Georgia Insurers Insolvency Pool v. Brewer

• Decision Date: 25 June 1992
• Docket Number: No. 78415,78415
• Parties: GEORGIA INSURERS INSOLVENCY POOL, Petitioner, v. Richard BREWER, et al., Respondents. 602 So.2d 1264, 61 U.S.L.W. 2038, 17 Fla. L. Week. S370
• Court: Florida Supreme Court

Page 1264

602 So.2d 1264

GEORGIA INSURERS INSOLVENCY POOL, Petitioner, v. Richard BREWER, et al., Respondents.

No. 78415.

602 So.2d 1264, 61 U.S.L.W. 2038, 17 Fla. L. Week. S370

Supreme Court of Florida.

June 25, 1992.

Elizabeth C. Wheeler of Johnson and Bussey, P.A., Orlando, for petitioner.

David S. Glicken of the Law Office of David S. Glicken, Orlando, for respondents.

McDONALD, Justice.

We review Georgia Insurers Insolvency Pool v. Brewer, 583 So.2d 377, 379 (Fla. 1st DCA 1991), wherein the district court certified the following question as being of great public importance: ¹

WHETHER THE CONDUCT OF AN INSOLVENT INSURER DOING BUSINESS IN FLORIDA MAY BE SHIFTED TO GEORGIA INSURERS INSOLVENCY POOL SO AS TO SATISFY THE MINIMUM CONTACTS REQUIREMENT OF THE DUE PROCESS CLAUSE AND VEST JURISDICTION BY THE FLORIDA COURTS OVER THE GEORGIA INSOLVENCY POOL UNDER SECTION 48.193, FLORIDA STATUTES?

We answer the certified question in the negative and disapprove the opinion of the district court.

This case arose from an automobile accident that killed Sandra Bentley and injured her three children. The accident occurred in Florida while Richard Brewer, a Florida resident, was driving a tractor-trailer owned by him, but leased to J.D. Ray Company, a Georgia company. Brewer, acting as an independent contractor to Ray, was insured under a policy issued by Allied Insurance Company, an Indiana corporation doing business in Florida and in Georgia. Ray's president, J.D. Ray, purchased the Allied policy through an insurance agent in Georgia. ² The terms of the policy covered owners of vehicles leased to Ray.

After the accident, Allied became insolvent. The plaintiffs (the estate of Sandra Bentley and her survivors) filed suit in Florida against Brewer and Ray. The Georgia Insurers Insolvency Pool (GIIP) successfully defended Ray by establishing through summary judgment that Brewer was acting as an independent contractor and that Ray was thus not negligent. At trial the jury found Brewer negligent in causing the fatal accident. Thereafter, the plaintiffs filed a motion for leave to add Allied, the Florida Insurance Guaranty Association (FIGA), and GIIP as defendants on a third-party beneficiary claim. The trial court denied the motion to add Allied, but granted the motion to add FIGA ³ and GIIP. GIIP appealed, asserting lack of personal jurisdiction.

The district court concluded that the plaintiffs' damages were "covered claims" under the GIIP statute and that GIIP stood in the place of Allied, which was conceded as having sufficient minimum contacts with Florida. Brewer, 583 So.2d at 379. It further held that GIIP's statutory scope of authority was sufficient to satisfy the purposeful availment requirement of due process, but certified the jurisdictional question to this Court.

Florida's long-arm statute, section 49.193, Florida Statutes (1991), sets forth the various activities by a nonresident that will give rise to personal jurisdiction. ⁴ There is no question that Allied, which was authorized to do business in Florida and was "[o]perating, conducting, engaging in, or carrying on a business or business venture," id. at subsection 48.193(1)(a), in Florida, satisfies both section 48.193 and the due process requirements needed to subject Allied to the personal jurisdiction of this state. International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945).

GIIP is a statutory entity created by the Georgia Insurers Insolvency Pool Act which requires that all insurers doing business in Georgia become members and absorb the costs of administering the pool. Ga.Code Ann. Secs. 33-36-1 to 33-36-19 (Michie 1990). Upon a member insurer's insolvency, GIIP insures all "covered claims" of the insolvent insurer for a limited period of time. Ga.Code Ann. Sec. 33-36-9. When Allied became insolvent, GIIP assumed the role of insurer of Allied's covered claims, "with all the rights, duties, and obligations of the insolvent insurer." ⁵ The issue is thus not whether GIIP stood in the place of Allied for purposes of covered claims, but whether GIIP stands in Allied's place for purposes of personal jurisdiction.

The central focus in determining personal jurisdiction is "the relationship among the defendant, the forum, and the litigation." Shaffer v. Heitner, 433 U.S. 186, 204, 97 S.Ct. 2569, 2579-80, 53 L.Ed.2d 683 (1977); Rush v. Savchuk, 444 U.S. 320, 100 S.Ct. 571, 62 L.Ed.2d 516 (1980).

