17 Fla. L. Weekly Supp. 108a

Online Reference: FLWSUPP 1702POE

Insurance — Property — Venue — Citizens Property Insurance Corporation is a governmental entity entitled to assert home venue privilege in Leon County, irrespective of its failure to assert privilege in other cases — Sword-wielder exception is inapplicable where complaint seeks to recover compensatory damages resulting from alleged breach of contract between Citizens and plaintiff and does not allege violation of fundamental constitutional right — Second Circuit in Leon County has jurisdiction and is appropriate forum

POE & ASSOCIATES, LLC, Plaintiff, vs. CITIZENS PROPERTY INSURANCE CORPORATION, Defendant. Circuit Court, 13th Judicial Circuit in and for Hillsborough County, Civil Action. Case No. 08-6352. December 23, 2008. Richard A. Nielson, Judge. Counsel: David S. Hendrix, for Defendant. Michael Chapman, for Plaintiff.

ORDER ON CTTIZENS PROPERTY INSURANCE CORPORATION’S MOTION TO TRANSFEROR DISMISS PLAINTIFF’S COMPLAINT FOR IMPROPER VENUE, OR IN THE ALTERNATIVE, MOTION TO DISMISS FOR FAILURE TO STATEA CAUSE OF ACTION

THIS CAUSE came on for hearing before the court on July 31, 2008, upon Citizens Property Insurance Corporation’s (“Citizens”) Motion to Transfer or Dismiss Plaintiff’s Complaint for Improper Venue, or in the Alternative, Motion to Dismiss for Failure to State a Cause of Action (“Motion”), and having read the motion and the Affidavit of Susanne Murphy, having reviewed the file, having heard oral argument, and being otherwise duly advised in the matter, the court makes the following findings and has concluded:

1.The court takes judicial notice of all documents and proceedings in the following cases.

a. Case No. 2006-CA-1060 in the Circuit Court of the Second Judicial Circuit in and for Leon County, Florida;

b. Case No. 2006-CA-1083 in the Circuit Court of the Second Judicial Circuit in and for Leon County, Florida;

c. Case No. 2006-CA-1198 in the Circuit Court of the Second Judicial Circuit in and for Leon County, Florida;

d. Case No. 06-CA-004911 in the Circuit Court of the Thirteenth Judicial Circuit in and for Hillsborough County, Florida;

e. Case No. 8:06-cv-01156-RAL-TGW in the United States District Court for the Middle District of Florida;

f. Case No. 8:06-bk-04288-CPM in the United States Bankruptcy Court for the Middle District of Florida;

g. Case No. 8:06-ap-00506-CPM in the United States Bankruptcy Court for the Middle District of Florida; and

h. Case No. 8:07-cv-01078-ISM in the United States District Court for the Middle District of Florida.

2. Citizens is a state entity as described in the Affidavit of Susanne Murphy and Florida Statutes §627.351(6), based on the following.

a. Florida Statutes §627.351(6)(a)1. includes a legislative statement that Citizens is considered a governmental entity, an integral part of the state, and not a private insurance company.

b. Florida Statutes §627.351(6)(a)1. provides that “[t]he absence of affordable property insurance threatens the public health, safety, and welfare and likewise threatens the economic health of the state. The state therefore has a compelling public interest and a public purpose to assist in assuring that property in the state is insured and that it is insured at affordable rates so as to facilitate the remediation, reconstruction, and replacement of damaged or destroyed property in order to reduce or avoid the negative effects otherwise resulting to the public health, safety, and welfare, to the economy of the state, and to the revenues of the state and local governments which are needed to provide for the public welfare.”

c. Like other government officials, Citizens’ Board members and senior managers are subject to Part III of Chapter 112, Florida’s statutory Code of Ethics for Public Officers and Employees. Fla. Stat. §627.351(6)(d)2.

d. Citizens operates subject to the supervision and approval of an eight-member board of governors, all of whom are appointed by state governmental officials. Fla. Stat. §627.351(6)(c)4.a.

e. Citizens functions pursuant to a plan of operation approved by the order of the State’s Financial Services Commission (consisting of the Governor, the Chief Financial Officer, the Attorney General, and the Commissioner of Agriculture). Fla. Stat §627.351(6)(a)2.

f. Citizens is required to fund deficits by levying tax-like assessments on all lines of property and casualty insurance. Fla. Stat. §627.351(6)(b)3.

