text:
    CITIZENS PROPERTY INSURANCE CORPORATION, Petitioner, v. Alan B. GARFINKEL, Respondent.
    No. 5D09-1641.
    District Court of Appeal of Florida, Fifth District.
    Dec. 18, 2009.
    Rehearing Denied Jan. 15, 2010.

      Anthony J. Russo of Butler, Pappas Weihmuller Katz Craig LLP, Tampa, and Kathy J. Maus and Gina G. Smith, Tallahassee, for Petitioner.
    Mayanne Downs and Kimberly D. Healy of King, Blackwell, Downs & Zehnder, P.A., Orlando, for Respondent.
   MONACO, C.J.

The petitioner, Citizens Property Insurance Corporation, seeks a writ of prohibition directed to the trial court to prevent the court from taking any further action with respect to a first-party bad faith claim brought by the respondent, Alan B. Gar-finkel. This case came to a head when the trial court denied Citizens’ motion to dismiss, and later entered an order requiring Citizens to produce its attorneys for depositions, and compelling it to produce its claims files and certain other documents for an in camera inspection. Because section 627.351(6)(r), Florida Statutes (2008), immunizes Citizens from bad faith claims, we grant the writ.

This court is empowered by the Florida Constitution to issue writs of prohibition. See Art. V, § 4(b)(3), Fla. Const.; see also Fla. R.App. P. 9.030(b)(3). Prohibition is an extraordinary writ by which a superior court having appellate and supervisory jurisdiction over a lower court may prevent the lower court from exceeding its jurisdiction or usurping authority over matters not within its jurisdiction. See English v. McCrary, 348 So.2d 293 (Fla.1977). It is well-established that a trial court lacks subject matter jurisdiction if a party enjoys the benefits of sovereign immunity with respect to the subject matter of the case before the court, and the issuance of the writ is appropriate to prevent the court from acting in the absence of such jurisdiction. See Circuit Court of Twelfth Judicial Circuit v. Dep't of Natural Res., 339 So.2d 1113 (Fla.1976); see also Underwood v. Univ. of Kentucky, 390 So.2d 433, 435-37 (Fla. 3d DCA 1980) (Pearson, J., specially concurring). Accordingly, we have jurisdiction to consider the issue before us, and we choose to exercise that jurisdiction.

In the present case Mr. Garfinkel obtained a policy of windstorm insurance from Citizens covering his residence. As with many other Floridians, his residence was damaged by the multiple 2004 hurricanes. After a dispute arose concerning the extent of damage to the residence Mr. Garfinkel filed a two-count complaint to enforce his contract rights. The first count alleged a breach by Citizens of the contract of insurance, while the second count sought a declaration that the damage was covered by the policy. The parties agreed to resolve these issues using the appraisal process, and an appraisal award was eventually entered in favor of Mr. Garfinkel. When Mr. Garfinkel moved to confirm the award, he sought an amount in excess of the policy limits, asserting three distinct claims resulting from three separate occurrences. The trial court confirmed the award, but limited the amount awarded to the policy limits for a single occurrence.

Mr. Garfinkel then amended his complaint, now asserting in Count I the right to a final judgment on the breach of contract claim, and in Count II a bad faith claim against Citizens under sections 624.155(l)(b)(l) and 626.954(l)(i)(3), Florida Statutes (2008). Citizens moved to dismiss on the basis of sovereign immunity, but the trial court denied the motion without elaborating on the basis for denial. When Citizens answered, it again asserted statutory and sovereign immunity, among other defenses. After Mr. Garfinkel sought discovery of its claims file and other documents, and sought to set its attorneys for deposition, Citizens objected. When the objections were overruled, Citizens sought prohibition in this court.

The issue specifically before us is whether Citizens is shielded by sovereign immunity for the purposes of bad faith claims. We begin our consideration of this important issue by examining the applicable statutes.

