CopyPublished | District Court, M.D. Florida | 2015 U.S. Dist. LEXIS 131321, 2015 WL 5853206
...47 at 22 (quoting Campus Commc’ns, Inc. v. Dep’t of Revenue,
473 So.2d 1290, 1293 (Fla.1985)).) USAA’s actual practices are inconsistent with its present position that -sales tax is not covéred at all. by the Policy.- USAA says it only .-pays sales tax because section
626.9743(5)(a), Florida Statutes seems to réquire it to do so any time it elects a Cash settlement based on the actual cost to purchase a , comparable motor vehicle. The Court, will discuss section
626.9743 further below. But, as detailed in USAA’s motion, even before section
626.9743 was enacted, and after its predecessor regulation was repealed, USAA’s practice was to pay sales tax, first, at the time of settlement (as plaintiffs contend here should be done) and later as incurred....
...For" this, and all the reasons discussed above, the Court holds that the Policy does require payment of the full amount of sales tax that would be due on a vehicle comparable to the covered vehicle, regardless of whether that amount is actually incurred. 4 B. Section 626.9743, Florida Statutes USAA resists relying on the language of the Policy alone to determine the proper *1279 handling of sales tax. USAA believes that the Florida Insurance Code is part of the Policy and that, in particular, section 626.9743, Florida Statutes permits USAA to pay sales tax only in the amount actually incurred....
...ill see what, if any, clarity the statute provides. The Florida Unfair Insurance Trade Practices Act, Flai Stát. §§
626.951-.99, includes a provision on the appropriate adjustment and claim settlement practices for motor vehicle insurance claims. Section
626.9743 provides, in part: (5) When the insurance policy provides for the adjustment and' settlement first-party motor vehicle total losses on the basis of actual cash value or replacement with another of like kind and quality, the insurer s...
...urer may defer payment of the sales tax unless and until the obligation has actually been incurred. (10) Nothing in this section shall be construed'to authorize or preclude enforcement of policy provisions relating to settlement disputes. Fla. Stat. § 626.9743 (emphasis added). 5 USAA’s unchallenged recitation of the history of section 626.9743 indicates that the idea behind subsection (5) began as a 1978 directive from the state agency regulating the insurance industry that insurers must pay sales tax as part of paying total vehicle loss claims....
...47-2.) In 1982, the directive came to include language allowing insurers to pay sales tax only once it has been incurred. (Doe. 47-6; see Doc. 47-4.) The directive eventually became a regulation in 1992, which was later repealed in 2001, before essentially the same language was codified in 2004 in the form of section- 626.9743....
...7 ) USAA changed its Florida procedure in 2001 (oddly, after the regulation was repealed) to pay sales tax only in the amount actually incurred. (Id. at 4-5, 7-8.) . This remains USAA’s practice in Florida for payment of sales tax. 8 (Id.' at 10-12, 14-15, 17-24.) USAA now argues that the Policy should be read with section 626.9743(9) as an essential component of the Policy that permits USAA’s current treatment of sales tax....
...re the policy is otherwise silent so that USAA may, páy only incurred sales tax. In USAA’s view, this practice makes good policy sense due to potential variations in local sales tax, along with other factors. The plaintiffs are not convinced that section 626.9743 does what USAA says or that the statute would trump the Policy in any event. Plaintiffs see section 626.9743 as permissive, not mandatory, such that parties may still contract to require sales tax to be paid in full upfront as part of “actual cash value.” Plaintiffs contend that such a permissive statute should not be read into an insur...
...ay payment of sales tax because of the difficulty in determining the amount of sales tax before a replacement vehicle has been purchased. (Doc. 47 at 17.) But none of USAA’s submissions indicate what purpose the legislature had in mind in enacting section 626.9743....
...d has signed a contract to buy a replacement vehicle, but before the insured has actually had to pay for it. Thus, even if consideration of public policy was appropriate, the Court is not convinced by either party’s argument; Moving past issues of section 626.9743(9)’s practical wisdom, .the Court turns to the dispute over what it actually means. From the Court’s own research, it appears that no provision of section 626.9743 has ever been the subject of a court opinion....
...The Court therefore presumes that the parties entered into the contract with knowledge of the statutory provisions, and those provisions became part of the contract.” (quotations omitted)).- USAA reads the Policy to leave open the details of claim adjustment and settlement practice, which section 626.9743 then provides; Plaintiffs dispute that these general principles apply to the kind of permissive statutory language found in subsections (5) and (9)....
...As between subsections (5) and (9),-the only mandatory language is that in subsection (5) requiring insurers to pick one of four options for settling first-party motor vehicle total losses arid those who pick option (a) ■ pay - sales tax. Fla. Stat. § 626.9743 (5) (“[T]he insurer shall use one of the following methods____(a) The insurer may elect a cash settlement based upon the actual cost to purchase a comparable motor vehiclé, including sales tax, if Applicable pursuant to subsection (9).” (emphasis added))....
