4 Fla. L. Weekly Supp. 257a
Insurance — Automobile — Cancellation of policy — Once insurer discovers that it charged an incorrect premium, insurer must send insured notice of the additional amount due — Notice must outline three options specified in statute and must include date policy will be cancelled in the event insured fails to timely respond to notice — Insurer violated statute when it cancelled plaintiff’s policies several weeks after cancellation date specified in notice and charged an additional premium for the improper coverage period
Affirmed at 22 Fla. L. Weekly D1538a
Additional rulings in this case: 27 Fla. L. Weekly D920b.
ONELIA MARIA ALEMAN, individually and on behalf of all others similarly situated, Plaintiffs, vs. ARIES INSURANCE COMPANY, Defendants. 11th Judicial Circuit in and for Dade County, General Jurisdiction Division. Case No. 95-002394 CA (05). August 29, 1996. Jon I. Gordon, Judge.
ORDER GRANTING PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT and DENYING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT
THIS CAUSE having come before this court on the parties’ Cross-Motions for Summary Judgment, and this court being fully advised in the premises, having reviewed the pleadings plus affidavits, depositions and other factual showings and having heard the arguments of counsel, finds as follows:
FINDINGS OF FACT
1. On April 1, 1993, Onelia Maria Aleman (“Plaintiff”) purchased a one-year car insurance policy from Aries Insurance Company (“Defendant”) covering the April 1, 1993 – April 1, 1994 period.
2. After paying an initial premium of $1,042.00, Aries billed Aleman an additional premium of $216.48.
3. Pursuant to statutory requirements, Defendant notified Plaintiff of the additional premium and outlined the following three options:
1. pay the additional premium within 10 days of notice and maintain the policy;
2. expressly cancel the policy within 10 days of notice and receive a refund of the unearned premium;
3. take no action, the policy would terminate on a date specified in the letter, and receive a refund of the unearned premium.
4. Plaintiff alleges that the “three-option” letter designated June 10, 1993 as both the payment and cancellation date.
5. Plaintiff indicates that she chose the third option expecting the policy to terminate on June 10th and the return of her unearned premium.
6. Defendant terminated the policy on July 2, 1993 and charged Aleman an additional premium for the period between June 10th and July 2nd.
7. Defendant’s motion is silent about the designated payment/termination date. Instead, Defendant alleges that, “on June 18, 1993, having received no response to this notice [i.e. the three-option letter] . . ., the insurer gave `Notice of Cancellation or Nonrenewal’ pursuant to § 627.728, Fla. Stat. (1993), with an effective cancellation date of July 2, 1993.”
FINDINGS OF LAW
PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT
8. In their motion, Plaintiffs argue that the Defendant violated the plain and ordinary language of §627.7282, Fla. Stat. (1993), when it cancelled Plaintiffs’ respective insurance policies several weeks after the designated cancellation date and charged an additional premium for the coverage.
9. The starting point for any statutory interpretation must be the general rules of construction. As Plaintiffs properly argued, Florida law has consistently and repeatedly mandated that:
[w]hen the language of a statute is clear and unambiguous and conveys a clear meaning, the statute must be given its plain and ordinary meaning. Streeter v. Sullivan, 509 So. 2d 268 (Fla. 1987); Holly v. Auld, 450 So. 2d 217 (Fla. 1984). Legislative history is irrelevant where the wording of a statute is clear. Maryland Casualty Co. v. Sutherland, 125 Fla. 282, 169 So. 679 (1936). This Court [or any other] will not go behind the plain and ordinary meaning of the words used in the statute unless an unreasonable or ridiculous conclusion would result from a failure to do so. See Auld, 450 So. 2d at 219.
In Re McCollam, 612 So. 2d 572, 573 (Fla. 1993). See also Zuckerman v. Alter, 615 So. 2d 661, 663 (Fla. 1993); Barnett Bank of South Florida v. Department of Revenue, 571 So. 2d 527, 528 (Fla. 3d DCA 1990). Thus, if the language of the relevant statute is clear and unambiguous, this court’s review is confined to the plain and ordinary meaning of the words which were carefully selected by the legislature.
10. Section 627.7282 of the Florida Statutes, provides that:
(1) Upon a determination by an insurer that, in accordance with its rate filings and the applicable laws of this state relating to private passenger motor vehicle insurance, a policyholder has been charged a premium that is incorrect for the coverage set forth in the insurance application, the insurer shall immediately provide notice to the policyholder of the amount of additional premium due to the insurer and that the policyholder has the following options:
(a) The policyholder has a period of 10 days, or a longer period if specified by the insurer, from receipt of the notice within which to pay the additional amount of premium due and thereby maintain the policy in full force under its original terms.
(b) The policyholder has a period of 10 days, or a longer period if specified by the insurer, from receipt of the notice within which to cancel the policy and demand a refund of any unearned premiums.
(c) If the policyholder fails to timely respond to the notice, the insurer shall cancel the policy and return any unearned premium to the insured. The date on which the policy will be canceled shall be stated in the notice and shall in no case be less than 14 days after the date of the notice.
