12 Fla. L. Weekly Supp. 758a
Insurance — Cancellation of policies by premium financing company for nonpayment — Interest — Premium finance companies are not entitled under statute to interest based on insurer’s failure to return unearned premiums by a date certain — Because there is no statutory authority to find entitlement to interest, absent an express agreement to pay interest when an unearned premium is not returned within a date certain, a premium finance company does not have a cause of action for interest under the common law — Because plaintiffs failed to allege that insurance policies provided agreement to pay interest when unearned premium was not returned within date certain, defendants’ motion to dismiss is granted
PURITAN BUDGET PLAN, INC., FIRST GRAMPIAN FINANCE CORPORATION, MHD PREMIUM FINANCE COMPANY, EQUITY PREMIUM, INC., GIBRALTAR BUDGET PLAN, INC., Plaintiffs, vs. AMERICAN EQUITY INSURANCE COMPANY, Defendants. Circuit Court, 17th Judicial Circuit in and for Broward County. Case No. 04-18926 (09). May 20, 2005. Robert Lance Andrews, Judge.
ORDER
THIS CAUSE having come before the Court on Defendant’s Motion to Dismiss, and the Court having considered same, having heard argument of counsel and being otherwise duly advised in premises, finds and decides as follows:
Plaintiffs, who are premium finance companies, initiated the instant action seeking to recover interest allegedly owed by Defendant insurance company. Plaintiffs’ complaint alleges that pursuant to an assignment from insureds, they were to receive refunds of unearned premiums when insurance policies were canceled for nonpayment. Plaintiffs allege that Defendant was required by Florida law to refund the unearned premiums within thirty (30) days of the cancellation of the policy and because they failed to do so, Plaintiffs are entitled to interest on the unearned premiums. Defendant now moves to dismiss the Complaint, arguing inter alia that Plaintiffs do not have the right to interest on any unearned premiums because Section 627.848, Florida Statutes does not provide for such interest.
Premium finance companies, such as Plaintiffs, finance insurance premiums for persons or entities who do not pay the premium in full at inception of coverage. In the typical transaction, the borrower executes a finance agreement which, among other things, contains a power of attorney to cancel the policy and the right to the return of the unearned portion of the premium. Absent a statutory provision or an express agreement however, an insurer is not required to return unearned premiums directly to the finance company. In Florida, premium finance companies are governed by Part XV and Part XVI of Chapter 627, Florida Statutes. Section 627.848, Florida Statutes governs the procedures when a premium finance company cancels an insurance policy upon default by the insured. Section 627.848(1)(e)1 provides in pertinent part:
Whenever a financed insurance contract is canceled in accordance with this section, the insurer shall promptly return the unpaid balance due under the finance contract up to the gross amount available upon the cancellation of the policy to the premium finance company and any remaining unearned premium to the agent or the insured, or both, for the benefit of the insured or insureds.
Under the express provisions of the statute, Plaintiffs are not entitled to interest based on the failure of Defendant to return the unearned premiums by a date certain. Plaintiffs, however, argue that Florida Statute § 627.7283(3) should be read in conjunction with § 627.848. Section 627.7283(3) provides that “[i]f the unearned premium is not mailed within the applicable period,2 the insurer must pay to the insured 8 percent interest on the amount due.” Plaintiffs’ argument is based on the doctrine of pari materia. However, the pari materia canon of statutory construction is appropriate only if the statute is ambiguous. Brown v. State, 848 So. 2d 361, 364 (Fla. 4th DCA 2003). Plaintiffs do not argue that the statute is ambiguous, nor does this Court find it to be. Had the legislature intended for premium finance companies to be entitled to interest if the unearned premiums were not returned by a date certain, it could easily have added these words to the statute. It is well settled, “[t]his court is without power to construe an unambiguous statute in a way which would extend, modify, or limit its express terms or its reasonable and obvious implications . . . [t]o do so would be abrogation of legislative power.” American Bankers Life Assurance Company of Florida v. Williams, 212 So. 2d 777, 778 (Fla. 1st DCA 1968). “While we are required to read statutes in their entirety, we are not free to add provisions to parts of a statute under the guise of such a reading.” Fortune Insurance Company v. Everglades Diagnostics, Inc., 721 So. 2d 384, 385 (Fla. 4th DCA 1998). Consequently, this Court agrees with Defendant’s argument that Plaintiffs do not have a statutory right to interest on any unearned premiums.
Since there is no statutory authority to find Plaintiff’s entitlement to interest, absent an express agreement to pay interest when an unearned premium is not returned within a date certain, a premium finance company does not have a cause of action for interest under the common law. Plaintiffs’ Complaint does not contain any allegations that the insurance policies provide an agreement to pay interest when an unearned premium is not returned within a date certain.
Accordingly, it is hereby
ORDERED AND ADJUDGED that Defendants’ Motion to Dismiss Complaint is GRANTED. Plaintiff’s Complaint is hereby dismissed in its entirety.
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1Section 627.848, as amended in 2004, provides that an insurer shall return the unpaid balance due under the finance contract by a date certain. The amendment did not, however, add any provision for interest if the unpaid balance was not paid within that specific time.
2Section 627.7283(1) provides that if an insured cancels the policy, the insurer must return any unearned premiums within 30 days after cancellation. Section 627.7283(2) provides that if an insurer cancels a policy, the insurer must mail unearned premiums within 15 days after cancellation.
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