Kathleen Miller v. Scottsdale Insurance Company

[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS
FILED
FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
________________________ ELEVENTH CIRCUIT
MAY 26, 2005
No. 04-11660 THOMAS K. KAHN
________________________ CLERK

D. C. Docket No. 03-00996-CV-T-23-MSS

KATHLEEN MILLER,
ROD MILLER,
husband of Kathleen Miller,

Plaintiffs-Appellants,

versus

SCOTTSDALE INSURANCE COMPANY,

Defendant-Appellee.

________________________

Appeal from the United States District Court
for the Middle District of Florida
_________________________

(May 26, 2005)

Before EDMONDSON, Chief Judge, and TJOFLAT and KRAVITCH, Circuit
Judges.

PER CURIAM:
 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.

I. Facts

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

1
In a premium financing arrangement, the insurance company receives its entire
premium up front from the premium finance company and the insured then repays the premium
finance company in installments.

2
 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

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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

2
We note that Scottsdale argues that the Millers’ position overlooks the fact that the only
portion of the policy in which Northside has an interest is the property and building coverage, a
coverage which Scottsdale contends is irrelevant to the Millers’ claim for damages under the
general liability portion of the policy. Specifically, Scottsdale points out that the policy’s
“Building and Personal Property Coverage Form” contains the notice requirement to Northside,
but the policy’s general liability coverage form does not contain any notice requirement to
Northside.
3
The Millers also argue that if § 627.848 contemplates separate dates of cancellation for
different insureds, it would raise difficult and complex premium allocation issues because many
types of insurance are not priced on a “per insured” basis. By contrast, Scottsdale urges that the
Millers’ position rewards an insured for failing to pay its premiums by extending coverage until
such time as all third parties have received notice.

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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

II. Discussion

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

§ 627.848 5, which governs insurance policy cancellations by premium finance

4
The district court acknowledged that there was no controlling Florida authority on the
issue. Therefore, the district court relied on an Illinois appellate decision, Dunbar v. Nat’l Union
Fire Ins. Co., 561 N.E.2d 450, 453 (Ill. App. Ct. 1990). In Dunbar, the court summarily
dismissed the claim that a policy cancellation was ineffective because the insurance company
had not notified third party lien holders, reasoning that “[t]his requirement is irrelevant to any
duty owed to the insured plaintiff.” 561 N.E.2d at 453.
5
§ 627.848 provides in part:

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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

(1) When a premium finance agreement contains a power of attorney or other
authority enabling the premium finance company to cancel any insurance contract
listed in the agreement, the insurance contract shall not be cancelled unless
cancellation is in accordance with the following provisions:

(a)1. Not less then 10 days’ written notice shall be mailed to each insured shown
on the premium finance agreement of the intent of the premium finance company
to cancel her or his insurance contract unless the defaulted installment payment is
received within 10 days.

***

(c) Upon receipt of a copy of the cancellation notice by the insurer or insurers, the
insurance contract shall be cancelled as of the date specified in the cancellation
notice with the same force and effect as if the notice of cancellation had been
submitted by the insured herself or himself, whether or not the premium finance
company has complied with the notice requirement of this subsection, without
requiring any further notice to the insured or the return of the insurance contract.

(d) All statutory, regulatory, and contractual restrictions providing that the
insured may not cancel her or his insurance contract unless she or he or the
insurer first satisfies such restrictions by giving a prescribed notice to a
governmental agency, the insurance carrier, a mortgagee, an individual, or a
person designated to receive such notice for such governmental agency, insurance
carrier, or individual shall apply when cancellation is effected under the
provisions of this section. The insurer, in accordance with such prescribed notice
when it is required to give such notice in behalf of itself or the insured, shall give
notice to such governmental agency, person, mortgagee, or individual; and it shall
determine and calculate the effective date of cancellation from the day it receives
the copy of the notice of cancellation from the premium finance company.
6
In addition to the cases discussed herein, Fidelity and Deposit Co. of Maryland v. First
State Ins. Co., 677 So. 2d 266 (Fla. 1996) and American Reliance Ins. Co. v. Martinez, 683 So.
2d 575 (Fla. 3d Dist. Ct. App. 1996) are instructive. In Fidelity, the Florida Supreme Court
reversed the district court’s determination that a policy was effectively cancelled when the

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(Fla. 4th Dist. Ct. App. 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

mortgagee was given oral rather than written notice of a policy cancellation. The court relied on
the then statutory equivalent of § 627.848(1)(d), holding that “[f]ailure to give the prescribed
notice nullifies the attempted cancellation by the premium finance company.” 677 So. 2d at 268.
Unlike the case at bar, in Fidelity, the mortgagee who failed to receive the notice of cancellation
was an injured plaintiff in the underlying suit. Thus, Fidelity did not address whether a failure to
provide notice of cancellation to the mortgagee also means that the policy cannot be cancelled as
to another named insured. In American Reliance Ins. Co., the court upheld a jury’s verdict that
an insured’s efforts to cancel its own insurance policy were ineffective when the insurer had not
provided the mortgagee and loss payee with proper notice of cancellation. 683 So. 2d at 575-76.
Like Fidelity, this case is distinguishable from the case at bar because the mortgagee who failed
to receive the notice of cancellation was an injured plaintiff in the underlying suit.
7
Thus, a loss that occurred between the cancellation date provided in the notice and the
date of receipt by the insurance company was covered.

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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

(Fla. 4th Dist. Ct. App. 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 Fla. Dist. Ct. of Appeal held that if 8

Security was required to give notice to CAD, and had failed to do so, the

cancellation was ineffective. 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

8
The court could not make this determination because the insurance policy filed with the
court was incomplete. Id. at 452.

8
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.

III. Question Certified

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

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 in subordinate or even contingent parts.

Swire Pacific Holdings v. Zurich Ins. Co., 284 F.3d 1228, 1234 (11th Cir. 2002)

(quoting Martinez v. Rodriguez, 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.

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