Sun Ins. Office, Limited v. Clay, 31079

• Decision Date: 18 October 1961
• Docket Number: No. 31079,31079
• Citation: 133 So.2d 735
• Parties: SUN INSURANCE OFFICE, LIMITED, Appellant, v. John CLAY, Appellee.
• Court: Florida Supreme Court

Page 735

133 So.2d 735

SUN INSURANCE OFFICE, LIMITED, Appellant, v. John CLAY, Appellee.

No. 31079.

Supreme Court of Florida.

Oct. 18, 1961.

Keen, O'Kelley & Spitz, J. Velma Keen, Charles H. Spitz, Tallahassee and Rein, Mound & Cotton, New York City, for appellant.

Paschal C. Reese and Gibson, Gibson & Reese, West Palm Beach, for appellee.

Richard W. Ervin, Atty. Gen., Robert J. Kelly and James Mahorner, Asst. Attys. Gen., as amicus curiae.

Fred M. Burns, Tallahassee, as amicus curiae.

ROBERTS, Chief Justice.

We here consider two questions of state law certified by the United States Court of Appeals for the Fifth Circuit to this court for decision as authorized by § 25.031, Fla.Stat., F.S.A., and Florida Appellate Rule 4.61, 31 F.S.A. The Court of Appeals acted in response to the opinion and mandate of the United States Supreme Court in Clay v. Sun Insurance Office, Limited, 363 U.S. 207, 80 S.Ct. 1222, 4 L.Ed.2d 1170, which vacated the judgment of the Court of Appeals in the cause, Sun Insurance Office Limited v. Clay, 5 Cir., 265 F.2d 522, and remanded the cause to such court.

The facts and circumstances culminating in the instant litigation, and its history, are stated in detail in the opinions of the federal appellate courts referred to above. The salient facts necessary to our determination of the legal questions presented to this court for decision are, however, stated in the questions as certified to this court by the Court of Appeals. The first question certified reads as follows:

'(1) Are the provisions of Section 95.03 and 95.11(3) Florida Statutes, making void any provisions of an insurance contract requiring suit on the contract to be filed in a period shorter than five years applicable to a personal property, world-wide, all-risks, floater insurance policy under the following circumstances: the policy was applied for in Illinois from a British company, qualified to do business in Illinois and in Florida and nine other states, by the assured, who was then a resident of Illinois; the premium was paid in Illinois and the policy was issued there in 1952; subsequently, the assured moved his legal residence to Florida and the losses occurred there in 1954-55; suit was filed in Florida more than twelve months after discovery of the loss; the policy provided that any suit under the contract must be filed within twelve months from the discovery of the loss; the twelve-month limitation clause of the contract is valid and enforceable in the State of Illinois?'

Section 95.03, supra, was enacted in 1913 as §§ 1 and 2 of Ch. 6465, Acts of 1913, and provides as follows:

'All provisions and stipulations contained in any contract whatever * * * fixing the period of time in which suits may be instituted under any such contract * * * at a period of time less than that provided by the statute of limitations of this state, are hereby declared * * * to be illegal and void. No court in this state shall give effect to any provision or stipulation of the character mentioned in this section.' (Emphasis added.)

And § 95.11(3), supra, specified a five-year limitation period for actions on written contracts not under seal, the type of contract with which we are here concerned.

The Fifth Circuit Court of Appeals in its opinion and judgment, supra, 265 F.2d 522, did not decide the question of whether § 95.03 was, in fact, intended to apply to a contract of insurance issued in another state to a resident of such state, since it was of the opinion that, even if applicable, a violation of the due process clause of the federal constitution would result from invalidating the 12-month 'suit clause' in the subject insurance contract. On certiorari to review such judgment a majority of the United States Supreme Court, speaking through Mr. Justice Frankfurter, held that, under settled canons of constitutional adjudication, 'the constitutional issue should have been reached only if, after decision of two non-constitutional questions, decision was compelled.' [363 U.S. 207, 80 S.Ct. 1224.] Accordingly, the judgment of the Court of Appeals was vacated and the cause remanded in order to secure from this court a decision on the two unresolved questions of state law now before us. Clay v. Sun Insurance Office Limited, supra.

In a dissenting opinion Mr. Justice Black, joined by the Chief Justice and Mr. Justice Douglas, argued strongly that all questions of law in the case--constitutional and non-- constitutional--could properly and should be decided without further delay by the High Court; and he proceeded to do so, advancing cogent reasons in support of the applicability of § 95.03 to the subject contract and its constitutionality when so applied.

