Kathleen Miller, Rod Miller, Husband of Kathleen Miller, Plaintiffs-appellants, v. Scottsdale Insurance Company, Defendant-appellee, 410 F.3d 678 (11th Cir. 2005)

This diversity action presents an obscure but important question of Florida insurance law, namely, whether § 627.848, Fla. Stat. (2002), which governs insurance policy cancellations by premium finance companies, contemplates separate dates of cancellation for different insureds or requires a single cancellation date. In this case, Kathleen Miller and Rod Miller ("the Millers"), as assignees of the rights under an insurance policy, seek to enforce against Scottsdale Insurance Company ("Scottsdale") a judgment which they obtained against the Cuban Club Foundation, Inc. and Circulo Cubano, Inc. (collectively "the Cuban Club"). After cross motions for summary judgment, the district court granted summary judgment in favor of Scottsdale. The Millers filed a timely appeal to this Court. Because there is no controlling Florida authority on this question, we certify this issue to the Florida Supreme Court.

Scottsdale issued a commercial property and general liability insurance policy to the Cuban Club for the period October 27, 2000 to October 27, 2001. The Cuban Club financed the premium through Premium Financing Specialists, Inc. ("PFS").¹ 

PFS and the Cuban Club entered into a standard premium finance agreement which included a power of attorney giving PFS authority to cancel the policy in the event of non-payment by the Cuban Club. The policy's "Building and Personal Property Coverage Form" contained a provision requiring Scottsdale, as the insurer, to provide Northside Bank of Tampa ("Northside"), as the mortgagee, with ten days' notice prior to cancellation of the policy. When the Cuban Club failed to make its December 2000 payment, PFS mailed a "notice of cancellation" which Scottsdale received on January 9, 2001. Scottsdale, however, did not give the required notice to Northside until January 22, 2001.

On January 13, 2001, Kathleen Miller was injured on the Cuban Club's property-four days after Scottsdale received the notice of cancellation, but nine days before Scottsdale provided the notice of cancellation to Northside. The Millers sued the Cuban Club in state court for damages arising from Kathleen Miller's injuries on the property. The Millers obtained a judgment against the Cuban Club in the amount of approximately $330,000. The Cuban Club assigned to the Millers all of its rights as named insured under its policy with Scottsdale. The Millers then filed the instant action against Scottsdale, alleging that the insurance policy provides coverage for the damages for which the Cuban Club is responsible. Scottsdale removed the case to federal court and contended that the policy was not in effect at the time of Kathleen Miller's injury.

The central dispute between the parties is as follows. Scottsdale contends that it has no duty to pay the Millers for any portion of the judgment because the policy was cancelled as of January 9, 2001, the date on which Scottsdale received the notice of cancellation. Under this view, because the policy was not in effect on the date Miller was injured, Scottsdale would owe the Millers nothing.²  By contrast, the Millers assert that Scottsdale's policy remained in effect as of the date of the injury because cancellation of the policy could not take effect prior to the expiration of the period required for notice to Northside, and Scottsdale did not give notice to Northside until after the date of the injury.³ 

In granting Scottsdale's motion for summary judgment, the district court determined that although the policy requires Scottsdale to provide written notice to Northside ten days before the effective date of cancellation, "this notice requirement exists for the exclusive benefit of Northside apart from any duty owed by Scottsdale to the Cuban Club [and therefore] Scottsdale's notice to Northside nine days after Kathleen Miller's January 13, 2001, accident fails to invalidate PFS's cancellation of the Cuban Club's insurance on January 9, 2001."⁴ 

We review a district court's grant of summary judgment de novo, "viewing the record and drawing all reasonable inferences in the light most favorable to the non-moving party." Patton v. Triad Guar. Ins. Corp., 277 F.3d 1294, 1296 (11th Cir. 2002). Summary judgment is appropriate when "there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c).

