SENTIA DUCTAN MARSHA PRINCE v. GEICO GENERAL INSURANCE COMPANY (2024)

ORDER GRANTING MOTION TO DISMISS

This matter is before the Court on Defendant GEICO General Insurance Company's Motion to Dismiss the Class Action Complaint [DE 7], Plaintiffs’ Opposition [DE 11], and Defendant's Reply [DE 14]. Plaintiffs’ putative class action Complaint [DE 1] alleges a single claim for declaratory relief, seeking a declaration that Defendant violated Florida Statutes, section 627.739. In addition to declaratory relief, Plaintiffs also seek reformation of the insurance policies held by Plaintiffs and the class members and reasonable attorneys’ fees and costs. Defendants seek to dismiss the Complaint, pursuant to Federal Rule of Civil Procedure 12(b)(6), because section 627.739 does not provide a private cause of action. For the reasons that follow, the Motion to Dismiss is granted.

I. THE COMPLAINT

Plaintiffs’ putative class action Complaint alleges Plaintiffs were insureds under insurance policies issued by Defendant. At the time of Plaintiffs’ initial applications and at the time of renewal of their policies, Defendant failed to offer Plaintiffs, in clear and unambiguous language, the right to affirmatively elect a personal injury protection (“PIP”) deductible, pursuant to section 627.739(5). The policies also do not contain the statutorily required notice of Plaintiffs’ option to elect an amount of the PIP deductible, as set forth in section 627.739(5). Plaintiffs seek to represent a class of persons who applied for and obtained, or renewed, PIP insurance with Defendant but were not provided the statutorily required offer to elect the deductible amount and have made one or more claims under the policy.

The single count of the Complaint seeks a declaration that Defendant failed to offer each applicant, and each policyholder upon renewal, in clear and unambiguous language the option to elect a PIP deductible and that such failure violated Florida law. In addition, Plaintiffs seek reformation of the policies held by Plaintiffs and the class members to reflect a zero deductible, as well as attorneys’ fees and costs pursuant to Florida Statutes, sections 627.428 and 627.736(8).

II. APPLICABLE STATUTE

Section 627.739, Florida Statutes, states, in relevant part:

(1) The named insured may elect a deductible or modified coverage or combination thereof to apply to the named insured alone or to the named insured and dependent relatives residing in the same household, but may not elect a deductible or modified coverage to apply to any other person covered under the policy.

(2) Insurers shall offer to each applicant and to each policyholder, upon the renewal of an existing policy, deductibles, in amounts of $250, $500, and $1,000. The deductible amount must be applied to 100 percent of the expenses and losses described in s. 627.736. After the deductible is met, each insured is eligible to receive up to $10,000 in total benefits described in s. 627.736(1). However, this subsection shall not be applied to reduce the amount of any benefits received in accordance with s. 627.736(1)(c).

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(5) All such offers shall be made in clear and unambiguous language at the time the initial application is taken and prior to each annual renewal and shall indicate that a premium reduction will result from each election. At the option of the insurer, the requirements of the preceding sentence are met by using forms of notice approved by the office, or by providing the following notice in 10-point type in the insurer's application for initial issuance of a policy of motor vehicle insurance and the insurer's annual notice of renewal premium:

For personal injury protection insurance, the named insured may elect a deductible and to exclude coverage for loss of gross income and loss of earning capacity (“lost wages”). These elections apply to the named insured alone, or to the named insured and all dependent resident relatives. A premium reduction will result from these elections. The named insured is hereby advised not to elect the lost wage exclusion if the named insured or dependent resident relatives are employed, since lost wages will not be payable in the event of an accident.

