Glendale Federal Sav. and Loan Ass'n v. State, Dept. of Ins.
| Citation | 485 So.2d 1321,11 Fla. L. Weekly 642 |
| Decision Date | 13 March 1986 |
| Docket Number | Nos. BA-488,BA-489,s. BA-488 |
| Parties | 11 Fla. L. Weekly 642 GLENDALE FEDERAL SAVINGS AND LOAN ASSOCIATION: Community Federal Savings and Loan Association of the Palm Beaches: Naples Federal Savings and Loan Association; and Fortune Federal Savings and Loan Association, federally chartered associations; Wilshire Glen Services, Inc., d/b/a Jewel City Insurance Agency, a California corporation registered to do business in the State of Florida; Comfed, Inc., d/b/a Community Insurance Agency, a Florida corporation, and John O'Conner, Appellants, and Community Savings and Loan Association, a Florida corporation, Appellant/Intervenor, v. STATE of Florida, DEPARTMENT OF INSURANCE, a state agency, et al., Appellees. |
| Court | Court of Appeal of Florida (US) |
Jack M. Skelding, Jr. and Keith C. Tischler of Madigan, Parker, Gatlin, Swedmark & Skelding, Tallahassee, Allan J. Katz, Martin B. Unger and Edward L. Kutter of Swann & Haddock, P.A., Tallahassee, for appellants.
Freeman W. Barner, Jr., of Cromwell & Remsen, Riviera Beach, for appellant Community Federal Sav. and Loan Ass'n and Comfed, Inc., d/b/a Community Ins. Agency.
Barry Richard, of Roberts, Baggett, LaFace, Richard & Weiser, Tallahassee, for appellant/intervenor Community Sav. and Loan Ass'n.
Frank X. Kowalski, of Gillette, Pilon, & Richman, Naples, for appellant Naples Federal Sav. and Loan Ass'n.
Jim Smith, Atty. Gen., Eric J. Taylor and Bruce Barkett, Dept. of Legal Affairs, Tallahassee, and Donald A. Dowdell and S. Strom Maxwell, Dept. of Ins., Tallahassee, for appellees/State, Dept. of Ins.
John K. Aurell, Robert L. Hinkle and Elizabeth W. McArthur, of Aurell, Fons, Radey & Hinkle, Tallahassee, and Dubose Ausley and Kenneth R. Hart of Ausley, McMullen, McGehee, Carothers & Proctor, Tallahassee, for appellees/Florida Ass'n of Ins. Agents.
J. Robert McClure, Jr., of Carlton, Fields, Ward, Emmanuel, Smith & Cutler, P.A., Tallahassee, for amicus curiae/Florida Ass'n of Life Underwriters.
Appellants seek reversal of an order of the trial court dismissing their second amended complaint challenging the constitutionality of section 626.988, Florida Statutes (1983). The trial court ruled that this court in the case of Production Credit Associations of Florida v. Department of Insurance, 356 So.2d 31 (Fla. 1st DCA 1978), implicitly, if not expressly, found section 626.988 to be constitutional and to constitute the proper exercise of legislative authority. However, this court's opinion in Production Credit did not dispose of the constitutional issues raised in this case. Accordingly, the order dismissing appellant's complaint is reversed and the cause is remanded for further proceedings.
Section 626.988(2) precludes licensed insurance agents from engaging in insurance agency activities if they are in any way associated with a financial institution agency or a financial institution. Definitions of "financial institution," "insurance agency activities," and "financial institution agency" are provided in section 626.988(1), and certain "grandfather" exceptions to the prohibition of section 626.988(2) can be found in subsections (5) and (7) of the statute.
Appellant John O'Conner alleged in the complaint that he is a California resident, holding a nonresident Florida insurance license, and that he wishes to sell insurance in Florida but is precluded from doing so because he is associated with and employed by a financial institution agency. The remaining appellants allege that they believe themselves to be financial institutions, and financial institution agencies. They also wish to sell insurance in Florida but are precluded or limited by the provisions of this statute. Two of the appellants fall within the "grandfather" exception contained in section 626.988(5) and wish to expand their insurance agency activities in Florida, but are precluded from doing so because of the prohibitions contained in the statute.
Appellants' complaint seeks an order declaring their rights, status, and other equitable or legal relations under section 626.988, and the applicability of the statute to their activities. To the extent that section 626.988 excludes them from engaging in insurance agency activities, appellants allege this statute is facially unconstitutional as being violative of the due process, equal protection, privileges and immunities, separation of powers, and supremacy clauses of the Florida or federal constitutions. Appellants allege that exhaustion of administrative remedies with the department would not reach the constitutional issues presented. Finally, appellants request an order permanently enjoining the department and the insurance commissioner from enforcing the provisions of section 626.988.
Upon appellees' motion to dismiss for failure to state a cause of action, the trial court entered an order dismissing the second amended complaint concluding that this court's decision in Production Credit implicitly, if not expressly, found such statute to be constitutional and to constitute the proper exercise of state authority.
