Court Opinion

ID: 9945803
Source: CourtListenerOpinion
Date Created: 2024-02-28 16:06:54.367716+00
Date Added: 2024-06-11T14:22:10.378764
License: Public Domain

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
                              FOURTH DISTRICT

   UNIVERSAL PROPERTY AND CASUALTY INSURANCE COMPANY
                 a/s/o DOLORES M. SENKO,
                         Appellant,

                                     v.

 GROVE ISLE AT VERO BEACH CONDOMINIUM ASSOCIATION, INC.,
                        Appellee.

                             No. 4D2023-0021

                            [February 28, 2024]

   Appeal from the County Court for the Nineteenth Judicial Circuit,
Indian River County; Robyn E. Stone, Judge; L.T. Case No.
312022CC001585.

   Nancy W. Gregoire Stamper of Birnbaum, Lippman & Gregoire, PLLC,
Fort Lauderdale, and Diana E. Rodriguez and Alyson Holob of Universal
Property and Casualty Insurance Company, Fort Lauderdale, for
appellant.

  E. Taylor George and Shaun R. Koby of Lydecker LLP, Tampa, for
appellee.

KUNTZ, J.

   Universal Property and Casualty Insurance Company appeals the
county court’s order granting Grove Isle at Vero Beach Condominium
Association’s motion for judgment on the pleadings. The county court
entered judgment based on its retroactive application of amendments to
section 627.714(4), Florida Statutes (2021). We conclude the court erred
when it retroactively applied the statutory amendments and reverse the
court’s order granting judgment on the pleadings.

                              i. Background

  Universal insured Dolores M. Senko’s condominium unit at Grove Isle.
The policy, effective April 30, 2021, included a provision granting Universal
subrogation rights. After the policy was issued, the Florida Legislature
amended section 627.714 to state that if a condominium association’s
policy does not provide the association’s insurer subrogation rights against
an individual unit owner, then a policy issued to an individual unit owner
cannot provide subrogation rights against the association.

    After the policy was issued and the statute was amended, Senko’s unit
sustained water damage, and Universal covered the loss. Universal sued
Grove Isle, alleging Grove Isle negligently failed to maintain Senko’s
exterior wall. In response, Grove Isle moved for judgment on the pleadings,
arguing the amendment to section 627.714(4) foreclosed Universal’s
action. Grove Isle argued that the amended statute precluded the
subrogation claim because Grove Isle’s condominium association
insurance policy did not grant its insurer subrogation rights against Grove
Isle’s unit owners. In response, Universal argued that even if the
amendment to section 627.714(4) applied, the Legislature did not intend
it to apply retroactively. Universal also argued its retroactive application
would unconstitutionally impair its subrogation rights, which took effect
on April 30, 2021.

   The county court agreed with Grove Isle and concluded that section
627.714(4) applied and that Grove Isle’s insurance policy waived its
insurer’s subrogation rights against Grove Isle’s unit owners.

                                ii. Analysis

   We focus on the county court’s retroactive application of the changes
to section 627.714(4). The effective date of the policy Universal issued to
Senko was April 30, 2021, and insurance contracts are generally governed
by the law as it existed when the policy issued. Menendez v. Progressive
Express Ins. Co., 35 So. 3d 873, 876 (Fla. 2010); Hassen v. State Farm Mut.
Auto. Ins. Co., 674 So. 2d 106, 108 (Fla. 1996) (“[I]t is generally accepted
that the statute in effect at the time an insurance contract is executed
governs substantive issues arising in connection with that contract.”).

   Grove Isle disagrees and argues the dispositive date is the date the tort
claim accrued. On that point, it argues R.A.M. of South Florida, Inc. v. WCI
Communities, Inc., 869 So. 2d 1210 (Fla. 2d DCA 2004), controls. But
R.A.M. is distinguishable.

   R.A.M. involved an unlicensed contractor who agreed to perform
construction work. Id. at 1213. At the time of contracting, a statute
provided that all contracts entered by unlicensed contractors were illegal
and unenforceable unless the contractor cured this defect by subsequently
obtaining a license. Id. at 1214. Later, the Legislature amended the
statute, eliminating the ability to cure. Id. Later still, the contractor

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obtained a license and sued on the contract. Id. The defendant argued
illegality and inability to cure, while the contractor argued that the
statutory right to cure created a vested contract right to cure that could
not later be eliminated. Id. at 1214–15.

