (2) of § 627.7011 states, in relevant part:

       Unless the insurer obtains the policyholder’s written refusal of the
       policies or endorsements specified in subsection (1), any policy
       covering the dwelling is deemed to include the law and ordinance
       coverage limited to 25 percent of the dwelling limit. The rejection or
       selection of alternative coverage shall be made on a form approved by
       the [Regulation] [O]ffice. . . .

To ascertain the meaning of subsection (2), one must understand its relationship to

subsection (1). Rather than lay out subsection (1) in full, we describe its

provisions in abridged form due to its protracted length.3

       Pursuant to subsection (1), the insurer must offer each homeowner two

“policies or endorsements” and the following three coverage options. Fla. Stat.

§ 627.7011(1). First, under subsection (1)(a), the insurer must offer a “policy or

endorsement” to adjust claims on the basis of “replacement cost[],” which does not

deduct depreciation from the value of the claim, as opposed to “actual cash value,”

which does deduct depreciation value from the claim. 4 Id. § 627.7011(1)(a). This

option excludes BOL coverage. Id. Second, under subsection (1)(b), the insurer
       3
           The text of § 627.7011 relevant to this appeal is attached as an appendix.
       4
          “In other words, replacement cost policies provide greater coverage than actual cash
value policies because depreciation is not excluded from replacement cost coverage, whereas it
generally is excluded from actual cash value.” Trinidad v. Fla. Peninsula Ins. Co., 121 So. 3d
433, 438 (Fla. 2013).
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must offer a “policy or endorsement” to adjust claims on the basis of replacement

cost including 25% BOL coverage. Id. § 627.7011(1)(b). Third, also under

subsection (1)(b), the same “policy or endorsement” referring to 25% BOL

coverage must additionally offer to adjust claims on the basis of replacement cost

including 50% BOL coverage, as selected by the policyholder. Id.

      If the policy already provides for replacement cost insurance including 25%

BOL coverage, the insurer need not separately offer the first two coverage options

listed above. Id. However, the insurer must still offer the third coverage option for

replacement cost insurance including 50% BOL coverage. Id.

      Thus, subsection (1) requires the insurer to offer two “policies or

endorsements.” The first “policy or endorsement” offers replacement cost

coverage. The second “policy or endorsement” offers both 25% and 50% BOL

coverage. There are accordingly two “policies or endorsements” and three

coverage options.

      Turning to subsection (2), a policy is deemed to include 25% BOL coverage

“[u]nless the insurer obtains the policyholder’s written refusal of the policies or

endorsements specified in subsection (1).” Id. § 627.7011(2). The phrase

“policies or endorsements” in subsection (2) refers back to the phrase “policy or

endorsement” found at the beginning of subsections (1)(a) and (1)(b). This is

because “related statutory provisions must be read together to achieve a consistent

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whole.” Woodham v. Blue Cross & Blue Shield of Fla., Inc., 829 So. 2d 891, 898

(Fla. 2002).

      Subsection (2) thus functions as a gap-filling measure. If a policyholder

receives the two “policies or endorsements” specified in subsection (1) and does

not reject them in writing on an approved form, the policy is deemed to include

25% BOL coverage adjusted according to replacement cost. In this way, a

policyholder who simply signs an insurance contract without reading the fine print

and explicitly rejecting replacement cost coverage or BOL coverage would still

acquire a sufficient, minimum level of protection.

      The Allens would agree with our analysis until this point. They would not

dispute that a policyholder is entitled to 25% BOL coverage when she signs a

homeowner insurance policy and does not explicitly reject such coverage.

However, the Allens contend that when a policyholder selects BOL coverage

above 25% percent, that selection must be made on a form approved by the

Regulation Office.

      The Allens’ entire argument hinges on a single sentence in subsection (2):

“The rejection or selection of alternative coverage shall be made on a form

approved by the [Regulation] [O]ffice.” Fla. Stat. § 627.7011(2). Since this

sentence follows the phrase “25 percent of the dwelling limit,” the Allens argue the

term “alternative coverage” refers to any departure—up or down—from 25%.

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      Considered in isolation, the Allens’ interpretation of this sentence is

persuasive. The ordinary meaning of the word “alternative” is “a proposition or

situation offering a choice between two things wherein if one thing is chosen the

other is rejected.” WEBSTER’S NEW INTERNATIONAL DICTIONARY 63 (3d ed. 1976).