g. Citizens’ revenues are to be used solely for the purposes reflected in the statute, and no part of the income generated by Citizens “may inure to the benefit of any private person.” Fla. Stat. §627.351(6)(b)2.f.

h. Like other government agencies, Citizens is subject to Florida Statutes, chapter 119 (public records) and chapter 286 (government in the sunshine laws). Fla. Stat. §627.351(6)(w).

i. Citizens is subject to a triennial audit by the Florida Auditor General, which conducts audits of state government in accordance with Florida Statutes §11.45(2). Fla. Stat. §627.351(6)(l).

j. In 2006, the Legislature appropriated $715 million to Citizens from the State Treasury to reduce Citizens’ deficit. Fla. Stat. §627.351 n.1 (Amendment Notes — Laws 2006, c. 2006-12, Sec. 44).

3. Venue is proper in Leon County, Florida because Citizens is entitled to assert the home venue privilege for the following reasons.

a. As a state entity, the Florida common law home venue privilege provides that Citizens has the absolute right to be sued where it maintains its principal headquarters, to wit: Leon County, Florida. Florida Public Service Commission v. Triple “A” Enterprises, Inc., 387 So.2d 940, 942 (Fla. 1980); Carlisle v. Game and Fresh Water Fish Commission, 354 So.24 362, 365 (Fla. 1977).

b. The home venue privilege “promotes orderly and uniform handling of state litigation and helps to minimize expenditure of public funds and manpower.” Carlile v. Game and Fresh Water Fish Commission, 354 So. 2d 362, 364 (Fla. 1977).¹

4. No exception to the home venue privilege has been or can be properly asserted in this action. The failure of Citizens to raise the home venue privilege in other cases does not bar Citizens from raising the home venue privilege in this case. In addition, the sword-wielder exception to the home venue privilege purported to be asserted by Poe is inapplicable for a number of reasons.

a. Count V of the plaintiff’s complaint, which alleges an equal protection violation under 42 U.S.C. §1983, does not waive the home venue privilege because Citizens, asa state entity, is immune from claims under 42 U.S.C. §1983. See Board of Regents v. Snyder, 826 So. 2d 382 (Fla. 2d DCA 2002); Arthur v. Hillsborough County Board of Criminal Justice, 588 So. 2d 236 (Fla. 2d DCA 1991); Brown v. Jenne, 941 So. 2d 447 (Fla. 4th DCA 2006); Hill v. Department of Corrections, 513 So. 2d 129 (Fla. 1987).

b. Count X related to Fifth Amendment regulatory takings does not waive the home venue privilege because the plaintiff is only seeking a declaratory judgment and not to obtain judicial protection for the real or imminent danger of invasion of the plaintiff’s constitutional rights by Citizens. See Florida Div. of Pari-Mutuel Wagering of the Florida Dept. of Professional Regulation v. Fla. Standardbred Breeders & Owners Assoc., Inc., 983 So.2d 61 (Fla. 4th DCA 2008).

c. Count XI related to regulatory takings does not waive the home venue privilege because the plaintiff is only seeking monetary damages and not to obtain judicial protection for the real or imminent danger of invasion of the plaintiff’s constitutional rights by Citizens. See Florida Div. of Pari-Mutuel Wagering of the Florida Dept. of Professional Regulation v. Fla. Standardbred Breeders & Owners Assoc., Inc., 983 So.2d 61 (Fla. 4th DCA 2008).

d. The sword-wielder exception to the common law privilege of venue is limited to those cases in which the primary purpose is to obtain direct judicial protection from an alleged unlawful invasion of the constitutional rights of the plaintiff because of the enforcement orthreatened enforcement by a state agency of a statute, rule or regulation alleged to be unconstitutional as to the plaintiff. Carlile v. Game and Fresh Water Fish Commission, 354 So. 2d 362, 365 (Fla. 1977); see also Florida Div. of Pari-Mutuel Wagering of the Florida Dept. of Professional Regulation v. Fla. Standardbred Breeders & Owners Assoc., Inc., 983 So.2d 61 (Fla. 4th DCA 2008); School Bd. of Osceola County v. State Bd. of Educ., 903 So. 2d 963, 967 (Fla. 5th DCA 2005). In this case the plaintiff’s complaint seeks to recover compensatory damages originating from an alleged breach of contract between plaintiff and Citizens. Other courts have rejected arguments similar to plaintiff’s which includes a constitutional claim to defeat the home venue privilege by characterizing a breach of contract claim as an equal protection claim. The allegations of the complaint have not alleged an appropriate constitutional violation necessary for the application of this sword-wielder exception. Fla. Dep’t of Corrections v. McCarty, 610 So.2d 693 (Fla. 2d DCA 1992); Fla. Agency for Healthcare Admin. v. St. John Med. Plans, Inc., 674 So.2d 911, 912 (Fla. 3rd DCA 1996); Dept. of Corrections v. Ross, 680 So.2d 622 (Fla. 5th DCA 1996).

