IN THE SUPREME COURT OF FLORIDA VIRGINIA FARM BUREAU MUTUAL INSURANCE COMPANY, CASE NO.: SC04-1603 vs. Petitioner, THOMAS ALBERT DUNFORD and RACHEL PEERY, Respondents. Application For Discretionary Review of A Decision Of The District Court Of Appeal, Fourth District Respondents Brief On Jurisdiction Richard W. Slawson Slawson Cunningham & Whalen, P.L. 2401 PGA Boulevard Suite 140 Palm Beach Gardens, FL 33410-3515 (561) 625-6260 and Marjorie Gadarian Graham Marjorie Gadarian Graham, P.A. Oakpark-Suite D129 11211 Prosperity Farms Road Palm Beach Gardens, FL 33410 (561) 775-1204
Attorneys for Respondents TABLE OF CONTENTS PAGES TABLE OF CITATIONS PREFACE iii iv STATEMENT OF THE CASE AND FACTS 1 QUESTION PRESENTED 2 I. Whether the decision of the Fourth District Court of Appeal directly and expressly conflicts with the decision of this court in Meyer v. Auto Club Insurance Association, 492 So. 2d 1314 (Fla. 1986), and the decision of the Third District Court of Appeal in Kight v. New Jersey Manufacturers Ins. Co., 441 So. 2d 189 (Fla. 5 th DCA 1983). SUMMARY OF ARGUMENT 2 ARGUMENT 2 POINT I 2 CONCLUSION 8 CERTIFICATE OF SERVICE 9 CERTIFICATE OF COMPLIANCE 9
TABLE OF CITATIONS CASES: PAGES Burger King Corp. v. Rudzewicz, 471 So. 2d 462, 105 S.Ct. 2174, 2183, 85 L.Ed.2d 528 (1985) 5 Kight v. New Jersey Manufacturers Ins. Co., 441 So. 2d 189 (Fla. 5 th DCA 1983) 2, 4, 5, 6 Kincaid v. World Insurance Co., 157 So. 2d 517 (Fla. 1963) 1, 3 Meyer v. Auto Club Insurance Association, 492 So. 2d 1314 (Fla. 1986) 2, 3, 4, 6, 7 National Grange Mutual Insurance Company v. Fondren, 433 So. 2d 1276 (Fla. 4 th DCA 1983), review denied 443 So. 2d 980 (Fla. 1983) 6 Nielsen v. City of Sarasota, 117 So. 2d 731 (Fla. 1960) 3 Reaves v. State, 485 So. 2d 829 (Fla. 1986) 1 Williams v. Duggan, 153 So. 2d 726 (Fla. 1963) 3 OTHER 48.193(1)(d), Florida Stautes 4, 5, 6 48.193(1)(g), Florida Statutes 5, 7 iii
iv
PREFACE This is a proceeding for discretionary review of a decision of the Fourth District Court of Appeal based on purported conflict with a decision of this court and another Florida appellate court on the same question of law. The Fourth District Court of Appeal affirmed a non-final order denying a motion to dismiss for lack of personal jurisdiction entered in a bad faith suit pending in the Fifteenth Judicial Circuit before the Honorable Art Wroble. The respondents, Thomas Albert Dunford and Rachel Peery, were the plaintiffs before the trial court and the appellees before the Fourth District Court of Appeal. The Fourth District Court of Appeal affirmed the non-final order and remanded the cause to the trial court. In this brief the parties will be referred to by name or as plaintiffs and defendant. The following symbol will be used in this brief: (PA. ) petitioner's appendix. v
STATEMENT OF THE CASE AND FACTS For the purpose of determining jurisdiction, the only relevant facts are those facts contained in the opinion of the District Court of Appeal, Fourth District. The record itself, or facts outside the four corners of the majority decision, cannot be used to establish jurisdiction. Reaves v. State, 485 So. 2d 829 (Fla. 1986); Kincaid v. World Insurance Co., 157 So. 2d 517 (Fla. 1963). Those facts as set forth in the opinion are as follows. Virginia Farm Bureau Mutual Insurance Company issued an automobile liability insurance policy to a Virginia resident that insured a car which was involved in an accident in Florida that ultimately resulted in a death. The decedent s estate offered without success to settle the claim against the respondents, Thomas Albert Dunford and Rachel Peery, for the automobile liability policy limits. A subsequent lawsuit brought by the decedent s estate resulted in a judgment in excess of the policy limits. The named insured and the driver against whom judgments were entered then instituted this bad faith lawsuit against the insurer, Virginia Farm Bureau. The insurer moved to dismiss the lawsuit on the basis that the Florida courts lacked personal jurisdiction over it under the long-arm statute and the due process clause of the federal constitution. The trial court denied the motion to dismiss. The insurer appealed to the Fourth District Court of Appeal, which affirmed in a written opinion. vi
QUESTION PRESENTED I. Whether the decision of the Fourth District Court of Appeal directly and expressly conflicts with the decision of this court in Meyer v. Auto Club Insurance Association, 492 So. 2d 1314 (Fla. 1986), and the decision of the Third District Court of Appeal in Kight v. New Jersey Manufacturers Ins. Co., 441 So. 2d 189 (Fla. 5 th DCA 1983). SUMMARY OF ARGUMENT This court does not have jurisdiction to hear this cause on the merits. The decision of the Fourth District Court of Appeal does not directly and expressly conflict with the decision of this court in Meyer v. Auto Club Insurance Association, 492 So. 2d 1314 (Fla. 1986), or with the decision in Kight v. New Jersey Manufacturers Ins. Co., 441 So. 2d 189 (Fla. 5 th DCA 1983). Those decisions are not inconsistent with the decision in this case. The Fourth District did not apply the rule of law set forth in those cases to produce a different result. Likewise, the Fourth District did not misconstrue the principles of law enunciated in those cases, nor did it misapply those principles in this case. Thus, there is no direct and express conflict and no jurisdiction based on a conflict with those cases. ARGUMENT This Court Does Not Have Jurisdiction To Hear This Cause On The Merits. 2
