Florida/Georgia Personal Injury & Workers Compensation

...Collado, 678 So.2d 1313 (Fla. 2d DCA 1996), based on express and direct conflict with Gaskins v. General Insurance Co., 397 So.2d 729 (Fla. 1st DCA 1981). We have jurisdiction. Art. V, § 3(b)(3), Fla. Const. For the reasons expressed below, we hold that under section 626.342(2), Florida Statutes (1989), civil liability for an agent's conduct may be imposed upon insurers who cloak insurance agents with sufficient indicia of agency to establish an agency relationship....

...A series of partial summary judgments were entered by the trial court concluding that: (1) the Collados' misrepresentations in the insurance application were material and RLI would not have issued the policy had it known the true facts; (2) Pliego was RLI's statutory agent pursuant to section 626.342, Florida Statutes, and RLI was estopped from rescinding the policy by reason of its actual knowledge, through its agent, of the alleged false or missing information; and (3) RLI breached its indemnity obligations by wrongfully denying coverage under the umbrella policy....

...nt to the exchange of business statute, section 626.752, Florida Statutes (1989). In addition, the court found that since Pliego and his insurance agency were properly licensed to sell the insurance in question, RLI did not violate the provisions of section 626.342(1), Florida Statutes (1989)....

...[4] Further, a review of the case law on agency indicates that evidence of indicia of agency may be demonstrated if the insurer furnishes an insurance agent or agency with "any blank forms, applications, stationery, or other supplies to be used in soliciting, negotiating, or effecting contracts of insurance." § 626.342(1); see Fidelity & Casualty Co....

...STATUTORY INTERPRETATION Florida has an extensive statutory scheme set out in Chapter 626, Florida Statutes (1997), regulating both the state licensing of insurance agents and the appointment of insurance agents as designated agents by insurance companies. Section 626.342, Florida Statutes (1989) provides in pertinent part: 626.342 Furnishing supplies to unlicensed life, health, or general lines agent prohibited; civil liability and penalty.— (1) No insurer, general agent, or agent, directly or through any representative, shall furnish to any agent any blank forms, app...

...nsurer to the same extent and in the same manner as if such agent or prospective agent had been appointed, licensed or authorized by the insurer or such agent to act in its or his behalf. (Emphasis supplied.) The district court concluded first, that section 626.342(1) was not violated by RLI, and second, that neither Pliego nor his insurance agency became RLI's statutory agent under section 626.342(2): [W]e conclude that under general law, Mr. Pliego was the agent of the Collados. We additionally hold that section 626.342 does not change that result and, therefore, the appellant is not estopped from rescinding the insurance policy....

...We recognize that the general rule discussed above can be modified by statute. See Peddy v. Pacific Employers Ins. Co., 246 F.2d 306 (5th Cir.1957). Under the facts of this case, however, the trial court erred by holding that Mr. Pliego was the statutory agent of the appellant pursuant to section 626.342, Florida Statutes (1989), and that the appellant was, therefore, estopped from rescinding the policy. Section 626.342 is entitled "Furnishing supplies to unlicensed life, health, or general lines agent prohibited; civil liability and penalty." ......

...thorized to furnish Mr. Pliego the applications involved pursuant to section 626.752, Florida Statutes (1989), which provides for the exchange of business between insurers and agents. Since the appellant and Mr. Pliego complied with section 626.752, section 626.342(1) was not violated and Mr. Pliego and/or J.R. Insurance Agency did not become the appellant's statutory agent under 626.342(2)....

...not specifically licensed by the concerned insurance company found in subsection (2), other than to conclude its provisions did not apply. In this regard we believe the analysis is incomplete. [7] The petitioners do not claim that subsection (1) of section 626.342 was violated or that Pliego was not "properly licensed" by the State to sell liability insurance....

...Nor is there any assertion that RLI was furnishing Pliego with insurance applications, blank forms, etc., pursuant to the exchange of business statute, section 626.752, Florida Statutes (1989). [8] Rather, at issue is the meaning and application of subsection (2) of 626.342 and the Second District's conclusion that, ipso facto, "Mr. Pliego and/or J.R. Insurance Agency did not become [RLI's] statutory agent under 626.342(2)." 678 So.2d at 1316-17....