We are not here concerned, of course, with the constitutionality vel non of § 95.03 as applied to so-called foreign contracts, including the subject contract, since this question is not before us. In view, however, of the ruling of the Court of Appeals respecting the validity of the statute as applied to the subject contract, we have considered the question of the applicability of the statute to the subject contract in the light of the well settled rule of statutory construction that a statute must be construed, if fairly possible, so as to avoid 'not only the conclusion that it is unconstitutional, but also grave doubts upon that score,' Burr v. Florida East Coast R. R. Co., 1919, 77 Fla. 259, 81 So. 464. Assuming arguendo that we are as sanguine as appellant insurance company that 'grave doubts' should be held to exist as to the validity of § 95.03 as applied to the subject contract, we must conclude, nevertheless, that it is not 'fairly possible' to construe the statute as applicable solely to contracts made and executed in Florida, as here contended by appellant.

Obviously, as pointed out by the appellant, the Legislature of this state could not conceivably have any interest in a contract executed in another state by residents of other states, involving property in another state; and we agree with appellant that 'Imputing any such intention to the Florida Legislature would be an absurdity.' But a statute must, of course, be read in its entirety; and we think it is equally clear, from the last sentence thereof, quoted and emphasized above, that the Legislature intended the Act to apply to 'any contract whatever'--foreign or domestic--when Florida's contact therewith, existing at the time of its execution or occurring thereafter, is sufficient to give a court of this state jurisdiction of a suit thereon. And, in such event, nothing could be clearer than the legislative mandate that 'No court in this state shall give effect to any provision or stipulation of the character mentioned in this section.'

From the facts set forth in the certified question, it is clear that this state's contact with the subject contract and parties thereto is abundantly sufficient to give a court of this state jurisdiction of a suit thereon. Accordingly, the first question certified to this court, supra, must be answered in the affirmative. This holding is in accord with the general rule stated in 29A Am.Jur., Insurance, Sec. 1794, p. 865, as follows:

'* * * [W]here the statutes of the forum make void all agreements whereby the time for the bringing of actions is fixed at a period less than that prescribed by law, a contractual stipulation made in another jurisdiction is not available as a defense.'

See also Galliher v. State Mutual Life Insurance Co., 150 Ala. 543, 43 So. 833; Asel v. Order of United Commercial Travelers of America, 355 Mo. 658, 197 S.W.2d 639; Gulf Insurance Co. v. Holland Construction Co., 218 Ark. 405, 236 S.W.2d 1003; and Watson v. Employers' Liability Assur. Corp., 348 U.S. 66, 75 S.Ct. 166, 99 L.Ed. 74.

The other question of state law which we are requested by the Court of Appeals to decide is stated by such court as follows:

'(2) Does an all-risks policy of insurance containing the following provision,

'The Company will also pay the actual loss of or damage (except by fire) to property of the Assured not specifically excluded by this Policy caused by theft or attempt thereat; or by vandalism or malicious mischief to the interior of the residences of the Assured,'

and containing numerous limitations, exceptions and exclusions but none touching on acts of a spouse of an assured, cover losses resulting from acts of vandalism and from theft committed by the wife of the assured, hostile to him and without his consent, when the property damaged and taken was in the common residence of the assured and his wife?'

We have concluded that this question must also be answered in the affirmative. Th policy in question, designated on its face as a 'Personal Property Floater Policy (World Wide),' is an 'all risk' type of insurance policy. 'This type of contract has been said to cover every conceivable loss or damage that may happen except when occasioned by the wilful or fraudulent act or acts of the insured.' 2 Richards on Insurance, (5th Ed.) § 212. The appellant also points out in its brief that, in Pierce's Development of Comprehensive Insurance for the Household, it is said that in an 'all risk' policy 'it is the list of excluded causes of loss which is used to determine the true scope of the hazard coverage.'

Clearly, then, in the absence of a provision expressly excluding from coverage loss caused by vandalism or theft on the part of the wife of the insured, and under the rule that an insurance policy must be liberally construed in favor of the insured, National Surety Co. v. Williams, 74 Fla. 446, 77 So. 212, it should be held that the loss here sustained is within the coverage of an 'all risk' policy.

But, argues the appellant, the subject policy was a 'family policy,' insuring all the family property, some joint and some individually owned, and should be construed 'to cover only against 'risks' and not against deliberate acts by one of the persons insured * * *' The...