Contrary to the trial court's order of dismissal, this court's opinion in Production Credit did not determine the constitutionality of section 626.988. In Production Credit, the court was reviewing an order of the Department of Insurance (respondent), holding that employees of Production Credit Associations of Florida and Federal Land Bank Associations of Florida (petitioners), may not be licensed as insurance agents by the department due to the prohibitions of section 626.988. The court's opinion addressing the issues raised on appeal is quoted in its entirety below:
Respondent correctly determined that Petitioners are financial institutions within the meaning of the above-quoted statute and that employees of Petitioners may not be licensed as insurance agents.
Insurance is an industry affected with a public interest and subject to regulation by the states. The Legislature has determined that there is potential for abuse inherent in financial institutions being involved in the sale of insurance, and that the licensing of employees of financial institutions as insurance agents is not in the public interest. No valid basis exists, either in the terms of the statute itself, or on the facts, from distinguishing Petitioners from any other lending institution in this regard.
Production Credit, 356 So.2d at 32.
The only issue squarely addressed in Production Credit is the applicability of the statute to employees of Production Credit Associations of Florida and Federal Land Bank Associations of Florida. The opinion contains no language remotely suggesting that any constitutional issue was intended to be addressed by the court. Questions concerning the facial constitutionality of a statute were, of course, beyond the scope of the administrative proceeding from which the appeal in Production Credit was taken. Key Haven Associated Enterprises, Inc. v. Board of Trustees of the Internal Improvement Fund, 427 So.2d 153, 157 (Fla.1982). Although constitutional issues may be considered de novo by this court on appeal from an administrative proceeding, Rice v. Department of Health and Rehabilitative Services, 386 So.2d 844 (Fla. 1st DCA 1980), the constitutional issues raised here were clearly not raised nor considered in Production Credit. 1
At oral argument, counsel for appellees urged that even though the trial court rested the dismissal of appellants' complaint on the incorrect premise that this court's decision in Production Credit decided the constitutional issues raised by appellants, it is not necessary to remand to the trial court for a trial of these issues since this court can address them without a record. Citing Criterion Insurance Co. v. State Department of Insurance, 458 So.2d 22 (Fla. 1st DCA 1984), counsel argued that appellants' facial constitutional attack on section 626.988 raises legal issues which may be decided on the basis of the complaint and the face of the statute, and therefore remand for a factual record is not necessary.
Appellees' reliance on this court's decision in Criterion is misplaced for several reasons. In Criterion, the Department of Insurance entered a final order disapproving Criterion's insurance rate increase without notice or hearing pursuant to section 120.59(3). Rather than exhaust its administrative remedies, Criterion filed suit in circuit court seeking declaratory and injunctive relief as well as a declaration that section 627.0651, under which the department acted, was facially unconstitutional. Upon the department's motion to dismiss, the circuit court recognized it had jurisdiction only to determine the facial constitutionality of the statute. The circuit court ruled that the statute "did not appear to be in violation of any constitutional principle," and dismissed the remaining issues raised in Criterion's complaint with prejudice. In affirming, this court did not address the constitutionality of section 627.0651 except peripherally, directing its attention instead to the questions of whether Criterion could bypass its administrative remedies by going to circuit court, and whether the trial court correctly determined it lacked jurisdiction to proceed once it found section 627.0651 to be facially constitutional.
This case arrives in this court in an entirely different posture than did Criterion. In Criterion, the insurance company's complaint primarily raised issues concerning the propriety of the department's order disapproving its rate increase. This order clearly amounted to agency action for which the Administrative Procedure Act provides a remedy. Criterion's constitutional attack on section 627.0651 centered around the department's alleged unconstitutional application of section 627.0651. Under established judicial precedent, a suit in circuit court challenging the constitutional deficiencies in...
To continue reading
Request your trial
-
State, Dept. of Health and Rehabilitative Services v. Cox
...challenge, however, the issue of facial constitutionality can be a mixed question of fact and law. Glendale Fed. Sav. & Loan Ass'n v. State, Dep't of Ins., 485 So.2d 1321 (Fla. 1st DCA), review denied, 494 So.2d 1150 (Fla.1986). When the constitutional issue is a mixed question of fact and ......
-
Powell v. State
...two of the cases, it is unclear whether the issue was raised for the first time at oral argument only. Glendale Fed. Sav. & Loan v. State Dep't of Ins., 485 So.2d 1321 (Fla. 1st DCA 1986) (issue argued at oral argument, but no indication whether it was raised there for the first time); Will......
-
Weizberg v. City of Des Moines
...to determine if, in fact, there is any reasonable basis for the purported rationale. See Glendale Fed. Sav. & Loan Ass’n v. State , 485 So.2d 1321, 1326 (Fla. Dist. Ct. App. 1986) ("Clearly, the constitutionality of a statute predicated upon the existence of a particular state of facts may ......
-
Communications Workers of America, Local 3170 v. City of Gainesville
...issues may be considered de novo by this court on appeal from an administrative proceeding." Glendale Federal Savings and Loan Ass'n v. Florida Dep't of Ins., 485 So.2d 1321, 1323 (Fla. 1st DCA), review denied mem., 494 So.2d 1150 (Fla.1986). In State Employees Attorneys Guild v. State of F......