...I provided its materials to an agent "not licensed to represent the insurer" and the statute creates "civil liability to any insured ... to the same extent and in the same manner as if such agent ... had been appointed ... to act in its ... behalf." § 626.342(2). We must determine the meaning and effect of that language. GASKINS The predecessor of section 626.342 construed in Gaskins was then designated as section 626.746, Florida Statutes (1977). The relevant and operative provisions of section 626.342 and its predecessor, section 626.746, are very similar....

...at 954. As can be seen, the court held that but for the express limitation of authority, the insurance company would have been bound under section 626.746(3) by the agent's representation. [9] Considered together, Brown and Gaskins indicate that under section 626.342(2), and its predecessor, 626.746(3), the furnishing of company materials by the insurance company to the individual agent or broker and the subsequent acceptance of business from that agent establish civil liability by an insurer to a...

...s to limitations on the agent's actual authority. Brown. Although we concede that the purpose of the statute is not entirely clear, we conclude that the interpretations of the statute reached in Gaskins and Brown are correct. We find the language of section 626.342(2) to be unambiguous insofar as it makes the insurer liable to the insured in the same way that it would be liable had it expressly appointed the broker as its agent....

...[10] RLI has offered no reasonable alternative interpretation. [11] Rather, RLI, in essence, suggests that subsection (2) not be read literally, but be *782 read only as to impose civil liability when subsection (1) is violated. However, even if we were to agree that the precise purpose of section 626.342(2) may be uncertain, we cannot so easily ignore the legislature's express language in subsection (2)....

...We would have to ignore a plain reading of subsection (2) to hold that it only provides for civil liability upon a finding of a violation of subsection (1). That is simply not what it says. If the provisions of subsection (2) are to be changed, it is for the legislature to do so. Section 626.342(2) appears to be an insurance consumer law designed to protect insurance consumers when dealing with insurance companies through brokers and agents....

...he insured just as if it had lawfully and formally appointed the agent as its own. Hence, as to that particular insurance transaction, unless the insured is specifically put on notice to the contrary as in Brown, the insurance company is bound under section 626.342(2) by the actions of its statutory agent....

...is similarly prominent on the Collados' 1989 renewal application, as was the caption on the top page displaying Pliego's "RLI Agent Number 2020" and "J R Insurance" as the "RLI Agent." [14] CONCLUSION In summary, we hold that under the provisions of section 626.342(2), Florida Statutes (1989), as well as Florida's common law, civil liability may be imposed upon insurers who cloak unaffiliated insurance agents with sufficient indicia of agency to induce a reasonable person to conclude that there is an actual agency relationship. [15] We are unable to determine conclusively, however, the state of the record and evidence as it pertains to the issues of whether the actions of the insurance company here bring it within the operation of section 626.342(2) and whether Pliego, while acting in the capacity of an agent for RLI, was in receipt of such information as would create an estoppel....

...[5] See also Mobil Oil Corp. v. Bransford, 648 So.2d 119, 121 (Fla.1995); Steele v. Jackson Nat'l Life Ins. Co., 691 So.2d 525, 528 (Fla. 5th DCA 1997); Robbins v. Hess, 659 So.2d 424 (Fla. 1st DCA 1995). [6] The petitioners point out that a violation of section 626.342(1) may also result in an administrative penalty, including the suspension of an insurer's license to do business in Florida. However, the penalty provision no longer appears in section 626.342, as the title would seemingly indicate, but rather appears in Rule 4-231.110(5) of the Florida Administrative Code....

...documents, binders, applications, and other incidental supplies. This statutory scheme places numerous responsibilities upon an insurer seeking to utilize its provisions. The statute also has a savings clause protecting the rights of insureds under section 626.342....

...This provision also appears to create civil liability for the insurance company and responsibility for the broker's actions and knowledge under the circumstances presented here. [11] We cannot agree with RLI that the later substitution of the word "unless" in section 626.342(1) for the word "until" in section 626.746(1) dramatically alters the meaning of subsection (1) and subsection (2) of 626.342....

