U.S. Fidelity and Guar. Co. v. Department of Ins.
| Decision Date | 05 July 1984 |
| Docket Number | No. 64405,64405 |
| Citation | 453 So.2d 1355 |
| Parties | UNITED STATES FIDELITY AND GUARANTY COMPANY, et al., Appellants, v. DEPARTMENT OF INSURANCE of the State of Florida and Bill Gunter, as Insurance Commissioner of the State of Florida, Appellees. |
| Court | Florida Supreme Court |
John K. Aurell, John Radey and Michael L. Rosen of Holland & Knight, Tallahassee; John M. McNatt, Jr., Jack W. Shaw, Jr. and J. Stephen O'Hara, Jr. of Mathews, Osborne, McNatt, Gobelman & Cobb, Jacksonville; and Martin B. Unger of Swann & Haddock, Orlando, for appellants.
Daniel Y. Sumner and David A. Yon, Department of Insurance, Tallahassee, for appellees.
This cause is before the Court on appeal from a judgment of the Circuit Court of the Second Judicial Circuit, sitting in Leon County. An appeal of the judgment was taken to the First District Court of Appeal and that court certified the judgment to be of great public importance and to require immediate resolution by this Court. Having exercised our discretion to review the judgment, we have plenary jurisdiction of the appeal. Art. V, § 3(b)(5), Fla.Const.
The judgment before us on appeal held section 627.066, Florida Statutes (1981), commonly referred to as the automobile insurance excess profits law, constitutional. After carefully considering all of the appellants' challenges to the validity of the law, we find it constitutional in all respects and therefore affirm the judgment of the circuit court.
The legislature first enacted the excess profits law in 1977. Ch. 77-468, § 23, Laws of Fla. That law required private passenger automobile insurers to file with the Department of Insurance forms containing information about earned premiums, losses and loss adjustment expenses, administrative and selling expenses incurred in Florida, and policyholder dividends. The law also required the insurers to file a schedule of their loss adjustment expenses for the three most recent accident years beginning with 1976. Excess profits were calculated to be amounts in excess of five percent of the anticipated underwriting profit. Finally, the law authorized the Department of Insurance to order the return of excess profits to policyholders and to exempt certain insurers from complying with the reporting requirements. Specifically, the law provided:
(6) If the insurer group has realized an excessive profit, the department may order a return of the excessive amounts to policyholders.
(7) In determining what action should be taken if excessive profits are realized, the department shall consider the following as they relate to Florida private passenger automobile insurance:
(a) The underwriting profit or loss of the insurer group in prior years.
(b) The financial strength and stability of the insurer group.
(c) The loss development patterns of the insurer group.
(8) The department may excuse an insurer from complying with these reporting requirements if the volume of business written by the insurer would not justify the expense of the reporting requirement.
§ 627.066(6)-(8), Fla.Stat. (1977).
After receiving an order to refund their excess profits, Government Employees Insurance Company, Liberty Mutual Fire Insurance Company, and Liberty Mutual Insurance Company filed suits in two circuit courts, seeking to have section 627.066 declared unconstitutional. Their main contention was that subsections six through eight gave the Department of Insurance unbridled discretion to order refunds of excess profits and therefore constituted an unconstitutional delegation of legislative authority. The trial judges in both cases agreed and granted the insurers' motions for summary judgment, holding section 627.066 to be unconstitutional.
The department appealed and at the same time sought from the legislature an amendment to the statute to abolish the defects found by the circuit court judges. The legislature obliged by enacting Chapter 80-236, Laws of Florida. Section 26 of that chapter amended and renumbered subsections six through eight of section 627.066 to provide as follows:
(7) If the insurer group has realized an excessive profit, the department shall order a return of the excessive amounts after affording the insurer group an opportunity for hearing and otherwise complying with the requirements of chapter 120. Such excessive amounts shall be refunded in all instances unless the insurer group affirmatively demonstrates to the department that the refund of the excessive amounts will render a member of the insurer group insolvent under the provisions of the Florida Insurance Code.
(8) The excessive amount shall be refunded on a pro rata basis in relation to the final compilation year earned premiums to the voluntary private passenger automobile policyholders of record of the insurer group on December 31 of the final compilation year.
§ 627.066(7) and (8), Fla.Stat. (1981). Section 27 of the law made these new provisions retroactive:
(13) Since it appears to the Legislature that private passenger automobile insurer groups have realized excessive profits during all or part of the years 1977, 1978, and 1979 and that such profits were realized in part due to statutory changes for which rates were not adequately adjusted, it is the desire and intent of the Legislature that the provisions of this section, as amended by chapter 80-236, Laws of Florida, shall apply retroactively to excessive profits realized during the years 1977, 1978, and 1979. In the event that such retroactive application is judicially determined to be unconstitutional, it is the intent of the Legislature that the act be given prospective application as stated hereinafter. Prior to July 1, 1982, the data required by this section shall be submitted to the department for the years 1979, 1980, and 1981. Excessive profits shall be calculated in accordance with the provisions of this section. However, only the excessive profits realized by the insurer group in 1981 shall be refunded to policyholders, and such refunds shall be made in accordance with this section. Prior to July 1, 1983, the data required by this section shall be submitted to the department for the years 1980, 1981, and 1982. Excessive profits shall be calculated in accordance with this section; however, refunds shall only be made for excessive profits realized in the years 1981 and 1982. Thereafter, excessive profits shall be calculated and refunded on the basis of 3 years as set forth in this section.