According to its enabling statute, Citizens was created by the Florida Legislature in order to ensure the existence of an orderly market for property insurance, and particularly windstorm insurance, within Florida. See § 627.351(6)(a)l., Fla. Stat. (2008). The statute continues:

The Legislature finds that private insurers are unwilling or unable to provide affordable property insurance coverage in this state to the extent sought and needed. The absence of affordable property insurance threatens the public health, safety and welfare and likewise threatens the economic health of the state. The state therefore has a compelling public interest and a public purpose to assist in assuring that property in the state is insured and that it is insured at affordable rates ... It is necessary, therefore, to provide affordable property insurance to applicants who are in good faith entitled to procure insurance through the voluntary market but are unable to do so. The Legislature intends by this subsection that affordable property insurance be provided and that it continue to be provided, as long as necessary, through Citizens Property Insurance Corporation, a government entity that is an integral part of the state and that is not a private insurance company. (Emphasis supplied).

Thus, it is explicitly clear that Citizens is not a private insurance company, but rather is a state body. The Legislature then endowed Citizens with immunity against all liability and suit apart from five specific exceptions:

There shall be no liability on the part of, and no cause of action of any nature shall arise against, any assessable insurer or its agents or employees, the corporation or its agents or employees, members of the board of governors or their respective designees at a board meeting, corporation committee members, or the office or its representatives, for any action taken by them in the performance of their duties or responsibilities under this subsection.
Such immunity does not apply to:
a. any of the foregoing persons or entities for any willful tort;
b. the corporation or its producing agents for breach of any contract or agreement pertaining to insurance coverage;
c. the corporation with respect to issuance or payment of debt;
d. any assessable insurer with respect to any action to enforce an assessable insurer’s obligations to the corporation under this subsection; or
e. the corporation in any pending or future action for breach of contract or for benefits under a policy issued by the corporation; in any such action, the corporation shall be liable to the policyholders and beneficiaries for attorney’s fees under 627.428.

See § 627.351(6)(r)l.a-e.

The rub comes because the very next paragraph, section 627.351(6)(r)(2), provides that:

2. The corporation shall manage its claim employees, independent adjusters, and others who handle claims to ensure they carry out the corporation’s duty to its policyholders to handle claims carefully, timely, diligently, and in good faith, balanced against the corporation’s duty to the state to manage its assets responsibly to minimize its assessment potential. (Emphasis supplied).

Citizens argues that the plain meaning of the statute permits only certain categories of suit against it, and bad faith claims are not among them. Mr. Garfinkel asserts to the contrary that the particular requirement to act in good faith found in section 627.351(6)(r) (2), suggests that the Legislature fully intended to allow a policy holder to assert a bad faith claim. The argument made by Citizens is more persuasive.

There are a number of foundational concepts that guide us in this regard. Initially, when the language of a statute is clear and conveys a certain and definite meaning, there is no occasion for resorting to the rules of statutory interpretation and construction; the statute must be given its plain and obvious meaning. Blanton v. City of Pinellas Park, 887 So.2d 1224 (Fla.2004). It is when the statutory language is unclear that courts will apply rules of statutory construction and explore legislative history to determine legislative intent. Freeman v. First Union Nat’l Bank, 865 So.2d 1272 (Fla.2004). In this case, both parties argue that the statute is clear and unambiguous, yet they reach utterly opposite conclusions as to its meaning. We agree that § 627.351(6)(r)l.a-e is unambiguous, but we agree with the interpretation articulated by Citizens. When the Legislature set forth five exceptions to its grant of sovereign immunity, it intended for there to be only five exceptions. What is unclear, however, is the effect of section 627.351(6)(r)(2), which contains the good faith language. To resolve the issue of whether the Legislature intended a sixth exception, therefore, we must drill deeper.

As a matter of statutory construction, when, as in the present case, a statute articulates exceptions, no other exceptions may be implied. Dobbs v. Sea Isle Hotel, 56 So.2d 341 (Fla.1952). Here, because the Legislature identified five exceptions to its grant of immunity, there is no reason to think that another grant would show up in a nearby but separate paragraph, unless specifically identified as such.

Additionally, we know that in construing statutes involving sovereign immunity, any waiver of that immunity must be clear and unequivocal. Spangler v. Florida State Turnpike Auth., 106 So.2d 421, 424 (Fla.1958). There is no clear waiver of sovereign immunity in section 627.351(6)(r)(2). If there is a waiver there, it is quite murky.