...Even if subsection (9) were mandatory, the parties would still be free to contract for this coverage. See Green v. Life & Health of Am.,
704 So.2d 1386, 1390-91 (Fla.1998); also Fla. Stat. §
627.418 (1); Allen v. USAA Ca. Ins. Co.,
790 F.3d 1274, 1283 (11th Cir.2015). Thus,, section
626.9743 does not decide the outcome in this case, and the plaintiffs are owed the full amount of sales tax that would be due on the purchase of a vehicle comparable to their covered vehicle....
...so is the deductible. (Id. at 7, 31.) . The Court, recognizes the- common sense in plaintiffs' suggestion that USAA's current internal operating procedures and responses to policyholder complaints would likely have cited to the Policy in addition to section 626.9743 if USAA believed the Policy supported its treatment of sales tax., But the Court is unwilling to go so far as to say that failure to specifically reference the Policy in either the procedures or the responses must mean that USAA’s practices are contrary to the Policy....
...the Policy alone does not require payment of sales tax at all. If the State meant to interpret Florida law, and not policy language, there would be no need to change the policy language if, as USAA sug *1280 gests, • the language of statutes like' section 626.9743 should be read into the....
...tax, (Doc. 75 at 11.) Another interesting discussion, but Florida is the focus here. . USAA submitted the Florida Senate staff analysis and the Florida Office of Insurance Regulation’s 2004 Legislative Summary as support for its interpretation of section 626.9743. (Doc.'47-8; Doc. 49-1.) While the staff analysis indicates that the general purpose of 626.9743 is to set uniform standards that maintain consumer protection and avoid disputes (Doc....
...Co.,
790 F.3d 1274, 1279 (11th Cir.2015) (citing Borden v. East-European Ins. Co.,
921 So.2d 587, 595 (Fla.2006), Atwater v. Kortum,
95 So.3d 85, 90 (Fla.2012), and Donato v. Am. Tel. & Tel. Co.,
767 So.2d 1146, 1154 (Fla.2000)). . Though not determinative, it is worth noting that section
626.9743 is in the chapter of the Insurance Code on .‘‘Insurance Field Representatives and Operation,” not "Insurance Rates and Contracts," ....
CopyPublished | Court of Appeals for the Eleventh Circuit
Argued: Sep 15, 2022
...Doc. 62-1 at 46, 50. Safeco does not dispute that under the terms of
the policy it had to comply with a Florida statute setting forth how
an automobile insurer calculates the actual cash value of a vehicle. 3
See Fla. Stat. § 626.9743(5).
The statute provides that when an “insurance policy pro-
vides for the adjustment and settlement of first-party motor vehicle
3 The policy incorporates Florida law; if Safeco’s methodology does not com-
port with Florida law, it has breached the policy....
...one of [a set of enumerated] methods” to determine that value. Id.
One of the enumerated methods permits the insurer to “elect a
cash settlement based upon the actual cost to purchase a compara-
ble motor vehicle.” Id. § 626.9743(5)(a)....
...cost to the first-party insured upon request; or
3. The retail cost using two or more quotations
obtained by the insurer from two or more licensed
dealers in the local market area.
Id. § 626.9743(5)(a)(1)–(3).
USCA11 Case: 21-13148 Document: 75-1 Date Filed: 07/03/2023 Page: 8 of 29
8 Opinion of the Court 21-13148
Signor argues that Safeco’s metho...
...the insurance policy. She acknowledges that subsection (5)(a)(1)
permits an insurer to calculate actual cash value based on “compa-
rable motor vehicles . . . available in the local market
area . . . within the preceding 90 days.” Id. § 626.9743(5)(a)(1)....
...10 Opinion of the Court 21-13148
Subsection (5)(a) provides that an insurer may offer a cash
settlement “based upon the actual cost to purchase a comparable
motor vehicle.” Fla. Stat. § 626.9743(5)(a)....
...bit an insurer from re-
lying on advertised prices in its valuation.
Subsection (5)(a)(1) permits an insurer to use the cost of
comparable motor vehicles “available within the preceding 90
days.” Fla. Stat. § 626.9743(5)(a)(1) (emphasis added)....
...and internal quotation
marks omitted)). Under subsection (5)(a)(3), an insurer may derive
actual cost from the retail cost of a motor vehicle by obtaining two
or more quotations from local licensed dealers. Fla. Stat.
§ 626.9743(5)(a)(3)....
... USCA11 Case: 21-13148 Document: 75-1 Date Filed: 07/03/2023 Page: 15 of 29
21-13148 Opinion of the Court 15
“available within the preceding 90 days.” Fla.
Stat. § 626.9743(5)(a)(1)....
...o’s use of
the CCC system, an electronic database, violated the statute be-
cause the system was not a “generally recognized used motor ve-
hicle industry source,” as required by subsection (5)(a)(2). Fla.
Stat. § 626.9743(5)(a)(2).