e. The type of constitutional invasions which have supported the application of the sword-wielder doctrine have been asserted by a private party and have been fundamental in nature. Barr v Fla. Bd. of Regents, 644 So.2d. 333 (Fla. 1st DCA 1994); Graham v Vann, 394 So.2d 178 (Fla. 1st DCA 1981). Fundamental rights include the specific freedoms protected by the Bill of Rights, including the rights to marry, have children, direct the education and upbringing of one’s children, enjoy marital privacy, use contraception, maintain bodily integrity, have to abortion. Butler v. State, 923 So. 2d 566, 571 (Fla. 4th DCA 2006). Here, plaintiff has not alleged a basic or fundamental constitutional right that would support the application of the sword-wielder doctrine.

5. The plaintiff has not contradicted the Affidavit of Susanne Murphy and the provisions of Florida Statutes §627.351(6). Therefore, the plaintiff has failed to meet its burden of establishing that Citizens is not a state entity or that any exception to the home venue privilege applies. Fish and Wildlife Conservation Commission v. Wilkinson, 799 So. 2d 258, 259 (Fla. 2d DCA 2001).

6. A Senate Staff Analysis and Economic Impact Statement, Senate Bill 2498, April 9, 2007 (“Staff Analysis”) when read in its entirety reveals the intent of the Florida Legislature by describing Citizens as “a governmental entity that is an integral part of the state, and that is not a private insurance company” for the sole purpose of avoiding federal taxation. See Fla. Stat. §627.351(6)(a)1.²

7. The Circuit Court for the Second Judicial Circuit in and for Leon County, Florida (the “Second Circuit”) has jurisdiction and is the appropriate forum for this action for the following reasons.

a. This action is intertwined with the actions currently pending in the Second Circuit involving the Poe Liquidated Insurers. See generally Fla. Stat. §631.021(6).

b. The Liquidation Plan for the Poe Liquidated Insurers was approved by the Second Circuit in case numbers 2006-CA-1060, 2006-CA-1083, 2006-CA-1198.

c. The Liquidation Plan provided that Citizens was to provide insurance coverage to the Poe Liquidated Insurers’ policyholders.

d. Paragraph 22 of the Liquidation Plan provides in relevant part that, “Citizens will notify the policyholders having Transition Coverage, and notify their agents, that upon the expiration of the Transition Coverage such policyholders may be eligible for coverage with Citizens utilizing its own forms, rates, and rules.”

e. Prior to the entry of the Liquidation Plan, the plaintiff was the agent for approximately 73,000 of the Poe Liquidated Insurers’ policyholders.

f. But for the Liquidation Plan, Citizens would not have become the insurer for policyholders of the Poe Liquidated Insurers which were serviced by the plaintiff.

g. Determining whether Citizens’ actions were pursuant to the Liquidation Plan will require a court to review and interpret the Liquidation Plan approved by the Second Circuit.

h. In a related action, District Court Judge Richard A. Lazzara, United States District Court for the Middle District of Florida, previously ruled that the Second Circuit in Leon County has jurisdiction.

Based upon the foregoing, it is

ADJUDGED as follows:

A. MOTION TO TRANSFER OR DISMISS PLAINTIFF’S COMPLAINT, FOR IMPROPER VENUE

1. Citizens Property Insurance Corporation’s Motion to Transfer or Dismiss Plaintiff’s Complaint for Improper Venue, or in the Alternative, Motion to Dismiss for Failure to State a Cause of Action is GRANTED.

2. This action is hereby transferred to Leon County, Florida for all purposes.

3. The Clerk of this Court is hereby directed to transmit the contents of the court file to the Clerk of the Circuit Court of the Second Judicial Circuit in and for Leon County, Florida with a certified copy of this Order and to take any other additional steps necessary to effectuate a transfer of this case from Hillsborough County, Florida to Leon County, Florida.