Mr. Garfinkel, however, alleges that his claim arises under section 624.155, Florida Statutes (2007). In fact, his amended complaint specifically sets forth that statute as the basis for the bad faith count, and asserts a right to punitive damages after the appropriate hearing is held. That statute, entitled “Civil Remedy,” provides that any person may bring a civil action against an insurer when such a person is damaged by the insurer not attempting in good faith to settle claims when, under all of the circumstances, it could and should have done so, had it acted fairly and honestly toward its insured and with due regard for his or her interests. Certainly it must be conceded that Citizens fits within the definition of “insurer” for purposes of chapter 624. Section 624.03 defines an insurer to include “every person engaged as indemnitor, surety, or contractor in the business of entering into contracts of insurance or of annuity.” But the inquiry does not end there.

Mr. Garfinkel, recognizing that section 624.155 applies generally to private insurers, does not claim that Citizens is an “authorized insurer” for purposes of that statute. Rather, he asserts that bad faith liability of Citizens springs from section 627.351- — -the statute that created it. There is a fundamental problem with this argument. Mr. Garfinkel’s complaint specifically pleads that bad faith liability is founded on section 624.155(l)(b). If Citizens is not an authorized insurer under section 624.155(l)(b), then it cannot be subject to bad faith claims pursuant to it.

The logical implication is that the Legislature created Citizens as a state entity and made it immune from suit except for those suits of a very particular variety. Nowhere in section 627.351(6)(r)l is there a specific exception stated for statutory bad faith claims under section 624.155(l)(b)(l). Moreover, the legislative history supports the view that there was no intention by the Legislature to subject Citizens to bad faith claims.

During the 2007 legislative session, the House and Senate considered several bills affecting Citizens. One House Bill attempted to subject Citizens to “all remedies,” while a Senate Bill attempted to add language that would have made a claim arising under Citizens’ duty to act in good faith one of the immunity exceptions. This latter bill would have added the word “or” after the five exceptions and before the subparagraph requiring Citizens to act in good faith. The Senate Bill was later redrafted with the word “or” excluded. In the end the House Bill was rejected, and the Committee Substitute for the Senate Bill, which contains the current language of section 627.351(6)(r)2., was adopted. Thus, the Legislature was specifically presented with the opportunity to amend the statute to make certain that bad faith claims against Citizens would be authorized, but chose not to do so. Accordingly, the recent legislative history suggests that the Legislature did not intend for section 627.351(6)(r)2. to create a private right of action by policy holders against Citizens.

When we consider other similar statutes involving parallel state residual market entities, we arrive at the same result. The legislative authorizations for the Florida Insurance Guarantee Association (“FIGA”), and the Florida Medical Malpractice Joint Under Writing Association (“FMMJUA”), demonstrate that the Legislature intended to shield these entities similar to Citizens from liability for bad faith. FIGA, FMMJUA and Citizens are all “insurance risk appointment plans” created to provide affordable insurance to applicants who are entitled, but who are unable to procure insurance from private insurers. Although FMMJUA concerns medical malpractice insurance, and FIGA pays covered claims under certain classes of insurance policies of insurers that have become insolvent, they, together with Citizens, all fulfill the State’s public policy to make insurance available in high risk situations when private insurers are unwilling to provide such coverage.

As with the Citizens sovereign immunity provision, the FIGA immunity statute provides, “There shall be no liability on the part of, and no cause of action of any nature shall arise against, any member insurer, the association or its agents or employees, the board of directors, the Chief Financial Officer, or the department or office or their representatives for any action taken by them in the performance of their powers and duties under this part.” § 631.66, Fla. Stat. (2007). In Fernandez v. Florida Ins. Guar. Ass’n, Inc., 383 So.2d 974, 975 (Fla. 3d DCA), review denied, 389 So.2d 1109 (Fla.1980), our sister coui-t in the Third District held that this immunity language precluded a bad faith action for an insurer’s refusal to set-tie within policy limits. See also Florida Ins. Guar. Ass’n v. Giordano, 485 So.2d 453, 457 (Fla. 3d DCA 1986); Hudson Envtl. Servs., Inc. v. New Jersey Property-Liability Ins. Guar. Ass’n, 372 N.J.Super. 284, 858 A.2d 39 (2004).