§ 627.066(13), Fla.Stat. (1981).
When the department issued notices ordering the refund of excessive profits earned from 1977 through 1979, several insurance companies, including all of the appellants in this case, filed actions in circuit court, seeking to have the 1980 amendments declared unconstitutional. The trial court granted judgment on the pleadings in favor of the insurance companies on the ground that the 1980 law was unconstitutional in its retroactive application to excessive profits realized in the years 1977, 1978 and 1979 because it impaired rights and obligations under contracts entered into before the effective date of the law. The department appealed to the district court of appeal, which in turn certified the case to this Court as one of great public importance requiring immediate resolution by this Court. We reversed, finding that it was "the 1977 excess profits law, and not the 1980 amendments, that provides the basis for the department's authority to order a return of excess profits." Department of Insurance v. Teachers Insurance Co., 404 So.2d 735, 741 (Fla.1981). We reasoned that the insurance companies were unaffected by the 1980 amendments, which merely removed the department's discretion not to order a refund, unless they could "allege and prove, which they have not, that but for the 1980 amendment, the department would not have initiated the refund orders." Id.
When the case returned to the trial court, appellants amended their complaints to allege that but for the 1980 amendment the department would not have issued refund notices because the 1977 law had been declared unconstitutional. Before trial the trial court granted partial summary judgment, finding the 1977 law to be unconstitutional. However, at the end of the trial, the trial court entered a final judgment upholding the constitutionality of section 26, chapter 80-236 and finding that the appellants had failed to prove that the department would not have required the excess profits earned since 1977 to be refunded had section 23, chapter 77-468, Laws of Florida, not been replaced by section 26, chapter 80-236, Laws of Florida. The appellants appealed to the district court of appeal which certified the case to be of great public importance requiring immediate resolution by this Court.
Appellants argue that the department lacked the authority to issue refund notices under the 1977 law since it had been declared unconstitutional. They claim the department must abide by the earlier rulings that the 1977 law was unconstitutional since it dismissed its appeals in those two cases where it was held unconstitutional, and since it did not cross-appeal the lower court's partial summary judgment reaffirming those earlier decisions. Appellants further argue that the 1977 law could not have served notice upon them that any excess profits earned from 1977 through 1979 would be subject to refund and that the 1980 amendment could not validate the earlier law nor be retroactively applied.
We do not agree with appellant's assertions that the 1977 law cannot be used by the department as a basis for its authority to issue refund orders. The fact that the department dismissed its appeals from those earlier circuit court rulings rendered those judgments final and binding on the parties to those lawsuits. But the department is not precluded from arguing in the present litigation that the 1977 law is a valid source of authority. Even though we adhere to our ruling in Teachers on that...
To continue reading
Request your trial
-
Searcy, Denney, Scarola, Barnhart & Shipley, Etc. v. State
...a party to gains it reasonably expected from the contract do not constitute substantial impairment. U.S. Fidelity & Guar. Co. v. Dep't of Ins. , 453 So.2d 1355, 1360 (Fla. 1984) (quoting Energy Reserves Group, Inc. v. Kansas Power & Light Co. , 459 U.S. 400, 411, 103 S.Ct. 697, 74 L.Ed.2d 5......
-
Smith v. Department of Ins.
...in section 10 is almost identical to that approved for passenger motor vehicle insurance. See United States Fidelity and Guaranty Co. v. Department of Insurance, 453 So.2d 1355 (Fla.1984), and Department of Insurance v. Teachers Insurance Co., 404 So.2d 735 (Fla.1981). See also John Deere I......
-
Sears, Roebuck & Co. v. Forbes/Cohen Fla. Props., L.P.
..."Total destruction of contractual expectations is not necessary for a finding of substantial impairment." U.S. Fid. & Guar. Co. v. Dep't of Ins. , 453 So.2d 1355, 1360 (Fla. 1984). Rather, impairment is defined as "to make worse; to diminish in quantity, value, excellency or strength; to le......
-
Gordon v. State
...it are subject to a prior claim, a party cannot thereafter obtain a vested right to that claim, see United States Fidelity & Guar. Co. v. Department of Ins., 453 So.2d 1355 (Fla.1984), and that (b) even substantive rights and obligations created by statute do not vest until the accrual of t......