...ent authority on behalf of Defendant and that Plaintiffs relied on the representations Defendant authorized Southwest to make when they dealt with Defendant. See Almerico v. RLI Ins. Co., 716 So. 2d 774, 783 (Fla. 1998) (holding under Fla. Stat. § 626.342(2) that “civil liability may be imposed upon insurers who cloak unaffiliated insurance agents with sufficient indicia of agency to induce a reasonable person to conclude that there is an actual agency relationship”). In short,...

...An agency relationship can be found where an insurance company "furnishes an insurance agent or agency with 'any blank forms, applications, stationery, or other supplies to be used in soliciting, negotiating, or effecting contracts of insurance.' " Id. (quoting Fla. Stat. § 626.342 )....

...3 Russ & Segalla, supra § 45:1 (emphasis supplied) (footnotes and internal division omitted); see also Almerico, 716 So.2d at 776-78. Based on its recognition of "the sometimes amorphous nature of an insurance broker," this Court held in Almerico "that under the provisions of section 626.342(2), Florida Statutes (1989), as well as Florida's common law, civil liability may be imposed upon insurers who cloak unaffiliated insurance agents with sufficient indicia of agency to induce a reasonable person to conclude that there is an actual agency relationship....

...[9] The Eleventh Circuit used the term "agent," whereas we elect to use the term "independent insurance broker." We do so because these two terms are not necessarily synonymous when used in the insurance-law context. See, e.g., 3 Lee R. Russ & Thomas F. Segalla, Couch on Insurance § 45:1 (3d ed.2007). [10] Section 626.342(3), Florida Statutes (2003), excludes surplus-lines insurers from section 626.342(2)'s coverage, but as indicated by the emphasized language quoted above, this Court also based its holding in Almerico upon the common law....

...endants have offered no evidence of agency, other than Defendant Grau's assertion in his affidavit that it was his "understanding that Elliott McKiever & Stowe, Inc. Was [sic] the agent of Clarendon." Further, Defendants' reliance on Florida Statute section 626.342 and Almerico v....

...e as a statutory, actual or apparent agent for Amstar for purposes of accepting the premium payments. See Almerico v. RLI Ins. Co., 716 So.2d 774, 776-77 (Fla.1998) (holding that a broker may be a statutory agent for an insurance company pursuant to section 626.342, Florida Statutes (1989), or be clothed with actual or apparent authority so that the broker's acts may be binding on the insurance company) (citations omitted); see also Guarente-Desantolo v....

...McClain Agency also acted as a statutory, actual or apparent agent for Amstar for the purpose of accepting premium payments. Statutory Agency The court in Almerico explained that an insurance broker may become a statutory agent for the insurer under section 626.342(2) if the insurance company furnishes to the broker company materials, such as blank forms, applications, stationery, or other supplies used in soliciting or negotiating insurance contracts, and the *741 insurance company subsequently accepts business from that broker....

...Jackson Nat. Life Ins. Co., 691 So.2d 525 (Fla. 5th DCA 1997). Therefore, we are unable to conclude that the McClain Agency's act of accepting payments from Cadet after the policy was cancelled estops Amstar from asserting cancellation as a defense under section 626.342(2)....

...The court also granted a partial summary judgment in connection with the appellees' first affirmative defense and count I of the counterclaim. The court held that J.R. Insurance Agency and/or J.R. Pliego was appellant's statutory agent pursuant to section 626.342, Florida Statutes (1989), and that the appellant was estopped from rescinding the insurance policy....

...ld not be estopped from rescinding the policy. See Empire Fire & Marine Ins. Co. v. Koven, 402 So.2d 1352 (Fla. 4th DCA 1981). As just mentioned, we conclude that under general law, Mr. Pliego was the agent of the Collados. We additionally hold that section 626.342 does not change that result and, therefore, the appellant is not estopped from rescinding the insurance policy....