The word “alternative” is therefore not limited to a downward departure. If a

policyholder selects 50% BOL coverage, she has chosen that amount and rejected

the 25% BOL coverage.

      The Allens buttress this argument by noting the sentence refers to the

selection, not just the rejection, of alternative coverage. If the approved form

requirement applied only when a policyholder sought to reject at least 25% BOL

coverage, there would be no reason to include the word “selection,” which

necessarily refers to BOL coverage exceeding 25%. See State v. Goode, 830 So.

2d 817, 824 (Fla. 2002) (“[T]he Legislature does not intend to enact useless

provisions, and courts should avoid readings that would render part of a statute

meaningless.”).

      The Allens’ argument is severely undermined, however, when this single

sentence in subsection (2) is considered within the entire context of § 627.7011.

“Where possible, courts must give full effect to all statutory provisions and

construe related statutory provisions in harmony with one another.” Forsythe v.

Longboat Key Beach Erosion Control Dist., 604 So. 2d 452, 455 (Fla. 1992).

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Analysis of the whole statute establishes the approved form requirement applies

only when a policyholder seeks to choose less than 25% BOL coverage.

      Although subsection (2) requires the written rejection or selection of

alternative coverage on an approved form, Fla. Stat. § 627.7011(2), subsection (1)

contains no such requirement and simply provides a BOL policy “may be limited

to 25 percent or 50 percent of the dwelling limit, as selected by the policyholder,”

id. § 627.7011(1). From this discrepancy, one can infer that when a policyholder

chooses 50% coverage, or any other level of coverage above 25%, writing on an

approved form is not required. Had the Legislature intended to require a

policyholder’s written consent on an approved form to select BOL coverage above

25%, it presumably would have written subsection (2)’s requirement into

subsection (1). “Where the legislature has included a specific provision in one part

of a statute and omitted it in another part, we must conclude that it knows how to

say what it means, and its failure to do so is intentional.” Paragon Health Servs.,

Inc. v. Cent. Palm Beach Cmty. Mental Health Ctr., Inc., 859 So. 2d 1233, 1235

(Fla. 4th DCA 2003).

      Furthermore, contrary to the Allens’ argument, the inclusion of the word

“selection” in subsection (2) is not superfluous merely because a policyholder’s

selection of BOL coverage over 25% is not subject to the approved form

requirement, Fla. Stat. § 627.7011(2). A policyholder could select 1%, 10%, or

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20% BOL coverage. These percentages are lower than the 25% default coverage

level, but would still have to be “selected” on an approved form.

      Our interpretation is bolstered by another sentence—directly following the

approved form requirement in subsection (2)—which states: “The form must fully

advise the applicant of the nature of the coverage being rejected.” Id. If an

applicant selected coverage above 25%, she would not, by definition, be

“rejecting” any coverage about which she could be advised. Rather, she would be

gaining coverage above 25%. If the approved form requirement applied when an

applicant selected coverage above 25%, the advisement requirement would be

superfluous. “Statutory interpretations that render statutory provisions superfluous

are, and should be, disfavored.” Johnson v. Feder, 485 So. 2d 409, 411 (Fla. 1986)

(quotation omitted). If the Legislature were truly concerned about excessive

insurance, it would not have limited the advisement requirement to situations in

which the applicant rejected BOL coverage. Rather, the Legislature would have

required applicants to be advised of the risks associated with excessive BOL

coverage. Where another, plausible reading of the statute that does not render any

language surplusage is available, a court “does not assume such clumsy

draftsmanship.” Dewsnup v. Timm, 502 U.S. 410, 425, 112 S. Ct. 773, 782 (1992).

      The statutory purpose of § 627.7011 is consistent with the interpretation that

subsection (2)’s approved form requirement does not apply to BOL coverage

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exceeding 25%. Under Florida law, “to the extent that there is any ambiguity as to

the intent of [a statutory provision], we are guided by the stated statutory purpose.”

