James R. Allen v. United Services Automobile Association
2015 U.S. App. LEXIS 10742
| 11th Cir. | 2015Background
- James and Diane Allen (and similarly situated Schalls) purchased USAA homeowner policies in Florida that included Building Ordinance or Law (BOL) coverage; policies provided 25% BOL from 2002–2006 and 50% BOL from 2006 onward.
- Florida Statute § 627.7011(1) requires insurers to offer replacement-cost and BOL options (25% and 50%); subsection (2) deems 25% included unless the insurer obtains the policyholder’s written refusal on a form approved by the Florida Office of Insurance Regulation.
- The Allens never signed an approved Regulation Office form (Form OIR‑1148 or an insurer form approved by the Office) rejecting or selecting alternative coverage; they signed USAA’s non‑approved form that specified 50% BOL and paid premiums accordingly.
- The Allens sued as a putative class seeking refund of the premium difference between 50% and 25% BOL (decl. judgment, injunction, damages), alleging violation of § 627.7011(2) for failing to obtain written selection/refusal on an approved form.
- The district court dismissed under Rule 12(b)(6), holding § 627.7011(2)’s approved‑form requirement applies only to selecting/rejecting coverage below the 25% default and that, in any event, Fla. Stat. § 627.418(1) requires enforcing a policy as written when it provides coverage beyond statutory limitations.
- The Eleventh Circuit affirmed: (1) § 627.7011(2) does not require approved‑form consent to obtain >25% BOL; and (2) § 627.418(1) bars premium‑refund claims because the insured may enforce the policy as written.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 627.7011(2) requires written consent on an Office‑approved form to obtain BOL coverage above 25% | Allens: the statute makes 25% the default and requires approved‑form written selection/refusal to depart either up or down from 25% | USAA: the approved‑form rule is a gap‑filler only when insured refuses the offers (i.e., to elect <25% or reject the offers); no approved‑form requirement to obtain >25% | Held for USAA: § 627.7011(2) applies only to selecting/rejecting coverage below 25%; no approved‑form consent required to obtain >25% |
| Whether § 627.418(1) permits premium restitution when an insurer issues a policy inconsistent with statutory form requirements | Allens: even if § 627.7011(2) was violated, they can recover the difference in premiums paid for unwanted 50% coverage | USAA: § 627.418(1) mandates the policy be enforced as written when it provides more than statutory limits; insured cannot recoup premiums | Held for USAA: § 627.418(1) bars the Allens’ premium‑refund claim; insureds get the full policy amount and cannot recover premiums for voluntarily purchased coverage |
Key Cases Cited
- Lord Abbett Mun. Income Fund, Inc. v. Tyson, 671 F.3d 1203 (11th Cir. 2012) (standard of review for Rule 12(b)(6) dismissal)
- Brooks v. Blue Cross & Blue Shield of Fla., Inc., 116 F.3d 1364 (11th Cir. 1997) (limitations on materials considered on a motion to dismiss)
- Fin. Sec. Assurance, Inc. v. Stephens, Inc., 500 F.3d 1276 (11th Cir. 2007) (when documents central to claim may be considered on dismissal)
- Atwater v. Kortum, 95 So.3d 85 (Fla. 2012) (Florida courts construe statutes to effectuate legislative intent)
- Woodham v. Blue Cross & Blue Shield of Fla., Inc., 829 So.2d 891 (Fla. 2002) (related statutory provisions read together)
- Dewsnup v. Timm, 502 U.S. 410 (1992) (avoid statutory interpretations that assume clumsy draftsmanship)
- Union Labor Life Ins. Co. v. Pireno, 458 U.S. 119 (1982) (insurance risk transfer is complete when contract is entered)
- Auto‑Owners Ins. Co. v. DeJohn, 640 So.2d 158 (Fla. 5th DCA 1994) (courts must construe nonconforming policies to provide statutorily required minimum coverage)