Penzer v. Transportation Ins. Co.

• Decision Date: 28 January 2010
• Docket Number: No. SC08-2068.,SC08-2068.
• Citation: 29 So.3d 1000
• Parties: Michael PENZER, etc., Appellant, v. TRANSPORTATION INSURANCE COMPANY, Appellee.
• Court: Florida Supreme Court

29 So.3d 1000

Michael PENZER, etc., Appellant, v. TRANSPORTATION INSURANCE COMPANY, Appellee.

No. SC08-2068.

Supreme Court of Florida.

January 28, 2010.

Marc A. Wites of Wites and Kapetan, P.A., Lighthouse Point, FL, Douglas S. Wilens and Stuart A. Davidson of Coughlin, Stoia, Geller, Rudman, and Robbins, LLP, Boca Raton, FL, for Appellants.

Raoul G. Cantero, III of White and Case, LLP, Miami, FL, Laura Besvinick and Parker D. Thomson of Hogan and Hartson, LLP, Miami, FL, and Arthur J. McColgan, II of Walker Wilcox Mastousek, LLP, Chicago, IL, for Appellee.

R. Hugh Lumpkin and Michael F. Huber of Ver, Ploeg, and Lumpkin, P.A., Miami, FL, Eugene R. Anderson, William G. Passannante, and Jane A. Horne of Anderson, Kill, and Olick, P.C., New York, NY, on behalf of United Policyholders; and Ronald L. Kammer and Maureen G. Pearcy of Hinshaw and Culbertson, LLP, Miami, FL, Laura A. Foggan and Parker Lavin of Wiley Rein, LLP, Washington, D.C., on behalf of Complex Insurance Claims Litigation Association, as Amicus Curiae.

POLSTON, J.

This case is before the Court for review of a question of Florida law certified by the United States Court of Appeals for the Eleventh Circuit that is determinative of a cause pending in that court and for which there appears to be no controlling precedent.¹

The coverage issue in this insurance dispute concerns whether, under Florida law, the sending of an unsolicited advertisement by fax, in violation of the federal Telephone Consumer Protection Act ("TCPA"), 47 U.S.C.A. § 227 (2001), is covered by a particular insurance policy provision. The Eleventh Circuit certified the following question:

Does a commercial Liability Policy Which Provides Coverage for "Advertising Injury," Defined as "Injury Arising out of ... Oral or Written Publication of Material That Violates a Person's Right of Privacy," Such as the Policy Described Here, Provide Coverage for Damages for Violation of a Law Prohibiting Using Any Telephone Facsimile Machine to Send Unsolicited Advertisement to a Telephone Facsimile Machine When No Private Information is Revealed in the Facsimile?

Penzer v. Transp. Ins. Co., 545 F.3d 1303, 1312 (11th Cir.2008).

For the reasons that follow, we hold that, under Florida law, the language of this insurance provision provides coverage for infringements of the TCPA. Accordingly, we answer the certified question in the affirmative.

I. BACKGROUND

In June 2003, Michael Penzer filed a class action suit in a Florida state court against Nextel South Corporation alleging that Nextel or one of its agents sent him an unsolicited facsimile advertisement in violation of the TCPA.² Penzer v. Transp. Ins. Co., 509 F.Supp.2d 1278, 1280 (S.D.Fla.2007). Nextel filed a third-party complaint against Sunbelt, a blast-fax advertiser, and Southeast Wireless, an authorized agent of Nextel, seeking indemnity and contributions for any liability Nextel may have in the class action. Id. Nextel also alleged that Southeast Wireless hired Sunbelt to create the advertisement and that Nextel did not authorize the fax transmissions. Id. Penzer then filed a third-party complaint against Southeast Wireless, and Southeast Wireless requested that Transportation Insurance Company ("Transportation"), its commercial liability insurer, defend it in the class action. Id. Transportation refused to provide a defense for the class action suit or the Nextel complaint, and also disclaimed any coverage on various grounds. Id. at 1281.

Thereafter, in April 2004, Penzer entered into a settlement agreement with Southeast Wireless in which Penzer agreed to release Southeast Wireless from any liability, and Southeast Wireless consented to a judgment and assigned its right to seek insurance coverage from Transportation to Penzer. Id. The state court approved the settlement and certified a settlement class. Id. Penzer then pursued a declaratory judgment action against Transportation in the United States District Court for the Southern District of Florida, wherein Transportation defended that, based upon the language of the policy, Transportation had no obligation to defend or indemnify Southeast Wireless. Id.

The insurance policy at issue here provides coverage for advertising injuries. The policy defines "advertising injury" as an "injury arising out of one or more of the following offenses:"

a. Oral or written publication of material that slanders or libels a person or organization or disparages a person's or organization's goods, products or services;

b. Oral or written publication of material that violates a person's right of privacy;

c. Misappropriation of advertising ideas or style of doing business; or

d. Infringement of copyright, title or slogan.

