14 Fla. L. Weekly Supp. 129a
Insurance — Automobile — Gap policy — Jurisdiction — County court — Appeal of county court’s dismissal of action brought by owner of vehicle totaled in accident against defendant that did not indemnify owner pursuant to gap policy in which defendant agreed to pay owner difference between outstanding balance of car loan and vehicle’s actual cash value in event of total loss, upon finding that court lacked subject matter jurisdiction to address sole remaining issue of attorney’s fees and costs following entry of default and defendant’s payment of damages because defendant is not insurer, but motor vehicle service agreement company — Chapter 634, which governs motor vehicle service agreements and grants jurisdiction to circuit court for violation of statute, is not applicable because gap policy sold by defendant did not indemnify against loss caused by failure of mechanical or other component part of vehicle and, therefore, was not motor vehicle service agreement — Rather, where gap policy indemnified owner against loss greater than value of totaled vehicle, but less than outstanding loan amount, defendant was operating as insurer outside of its authority under chapter 634 — No merit to defendant’s argument that it cannot be insurer because license as motor vehicle service agreement company prevents it from simultaneously being insurer where defendant’s answer to complaint refers to “gap insurance contract” and policy refers to “gap protection” and “gap addendum” throughout — Because defendant was acting as insurer pursuant to Insurance Code, county court erred in dismissing for lack of jurisdiction
KATHLEEN PRESSMAN, Appellant, v. AUTOMOBILE PROTECTION CORPORATION, a Florida corporation, d/b/a EasyCare GAP Protection, Appellee. Circuit Court, 10th Judicial Circuit (Appellate) for Hardee, Highlands, and Polk County. Case No. 2005AP-000015. L.C. Case No. 2005SC-1736. August 7, 2006. Counsel: Roy D. Watson, Miami. Robert Miller, Coral Gables. Robert C. Chilton and R. Scott Bunn, Sharit, Bunn & Chilton, P.A., Winter Haven.
OPINION OF THE COURT
(RONALD HERRING, C.J.) This matter came before the Court on appeal from the county court of Polk County, Judge Karla F. Wright presiding. Appellant appeals the “Final Order” of the lower court dismissing Appellant’s action against Appellee. This Court has jurisdiction pursuant to Rule 9.110, Florida Rules of Appellate Procedure. The ruling of the county court is reversed.I.
On August 23, 2003, Kathleen Pressman (hereinafter “Pressman” or “Appellant”) bought a Mitsubishi Galant from Prestige VW Mitsubishi in Turnersville, New Jersey for $15,259.50. On that same day Appellant purchased from Automobile Protection Corporation (hereinafter “APCO” or “Appellee”) a “Deficiency Waiver Addendum” under its EasyCare Vehicle Protection Program in exchange for a $495.00 premium. Appellant refers to this as a “gap policy” or “gap insurance”. Under the agreement, APCO agreed to pay to Pressman the difference between the outstanding balance of her car loan and the vehicle’s actual cash value “in the event of a Total Loss”.
On August 17, 2004, the car was totaled in a car accident. The remaining amount due on Pressman’s car loan at the time of the accident was $12,570.42. The actual cash value of her car at the time of the accident was $8,240.29. Despite numerous requests, APCO did not indemnify Pressman pursuant to the “Deficiency Waiver Addendum”.
On April 15, 2005, Pressman filed suit in small claims court under the Florida Insurance Code seeking damages, attorney’s fees and costs. After APCO failed to attend the pretrial conference, the lower court verbally entered a default. APCO then filed a “Motion to Set Aside Default”. On June 9, 2005, the lower court entered a “Default” and denied APCO’s “Motion to Set Aside Default”. Following entry of the default, a trial date was set on the issue of damages only. A week before the trial, APCO paid Appellant the full amount of the claim, leaving attorney’s fees and costs as the only remaining issues.
The focus at trial centered around APCO’s argument that they were not an insurer, but instead a motor vehicle service agreement company under Chapter 634, Florida Statutes, and that the lower court did not have subject matter jurisdiction to address attorney’s fees and costs. The lower court agreed with APCO, dismissed the action without prejudice, and found that jurisdiction lies with the circuit court.II.
The standard of review when reviewing an order of dismissal for lack of subject matter jurisdiction is de novo. See Stanek-Cousins v. State, 912 So.2d 43 (Fla. 4th DCA 2005); Sanchez v. Fernandez, 915 So.2d 192 (Fla. 4th DCA 2005); Jacobson v. Ross Stores, 882 So.2d 431, 432 (Fla. 1st DCA 2004); Seven Hills, Inc. v. Bentley, 848 So.2d 345 (Fla. 1st DCA 2003).III.