    The Second District rejected the contractor’s argument, holding that
the cure provision did not constitute a vested right under the contract, but
a gift of “legislative grace that could be withdrawn by subsequent
legislative action.” Id. at 1217. The court explained that because the
contractor had no right to enforce an illegal contract, he had no rights
under the contract until he cured by obtaining a license, and his failure to
obtain a license before the cure provision was eliminated precluded vesting
of any enforceable right. Id. at 1218–19.

    Distinct from R.A.M., this case does not involve an illegal contract
needing a cure. Instead, it involves an insurance contract that included a
valid subrogation provision at the time the contract was entered. As
Universal argues, the insurance policy was issued based on the inclusion
of the subrogation right. The price paid for the policy was based, in part,
on Universal’s right to seek subrogation when appropriate. Thus, unlike
in R.A.M., enforceable contract rights were created when the policy was
issued. As such, the presumption that an insurance policy is governed by
the law at the time the policy was issued applies. See Menendez, 35 So.
3d at 876.

   Of course, presumptions are not absolute. After the policy was issued,
the Legislature amended subsection (4) of section 627.714 to state: “If a
condominium association’s insurance policy does not provide rights for
subrogation against the unit owners in the association, an insurance
policy issued to an individual unit owner in the association may not
provide rights of subrogation against the condominium association.” §
627.714(4), Fla. Stat. (2021). So if the amendments to section 627.714(4)
apply retroactively, Senko’s insurer cannot exercise its subrogation rights
against Grove Isle. 1

   Generally, “a substantive statute will not operate retrospectively absent
clear legislative intent to the contrary, but . . . a procedural or remedial
statute operate[s] retrospectively.” State Farm Mut. Auto. Ins. Co. v. Laforet,
658 So. 2d 55, 61 (Fla. 1995) (citations omitted). We conclude the
statutory amendments at issue were substantive. See Fla. Ins. Guar.
Ass’n, Inc. v. Devon Neighborhood Ass’n, Inc., 67 So. 3d 187 (Fla. 2011).

1 We agree with the county court that Grove Isle’s insurance policy waives its
insurer’s right to subrogation against Grove Isle unit owners.

                                      3
    In Devon, the statute was amended after the policy was issued to extend
its reach to commercial insurance policies and impose penalties for failure
to comply with new statutory requirements. Id. at 194–95. The court
concluded that the amendments to “section 627.7015 as amended in 2005
cannot be characterized as simply procedural or remedial, but w[ere]
clearly substantive.” Id. at 195. As a result, “the presumption against
retroactive application of the substantive amendments to section
627.7015 applie[d].” Id. As in Devon, the statutory amendments here
impact a substantive right. If applied retroactively, the statute removes
the insurer’s contractually bargained-for subrogation right that existed
before the enactment of the statutory amendment.

    For a substantive statute to apply retroactively it must satisfy a two-
prong test. Menendez, 35 So. 3d at 877. “First, the Court must ascertain
whether the Legislature intended for the statute to apply retroactively.” Id.
at 877. “Second, . . . the Court must determine whether retroactive
application would violate any constitutional principles.” Id. Because
“[e]ven when the Legislature . . . expressly state[s] that a statute is to have
retroactive application, [the Florida Supreme Court] has refused to apply
a statute retroactively if the statute impairs vested rights, creates new
obligations, or imposes new penalties.” Laforet, 658 So. 2d at 61.

    On the first prong of the test, we again turn to Devon. In Devon, the
court determined the Legislature did not clearly intend a statutory
amendment to apply retroactively for two main reasons. 67 So. 3d at 194–
97. First, “the text of the amendment itself [was] silent as to its forward
or backward reach,” and, second, “the enacting law specifically state[d]
that the amendments [were] to be effective” on a particular date. Id. at
196. The same is true here. The text of the statutory amendment was
silent about retroactivity. But the enacting law explicitly provided that the
legislation “shall take effect July 1, 2021.” Ch. 2021-99, Laws of Fla. In
Devon, the court “noted that the Legislature’s inclusion of an effective date
for an amendment is considered to be evidence rebutting intent for
retroactive application of a law.” Devon, 67 So. 3d at 196. Nothing
suggests the Legislature intended to apply the section 627.714(4)
amendments retroactively.