Subsection (5)(a)(2) provides another alternative methodol-
ogy for an insurer to derive actual cost: from “[t]he retail cost as
determined from a generally recognized used motor vehicle indus-
try source.” Id. The subsection goes on to provide an example of
such a source: an electronic database. 5 Id. § 626.9743(5)(a)(2)(a).
But to accept Signor’s argument would mean that an insurer who
relies on the methodology described in subsection (5)(a)(1) to es-
tablish the cost of two or more available comparable vehicles, and...
...more than one of the enumerated methods listed under subsection
5 An insurer must meet further conditions if it uses an electronic database to
comply with the methodology described in subsection (5)(a)(2). See Fla.
Stat. § 626.9743(5)(a)(2)(a) (“[Such as] [a]n electronic database if the pertinent
portions of the valuation documents generated by the database are provided
by the insurer to the first-party insured upon request.”)....
...21-13148 Opinion of the Court 17
(5)(a). The statute states that actual cost “may be derived from” a
list of three distinct methods, joined by the disjunctive term “or.”
See generally id. § 626.9743(5)(a), (5)(a)(1)–(3)....
...s (5)(a)(2) and
(5)(a)(3), we need not reach these arguments because we conclude that Safeco
complied with subsection (5)(a)(1), and compliance with more than one sub-
section of section (5)(a) is not required. See Fla. Stat. § 626.9743(5)(a)(1)–(3)
(“Such cost may be derived from: [one of the three methods listed in the dis-
junctive].”); Sparkman, 498 So....
...uces subpart
(5)(a)(2)(a) with the phrase “such as,” suggesting that subpart
(5)(a)(2)(a) concerns one alternative form (a database) of a “gener-
ally recognized used motor vehicle industry source.” Fla.
Stat. § 626.9743(5)(a)(2)....
...source” may include the use of a database.
To sum up, Safeco’s use of the Uniform Condition Adjust-
ment, advertised prices, and the CCC system to calculate the actual
cash value of Signor’s vehicle complied with the statute.
Id. § 626.9743(5)....
...The majority opinion
recites the correct statutory language when describing the
substance of paragraph 5(a)’s guarantee: “an insurer may offer a
cash settlement ‘based upon the actual cost to purchase a
comparable motor vehicle.’” Maj. Op. at 10 (quoting Fla. Stat.
§ 626.9743(5)(a))....
...As a result, under the
majority’s interpretation, an insurer has freewheeling discretion to
set “actual cost” at any amount. Id. at 11–12. Because the statute
cannot support that interpretation, I respectfully dissent.
Under Florida Statutes § 626.9743(5)(a), insurers “may elect
a cash settlement based upon the actual cost to purchase a
comparable motor vehicle.” Subparagraph (5)(a)(1) permits
insurers to use the “the cost of two or more” comparable vehic...
...costs
and adjustments.
Second, Safeco’s cash value number was not the “cost” at all.
Paragraph (5)(a) demands that insurers first calculate “the actual
cost to purchase” a comparable car. Fla. Stat. § 626.9743(5)(a)
(emphasis added)....
...Here’s why. Paragraph (5)(a) states that “actual cost” may
be “derived from” three sources: (1) the cost of comparable
vehicles; (2) industry sources like databases or guidebooks; or
(3) licensed dealer quotations. Fla. Stat. § 626.9743(5)(a)(1)–(3).
The majority correctly defines “derived from” as “originated from
or obtained from.” Maj....
...ely on.
Under (5)(c), an insurer may adjust or settle “on a basis that varies
from the methods described in paragraph (a)” so long as it supports
the calculation with itemized amounts and documentation. Fla.
Stat. § 626.9743(5)(c). And (5)(d) provides that an insurer may
contract with its insureds to use “[a]ny other method.” Id.
§ 626.9743(5)(d)....
...Indeed, Safeco has presented these
adjustments as necessary to calculating the actual cost itself.
The best interpretation of “based upon” is that it accounts
for certain routine adjustments made to “actual cost” during the
settlement process. Fla. Stat. § 626.9743(5)(a)....
...because of betterment or depreciation, information pertaining to
the reduction shall be maintained with the insurer’s claim file” and
the “basis for any deduction shall be explained to the claimant in
writing, if requested.” Id. § 626.9743(6)....
...ender part
of a statute meaningless.” Larimore v. State,
2 So. 3d 101, 114 (Fla.
2008) (quotation omitted).
* * *
Simply put, the requirements found in the text of
§
626.9743(5)(a) work together to require transparent, reliable, and
understandable settlement calculations that allow customers to
USCA11 Case: 21-13148 Document: 75-1 Date Filed: 07/03/2023 Page: 29 of 29
21-13148...
...Because the majority misreads the words
“actual,” “cost,” and “comparable,” and misinterpreted “derived
from” and “based upon,” its interpretation of the statute veers
away from the text. I would hold that Safeco’s methodology
violates § 626.9743(5)(a)(1) and respectfully dissent.
