Lutz v. Protective Life Insurance Company

• Decision Date: 03 January 2007
• Docket Number: No. 4D05-1405.,4D05-1405.
• Citation: 951 So.2d 884
• Parties: Mark LUTZ, Appellant, v. PROTECTIVE LIFE INSURANCE COMPANY, Appellee.
• Court: Florida District Court of Appeals

951 So.2d 884

Mark LUTZ, Appellant, v. PROTECTIVE LIFE INSURANCE COMPANY, Appellee.

No. 4D05-1405.

District Court of Appeal of Florida, Fourth District.

January 3, 2007.

Philip M. Burlington of Burlington & Rockenbach, P.A., and Jeffrey M. Liggio and Richard M. Benrubi of Liggio, Benrubi & Williams, P.A., West Palm Beach, for appellant.

Irma Reboso Solares of Jorden Burt LLP, Miami, Phillip E. Stano of Jorden Burt LLP, Washington, D.C., and W. Michael Atchison, Anthony C. Harlow and Alfred H. Perkins, Jr., of Starnes & Atchison LLP, Birmingham, AL, for appellee.

Evan M. Tager of Mayer, Brown, Rowe & Maw LLP, Washington, D.C., Brian P. Trauman of Mayer, Brown, Rowe & Maw LLP, New York, New York, Carl B. Wilkerson and Lisa Tate, Washington, D.C., for Amicus Curiae American Council of Life Insurers.

STEVENSON, C.J.

Mark Lutz appeals a judgment on the pleadings entered in favor of Protective Life Insurance Company ("Protective Life") on his class action suit for breach of contract and declaratory judgment. We affirm the judgment on the pleadings with respect to the breach of contract claim, but reverse on the count for declaratory relief.

Protective Life is an out-of-state insurer that provided a group health insurance policy to Lutz and other members of the class. Lutz alleged in count one of his complaint that Protective Life breached its insurance contract by improperly raising his and other group members' premiums based on individual health status/claims-related factors contrary to Part VII of Chapter 627 (Group, Blanket, and Franchise Health Insurance Policies). In count two, Lutz sought a declaration that the group policy issued by Protective Life failed to meet the statutory conditions in section 627.6515(2), which would exempt it from the general provisions of Part VII of Chapter 627, and that Protective Life improperly raised the class members' premiums based on their claims history and/or health status, contrary to "Florida Law."

The trial court granted judgment on the pleadings in favor of Protective Life on both counts of the complaint based on its conclusion that a private right of action was not available to enforce violations of the statutory provisions which Lutz cited. The trial court believed that Lutz's claims were actually "for breach of the statutes couched in the form of actions for breach of contract and declaratory relief." An appellate court considers a trial court's granting of a judgment on the pleadings by a de novo standard of review. See Thompson v. Napotnik, 923 So.2d 537 (Fla. 5th DCA 2006). In the consideration of a motion for judgment on the pleadings, all well-pleaded material allegations of the non-moving party are to be taken as true. See Venditti-Siravo, Inc. v. City of Hollywood, Fla., 418 So.2d 1251, 1253 (Fla. 4th DCA 1982). Thus, in reviewing this case, we must take as true all of the material allegations in Lutz's complaint and disregard all of the denials in Protective Life's answer.

While we agree with the trial court that nothing in the relevant statutes indicates that the legislature intended to create a private right of action for an insured to enforce compliance with an insurer's violation of sections 627.6515, 627.6571 or 627.6675, we believe these statutory provisions could form the basis for a breach of contract action by an insured if properly pled and supported by the evidence. As the court pointed out in Foundation Health v. Westside EKG Associates, 944 So.2d 188, 195 (Fla.2006):

Florida courts have long recognized that the statutory limitations and requirements surrounding traditional insurance contracts may be incorporated into an insurance contract for purposes of determining the parties' contractual rights. See Citizens Ins. Co. v. Barnes, 98 Fla. 933, 124 So. 722, 723 (1929) (finding an ordinance is "part of the contract of insurance" because there was no reason not to apply the "general doctrine that, where parties contract upon a subject which is surrounded by statutory limitations and requirements, they are presumed to have entered into their engagements with reference to such statute, and the same enters into and becomes a part of the contract"); see also Weldon v. All Am. Life Ins. Co., 605 So.2d 911, 914 (Fla. 2d DCA 1992) (applying the general principle to determine the extent to which a chiropractor's services were covered under an insurance policy).

In Westside, the court found that the "prompt pay provisions" found in Florida Statutes section 641.3155 may be incorporated into an HMO contract for the purpose of establishing a breach of contract cause of action when the provider's claim is for a service the HMO is required to provide either under the HMO Act or the HMO contract. The court noted that the HMO Act itself did not "foreclose" a common law contract action for breach of the statutorily-imposed prompt pay provision.

Here, we find that, like the prompt pay provisions in Westside, the statutory requirements for group insurance policies could be incorporated into Lutz's insurance contract and form the basis of a properly-pled breach of contract action even though the statutory scheme does not appear to support a private right of action merely to enforce compliance with some or all of them. Of course, a breach of contract claim based on the insurer's failure to comply with "incorporated" provisions of the Florida Insurance Code must be supported by allegations showing actual and direct damages to the insured, not merely hypothetical, speculative or potential ones. Further, we do not believe that section 624.155, which authorizes any person to bring a damages action against an insurer for certain enumerated statutory provisions, forecloses Lutz's right to bring a properly-pled common law breach of contract action based on statutory provisions other than those named therein. The statute itself specifically states that "[t]he civil remedy specified in this section does not preempt any other remedy or cause of action provided for pursuant to any other statute or pursuant to the common law. . . ." § 624.155(8), Fla. Stat. (2005). The trial court apparently agreed with this conclusion as well, stating in the final order that "[t]his Court does not dispute Plaintiff's argument that Section 624.155 does not preempt common law causes of action for breach of contract and declaratory relief under Chapter 86, Florida Statutes."

Nevertheless, we agree with the trial court's conclusion that the complaint failed to show how Protective Life violated the cited statutory provisions such that a breach of contract based on the "incorporated statutory provisions" would have occurred. True, the complaint alleged that Protective Life "unilaterally and irregularly drastically increased the approximate monthly premiums it charged" and "improperly raised premiums based on health status related factors," but the complaint never sufficiently tied these so-called contractual breaches to any specific statutory language or requirements. Lutz alleged that Protective Life failed to comply with section 627.6515(2), which would exempt the out-of-state policy from the requirements of the bulk of Part VII of Chapter 627; section 627.6675, which requires group policies to provide employees with the option of transferring to a conversion policy when coverage under the group policy is terminated; and section 627.6571, which provides in part that an insurer "must renew or continue in force such coverage at the option of the policyholder." The complaint alleged that other provisions in the Florida Insurance Code were violated, but does not specify what provisions. Judgment on the pleadings may be granted when the moving party is clearly entitled to a judgment, as a matter of law, based solely on the content of the pleadings. See Reinhard v. Bliss, 85 So.2d 131, 133 (Fla.1956); Tres-AAA-Exxon v. City First Mortg., Inc., 870 So.2d 905, 907 (Fla. 4th DCA 2004). Because the complaint did not establish that Lutz was entitled to relief on the breach of contract claim, the trial court properly granted judgment on the pleadings in favor of Protective Life.

Lutz contends for the first time on appeal that he should have been afforded an opportunity to amend his complaint on the breach of contract claim. As a result, we are unable to consider the merits of this argument. See Century 21 Admiral's Port, Inc. v. Walker, 471 So.2d 544, 545 (Fla. 3d DCA 1985) ...