Venue Transferred In Public Adjusters Lawsuit Challenging Florida Statutes

In Sink v. East Coast Public Adjusters, Inc. & Ameriloss Public Adjusting Corp. (3D10-246), the Third District reversed the trial court's order denying a motion to dismiss and/or to transfer venue.  The court stated:

In 2008, the Florida Legislature amended section 626.854 of the Florida Statutes to include new regulations on public adjusters doing business in Florida. Among these regulations were section 626.854(6), limiting the timing of a public adjuster’s initial contact with a potential client, and section 626.854(11)(b)(2), capping the maximum fee that may be charged by a public adjuster.

The appellees filed a lawsuit challenging the constitutionality of the statutes and seeking an injunction against enforcement of the statutes.  Alex Sink in her capacity as Chief Financial Officer of the State of Florida, the Florida Department of Financial Services (the “Department”), and the State of Florida filed a motion to dismiss and/or to transfer venue to Leon County.  The Third District stated:

In civil actions 'against the state or one of its agencies, the Florida common law home venue privilege provides that venue is proper in the county where the agency maintains its principal headquarters.'  The home venue privilege, however, is not without exception....The exception argued by the Adjusters, known as the “sword-wielder” doctrine, applies when a “plaintiff seeks judicial protection from a real or imminent danger of invasion of the plaintiff’s constitutional rights by the state agency.”

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Aside from the general statement that “[a]ll of the actions giving rise to this cause of actions [sic] occurred in Miami-Dade County,” the Adjusters’ complaint is devoid of specific allegations tying the Department’s  investigations to the challenged statutory provisions.

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The documents filed by the Adjusters show that the Department sent correspondence to Ameriloss and Premier advising them that investigations had been opened concerning their insurance-related activities in Florida...The Adjusters, however, also filed affidavits stating that Gene Cashier (“Cashier”), an agent of the Department, traveled to Miami-Dade County, visited and interviewed East Coast’s clients, interviewed a contractor used by one of the clients, and advised the clients that East Coast was being investigated on suspicion of fraudulent or excessive claims.

The state, however, was investigating allegations of fraud not related to the challenged sections.  Therefore, constitutional rights were not at risk by statutes which were not at issue in the investigation.

Based upon the plain language of this section, fraudulent and excessive claims, such as those purportedly being investigated by Cashier, are outside of the scope of section 626.854(11)(b)(2), and the Adjusters’ attempt to attack and forestall these investigations by challenging the constitutionality of sections 626.854(6) and 626.854(11)(b)(2) is misplaced.  The Adjusters argue that the two statutory sections are unconstitutional, and as such, their affirmative enforcement is a violation of the Adjuster’s constitutional rights sufficient to merit application of the sword-wielder doctrine. This argument fails because there is nothing in the complaint or in the evidence presented in response to the motion demonstrating that the Department’s purported investigation of the Adjusters results from or is related to the enforcement of the two challenged sections.

Finally, the court stated:

As the Adjusters were unable to sufficiently establish the application of the sword-wielder doctrine, the home venue privilege should have been applied by the trial court....Based on the foregoing, we reverse the trial court’s order and remand with instructions that venue be transferred to Leon County.

The Third District's docket can be viewed HERE.  The court's opinion is below:
Sink v. East Coast Public Adjusters, Inc. et al, - So. 3d -, 3D10-246, 2010 WL 2925177 (Fla. 3d DCA July 28...