...We recognize that the general rule discussed above can be modified by statute. See Peddy v. Pacific Employers Ins. Co., 246 F.2d 306 (5th Cir.1957). Under the facts of this case, however, the trial court erred by holding that Mr. Pliego was the statutory agent of the appellant pursuant to section 626.342, Florida Statutes (1989), and that the appellant was, therefore, estopped from rescinding the policy. Section 626.342 is entitled "Furnishing supplies to unlicensed life, health, or general lines agent prohibited; civil liability and penalty." That statute provides: (1) No insurer, general agent, or agent, directly or through any representative, shal...

...thorized to furnish Mr. Pliego the applications involved pursuant to section 626.752, Florida Statutes (1989), which provides for the exchange of business between insurers and agents. Since the appellant and Mr. Pliego complied with section 626.752, section 626.342(1) was not violated and Mr. Pliego and/or J.R. Insurance *1317 Agency did not become the appellant's statutory agent under 626.342(2)....

...At the time of its ruling, the trial court did not have the benefit of the Florida Supreme Court's decision in Almerico v. RLI Ins. Co., 716 So.2d 774 (Fla.1998). In Almerico, the supreme court noted the general rule that insurance brokers are agents of the insured rather than the insurer, but interpreted section 626.342(2), Florida Statutes to mean that an insurance broker may act in the dual capacity of broker for the insured and agent of the insurer....

...Further ... the principal (insurer) will be bound by the agent's action unless the insured knew or was put on notice of inquiry as to limitations on the agent's actual authority. Almerico, 716 So.2d at 781. The Almerico court observed that "[s]ection 626.342(2) appears to be an insurance consumer law designed to protect insurance consumers when dealing with insurance companies through brokers and agents." Id....

...NOTES [1] Other misrepresentations and omissions claimed by John Alden concerned appellant's prior medical treatment for her neck, employment status with the company providing group health insurance, and insurance status under another group medical plan. [2] The predecessor to section 626.342(2) was section 626.746(3), Florida Statutes (1977).

...Rather, we conclude that Associated made Neely its agent by providing her with blank applications and then accepting the business generated therefrom. The supreme court recently established in Almerico v. RLI Ins. Co., 716 So.2d 774 (Fla.1998) that under section 626.342(2), Florida Statutes (1997): the furnishing of company materials by the insurance company to the individual agent or broker and the subsequent acceptance of business from that agent establish civil liability by an insurer to an insure...

...Inter-Ocean Ins. Co., 438 F.Supp. 951 (N.D.Ga.1977) (interpreting Florida Insurance laws and ruling that an agency relationship may be created where the insurance company provides the alleged agent with application forms and accepts *358 the resulting business). Section 626.342 imposes civil liability and penalties on insurance companies who furnish supplies to their supposed independent brokers....

...y shall be subject to civil liability to any insured of such insurer to the same extent and in the same manner as if such agent or prospective agent had been appointed or authorized by the insurer or such agent to act in its or his or her behalf.... § 626.342, Fla. Stat. (1997). We conclude that under the supreme court's interpretation of section 626.342 in Almerico, Neely became Associated's agent for purposes of this action....

...annually to remain within the insurer's network. More importantly, though, he used applications supplied by the insurer to acquire new business which the insurer accepted. The supreme court ruled that this arrangement created an agency, noting that section 626.342(2) is "unambiguous insofar as it makes the insurer liable to the insured in the same way that it would be liable had it expressly appointed the broker as its agent." Id....

...Further, Associated accepted the business generated by this relationship, in particular Mr. Straw's November premium payment. Significantly, Straw made his premium payment with a check payable to "Associated Doctors," which Neely accepted and forwarded to Associated. While we reverse under the authority of Almerico and subsection 626.342(2), we also note that the arrangement may have cloaked Neely with sufficient indicia of agency to create an "apparent agency." Accordingly, we reverse and remand for proceedings consistent with this opinion....

...The rule in Florida is that a broker may be found to be a statutory agent of a particular insurance company if the company provides sufficient indicia of agency, such as "blank forms, applications, stationery, or other supplies used in soliciting or negotiating insurance contracts." § 626.342(1), Fla....