(3) No insurer shall unilaterally alter or modify the policy period for a private passenger automobile insurance policy to provide an expiration date that is prior to the date specified in the policyholder’s application, except as provided in this section.
(4) This section shall not be construed to limit insurers’ rights to cancel in accordance with applicable provisions of the insurance code.
§ 627.7282, Fla. Stat. (1993) (emphasis added).
11. Reviewing this statute, the court finds unambiguous language which requires the following: once the insurer discovers that it charged an incorrect premium, the insurer must (i.e. “shall”) immediately send the insured a letter outlining the three options expressly stated in the statute. (emphasis added). The third option allows the insured to take no action, let the policy expire on a cancellation date selected by the insurer and listed in its notice letter, and recover the unearned premium. Unable to predict the insured’s choice of options, it logically follows that the insurer must include a cancellation date in the notice letter in the event that the insured chooses the third option. (emphasis added).
12. The court would reach an “absurd” result if its interpretation required the insurer to list a cancellation date, but allowed cancellation on a different date. Since the rules of construction reject an “absurd” interpretation,1 this court interprets the language of the third option as a mandatory requirement to state a cancellation date, to terminate the policy on the designated date, and to refund any unearned premium.
13. This reasoning is reinforced by a recent order authored by Judge Murray Goldman in a factually similar case. See Rodriguez v. Union American Insurance Co., 93-02469 (11th Judicial Circuit) [3 Fla. L. Weekly Supp. 721]. In his opinion, Judge Goldman held that improper and additional premiums which were levied subsequent to the date specified in the three-option letter, “operates as a `unilateral alteration or modification of the policy period,’ ” in direct violation of Section 627.7282(3) of the Florida Statutes. In sum, finding a direct violation of § 627.7282, Judge Goldman granted Plaintiffs’ Motion for Summary Judgment and denied Defendant’s cross-motion.
14. Because Defendant cancelled Plaintiffs’ respective insurance policies several weeks after the specified cancellation date and then charged an additional premium for the improper coverage period; because Judge Goldman’s order comports with a plain reading of the statute; and finally because this court took judicial notice of Judge Goldman’s order, this court adopts the holding and reasoning in Judge Goldman’s order.
15. Based on the foregoing findings it is hereby ORDERED and ADJUDGED that Plaintiffs’ Motion for Summary Judgment is GRANTED.
DEFENDANT’S MOTION FOR SUMMARY JUDGMENT
16. In its Motion for Summary Judgment, Defendant raises the following three arguments.
17. Civil Cause of Action for a Violation of Section 627.7282: Relying on Murthy v. N. Sinha Corp., 644 So.2d 983, 985 (Fla. 1994) (involving a tort action based on a violation of chapter 489, Florida Statutes (1991)), Defendant argues that no civil action exists for a violation of § 627.7282, since the “legislative intent, rather than the duty to benefit a class of individuals, should be the primary factor considered by a court in determining whether a cause of action exists when a statute does not expressly provide for one.” Murthy, 644 So. 2d at 985.
18. The applicable provisions of the insurance policy reveal that the insurance company expressly agreed to comply with the statutory laws of this state regarding “any special form of or procedure giving notice.” Aries Insurance Policy, “Other Termination Provisions” § 1.
19. This court finds that this provision includes § 627.7282 and effectively incorporates this statute into the contract, creating an independent contract cause of action based on the insurance company’s violation of the statute. Thus, even if the statute itself is silent about a civil cause of action, an independent cause of action exists based on the reference adopted in the contract.
20. Interpretation of Section 627.7282: Defendant argues that § 627.7282(c) lacks a provision requiring a mandatory cancellation date. Defendant claims that the 10 day time limits required in § 627.7282(a) and (c) and its apparent exclusion in § 627.7282(c), indicates the legislature’s conscious intent to exclude a definitive cancellation date from § 627.7282(c). Defendant believes that the legislature would have expressly included a date if it intended a mandatory cancellation date.
21. This court’s plain interpretation of the statute reveals unambiguous and mandatory language that, “[t]he date on which the policy will be canceled shall be stated in the notice and shall in no case be less than 14 days after the date of the notice.” § 627.7282(c), Fla. Stat. (1993). (emphasis added). Consequently, this court finds that the statute requires a mandatory date which the insurer may choose, as long as it is no less than 14 days after the date of notice.
22. Judicial Review and Administrative Procedures: Defendant argues that Plaintiffs have improperly sought judicial review of an “excessive” insurance rate, ignoring the administrative review of the Department of Insurance which has exclusive jurisdiction over insurance rates.
23. This argument mischaracterizes this lawsuit as a review of an “excessive” premium. Defendant fails to realize that Plaintiff is not disputing the “excessive” amount of the premium, but rather Defendant’s failure to follow the procedures outlined in §627.7282.
24. Based on the foregoing findings it is hereby ORDERED that Defendant’s Motion for Summary Judgment is DENIED.
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1See Williams v. Florida, 492 So. 2d 1051, 1054 (Fla. 1986) (“It is a basic tenet of statutory construction that statutes will not be interpreted to yield an absurd result”).
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