III. DISCUSSION

Defendant argues that Plaintiffs’ Complaint must be dismissed with prejudice because (1) there is no private cause of action under section 627.739; (2) the Office of Insurance Regulation (“OIR”) has exclusive authority and primary jurisdiction to enforce the alleged violation of section 627.739; (3) the Court should exercise its discretionary authority to decline Plaintiffs’ request for declaratory relief; and (4) Plaintiffs’ request for reformation is not appropriate declaratory relief, but an insufficiently pled claim for reformation. As explained below, there is no private right of action under section 627.739; therefore, Plaintiffs’ Complaint must be dismissed.¹

Defendant primarily relies on QBE Insurance Corp. v. Chalfonte Condominium Apartment Association, Inc., 94 So. 3d 541 (Fla. 2012), for the proposition that section 627.739 does not provide for a private cause of action. In Chalfonte, the Florida Supreme Court analyzed whether a different section of Florida's Insurance Code provided a private cause of action. The court first noted that “[t]he plain language of the statute does not provide for either a private cause of action or a penalty for a violation of its requirements.” Id. at 550 (alteration added). The Chalfonte court then turned to the legislative intent to determine whether to judicially infer a cause of action when a statute does not provide for one. Id. at 550-51. The court explained that “legislative intent” means considering the text, context, and purpose of the statute. Id. at 551 (citations omitted). The court further noted that “[i]n general, a statute that does not purport to establish civil liability but merely makes provision to secure the safety or welfare of the public as an entity, will not be construed as establishing a civil liability.” Id. (citation omitted; alteration in original).

As in Chalfonte, the plain language of section 627.739 does not provide for either a private cause of action or a penalty for a violation of its requirements. Thus, the Court must look to the legislative intent. Nothing in the text or context of section 627.739 indicates that the legislature intended to create a private cause of action or other penalty for non-compliance with the section. As noted by the Chalfonte court, elsewhere in the Insurance Code, the legislature included explicit penalties for violations of the statute, demonstrating that the legislature was capable of crafting an express penalty if it so desired. Id. at 552-53. Because the statute does not purport to establish civil liability but merely makes provision to secure the safety or welfare of the public as an entity, it will not be construed as establishing a civil liability.

Plaintiffs’ response fails to provide authority to the contrary. Plaintiff argues, without authority, that the legislative intent of section 627.739 was to discourage higher deductibles. However, assuming this was the legislature's intent, nothing about that intent indicates that the statute would provide a private cause of action. Further, the cases relied on by Plaintiffs are inapposite. In Progressive Select Insurance Company v. Florida Hospital Medical Center, 260 So. 3d 219, 220 (Fla. 2018), the issue was “whether section 627.739(2), Florida Statutes (2014), requires the deductible to be applied before or after medical charges are reduced under the reimbursement limitation in section 627.736(5)(a)1.b., Florida Statutes (2014).” Nothing in that case addresses whether an insured has a cause of action under section 627.739 against an insurer for failing to comply with the statute's notice requirement.

The only other case cited by Plaintiffs also deals with reimbursement under the PIP statute. In Geico General Insurance Company v. Virtual Imaging Services, Inc., 141 So. 3d 147, 150 (Fla. 2013), the issue before the court was “with respect to PIP policies issued after January 1, 2008, may an insurer limit reimbursements based on the Medicare fee schedules identified in section 627.736(5)(a), Florida Statutes, without providing notice in its policy of an election to use the Medicare fee schedules as the basis for calculating reimbursements?” Virtual Imaging did not even address section 627.739, the statute at issue in the instant case. Thus, neither of these cases indicate that Florida courts have recognized a private right of action under section 627.739 for an insurer's failure to comply with the notice requirements set out in the statute.

Plaintiffs have provided no other authority to support the existence of a private right of action under section 627.739. Nor have Plaintiffs provided any authority that would undermine Chalfonte and its discussion of how a court should determine whether a statute creates a private cause of action. Further, because no private cause of action exists under section 627.739, dismissal with prejudice is appropriate. Accordingly, it is

ORDERED that Defendant GEICO General Insurance Company's Motion to Dismiss the Class Action Complaint [DE 7] is GRANTED. This case is DISMISSED with prejudice and CLOSED.

DONE AND ORDERED in Fort Lauderdale, Florida, this 29th day of February, 2024.

FOOTNOTES

1.   Because the Court finds that Plaintiffs have no right of action under the statute, the Court need not address Defendant's other arguments.

RODNEY SMITH UNITED STATES DISTRICT JUDGE