State Farm Florida Insurance Co. v. Buitrago

100 So. 3d 85, 2012 Fla. App. LEXIS 10547, 2012 WL 2471601
CourtDistrict Court of Appeal of Florida
DecidedJune 29, 2012
DocketNo. 2D11-4509
StatusPublished
Cited by4 cases

This text of 100 So. 3d 85 (State Farm Florida Insurance Co. v. Buitrago) is published on Counsel Stack Legal Research, covering District Court of Appeal of Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State Farm Florida Insurance Co. v. Buitrago, 100 So. 3d 85, 2012 Fla. App. LEXIS 10547, 2012 WL 2471601 (Fla. Ct. App. 2012).

Opinion

CRENSHAW, Judge.

State Farm Florida Insurance Company (State Farm) petitions this court for certio-[87]*87rari review of a nonfinal order from the circuit court ruling that section 627.7074, Florida Statutes (2010), is unconstitutional and prohibiting State Farm from conducting any further action on a neutral evaluation under the statute. We hold that the circuit court departed from the essential requirements of law by finding section 627.7074 unconstitutional. Accordingly, we grant State Farm’s petition and quash the circuit court’s order.

Background

Homeowners Jairo Buitrago and Nohora Buitrago filed a breach of contract action against their home insurance provider State Farm, alleging that State Farm failed to provide coverage and pay for damages sustained as a result of sinkhole activity on their property.1 In response, State Farm filed an answer and affirmative defenses and moved to stay the proceedings so that it could conduct a neutral evaluation under section 627.7074 as an alternative procedure to resolve the Bui-tragos’ disputed claim. State Farm then requested a neutral evaluation, and pursuant to section 627.7074(4), the Department of Financial Services (the Department) assigned a neutral evaluator to conduct the nonbinding but mandatory evaluation.

The Buitragos objected to State Farm’s request for a neutral evaluation, alleging that section 627.7074 was unconstitutional because it violated the separation of powers doctrine by usurping the circuit court’s authority to adjudicate the disputed coverage issues. The Buitragos also contended that subsection (13) of the statute, which required that the neutral evaluator’s written recommendation be admissible in their action,2 violated their due process rights by requiring the circuit court to consider a report that did not necessarily comply with the Florida Evidence Code. Therefore, they moved for an emergency protective order to block the neutral evaluation from proceeding.

After conducting a hearing on the parties’ motions, the circuit court entered an order denying State Farm’s motion to stay and granting the Buitragos’ motion for a protective order. The circuit court found that section 627.7074 unconstitutionally encroached upon the judiciary’s powers and, as such, directed the Department to cease and desist from taking any further action on the neutral evaluation regarding the Buitragos’ claim. In particular, the circuit court ruled that the neutral evaluation misappropriated its judicial authority by permitting the Department, as an executive agency, to become the trier of fact and by allowing the Department to adopt rules during the proceeding that may not comply with any formal rules of evidence or procedure.

Standard of review

This court may review an interlocutory order in a certiorari petition when the petitioner establishes “(1) a departure from the essential requirements of the law, (2) resulting in material injury for the remainder of the trial (3) that cannot be corrected on postjudgment appeal.” Parkway Bank v. Fort Myers Armature Works, Inc., 658 So.2d 646, 648 (Fla. 2d DCA [88]*881995). We must first examine the second and third prongs to determine our certio-rari jurisdiction. See DeLoach v. Aird, 989 So.2d 652, 654 (Fla. 2d DCA 2007). If the jurisdictional prongs are met, then we must determine whether the circuit court departed from the essential requirements of law. Fassy v. Crowley, 884 So.2d 359, 363 (Fla. 2d DCA 2004). This departure is more than a simple legal error; “[tjhere must be a violation of a clearly established principle of law resulting in a miscarriage of justice.” Id. at 364 (citing Combs v. State, 436 So.2d 93, 95-96 (Fla.1983)). A clearly established principle of law includes a court’s interpretation or application of a statute or constitutional provision. Id. (citing Allstate Ins. Co. v. Kaklamanos, 843 So.2d 885, 890 (Fla.2003)).

Discussion

The legislature explicitly enacted the neutral evaluation process under section 627.7074 “to efficiently resolve sinkhole disputes, in order to accelerate the timeline by which sinkhole activity is mitigated, where verified at the property, and to minimize, if not avoid, the costs associated with unnecessary litigation.” Morejon v. Am. Sec. Ins. Co., 829 F.Supp.2d 1258, 1260 (M.D.Fla.2011). If a sinkhole dispute was allowed to proceed in the circuit court without a stay during the neutral evaluation, or as here, by failing to hold any neutral evaluation, then the legislative purpose of the statute — mandating the completion of the neutral evaluation process as a condition precedent to proceeding with litigation on related matters — would not be accomplished. Id. And if the parties decided not to resolve the claim at the conclusion of the neutral evaluation, then State Farm would be unable to submit the recommendation of the neutral evaluator at subsequent proceedings because the circuit court’s order effectively prevents the neutral evaluation from ever being conducted. Hence, the circuit court’s prohibition materially harms State Farm for the remainder of the proceedings by preventing it from participating in a neutral evaluation process, the results of which could favor State Farm. Further, there is no method that would allow us to determine postjudgment how the absence of the neutral evaluation affected the outcome of the case. See, e.g., Baldwin v. Shands Teaching Hosp. & Clinics, Inc., 45 So.3d 118, 122 (Fla. 1st DCA 2010) (noting there was no postjudgment remedy to establish the effect of exclusion of discovery), review denied, 55 So.3d 1288 (Fla.2011).

Thus we are left to consider whether the circuit court’s ruling on the constitutionality of section 627.7074 departed from the essential requirements of law. Upon reviewing the constitutionality of a statute, this court is “ ‘obligated to accord legislative acts a presumption of constitutionality and to construe challenged legislation to effect a constitutional outcome whenever possible.’ ” Peninsular Props. Braden River, LLC v. City of Bradenton, 965 So.2d 160, 161 (Fla. 2d DCA 2007) (quoting Fla. Dep’t of Revenue v. City of Gainesville, 918 So.2d 250, 256 (Fla.2005)).

This court has already held that the stay provision of the statute “is sufficiently intertwined with substantive provisions so that [the requirement of a stay once a neutral evaluation is requested] is not an unconstitutional violation of separation of powers.” Cruz v. Cooperativa De Seguros Multiples De P.R., Inc., 76 So.3d 394, 398 (Fla. 2d DCA 2011). Moreover, the federal court in Morejon concluded that section 627.7074 was substantive in nature rather than procedural because the statute would not impact a plaintiff’s method of proceeding with litigation “once the condition precedent of neutral evaluation is met.” 829 F.Supp.2d at 1261. As such, [89]*89“Florida law is well-settled [sic] that substantive statutes may permissibly include procedural elements without violating the separation of powers clause.” Id. (citing Caple v. Tuttle’s Design-Build, Inc., 753 So.2d 49, 54 (Fla.2000)).

The Buitragos nonetheless aver that section 627.7074 violates the separation of powers by allowing a neutral evaluator appointed by an executive agency to encroach upon the authority of the judiciary.

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Bluebook (online)
100 So. 3d 85, 2012 Fla. App. LEXIS 10547, 2012 WL 2471601, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-farm-florida-insurance-co-v-buitrago-fladistctapp-2012.