Fla. Supreme Court Rules Against Nonresidents in Coverage Disputes

January 20, 2006

Only Florida residents can sue insurers in state courts when companies are unauthorized to do business in Florida, the state Supreme Court ruled recently.

State law prohibits nonresidents from filing such suits, the high court said in an unanimous opinion.

The justices denied an appeal by Victor K. Borden, a Honduras resident, who had tried to sue Alfa Insurance PLC for the loss of a fishing boat insured with the Russian company. Alfa denied his claim on grounds the vessel sank in international waters outside the coverage area.

Borden, who had obtained the coverage through a series of brokers in Florida, Britain and Turkey, sued under a section of the state’s Unauthorized Insurers Process Law that applies to “any other transaction of insurance.”

The section does not specifically say it applies only to Floridians but three other sections dealing with insurance contracts and premiums each say they are limited to residents. The law, however, also states its purpose is to aid “residents of this state.”

“We endeavor to construe statutes to effectuate the intent of the Legislature,” Pariente wrote, adding that to rule it covers nonresidents would make the other three sections “meaningless.”

The opinion upheld the 2nd District Court of Appeal in Lakeland in reversing a trial judge in Tampa who had permitted the lawsuit. The justices also disapproved a 1990 decision by the 3rd District Court of Appeal in Miami that had allowed a similar suit by a resident of Peru against an insurer from Bermuda.

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