As discussed in the first part of this series, sometimes there is a question of which state law will apply to an insurance dispute in litigation. Policyholders could be domiciled in one state; fill out an application for insurance in another state for a property located in another state. This question is called choice of law.

In Quarty v. Ins. Co. of North America,1 the Florida Second District Court of Appeal was looking into the issue of whether Florida law applied. The policyholder had filed suit in Florida against the insurer. The facts are: the insurance carrier had issued the policy in New York insuring the contents of the policyholder’s dwelling in New York; the home was burglarized and personal property was stolen from her home in New York; several months later, the policyholder moved to St. Petersburg, Florida, and became a resident of that city after notifying the insurance carrier; over a year and a half after the burglary, the insurance carrier denied the claim; the policy “Suit Against Us” provision required a lawsuit to be filed within 1 year after the loss; the policyholder filed a lawsuit in Florida; the trial court granted summary final judgment in favor of the insurance carrier and that New York law applied, and as such, the lawsuit was brought too late after the policy “Suit Against Us” provision.

On appeal, the policyholder contended that Florida Statute 95.032 prohibits contract provisions from shortening the time in which suits must be brought to a period of time less than less than that provided by the Florida statute of limitations. The policyholder argued this Florida law applied because she moved and became a resident of Florida within the one year contractual provision. Additionally, she argued that fact voided the one year contractual provision, and the insurance carrier is also licensed to do business in Florida. She argued that was sufficient contact with the parties to give a Florida court jurisdiction of a suit on the contract.

The Appellate Court discussed a Florida Supreme Court case, Sun Insurance Office, Limited v. Clay,3 on a question certified to it by the United States Court of Appeals for the Fifth Circuit at the direction of the United States Supreme Court. In Clay, it was held that Florida Statute 95.03 applies to any contract whether foreign or domestic – when Florida’s contact is sufficient to give a Florida court jurisdiction of a suit. Clay involved a policy of insurance purchased in Illinois by a resident of that state. Clay moved to Florida, the loss occurred in Florida two years later, and the insurance company was licensed to do business in Florida. When the case returned to the United States Supreme Court in 1964, the Court approved the construction given the statute by the Florida Supreme Court, finding that Florida had ample contacts with the transaction and the parties.

Considering these principles, the Florida appellate court in Quarty noted that the insurance contract was made in New York by New York residents; the premiums were paid in New York; the property was in New York; and the loss occurred in New York. The Court noted that:

The mere fact that Quarty moved and became a resident of Florida within twelve months after the loss occurred did not give Florida ample contact with the transaction and the parties to satisfy any conceivable requirement of full faith and credit or of due process.

The lex loci contractus principle discussed in the last post does not seem to be a hard and fast rule. The two cases discussed in this post each involve a situation where the contract was entered into outside the State of Florida and you have different results; one where Florida law applied and the other where it did not. The thing to take away from this is that the question of which law applies is factually specific. Always consult with experienced legal representation about which law applies should you ever find yourself in a situation with this question.

1 Quarty v. Ins. Co. of North America, 244 So.2d 181 (Fla. 2d DCA 1971).
2 F.S. 95.03 states: Any provision in a contract fixing the period of time within which an action arising out of the contract may be begun at a time less than that provided by the applicable statute of limitations is void.
3 Sun Insurance Office, Limited v. Clay, 133 So.2d 735 (Fla.1961).