It is undisputed that the policy was not cancelled as to Northside until after Kathleen Miller's injury. Because the policy remained in effect with respect to some insureds until after the date of injury, the question becomes whether § 627.848⁵ , which governs insurance policy cancellations by premium finance companies, contemplates separate dates of cancellation for different insureds or requires a single cancellation date.

Although there is no Florida case on all fours, several Florida decisions have interpreted § 627.848.⁶  In Southern Group Indem., Inc. v. Cullen, 831 So. 2d 681 (2002), the premium finance company sent a notice of cancellation to the insurer because the insured failed to make the first premium payment. 831 So. 2d at 682. The notice of cancellation purported to cancel the policy prior to the date on which the insurer received the notice of cancellation. Id. The policy, however, required that the premium finance company give the insurer advance written notice of the effective date of any policy cancellation. Id. The issue before the court was when the notice of cancellation became effective. Id. The court reasoned that § 627.848(1) (d) required that the policy's cancellation provision be enforced, meaning that the premium finance company had to comply with the advance notice requirement in the policy.⁷  Id. at 682-83. Therefore, in the context of that case, Cullen held that § 627.848(1) (d) requires that policy restrictions on cancellation be satisfied before cancellation can be effective. Id. Cullen did not, however, involve multiple insureds or address whether § 627.848 contemplates a single policy cancellation date or instead permits multiple dates of cancellation for different insureds.

Another instructive case is Alfred v. Security Nat'l Ins. Co., 766 So. 2d 449 (2000). There, the insurer Security National ("Security") issued a liability insurance policy to ATM Towing, Inc. ("ATM") effective June 29, 1993 through June 29, 1994. Id. at 450. ATM financed the policy through a premium finance company. Id. On September 7, 1993, the premium finance company cancelled the policy for non-payment of premiums. Id. Security did not, however, provide the required notice of cancellation to the Broward County Consumer Affairs Division ("CAD"). Id. at 450-51. On November 23, 1993, the plaintiff Alfred sustained injuries from an automobile collision with a vehicle driven by an ATM employee. Id. at 450. Security denied coverage, claiming that the policy was cancelled as of September 7, 1993. Id. Relying on the then statutory equivalent of § 627.848(1) (d), the court held that if Security was required to give notice to CAD, and had failed to do so, the cancellation was ineffective.⁸  Id. at 451. Alfred is factually analogous to the case at bar in that it addressed whether cancellation of a policy can occur when a third party notice requirement is not satisfied. However, unlike the case at bar, the third party in Alfred was a governmental entity rather than a mortgagee. Therefore, one could argue that the third party notice requirement in Alfred was for the purpose of protecting the general public from uninsured truck operators, and the injured plaintiff, as a member of the general public, was an intended beneficiary of the third party notice requirement.

Rather than predict how this question of Florida law should be decided, we certify the issue to the Florida Supreme Court for a definitive statement.

We respectfully certify to the Florida Supreme Court the following question:

Whether § 627.848, Fla. Stat. (2002) contemplates a single date of cancellation for the insurance contract as a whole or whether the contract can be cancelled as to different insureds at different times depending on when a statutorily required notice is given to that insured?

Our phrasing of the certified question is merely suggestive and does not in any way restrict the scope of the inquiry by the Supreme Court of Florida. As we previously noted:

[T]he particular phrasing used in the certified question is not to restrict the Supreme Court's consideration of the problems involved and the issues as the Supreme Court perceives them to be in its analysis of the record certified in this case. This latitude extends to the Supreme Court's restatement of the issue or issues and the manner in which the answers are given, whether as a comprehensive whole or in subordinate or even contingent parts.

Swire Pacific Holdings v. Zurich Ins. Co., 284 F.3d 1228, 1234 (11th Cir. 2002) (quoting Martinez v. Rodriquez, 394 F.2d 156, 159 n. 6 (5th Cir. 1968)).

The entire record in this case and the briefs of the parties are transmitted herewith.

QUESTION CERTIFIED.