This court does not have jurisdiction to hear this case on the merits because there is no direct and express conflict with other Florida appellate decisions. Conflict exists when two decisions are wholly irreconcilable or when the decisions collide so as to create an inconsistency or conflict among the precedents. Williams v. Duggan, 153 So. 2d 726 (Fla. 1963); Kincaid v. World Insurance Co., 157 So. 2d 517 (Fla. 1963). In Nielsen v. City of Sarasota, 117 So. 2d 731 (Fla. 1960), this court explained that conflict jurisdiction may be invoked where: (1) the District Court of Appeal announces a rule of law that conflicts with a rule previously announced by the Supreme Court or another District Court of Appeal, or (2) the District Court of Appeal applies a rule of law to produce a different result in a case that involves substantially the same controlling facts as a prior decision. This court s jurisdiction cannot be invoked merely because this court might disagree with the decision of the District Court of Appeal. Kincaid v. World Insurance Co., supra. The constitutional standard is whether the decision of the District Court of Appeal on its face collides with a prior decision of this court or another District Court of Appeal on the same point of law so as to create an inconsistency or conflict among the precedents. In this case there is no inconsistency or conflict among the precedents. Thus, this court does not have jurisdiction to hear this cause on the merits. Virginia Farm Bureau contends that subjecting it to personal jurisdiction of Florida courts offends the due process clause of the federal Fourteenth 3
Amendment and conflicts with the rules of law announced by this court in Meyer v. Auto Club Insurance Association, 492 So. 2d 1314 (Fla. 1986), and by the Fifth District Court of Appeal in Kight v. New Jersey Manufacturers Ins. Co., 441 So. 2d 189 (Fla. 5 th DCA 1983). The decision of the Fourth District Court of Appeal does not directly and expressly conflict with these decisions. Those cases are distinguishable and do not support Virginia Farm Bureau s position. Meyer v. Auto-Club involved a claim by the insured for medical and lost wage benefits. In that case, unlike this one, long-arm jurisdiction over the defendant was purportedly based on section 48.193(1)(d), Florida Stautes. That case was not a bad faith case that involved breach of contractual duties to be performed in Florida and that was based on acts constituting bad faith that occurred in the state of Florida. There, the claim did not arise out of any activity of the insurer in Florida. In that case, unlike this one, the defendant had absolutely no contacts with Florida. In Meyer there was no conduct by the defendant in the state of Florida or connection with the state of Florida, such that the defendant could reasonably anticipate being haled into court in Florida. In this case Virginia Farm Bureau acquiesced to the jurisdiction of the courts of Florida by voluntarily agreeing to insure the plaintiffs/respondents against liability for injury due to operation of the insured vehicle in this state, by voluntarily agreeing to defend the insureds and to handle all claims against them that occurred in the state of Florida, and by voluntarily coming into the state of Florida and 4
breaching the contractual duties that it was required to perform in Florida. In this case, unlike Meyer, Virginia Farm Bureau came into the state of Florida and conducted activities here, to wit, adjusting, defending, and attempting to settle the underlying claim. This is not unilateral activity by the insured, but is active conduct by Virginia Farm Bureau in the state of Florida. What Virginia Farm Bureau attempts to do here is to wield the due process sword as a territorial shield in order to avoid interstate obligations that it voluntarily assumed. The defendant cannot do that. Burger King Corp. v. Rudzewicz, 471 So. 2d 462, 105 S.Ct. 2174, 2183, 85 L.Ed.2d 528 (1985). In Kight v. New Jersey Manufacturers, long-arm jurisdiction was asserted based on the provisions of section 48.193(1)(d), Florida Statutes. That statute provides long-arm jurisdiction over any person who contracts to insure any person, property, or risk located within Florida at the time of contracting. In this case, jurisdiction was predicated on the provisions of section 48.193(1)(g), which provides for long-arm jurisdiction for any person who breaches a contract in the state of Florida by failing to perform acts required by the contract to be performed in the state of Florida. In this case, Virginia Farm Bureau had a contractual duty to adjust claims and defend lawsuits brought against its insured in the state of Florida. It actually undertook the performance of its contractual duties in the state of Florida and was required to act in good faith in settling claims brought against its insured in the state 5