   Grove Isle counters that subsection (1) of section 627.714 applies to
“policies issued or renewed on or after July 1, 2010 . . . .” § 627.714(1). 2

2 Section 627.714(1) stated at the time the policy was issued, and still states
today, that:

                                      4
But only subsection (1) of section 627.714 states “[f]or policies issued or
renewed on or after July 1, 2010 . . . .” Id. The remaining language in
subsection (1) does not discuss subrogation rights, but instead discusses
required coverage and maximum deductibles for “loss assessment
coverage.” Id. The different subjects addressed in subsections (1) and (4)
suggest that the July 1, 2010 date is inapplicable to subsection (4).

   As the Florida Supreme Court did in Devon, we conclude the Legislature
did not express a clear intent to retroactively apply the amendments to
section 627.714(4).

   “Once the first inquiry is made, and only ‘[i]f the legislation clearly
expresses an intent that it must apply retroactively, then the second
inquiry is whether retroactive application is constitutionally permissible.’”
Devon, 67 So. 3d at 194 (quoting Metro. Dade County v. Chase Fed. Hous.
Corp., 737 So. 2d 494, 499 (Fla. 1999) (cleaned up)). But “[because w]e
conclude that the [statute’s] plain language . . . does not evince an intent
that the statute apply retroactively[, w]e . . . need not address the second
prong.” Old Port Cove Holdings, Inc. v. Old Port Cove Condo. Ass’n One,
Inc., 986 So. 2d 1279, 1284 (Fla. 2008).

                                 iii. Conclusion

   We reverse the county court’s order retroactively applying amendments
to section 627.714(4), and remand for further proceedings.

   Reversed and remanded.

KLINGENSMITH, C.J., concurs.
ARTAU, J., dissents with opinion.

ARTAU, J., dissenting.

      For policies issued or renewed on or after July 1, 2010, coverage
      under a unit owner’s residential property policy must include at
      least $2,000 in property loss assessment coverage for all
      assessments made as a result of the same direct loss to the
      property, regardless of the number of assessments, owned by all
      members of the association collectively if such loss is of the type of
      loss covered by the unit owner’s residential property insurance
      policy, to which a deductible of no more than $250 per direct
      property loss applies. If a deductible was or will be applied to other
      property loss sustained by the unit owner resulting from the same
      direct loss to the property, no deductible applies to the loss
      assessment coverage.

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   I respectfully dissent. In my view, the trial court did not impermissibly
give retroactive application to section 627.714(4), Florida Statutes (2021).
Instead, the trial court correctly applied section 627.714(4)’s amended
version because the contractual right to bring the cause of action in this
case did not accrue until well after the amended statute’s effective date.

    As Justice Canady observed while serving on the Second District,
“[d]etermining proper limitations on the temporal reach of statutes is a
recurring problem in the law.” R.A.M. of S. Fla., Inc. v. WCI Cmtys., Inc.,
869 So. 2d 1210, 1215 (Fla. 2d DCA 2004).

     In Landgraf v. USI Film Products, 511 U.S. 244, 268-69 (1994), the
United States Supreme Court explained that the universally accepted “ban
on retrospective legislation” applies to “statutes, which though operating
only from their passage, affect vested rights and past transactions.”
However, “[a] statute does not operate ‘retrospectively’ merely because it is
applied in a case arising from conduct antedating the statute’s enactment
. . . or upsets expectations based in prior law.” Id. at 269 (citing Republic
Nat’l Bank of Miami v. United States, 506 U.S. 80, 100 (1992) (Thomas, J.,
concurring in part and concurring in judgment)).

    Instead, as our supreme court in Metropolitan Dade County v. Chase
Federal Housing Corp., 737 So. 2d 494 (Fla. 1999), made clear, a statute
can only be said to apply retroactively if it “attaches new legal
consequences to events completed before its enactment.” Id. at 499
(emphasis added) (quoting Landgraf, 511 U.S. at 270). As our sister court
held in R.A.M., where a contract provides “merely an expectant and
contingent right,” rather than “an ‘immediate, fixed right[,]’” there can be
“no [enforceable] cause of action on the contract” or “vested right” that is
infringed upon by application of a statute that took effect before “a cause
of action has accrued[.]” R.A.M., 869 So. 2d at 1218-20; see also Menendez
v. Progressive Express Ins. Co., 35 So. 3d 873, 877 (Fla. 2010) (explaining
that courts will reject retroactive application of new statutory enactments
where the new statute “impairs a vested right, creates a new obligation, or
imposes a new penalty” (emphasis added)).