Similarly, the FMMJUA immunity statute reads: “There shall be no liability on the part of, and no cause of action of any nature shall arise against, any member insurer, self-insurer, or its agents or employees, the Joint Underwriting Association or its agents or employees, members of the board of governors or the office or its representatives for any action taken by them in performance of their powers and duties under this subsection.” § 627.351(4)(c), Fla. Stat. (1993). In Florida Medical Malpractice Joint Underwriting Ass’n v. Indem. Ins. Co. of North America, 689 So.2d 1040, 1041 (Fla.1996), the Florida Supreme Court held that this immunity language found in the very same section that contains Citizens enabling statute and -immunity provision, required dismissal of a lawsuit against FMMJUA for statutory and common law bad faith in the investigation, evaluation and settlement of a claim. The high court held that this “statute expressly states that ‘no cause of action of any nature’ shall arise against the petitioners.” Id. at 1042.

A comparison of the three immunity provisions reveals that they all use essentially the same immunizing language: “There should be no liability on the part of, and no cause of action of any nature shall arise against....” Mr. Garfinkel argues that FIGA and FMMJUA are not applicable here because those statutes do not contain comparable language requiring them to act in good faith or providing any exceptions. This distinction is not meaningful, however, because none of the exceptions in section 627.351(6)(r) specifically allow bad faith claims, and the duty of Citizens to act in good faith does not include a private right of action. Statutory language that merely points to a benefit for a class of persons will not justify a judicial inference that the Legislature intended to create a private right of action to enforce delivery of those benefits. Murthy v. N. Sinha Corp., 644 So.2d 983 (Fla.1994). Absent an explicit expression of legislative intent to create a private right of action, none will be implied. Villazon v. Prudential Health Care Plan, Inc., 843 So.2d 842 (Fla.2003).

Finally, we note that one of the exceptions from immunity for suits against Citizens is for “any willful tort.” See § 627.351(6)(r)l.a., Florida Statutes (2007). A bad faith claim, however, is not considered to be a willful tort that would give rise to a claim for damages. Allstate Ins. Co. v. Gibbs, 340 So.2d 1202 (Fla. 4th DCA 1976), cert. dismissed, 354 So.2d 980 (Fla.1977), receded from on other grounds by Hartford Accident and Indem. Co. v. U.S.C.P. Co., 515 So.2d 998 (Fla. 4th DCA 1987); Nationwide Mut. Ins. Co. v. Lowe, 347 So.2d 630 (Fla. 4th DCA 1977). Rather, we have in essence viewed bad faith claims as comparable to claims for unfair settlement practices. Progressive Am. Ins. Co. v. Rural/Metro Corp. of Florida, 994 So.2d 1202, 1208 (Fla. 5th DCA 2008) (citing Hartford Ins. Co. v. Mainstream Const. Group, Inc., 864 So.2d 1270, 1272 (Fla. 5th DCA 2004)).

The reason why first-party bad faith claims are not considered to be willful torts is best explained by examining the history of this cause of action. A third-party bad faith action (that is, a claim against one’s own insurer for failing in good faith to settle a third-party’s claim, thus exposing the insured to liability in excess of the available insurance coverage), was recognized in Florida as part of the common law as early as 1938. The foundation for this claim is found in the fiduciary nature of the insurance carrier’s relationship with the insured. The carrier was required to act in good faith to negotiate a settlement for the benefit of its insured, and not to protect its own interest alone. Opperman v. Nationwide Mut. Fire Ins. Co., 515 So.2d 263, 265 (Fla. 5th DCA 1987), review denied, 523 So.2d 578 (Fla.1988). Because of the perceived absence of the fiduciary relationship, however, there was no first-party bad faith action by an insured against the insurer recognized at common law. See Allstate Indem. Co. v. Ruiz, 899 So.2d 1121 (Fla.2005); State Farm Mut. Auto. Ins. Co. v. Laforet, 658 So.2d 55, 58-59 (Fla.1995); Baxter v. Royal Indem. Co., 285 So.2d 652 (Fla. 1st DCA 1973); cert. discharged, 317 So.2d 725 (Fla.1975). Thus, unless the insured could allege an independent tort such as fraud, the only relief available on a first-party claim was a cause of action for breach of contract. Butchikas v. Travelers Indem. Co., 343 So.2d 816 (Fla.1976); Rubio v. State Farm Fire & Cas. Co., 662 So.2d 956, 957 (Fla. 3d DCA 1995), review denied, 669 So.2d 252 (Fla.1996); Opperman; Allstate Ins. Co. v. Kelley, 481 So.2d 989 (Fla. 5th DCA 1986).