Id.

Transportation argued:

The phrase "oral or written publication of material that violates a person's right of privacy," read as a whole and in context, provides coverage only for injuries to privacy rights caused by the content of the material. Second, Florida law interpreting the phrase "publication ... in violation of an individual's right of privacy" makes clear that coverage exists only when private matters about one person are communicated to another person. Although Southeast's conduct in having the commercial advertisements sent by facsimile may have violated the TCPA, there is no coverage under the policy because there were no content-based privacy violations.

Id. at 1283.

The Southern District agreed with Transportation. Specifically, it found that Transportation did "not have a duty to indemnify the plaintiffs for Southeast's violations of the TCPA." Id. at 1288.³ It ruled that the policy language was not ambiguous and that "advertising injury coverage under this provision exists only when the content of the material published violates a person's right to privacy." Id. at 1286. The Southern District declined to adopt the reasoning of the Eleventh Circuit in Hooters of Augusta, Inc. v. American Global Insurance Co., 157 F. App'x 201 (11th Cir.2005), which reached the opposite conclusion under Georgia law, reasoning that (1) "Hooters did not address the main argument made by Transportation here," and (2) Florida law calls for a different result. 509 F.Supp.2d at 1284. Instead, the Southern District relied on the reasoning of the Third District Court of Appeal in State Farm Fire & Casualty Co. v. Compupay, Inc., 654 So.2d 944 (Fla. 3d DCA 1995), a case holding that an insurer had no duty to defend its insured against a sexual harassment claim under a policy provision that provided coverage for "a publication or utterance in violation of an individual's right of privacy." 509 F.Supp.2d at 1284 (quoting Compupay, 654 So.2d at 948).

Penzer appealed the Southern District's decision to the Eleventh Circuit, which concluded that "neither the policy exclusions nor Florida public policy lead to denial of coverage."⁴ Penzer, 545 F.3d at 1311. However, the Eleventh Circuit also found that the disposition of this case rested on an unsettled issue of Florida law and that "a pure legal question of the interpretation of widely used language in commercial liability insurance is at issue."⁵ Id. Accordingly, it certified its question to this Court. Id. at 1312.

II. ANALYSIS

This case presents a question of insurance policy interpretation, which is a question of law, subject to de novo review. See Auto-Owners Ins. Co. v. Pozzi Window Co., 984 So.2d 1241, 1246 (Fla.2008).

In interpreting insurance contracts, this Court follows the generally accepted rules of construction, meaning that "insurance contracts are construed according to their plain meaning, with any ambiguities construed against the insurer and in favor of coverage." U.S. Fire Ins. Co. v. J.S.U.B., Inc., 979 So.2d 871, 877 (Fla.2007) (citing Taurus Holdings, Inc. v. U.S. Fid. & Guar. Co., 913 So.2d 528, 532 (Fla.2005)). "If the relevant policy language is susceptible to more than one reasonable interpretation, one providing coverage and another limiting coverage, the insurance policy is considered ambiguous." Garcia v. Fed. Ins. Co., 969 So.2d 288, 291(Fla.2007) (quoting Auto-Owners Ins. Co. v. Anderson, 756 So.2d 29, 34 (Fla. 2000)). To find in favor of the insured on this basis, however, the policy must actually be ambiguous. Garcia, 969 So.2d at 291 (citing Taurus Holdings, 913 So.2d at 532). "A provision is not ambiguous simply because it is complex or requires analysis.... `If a policy provision is clear and unambiguous, it should be enforced according to its terms.'" Garcia, 969 So.2d at 291 (citation omitted) (quoting Taurus Holdings, 913 So.2d at 532).

Here, the policy language at issue is, "oral or written publication of material that violates a person's right of privacy." Three terms—"publication," "material," and "right of privacy"—are particularly relevant, and none are defined by the policy. Consequently, the first step towards discerning the plain meaning of the phrase is to "consult references that are commonly relied upon to supply the accepted meaning of the words." Garcia, 969 So.2d at 292 (citing Gov't Employees Ins. Co. v. Novak, 453 So.2d 1116, 1118 (Fla. 1984)).

The first term, "publication" is defined as "communication (as of news or information) to the public: public announcement" or as "the act or process of issuing copies (as a book, photograph, or musical score) for general distribution to the public." Webster's Third New International Dictionary 1836 (1981). The definition also refers the reader to the definition of "publish." Id. To publish is "to place before the public (as through a mass medium): DISSEMINATE." Id. at 1837. Here, sending 24,000 unsolicited blast-facsimile advertisements to Mr. Penzer and others is included in the broad definition of "publication" because it constitutes a communication of information disseminated to the public and it is "the act or process of issuing copies ... for general distribution to the public."

"Material" has several definitions, two of...