Monday, September 3, 2012

An insurance dispute with Citizens may require you to travel to Tallahassee

The Castle Beach Club Condominium Inc., a Miami condominium association, sued Citizens Property Insurance Corporation for breach of contract over a disputed insurance claim. The case was originally filed in Miami but Citizens sought to transfer the suit to Leon County (Tallahassee) by invoking Florida's "home venue privilege".

On August 1, 2012, the Third District Court of Appeals affirmed the trial court's order granting Citizens' request to transfer venue up to Leon County. The Court did this because it found that Citizens:

Is a state entity based on language in the Citizens enabling statute which provides that Citizens is a "government entity that is an integral part of the state...not a private insurance company."

There was no exception to the home venue privilege presented; and

There was no waiver by Citizens of its home venue privilege

Castle Beach Club Condominium argued that the Florida Legislature did not intend for the home venue privilege to apply to Citizens even though the enabling statute (Section 627.351(6)(a)1, F.S. ) is silent on the issue. The 3rd DCA ruled that in the face of such statutory silence, the burden was on the condominium association to prove that the privilege was not meant to apply and that burden of proof was not met. This does leave the door open for our Florida Legislature to address whether or not it wishes to allow Citizens Property Insurance Corporation to retain this kind of legal advantage in the upcoming 2013 Legislative Session.

Castle Beach Club also argued that Citizens is a state entity but not a state agency or state subdivision and thus, it should not be entitled to home venue privilege. The Court rejected that argument based on the enabling language quoted above. Interestingly, this same Court declined in 1979 to grant home venue privilege to the Florida Insurance Guaranty Association (FIGA) after concluding that it was a business entity and "not an arm of the government". When you visit FIGA's website and click on their Frequently Asked Questions, the following is the answer to What is FIGA:

FIGA is part of a non-profit, state-based, statutorily-created system that pays certain outstanding claims of insolvent insurance companies. By paying these claims, guaranty associations protect policyholders and claimants.

That description certainly sounds more like a governmental entity than a private business entity but the current case law says otherwise.

Lastly, Castle Beach Club argued that even if Citizens did have home venue privilege, it had waived that right due to the fact that it had previously litigated similar disputes in Miami-Dade County. The 3rd DCA disagreed with this logic and countered that a waiver of the home venue privilege could only occur through actions in the same case, not different cases.

What exactly could this ruling mean for your condominium, cooperative or homeowners' association as well as for individual Citizens policy holders?

Frankly, it is another reason not to feel great about being a Citizens policy holder. It means you might have to worry about trekking up to Tallahssee should you ever dispute a claim with Citizens. It means that should Citizens decide its venue victory in the Castle Beach Club case is worth duplicating, the vast majority of Florida policy holders can expect to incur additional hassles and expenses to puruse their rights. Some associations may file in Leon County right from the start as a result of this case and others may continue to file locally and hope that Citizens doesn't move for a venue change or that the Florida Legislature amends the enabling statute to waive this privilege.

Isn't being a Citizens policy holder difficult enough at times without the added burden of home venue privilege now being thrown into the mix?

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