Woodham, 829 So. 2d at 897. The statutory purpose of § 627.7011(2) is evident in

subsection (4). The Legislature intended to “encourage policyholders to purchase

sufficient coverage to protect them in case events excluded from the standard

homeowners policy, such as law and ordinance enforcement . . . , combine with

covered events to produce damage or loss to the insured property.” Fla. Stat.

§ 627.7011(4). The Legislature undoubtedly sought to protect homeowners from

insufficient insurance coverage.

      The Allens, though, contend the final sentence of subsection (4) shows the

Legislature was equally concerned with the financial burden of excessive

insurance. The sentence says, “The intent is also to encourage policyholders to

discuss these issues [of BOL coverage] with their insurance agent.” Id. This

sentence does not evince the Legislature’s concern about policyholders acquiring

too much insurance. Read in conjunction with the prior sentence’s discussion of

“sufficient coverage,” id., this language signals the Legislature’s intent to have

insurance agents warn policyholders about the dangers of underinsuring one’s

home. The overriding concern of § 627.7011 is to decrease the prevalence of

underinsurance, not excessive insurance. Accordingly, subsection (2)’s approved

form requirement does not apply when a policyholder selects BOL coverage

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greater than 25% of the dwelling limit.

       2. Legislative history

       When, as here, the words of the Legislature are clear, “the legislative history

of a statute is irrelevant.” First Healthcare Corp. v. Hamilton, 740 So. 2d 1189,

1196 (Fla. 4th DCA 1999), disapproved on other grounds by Fla. Convalescent

Ctrs. v. Somberg, 840 So. 2d 998 (Fla. 2003). We nonetheless note the legislative

history of § 627.7011 is consistent with our plain reading of the Legislature’s

intended meaning.

       The Legislature originally enacted § 627.7011 in 1993. Act of Nov. 10,

1993, ch. 93-410, § 17, 1994 Fla. Laws 37–38 (codified at Fla. Stat. § 627.7011).

The Legislature passed the statute in response to the widespread property insurance

availability crisis caused by Hurricane Andrew. STAFF OF S. COMM. ON INS., STAFF

ANALYSIS AND ECONOMIC IMPACT STATEMENT, SB 16C, 13th Leg., Spec. Sess. C,

at 1–3 (Fla. 1993).5 After the hurricane, the Legislature learned many

policyholders were unaware they could have obtained coverage for replacement

cost and BOL coverage. STAFF OF H.R. COMM. ON INS., FINAL BILL ANALYSIS &

ECONOMIC IMPACT STATEMENT, HBs 33-C & 43-3, 13th Leg. Spec. Sess. C, at 3

(Fla. 1993). The problem of insufficient BOL coverage was most pronounced for

       5
         “[W]hile not determinative of final legislative intent,” legislative staff analyses are
“one touchstone of the collective legislative will.” GTC, Inc. v. Edgar, 967 So. 2d 781, 789 (Fla.
2007).
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policyholders who were required by the Federal Emergency Management

Administration to raise the floor level of their homes by several feet, a renovation

that typically cost $10,000 to $30,000. Id.

      The Legislature created the Study Commission on Property Insurance and

Reinsurance, which met during the summer of 1993 and recommended the contract

reforms codified in § 627.7011. Id. The Commission recommended the

Legislature “mandat[e] offer of replacement cost coverage up to policy limits” and

“mandat[e] offer of law and ordinance coverage with limits of 25 percent of

dwelling limits.” Id. The Legislature did precisely that by enacting § 627.7011.

Nothing in the legislative history suggests the Legislature passed § 627.7011(2) to

protect homeowners from having too much insurance. The Legislature instead

sought to ward off the financial calamity many Floridians experienced when

Hurricane Andrew destroyed their homes and they lacked the funds to rebuild in

accordance with federal law and modern building codes.

      Both the plain language of § 627.7011(2) and its legislative history

demonstrate a homeowner need not give written consent on an approved

Regulation Office form to acquire BOL coverage above 25%. Since USAA did

not violate § 627.7011(2), the district court did not err in dismissing the complaint.

The Allens failed to allege a violation of § 627.7011(2), and USAA therefore did

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not breach the contract because the Allens paid for and received the 50% BOL

coverage in the policy.

B. Florida Statutes § 627.418(1)

       Alternatively, even if USAA had violated § 627.7011(2), the district court

did not err in dismissing the complaint. Florida Statutes § 627.418(1) mandates

dismissal because a policy whose limits exceed Florida insurance coverage

limitations must be enforced as written.