The Legislature addressed this issue in 1982 by the adoption of section 624.155, Florida Statutes. As our Supreme Court has indicated, “[tjhrough this statute, the Legislature created a first-party bad faith cause of action.... ” Laforet, 658 So.2d at 59. Thus, first-party bad faith causes of action now exist in Florida not because they are torts, but because they are a statutory cause of action. Accordingly, a first-party bad faith claim cannot be wedged into the statutory exception for willful torts because it is not a tort of any variety.

In summary, we hold that Citizens is immune from first-party bad faith claims pursuant to section 627.351(6)(r)l. Likewise, we hold that Citizens is not subject to bad faith liability under section 624.155(l)(b)(l), as that statute is not applicable to it. Finally, we quash the discovery order dated April 15, 2009, and remand for further proceedings not inconsistent with this opinion. Prohibition, of course, applies only to the count seeking bad faith liability.

PETITION FOR WRIT OF PROHIBITION GRANTED; ORDER QUASHED.

SAWAYA and JACOBUS, JJ., concur.

      . Citizens originally also sought common law certiorari. It abandoned this position at oral argument.

      . See § 624.401, Fla. Stat. (2007).

      . HB 7077E2 (April 26, 2007).

      .SB 2498E1, § 5 (May 1, 2007).

      . See O'Malley v. Florida Ins. Guar. Ass'n, 257 So.2d 9, 10 (Fla.1971).

      . In Jones v. Fla. Ins. Guar. Ass’n, Inc., 908 So.2d 435 (Fla.2005), the supreme court in dealing with a somewhat similar claim noted specifically that, “We do recognize, however, that no viable cause of action for bad faith may be asserted against FIGA.” Id. at 438.


source: Caselaw Access Project

author: GRIFFIN, J.

license: Public Domain

text:
    Ann R. EPPINGER, Appellant, v. Douglas J. SEALY and Prager, Sealy & Co. LLC, Appellees.
    No. 5D08-4286.
    District Court of Appeal of Florida, Fifth District.
    Dec. 18, 2009.
    T. Todd Pittenger and Kristopher Kest, of Lowndes, Drosdick, Doster, Kantor & Reed, P.A., Orlando, for Appellant.
    No Appearance for Appellee, Douglas J. Sealy.
    Carlos J. Burruezo and Juan C. Lopez-Campillo, and Ashley L. Gay, of Littler Mendelson, P.C., Orlando, Julissa Rodriguez and Kerri L. McNulty, of Greenberg & Traurig, P.A., Miami, and I. William Spivey, II, of Greenberg Traurig, P.A., Orlando, for Appellee, Prager, Sealy & Co. LLC.
   GRIFFIN, J.

Ann R. Eppinger [“Eppinger”] appeals the trial court’s non-final order granting Prager, Sealy & Co. LLC’s [“Prager Sealy”] motion to compel arbitration. Ep-pinger argues that the trial court erred by granting Prager Sealy’s motion to compel arbitration. We agree that the allegations in her complaint do not raise an arbitrable issue and reverse.

Eppinger and Douglas J. Sealy [“Sealy”] joined Prager Sealy’s predecessor in 1991, opening the company’s Orlando office and serving as managing directors. In 1993, Eppinger and Sealy married each other. Both continued their work at the company, but Eppinger decreased her workload and responsibilities with the birth of each of their two children. Ep-pinger’s and Sealy’s marriage ended in 2006 with a mediated settlement agreement [“MSA”] being incorporated into the final judgment of dissolution. Included in the MSA was a provision that Eppinger would remain an employee of Prager Sealy for a specified term. Eppinger was later terminated from Prager Sealy after Prager Sealy unsuccessfully attempted to have Eppinger enter into a Separation Agreement and General Release.