Ultimately, the issue is whether APCO qualifies as an “insurer” under The Florida Insurance Code, as there is no contractual basis or statutory basis in county court for an award of attorney’s fees and costs and whether The Florida Insurance Code or Chapter 634, Florida Statutes, applies to this action. APCO argues that Chapter 634 applies because the company is registered asa motor vehicle servicing agreement company and Chapter 634 pertains to motor vehicle servicing agreement companies. Pressman argues that The Florida Insurance Code applies because their claim was not pursuant to Chapter 634 and because APCO was “acting” as an insurer despite its registration and lack of a certificate of authority to transact insurance business.
Under Chapter 634 “ ‘[i]nsurer’ means any property or casualty insurer duly authorized to transact such business in this state.” Fla. Stat. §634.011(5). Additionally, “ ‘[m]otor vehicle service agreement company’ or ‘service agreement company’ means any corporation, sole proprietorship, or partnership (other than an authorized insurer) issuing motor vehicle service agreements.” Fla. Stat. §634.011(8). Moreover, motor vehicle service agreement companies are exempt from the provisions of The Florida Insurance Code unless specifically provided for in Chapter 634. See, Fla. Stat. §634.023(1). However, “nothing in the Florida Insurance Code . . . shall be deemed to authorize any motor vehicle service agreement company to transact any insurance business other than that of motor vehicle service agreement as herein defined or otherwise to engage in any other type of insurance unless the company is authorized under a certificate of authority issued by the office under the provisions of the Florida Insurance Code.” Fla. Stat. §634.231. APCO lacks such a certificate of authority. Thus, APCO asserts that Chapter 634 applies to this action, not The Florida Insurance Code.
Appellant, on the other hand, argues that Chapter 634 is inapplicable because Appellant’s claim was not pursuant to Chapter 634 and because despite APCO’s registration and lack of a certificate of authority to transact insurance business, APCO was “acting” as an insurer during the transaction and ultimate contract with Appellant.
Appellant asks this Court to look past what APCO is authorized to do and to look instead at APCO’s actions to determine whether APCO qualifies as an insurer. Chapter 634 is titled “Warranty Associations” and provides that motor vehicle service agreement companies may sell motor vehicle service agreements which by definition indemnify “against loss caused by failure of any mechanical or other component part, or any mechanical or other component part that does not function as it was originally intended”. Fla. Stat. §634.011(7). Appellant’s contract with APCO does not protect her from part or component failures. Instead, the contract provides that the policy “will pay the amount equal to the Unpaid Net Balance less the Actual Cash Value (ACV) of the Vehicle. . .” “in the event of a Total Loss of the Vehicle. . .”. Nothing in Chapter 634 provides for a motor vehicle service agreement company to sell a “Deficiency Waiver Addendum” or GAP policy. More importantly, the civil remedy provided for in §634.271(1), Florida Statutes, which grants jurisdiction to the circuit court for a violation of a provision of Chapter 634, is inapplicable, as Appellant is not claiming a violation of a motor vehicle servicing agreement falling under Chapter 634.
Thus, if Chapter 634 is inapplicable to this action, what about The Florida Insurance Code? The Florida Insurance Code defines “insurer” as “every person engaged as indemnitor, surety, or contractor in the business of entering into contracts of insurance or of annuity.” Fla. Stat. s. 624.03. Section 624.03, Florida Statutes, defines “insurance” as “a contract whereby one undertakes to indemnify another or pay or allow a specified amount or a determinable benefit upon determinable contingencies.” APCO’s contract with Appellant indemnifies Appellant against loss greater than the value of the totaled car, but less than the outstanding loan amount on the car. Under the contract, APCO would pay a determinable benefit (i.e., GAP difference) upon determinable contingencies (i.e., car being totaled). Thus, by its actions, APCO was operating as an insurer outside of its authority under Chapter 634.
APCO argues that they cannot be an insurer because their license status as a motor vehicle service agreement company prevents them from simultaneously being an insurer. However, Appellant argues that APCO provides no legal authority of immunity from unauthorized practices, and that it would be unconscionable to allow APCO to profit from the transaction. Despite APCO’s contention, in “Defendant’s Proposed Answer to Plaintiff’s Complaint”, the first affirmative defense asserted by APCO is that “[t]he Defendant has fully complied with terms of its GAP insurance contract (emphasis added) with the Plaintiff. . .” And, a closer look at the “Deficiency Waiver Addendum” itself reveals that APCO refers to “GAP protection” and “GAP addendum” throughout the contract.
Accordingly, APCO was acting as an insurer pursuant to The Florida Insurance Code. Thus, the lower court erred in dismissing Appellant’s action for lack of subject matter jurisdiction, and
It is, therefore, ORDERED and ADJUDGED that the ruling of the lower court is REVERSED and REMANDED to the lower court for proceedings consistent with this opinion.