       Again, under Florida law we examine the statute’s plain language. See

Atwater, 95 So. 3d at 90. Section 627.418(1) states,

              Any insurance policy, rider, or endorsement otherwise valid
       which contains any condition or provision not in compliance with the
       requirements of this code shall not be thereby rendered invalid, except
       as provided in s. 627.415,6 but shall be construed and applied in
       accordance with such conditions and provisions as would have
       applied had such policy, rider, or endorsement been in full compliance
       with this code. In the event an insurer issues or delivers any policy
       for an amount which exceeds any limitations otherwise provided in
       this code, such insurer shall be liable to the insured or his or her
       beneficiary for the full amount stated in the policy in addition to any
       other penalties that may be imposed under this code.

The only plausible reading of § 627.418(1) is that where a policy provides

coverage beyond any limitation in the code, the court must enforce the terms of the

contract as written unless the code expressly authorizes other penalties.

       6
          Florida Statutes § 627.415 is inapplicable here. That section prohibits insurers from
issuing policies “purporting to make any portion of the charter, bylaws, or other constituent
document of the insurer . . . a part of the contract unless such portion is set forth in full in the
policy.” Fla. Stat. § 627.415.
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      The first sentence of § 627.418(1) governs situations where an insurer issues

a policy providing less than the minimum coverage required by law. In such

circumstances, the policy must be enforced as if the insurer were liable for the

minimum coverage amount. See Auto-Owners Ins. Co. v. DeJohn, 640 So. 2d 158,

161 (Fla. 5th DCA 1994) (“When an insurance policy does not conform to the

requirements of statutory law, a court must write a provision into the policy to

comply with the law, or construe the policy as providing the coverage required by

law.”).

      By contrast, the second sentence of § 627.418(1) governs the opposite

situation, where a policy provides more than the maximum coverage allowed by

law. When that occurs, a policyholder can only enforce the contract as written or

recover “other penalties that may be imposed under this code.” Fla. Stat.

§ 627.418(1). The Allens have not pointed to “any other penalties that may be

imposed under this code.” Id. As such, the plain language of § 627.418(1) bars

the Allens’ attempt to recover premium payments.

      Nonetheless, the Allens argue the second sentence of § 627.418(1) is

irrelevant to their claim for relief. They assert the statute applies only when the

policyholder alleges a property loss for which the insurer is “liable.” Id. In other

words, where an insurer provides coverage above the amount allowed by law, the

insured can both recover her premium payments and, in the event of a property

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loss, force the insurer to pay the full coverage amount. The policyholder can have

her cake and eat it, too.

      The plain language of the statute does not support the Allens’ interpretation

for two reasons. First, the statute’s words do not distinguish between premium

recovery and property loss. The Allens claim the word “liable” in the second

sentence refers only to property loss, but the word “liable” is not defined in the

statute. In the absence of a statutory definition, “words are construed in their plain

and ordinary sense.” Jones v. Williams Pawn & Gun, Inc., 800 So. 2d 267, 270

(Fla. 4th DCA 2001). The ordinary meaning of “liable” is broad enough to include

both premium recovery and property loss. See WEBSTER’S NEW INTERNATIONAL

DICTIONARY 1302 (3d ed. 1976) (defining “liable” as “bound or obligated

according to law or equity”). The Allens’ narrow interpretation therefore finds no

support in the statutory text.

      Additionally, the Allens’ interpretation would yield bizarre, inconsistent

results. According to the Allens, a noncompliant insurance policy must be

construed as if “in full compliance with this code,” yet at the same time also be

construed “for the full amount stated in the policy.” Fla. Stat. § 627.418(1). A

court cannot simultaneously construe an insurance policy as fully in compliance

with governing law while also giving effect to terms not fully in compliance. We

resist attributing to the Legislature an intention that “would render the statute

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              Case: 14-13478     Date Filed: 06/25/2015     Page: 21 of 23

internally inconsistent.” Mancuso v. State, 636 So. 2d 753, 755 (Fla. 4th DCA

1994). The district court did not err in dismissing the complaint because

§ 627.418(1) mandates enforcement of the Allens’ policies as written.