This is not a situation where Allied acted as an agent of GIIP, thus clearly satisfying section 48.193. ⁶ Unlike a pure agent-principal relationship where all of one party's activities are imputed to another, GIIP's statutorily derived obligations are not wholly coextensive with Allied's, but rather are restricted to those covered claims that arise from policies issued by insurers authorized to do business in Georgia and are made by policyholders or insureds who are Georgia residents at the time of the loss. Ga.Code Ann. Sec. 33-36-3(2)(A). Its responsibilities, with respect to Allied's covered claims, are substantive obligations of supplying limited amounts of insurance under limited circumstances. These responsibilities do not estop GIIP from claiming lack of personal jurisdiction.

Obligations arising from incidents occurring in another state alone do not result in personal jurisdiction. Meyer v. Auto Club Ins. Ass'n, 492 So.2d 1314 (Fla.1986). Nothing in GIIP's statutory provisions indicates that GIIP or the Georgia Assembly intended to shift GIIP's member insurer's jurisdictional contacts to GIIP. Without such an intent being evident in GIIP's statutes, the due process analysis in Rush, as well as that in Hanson v. Denckla, 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958), and Kulko v. Superior Court, 436 U.S. 84, 98 S.Ct. 1690, 56 L.Ed.2d 132 (1978), compels that an independent basis of personal jurisdiction over GIIP be established apart from Allied's activities in this state.

The unilateral activity of those who claim some relationship with a nonresident defendant cannot satisfy the requirement of contact with the forum State. The application of that rule will vary with the quality and nature of the defendant's activity, but it is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.

Hanson v. Denckla, 357 U.S. at 253, 78 S.Ct. at 1239-40.

GIIP did not transact business, maintain offices, supply goods, commit torts, own real property, or do anything of the kind in this state. Thus, subsections 48.193(1)(a) through (c) of the long-arm statute clearly are not met. In addition, GIIP did not enter into a contract to insure a person in this state. Sec. 48.193(1)(d). The insurance contract in question is solely between Allied and Ray. GIIP's statutory obligations to cover its member insolvent insurers' contractual obligations cannot be deemed as contractual in nature, thus amounting to "[b]reaching a contract in this state by failing to perform acts required by the contract to be performed in this state." Sec. 48.193(1)(g); see South Carolina Ins. Guar. Ass'n v. Underwood, 527 So.2d 931 (Fla. 5th DCA 1988) (Cowart, J., concurring). Moreover, GIIP's activities clearly are not so substantial or continuous to give rise to general jurisdiction under subsection 48.193(2). Therefore, GIIP's activities do not fall within the purview of Florida's long-arm statute.

Even if the requirements of section 48.193 were satisfied, the minimum contacts requirements of due process are not met in this case. ⁷ International Shoe, 326 U.S. at 316, 66 S.Ct. at 158, dispelled mechanistic approaches to personal jurisdiction by signalling the modern jurisprudential method of engaging in a twofold constitutional inquiry: (1) whether the acts of the nonresident defendant give rise to sufficient "minimum contacts" with the forum state such that (2) maintaining a suit there "does not offend 'traditional notions of fair play and substantial justice.' " (quoting Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 343, 85 L.Ed. 278 (1940)). Factors that go into determining whether sufficient minimum contacts exist include the foreseeability that the defendant's conduct will result in suit in the forum state and the defendant's purposeful availment of the forum's privileges and protections. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985).

That GIIP's member insurers, like Allied, would write policies in Georgia that covered risks arising in Florida was no doubt foreseeable. Foreseeability in this sense "alone has never been a sufficient benchmark for personal jurisdiction under the Due Process Clause." World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 295, 100 S.Ct. 559, 566, 62 L.Ed.2d 490 (1980). The foreseeability that is crucial to due process is whether the defendant's conduct and activities in the state are such that " 'he should reasonably anticipate being haled into court there.' " Burger King, 471 U.S. at 474, 105 S.Ct. at 2183 (quoting World-Wide Volkswagen, 444 U.S. at 297, 100 S.Ct. at 567). GIIP's statutory provisions address the possibility of double recovery under statutory insurance guaranty associations of other states and provide, in construing GIIP's statutes, that with "a covered claim which may be recoverable under this chapter and under an insolvency fund or its equivalent in another state, the sole recovery ... shall be under the insolvency fund or its equivalent of the state of residence of the insured." Ga.Code Ann. Sec. 33-36-10(a). ⁸ This provision is silent on the issue of jurisdiction. In light of the clear legislative intent to protect only Georgia residents, however, the provision means that a claimant must first exhaust the remedies under the statutory insurance guaranty fund of his or her state, and, if there is no...