In June of 2008, Eppinger filed a five-count complaint against Sealy and Prager Sealy to enforce Sealy’s and Prager Sealy’s obligations under the MSA. Eppinger alleged that Sealy and Prager Sealy were obligated to pay her sums as provided for under paragraph 7 of the MSA:

7. Employment by Prayer, Sealy and Company:
Ms. Eppinger shall continue as an employee with Prager, Sealy & Company, LLC for a five year period commencing with the execution of this agreement, with a salary of $120,000.00 per year, payable monthly. Ms. Eppinger shall continue to be the lead banker for Villages of Lake-Sumter, Inc., or its successors and will receive 70% of all gross revenues generated from any such bond issues, payable at the same time as other bonuses are paid by the Company. Mr. Sealy guarantees that Ms. Eppinger will be paid a bonus of at least $650,000 annually regardless of whether Villages produces revenues or not. The above payments are to be made by February 15th of the succeeding year for the prior year, subject to regulatory requirements and February 15th of each year thereafter. This guarantee shall be null and void if Ms. Eppinger remarries within the five year period, but all other provisions shall remain in effect. Ms. Ep-pinger shall also enjoy health insurance benefits as provided to employees as well as participate in all other similar benefits available through Prager, Sealy & Company, LLC, with its employees.

Eppinger alleged that, even though Sealy and Prager Sealy operated under the MSA for more than one year, they failed to fully perform. Sealy told her that neither he nor Prager Sealy was required to pay her the “salary” and “bonuses” called for under the MSA because he was not, at the time he executed the MSA, authorized to bind Prager Sealy and Prager Sealy never did accept its obligations under the MSA.

Sealy answered Eppinger’s complaint and asserted affirmative defenses and counterclaims. Prager Sealy filed a motion to dismiss, to compel arbitration and to stay discovery. In its motion, Prager Sealy alleged that Eppinger executed a Form U-4 “[a]t the start of her employment in 1991, ... which requires her to arbitrate any dispute, claim or controversy that might arise” and that she subsequently executed a Predispute Arbitration Clause, which related to the Form U-4, in both 2003 and 2006.

The Form U-4 attached to the motion is entitled “UNIFORM APPLICATION FOR SECURITIES INDUSTRY REGISTRATION OR TRANSFER” and contains the following arbitration clause: “I agree to arbitrate any dispute, claim or controversy that may arise between me and my firm, or a customer, or any other person, that is required to be arbitrated under the rules, constitutions, or by-laws of the organization indicated in Item 10 as may be amended from time to time and that any arbitration award rendered against me may be entered as a judgement [sic] in any court of competent jurisdiction.” Eppinger’s signature appears on the form.

The Predispute Arbitration Clause provides:

In accordance with the NASD Conduct Rules, the following disclosure is being provided to you in connection with your Form U-4 application or Form U-4 amendment(s):
The Form U-4 contains a predispute arbitration clause. It is in item 5 on page 4 of the Form U-4. You should read that clause now. Before signing the Form U-4, you should understand the following:
(1.) You are agreeing to arbitrate any dispute, claim or controversy that may arise between you and your firm or a customer, or any other person, that is required to be arbitrated under the rules of the self-regulatory organizations with which you are registering. This means that you are giving up the right to sue a member, customer, or another associated person in court, including the right to a trial by jury, except as provided by the rules of the arbitration forum in which a claim is filed.
(2.) A claim alleging employment discrimination, including a sexual harassment claim, in violation of a statute is not required to be arbitrated under NASD rules. Such a claim may be arbitrated at the NASD only if the parties have agreed to arbitrate it, either before or after the dispute arose. The rules of other arbitration forums may be different

Sealy responded to Prager Sealy’s motion, asserting:

5. In sum, [Prager Sealy’s] Motion to Compel Arbitration is limited, by its own terms, to arbitration of claims between [Prager Sealy] and Eppinger; [Prager Sealy] has not cited or invoked an agreement to compel Sealy to arbitrate the claims Eppinger has asserted against [Prager Sealy]; and Eppinger and Sealy have committed their separable claims against one another to the jurisdiction of this Court. Accordingly, Sealy submits that [Prager Sealy’s] Motion to Compel Arbitration should be Granted, insofar as it is limited to compelling arbitration of claims Eppinger has asserted against [Prager Sealy].

Eppinger filed a memorandum in opposition to Prager Sealy’s motion. She attached a BrokerCheck Report to her memorandum showing that Eppinger held FINRA registration with Prager Sealy from May of 1993 through March of 2008. The trial court conducted a hearing and entered an order granting Prager Sealy’s motion to dismiss and compel arbitration, and to stay discovery.