                                  IV. CONCLUSION

      The Allens claim they received no value from their BOL insurance because

their home never suffered a covered loss, and they now wish to recoup their

premiums. Florida law does not countenance that result. The Allens freely

contracted to buy 50% coverage, and that is precisely what they received. They

cannot now, with the benefit of hindsight, undo their decision to protect their home

from unrealized risk. The value of insurance lies in the “[t]he transfer of risk from

insured to insurer . . . and that transfer is complete at the time that the contract is

entered.” Union Labor Life Ins. Co. v. Pireno, 458 U.S. 119, 130, 102 S. Ct. 3002,

3009 (1982). We affirm the district court’s dismissal of the complaint.

      AFFIRMED.

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                                   APPENDIX

627.7011. Homeowners’ policies; offer of replacement cost coverage and law and
                            ordinance coverage

(1) Prior to issuing a homeowner’s insurance policy, the insurer must offer each of
the following:

(a) A policy or endorsement providing that any loss that is repaired or replaced will
be adjusted on the basis of replacement costs to the dwelling not exceeding policy
limits, rather than actual cash value, but not including costs necessary to meet
applicable laws and ordinances regulating the construction, use, or repair of any
property or requiring the tearing down of any property, including the costs of
removing debris.

(b) A policy or endorsement providing that, subject to other policy provisions, any
loss that is repaired or replaced at any location will be adjusted on the basis of
replacement costs to the dwelling not exceeding policy limits, rather than actual
cash value, and also including costs necessary to meet applicable laws and
ordinances regulating the construction, use, or repair of any property or requiring
the tearing down of any property, including the costs of removing debris.
However, additional costs necessary to meet applicable laws and ordinances may
be limited to 25 percent or 50 percent of the dwelling limit, as selected by the
policyholder, and such coverage applies only to repairs of the damaged portion of
the structure unless the total damage to the structure exceeds 50 percent of the
replacement cost of the structure.

An insurer is not required to make the offers required by this subsection with
respect to the issuance or renewal of a homeowner’s policy that contains the
provisions specified in paragraph (b) for law and ordinance coverage limited to 25
percent of the dwelling limit, except that the insurer must offer the law and
ordinance coverage limited to 50 percent of the dwelling limit. This subsection
does not prohibit the offer of a guaranteed replacement cost policy.

(2) Unless the insurer obtains the policyholder’s written refusal of the policies or
endorsements specified in subsection (1), any policy covering the dwelling is
deemed to include the law and ordinance coverage limited to 25 percent of the
dwelling limit. The rejection or selection of alternative coverage shall be made on
a form approved by the office. The form must fully advise the applicant of the
nature of the coverage being rejected. If this form is signed by a named insured, it
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is conclusively presumed that there was an informed, knowing rejection of the
coverage or election of the alternative coverage on behalf of all insureds. Unless
the policyholder requests in writing the coverage specified in this section, it need
not be provided in or supplemental to any other policy that renews, insures,
extends, changes, supersedes, or replaces an existing policy if the policyholder has
rejected the coverage specified in this section or has selected alternative coverage.
The insurer must provide the policyholder with notice of the availability of such
coverage in a form approved by the office at least once every 3 years. The failure
to provide such notice constitutes a violation of this code, but does not affect the
coverage provided under the policy.

      ....

(4) A homeowner’s insurance policy must include in bold type no smaller than 18
points the following statement:

“LAW AND ORDINANCE COVERAGE IS AN IMPORTANT COVERAGE
THAT YOU MAY WISH TO PURCHASE. YOU MAY ALSO NEED TO
CONSIDER THE PURCHASE OF FLOOD INSURANCE FROM THE
NATIONAL FLOOD INSURANCE PROGRAM. WITHOUT THIS
COVERAGE, YOU MAY HAVE UNCOVERED LOSSES. PLEASE DISCUSS
THESE COVERAGES WITH YOUR INSURANCE AGENT.”

The intent of this subsection is to encourage policyholders to purchase sufficient
coverage to protect them in case events excluded from the standard homeowners
policy, such as law and ordinance enforcement and flood, combine with covered
events to produce damage or loss to the insured property. The intent is also to
encourage policyholders to discuss these issues with their insurance agent.

      ....

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