of Florida. It breached its duty of good faith by failing to perform acts that were required by the contract of insurance to be performed in the state of Florida. Kight is factually distinguishable. Kight, which was brought prior to enactment of the non-joinder statute, was a suit brought by an injured plaintiff against the non-resident insured and the insurer in the state of Florida as a result of an automobile accident that occurred in the state of Florida. In Kight, unlike this case, there were no alleged acts of bad faith and no failure by the insurer to perform acts in the state of Florida that it was required to perform here. Virginia Farm Bureau also argues that in its opinion in this case, the Fourth District Court of Appeal says the very same thing that the court said in National Grange Mutual Insurance Company v. Fondren, 433 So. 2d 1276 (Fla. 4 th DCA 1983), review denied 443 So. 2d 980 (Fla. 1983), that was expressly disapproved of by this court in Meyer v. Auto Club, supra. That statement is misleading. National Grange, like Meyer v. Auto Club, involved jurisdiction under section 48.193(1)(d), Florida Statutes. What this court said in the Meyer decision is as follows: Petitioner further argues that the risk of loss occurring in Florida was a foreseeable consequence of respondent s issuing the policy with the covered territory defined as the fifty states, and relies on National Grange, wherein the court stated: National Grange s policy territory encompassed the entire United States. The company was aware that the risk of loss was coextensive with the policy territory and that a loss could occur anywhere in the country. The fact that the loss occurred in Florida was a foreseeable 6
consequence of issuing the policy with the unrestricted territory language. Thus, the Florida long arm statute, section 48.193(1)(d), should apply to National Grange. Id. at 1277. The Supreme Court has rejected an identical theory that this type of foreseeability may be used as a basis for establishing in personam jurisdiction. In World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980), the court held: [T]he foreseeability that is critical to due process analysis... is that the defendant s conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there. Id. at 297, 100 S.Ct. at 567. (emphasis supplied). 492 So. 2d at 1316. As noted by this court in Meyer, the foreseeability that is critical to the due process analysis is that the defendant s conduct and connection within the forum state are such that the defendant could reasonably anticipate being haled into court there. In this case, as alleged in the complaint, there was a breach of contract and conduct by the defendant within the state of Florida that constituted bad faith. Jurisdiction in this case is predicated on section 48.193(1)(g), Florida Statutes. On page 6 of its brief, Virginia Farm Bureau suggests that this court should accept jurisdiction in order to determine whether an insurer s contractual obligation to pay, defend, and indemnify in all fifty states alone satisfies constitutional due process requirements sufficient to confer personal jurisdiction over the carrier in Florida. That is not the question in this case. The question here is whether the insurer s breach of a contract in the state of Florida by failing to perform its 7
contractual duties and to act in good faith in the state of Florida as required by its insurance contract satisfies the constitutional due process requirements. It has been almost six years since this accident occurred and since the actions that give rise to this bad faith claim occurred. A final judgment was entered against these plaintiffs/respondents for the sum of $457,311.00 on March 5, 2002. Obviously, entry of this excess judgment against the plaintiffs/respondents impacts very negatively on their ability to conduct commercial transactions, to borrow money, to buy and sell real estate, and to do numerous other things. This court should decline to exercise its jurisdiction and should permit this bad faith case to proceed in the state of Florida where the breach of contract and acts of bad faith occurred. CONCLUSION This court does not have jurisdiction. It should deny the application for discretionary review. Respectfully submitted, RICHARD W. SLAWSON Slawson Cunningham & Whalen, P.L. 2401 PGA Boulevard Suite 140 Palm Beach Gardens, FL 33410-3515 (561) 625-6260 and MARJORIE GADARIAN GRAHAM 8
Marjorie Gadarian Graham, P.A. 11211 Prosperity Farms Road Oakpark - Suite D 129 Palm Beach Gardens, FL 33410 (561) 775-1204 By: Marjorie Gadarian Graham Florida Bar No. 142053 CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing has been furnished by U.S. mail this 1st day of October, 2004 to: Susan S. Lerner, Josephs, Jack & Miranda, P.O. Box 330519, Miami, FL 33233-0519 (counsel for petitioner); and Richard W. Slawson, Slawson, Cunningham & Whalen, P.L., 2401 PGA Boulevard, Suite 140, Palm Beach Gardens, FL 33410 (counsel for respondents). By: Marjorie Gadarian Graham Florida Bar No. 142053 CERTIFICATE OF COMPLIANCE I HEREBY CERTIFY that this brief is written in 14 point Times New Roman font. 9
By: Marjorie Gadarian Graham Florida Bar No. 142053 10