B. MOTION TO DISMISS PLAINTIFF’S COMPLAINT FOR FAILURE TO STATE A CAUSE OF ACTION

4. Citizens’ motion to dismiss Count II of the complaint (breach of implied covenant of good faith and fair dealing) is DENIED. Count II contains sufficient allegations of a breach of an implied covenant of good faith and fair dealing. See, e.g., Almarante v. Art Institute of Ft. Lauderdale. Inc., 921 So. 2d 703, 705 (Fla. 4th DCA 2006); Hall v. Farmers Ins. Exchange, 713 P. 2d 1027, 1030 (Okl. 1985).

5. Citizens’ motion to dismiss Counts IV (tortious interference) and XII (common law trademark infringement) of the complaint for failure to comply with the pre-suit notice requirement in section 768.28, Florida Statutes is DENIED. See Fla. Stat. §627.351(6); Smart v. Monge, 667 So. 2d 957, 958 (Fla. 2d DCA 1996).

6. Citizens’ motion to dismiss Count IV (tortious interference with advantageous business relationships) of the complaint is DENIED. See American Nat’l Title & Escrow of Fla., Inc. v. Guarantee Title & Trust Co., 810 So. 2d 996, 999 (Fla. 4th DCA 2002); Scheller v. Am. Med. Intern., Inc., 502 So. 2d 1268 (Fla. 4th DCA 1987). See also KMS Restaurant Corp. v. Wendy’s Int’l, Inc., 361 F.3d 1321, 1328 (11th Cir. 2004); Manufacturing Research Corp. v. Greenlee Tool Co., 693 F.2d 1037, 1040 (11th Cir. 1982).

7. Citizens’ motion to dismiss Count V (equal protection violation under 42 U.S.C. §1983) of the complaint is GRANTED.

8. Citizens’ motion to dismiss Count VI (statutory claim under 11 U.S.C. §525(a)) of the complaint is DENIED.

9. Citizens’ motion to dismiss Count VII (false designation of origin claim under §43(A) of the Lanham Act) of the complaint is GRANTED.

10. Citizens’ motion to dismiss Counts VIII and IX (trademark dilution under state and federal law) of the complaint is DENIED.

11. Citizens’ motion to dismiss Counts X and XI (Fifth Amendment regulatory taking) of the complaint is DENIED. See, e.g., Tampa-Hillsborough County Expressway Auth. v. A.G.W.S. Corp., 640 So.2d 54, 58 (Fla. 1994); City of St. Petersburg v. Bowen, 675 So. 2d 626 (Fla. 2d DCA 1996); United States v. Security Industrial Bank, 459 U.S. 70, 78 (1982).

12. Citizens’ motion to dismiss Count XII (common law trademark infringement, Florida law) of the complaint is GRANTED.

13. Citizens’ motion to dismiss Count XIII (common law unfair competition, Florida law)of the complaint is GRANTED.

14. Citizens’ motion to dismiss Count XIV (Florida Unfair and Deceptive Trade Practices Act) of the complaint is GRANTED. See Fla. Stat. §501.212(4)(a).

15. Plaintiff Poe & Associates, LLC shall have 30 days from the date of this Order to serve its Amended Complaint.

16. Defendant Citizens Property Insurance Corporation shall serve any motion or its answer to the Amended Complaint within fifteen days of service of the Amended Complaint.

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¹Kuvin, Klingen Smith & Lewis, P.A. v. Fla. Insurance Guaranty Association, Inc., 371 So.2d 214 (Fla. 3rd DCA 1979) relied upon by the plaintiff is inapplicable due to several differences between FIGA and Citizens and thestatutes applicable to them. Compare Fla. Stat. §631.50-631.70 with Fla. Stat. §627.351(6). These differences include the following. FIGA is a chapter 617 non-profit corporation whose membership consists of private insurers. Kuvin, 371 So. 2d at 216. FIGA’s “ ‘governing committee’ contains no public officials or employees but consists entirely of persons recommended to the insurance department by the member insurers.” Kuvin, 371 So.2d at 216. Moreover, (1)FIGA is funded entirely and exclusively by assessed contributions from member companies; and (2) by specific statutory prohibition, no tax monies may be paid to FIGA. See Fla. Stat. §631.57(3)(a) and (d).

²The court has considered the Staff Analysis notwithstanding defendant’s argument that it wasnot properly before the court. Defendant cited two reasons. First, plaintiff introduced and argued it without filing a Notice and Request for Judicial Notice with the court. Second, the plaintiff did not provide the Staff Analysis to Citizens at least five (5) business days prior to the hearing as provided in Complex Business Procedure section 5.4.