    Here, the insurer’s contractual right to seek subrogation under the
terms of its insurance policy with its insured did not mature into a “vested”
contractual right to pursue the subrogated cause of action against the
association until well after section 627.714(4)’s amended version became
effective.

   A contractually subrogated cause of action does not arise or vest until
the date on which the original “rightsholder” suffers the loss giving rise to

                                     6
the cause of action that is subrogated. See Villa Maria Nursing & Rehab.
Ctr., Inc. v. S. Broward Hosp. Dist., 8 So. 3d 1167, 1170 n.1 (Fla. 4th DCA
2009) (explaining that the limitations period for a contractual subrogation
action runs “from the date of the injury to the original ‘rightsholder’”
(quoting Allstate Ins. Co. v. Metro. Dade Cnty., 436 So. 2d 976, 979 (Fla.
3d DCA 1983))); see also Harris v. Aberdeen Prop. Owners Ass’n, Inc., 135
So. 3d 365, 368 (Fla. 4th DCA 2014) (noting that “[a] cause of action
accrues when the last element constituting the cause of action occurs”
(quoting section 95.031(1), Fla. Stat. (2005))).

   “Florida law is well established that the right to sue on an inchoate
cause of action—one that has not yet accrued—is not a vested right.”
Raphael v. Shecter, 18 So. 3d 1152, 1157 (Fla. 4th DCA 2009) (quoting
Williams v. Am. Optical Corp., 985 So. 2d 23, 30 (Fla. 4th DCA 2008)). As
a result, and contrary to the position taken by the majority, the insurer
could not possibly have had a “vested,” and therefore enforceable,
contractual right to pursue the subrogated claim against the association
when the insurer issued its policy to the unit owner.

    In my view, the trial court correctly determined in the judgment on
review that, “at the time the [insurance] contract was executed[,]” the
insurer “possessed only an expectant or contingent right, not an
immediate, fixed, and vested right” to the subrogated negligence cause of
action against the association at issue here that only matured into a
“vested” contractual right after section 627.714(4)’s amended version
became effective. As the trial court explained, “[t]here simply was no
possible way for [the insurer] to know in advance what would occur, whom
it might occur with, and on what day it might occur.” Therefore, the trial
court correctly concluded that “[i]t [was] impossible for [the insurer] to
possess an immediate, fixed, vested right for an unknown cause of action
against an unknown defendant on an unknown day” when the insurer
issued its policy to the unit owner.

   No retroactive application of section 627.714(4)’s amended version can
be said to have occurred in this case because the insurer possessed no
“vested” contractual right to sue the association on the subrogated
negligence claim before the enactment of the amended statute. See Adjei
v. First Cmty. Ins. Co., 352 So. 3d 900, 905-06 (Fla. 3d DCA 2022)
(determining that a statute governing post-loss assignments of insurance
benefits could be applied to a claim arising under a policy issued prior to
the statute’s enactment because the only vested rights affected were those
arising under the assignment of benefits that occurred after the statute’s
enactment); Blaesser v. State Bd. of Admin., 134 So. 3d 1013, 1016 (Fla.
1st DCA 2012) (holding that a former state employee could not establish

                                    7
retroactive impairment of any right to renewed membership in the Florida
Retirement System (FRS), resulting from a statute’s enactment after his
separation from FRS-covered employment but before he returned to work
with an FRS-covered agency, because any such right was only an
“expectant or contingent right” that could vest only “if he [had] returned to
FRS-covered employment” before the enactment of the challenged statute).

   Moreover, the inchoate nature of the insurer’s subrogation claim, at the
time section 627.714(4)’s amended version became effective, distinguishes
this case from Hassen v. State Farm Mutual Automobile Insurance Co., 674
So. 2d 106 (Fla. 1996)—the case upon which the majority relies for the
proposition that “the statute in effect at the time an insurance contract is
executed governs substantive issues arising in connection with that
contract.” Id. at 108. Unlike here, where the incident giving rise to the
subrogation claim did not occur until well after section 627.714(4)’s
amended version became effective, the subrogation claim in Hassen vested
two years prior to that challenged statute’s enactment when the accident
giving rise to the covered loss occurred. See id. at 107-10.

   Thus, I would affirm the trial court’s entry of judgment on the pleadings
in favor of the association because section 627.714(4), as amended,
barred recovery on the insurer’s subrogation claim, which was merely
inchoate and not yet vested when the amended statute became effective.

                            *        *         *

    Not final until disposition of timey filed motion for rehearing.

                                     8