BROWN & BROWN, INC., and BRIAN LINDAHL v. The Estate of RALPH NOLAN EDENFIELD, by and through GLADYS EDENFIELD, Personal Representative
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IN THE DISTRICT COURT OF APPEAL
FIRST DISTRICT, STATE OF FLORIDA
BROWN & BROWN, INC., and
BRIAN LINDAHL,
NOT FINAL UNTIL TIME EXPIRES TO
FILE MOTION FOR REHEARING AND
DISPOSITION THEREOF IF FILED
Appellants,
CASE NO. 1D09-2379
v.
The Estate of RALPH NOLAN
EDENFIELD, by and through
GLADYS EDENFIELD, Personal
Representative,
Appellee.
_____________________________/
Opinion filed April 7, 2010.
An appeal from the Circuit Court for Escambia County.
Terry D. Terrell, Judge.
Shelley H. Leinicke, of Wicker, Smith, O'Hara, McCoy & Ford, P.A., Ft.
Lauderdale, for Appellants.
Scott E. Gwartney and Dean R. LeBoeuf, of Brooks, LeBoeuf, Bennett, Foster &
Gwartney, P.A., Tallahassee, for Appellee.
WETHERELL, J.
Appellants seek review of the $850,000 final judgment entered in favor of
Appellee. Among the issues raised on appeal, Appellants argue that the trial court
erred in finding that Appellants negligently created a “gap” in professional liability
insurance coverage for Parthenon Healthcare (Parthenon). We agree, and because
we reverse on this issue, we need not address the remaining issues on appeal.
In June 2001, Ralph Edenfield died after having sustained injuries while a
patient at Parthenon’s skilled nursing facility. On September 17 and October 30,
2001, Appellee, Edenfield’s estate, notified Parthenon of its intent to initiate
litigation. After receiving no response, Appellee brought a wrongful death action
against Parthenon in December 2001. The case ultimately settled for $1,000,000,
and as part of the settlement, Parthenon assigned to Appellee any claims that it had
against its insurer, Lloyd’s of London (Lloyd’s), for failure to defend the claim and
against Appellants, its insurance agent, for failure to procure insurance coverage.
Appellants had obtained a $1,000,000 professional liability insurance policy
for Parthenon through CRC, a syndicate of Lloyd’s, for the period of September 7,
2000, to September 7, 2001. The term of the policy was extended by Lloyd’s to
September 15, 2001, as a result of the tragic events of September 11th, and the
policy also contained a 30-day reporting period for claims after the expiration of
the policy.
In September and October 2001, Appellants negotiated terms with CRC for
a $500,000 “renewal” policy, but they were unable to bind the coverage.
Appellants thereafter obtained a $500,000 policy for Parthenon with Sapphire
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Blue, another syndicate of Lloyd’s, which took effect on November 1, 2001. The
Sapphire Blue policy, like the original CRC policy, was a “claims-made policy”
which provided coverage based upon the date that the claim was submitted rather
than the date on which the incident giving rise to the claim occurred.
In September 2005, Appellee filed a complaint against Lloyd’s and
Appellants. The complaint alleged that Lloyd’s breached its insurance contract
with Parthenon by failing to defend the Edenfield claim.
Alternatively, the
complaint alleged that in the event that coverage under the CRC policy was
properly denied, Appellants breached their fiduciary duty to Parthenon and were
negligent in failing to procure insurance or in allowing the coverage to lapse. The
negligent procurement case against Appellants was abated pending resolution of
the coverage case against Lloyd’s.
In April 2007, Appellee settled with Lloyd’s for $150,000 and dismissed the
claims against Lloyd’s. The case proceeded against Appellants only. After a nonjury trial, the trial court entered final judgment against Appellants, finding that,
when Appellants transferred Parthenon’s insurance coverage from CRC to
Sapphire Blue, they negligently created a “gap” in the coverage. The trial court
found that the purchase of the Sapphire Blue policy was done in good faith, but it
also found that Appellants acted in haste without fully comprehending that they
were creating a “gap” in coverage and leaving Parthenon without coverage for the
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Edenfield claim. The trial court entered judgment for Appellee in the amount of
$850,000, which was based upon the $1,000,000 of coverage under the CRC
policy less Appellee’s $150,000 settlement with Lloyd’s.
The insurance policies at issue in this case are governed by the Surplus Lines
Law, sections 626.913-626.937, Florida Statutes (2005).
Section 626.9201
provides in pertinent part:
(1) An insurer issuing a policy providing coverage for property,
casualty, surety, or marine insurance shall give the named insured at
least 45 days’ advance written notice of nonrenewal. If the policy is
not to be renewed, the written notice shall state the reason or reasons
as to why the policy is not to be renewed.
*
*
*
(3) If an insurer fails to provide the 45-day . . . written notice
required under this section, the coverage provided to the named
insured shall remain in effect until 45 days after the notice is given or
until the effective date of replacement coverage obtained by the
named insured, whichever occurs first.
These statutory requirements are clear and unambiguous.
When the
language of a statute is clear and unambiguous, the statute must be given its plain
and obvious meaning. See Rollins v. Pizzarelli, 761 So. 2d 294, 298 (Fla. 2000).
The plain meaning construction of the statute should honor the obvious legislative
intent and policy behind its enactment.
See Tampa-Hillsborough County
Expressway Auth. v. K.E. Morris Alignment Serv., Inc., 444 So. 2d 926 (Fla.
1983).
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The clear purpose and intent of section 626.9201 is to give the insured
adequate time to obtain coverage from another insurer before it is subjected to risk
without protection as a result of the nonrenewal of its insurance. See St. Paul Fire
& Marine Ins. Co. v. Valdivia, 771 So. 2d 1229, 1230 (Fla. 3d DCA 2000)
(explaining that the purpose of the nearly-identical section 627.4133(1)(a) is to
“enable an insured to obtain coverage elsewhere before the insured is subjected to
risk without protection”) (quoting United States Fire Ins. Co. v. Southern Security
Life Ins. Co., 710 So. 2d 130, 131 (Fla. 5th DCA 1998)). The purpose of the
statute would be frustrated if, as Appellee argues, the statute did not apply when
the insurer had the intent to renew the coverage but did not do so for whatever
reason because in those circumstances, the result would be the same as if renewal
coverage was never offered – i.e., the insured would be left without coverage.
It was undisputed that Lloyd’s did not provide notice of nonrenewal of the
CRC policy to Parthenon. As stated above, section 626.9201 does not require any
intent by the insurer not to renew the policy; rather the statute provides that if the
45-day notice is not provided for whatever reason, then the coverage shall remain
in effect. Therefore, under the clear and unambiguous terms of section 626.9201,
coverage under the CRC policy continued until the effective date of the Sapphire
Blue policy.
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In sum, because Parthenon was covered by the CRC policy by operation of
law until the Sapphire Blue policy was obtained on November 1, 2001, the trial
court erred in finding that Appellants created a “gap” in Parthenon’s insurance
coverage. Accordingly, even if Appellants were negligent in not binding renewal
coverage with CRC, their negligence did not result in any damages to Parthenon
because it was still covered by the CRC policy until the Sapphire Blue policy took
effect.
For these reasons, we reverse the final judgment and remand for further
proceedings.
REVERSED and REMANDED.
KAHN and PADOVANO, JJ., CONCUR.
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