Eppinger’s central argument on appeal is that her claims and the facts on which they are based as alleged in her complaint do not give rise to an arbitrable issue and that the trial court erred in granting Prager Seales motion to compel arbitration. Prager Sealy counters that, although Ep-pinger relies upon the terms of the MSA in bringing her claims, her claims are “grounded on her employment relationship with the company.” Prager Sealy contends that, under the rules of arbitration applicable to FINRA, arbitration was required because the dispute arose out of her employment or termination of employment. Therefore, the question becomes whether the rules of arbitration applicable to FINRA require arbitration of the instant dispute.

At the time the instant dispute arose, the NASD Code of Arbitration Procedure for Industry Disputes [“NASD Arbitration Code”] constituted the rules of arbitration applicable to FINRA. Section 13200 of the NASD Arbitration Code provides in pertinent part:

Required Arbitration
(a) Generally
Except as otherwise provided in the Code, a dispute must be arbitrated under the Code if the dispute arises out of the business activities of a member or an associated person and is between or among:
• Members;
• Members and Associated Persons; or
• Associated Persons.

Based upon the language of section 13200(a), the dispute between Eppinger and Prager Sealy must be arbitrated if it arose out of the “business activities” of either Eppinger or Prager Sealy. Relying upon Seifert v. U.S. Home Corp., 750 So.2d 633 (Fla.1999), Eppinger contends that the dispute did not arise out of her or Prager Sealy’s “business activities” because the allegations in her complaint do not suggest a nexus between the dispute and the agreement containing the arbitration clause, namely the Form U-4.

In Seifert> the Florida Supreme Court addressed “whether the terms of an arbitration provision in a contract for the sale and purchase of a house require[d] [a] wrongful death action to be arbitrated.” Id. at 635. The arbitration provision required arbitration of “[a]ny controversy or claim arising under or related to” the purchase and sale agreement. Id. The Florida Supreme Court analyzed “the governing principles surrounding the determination of whether a particular claim is subject to arbitration” and concluded: “As the prevailing case law illustrates, even in contracts containing broad arbitration provisions, the determination of whether a particular claim must be submitted to arbitration necessarily depends on the. existence of some nexus between the dispute and the contract containing the arbitration clause.” Id. at 638.

While there does not appear to be Florida case law directly on point, a recent California case supports application of the “nexus” requirement in this context. In Valentine Capital Asset Mgmt., Inc. v. Again, 174 Cal.App.4th 606, 94 Cal.Rptr.3d 526, 534 (2009), a California appellate court addressed the scope of “business activities” that are subject to arbitration under FINRA Rule 13200, stating:

Since there must be some limit to the scope of “business activities” subject to mandatoiy arbitration under FINRA, we must next find an appropriate means of defining the limitation. We need look no further than the words of Rule 13200 itself. The mandate to arbitrate disputes arising out of “business activities of ... an associated person,” reasonably read, must require arbitration of disputes only if they arise out of the business activities of an individual as an associated person of a FINRA member. With this interpretation, FINRA and the registered representatives under its jurisdiction are assured that arbitration will pertain to matters with some nexus to the activity actually regulated by FINRA. This is nothing more than the common sense meaning of the plain language contained in Rule 13200, and any other interpretation would wrongly strip individuals of their civil jury trial rights concerning subject matter in which FINRA maintains no regulatory interest.

Id. (emphasis in original). As Valentine suggests, a dispute arises out of “business activities” if there exists a nexus between the dispute and an activity regulated by FINRA. The allegations of Eppinger’s complaint concern whether Prager Sealy is obligated under the MSA to pay certain sums to Eppinger as a result of the dissolution of her marriage to Sealy. The dispute arises out of the agreement that obligated Prager Sealy to employ Eppinger; it does not arise out of the employment itself. The dispute does not involve activities on the part of either Eppinger or Prager Sealy that are regulated by FIN-RA. Therefore, there does not exist a nexus between the dispute and the “business activities” of Eppinger or Prager Sealy.

Prager Sealy asserts that section 13200(a) of the NASD Arbitration Code covers employment and employment termination claims. In support of its assertion, Prager Sealy cites a footnoted comment made by the SEC in relation to the consolidation of the regulatory functions of NASD and NYSE Regulation. The SEC’s comment provides in pertinent part:

[NYSE] Rule 347(a) provides that a controversy between a registered representative and a member organization “arising out of the employment or termination of employment of such registered representative” shall be arbitrated at the request of any party. These employment claims will continue to be covered by NASD DR Rule 13200(a), which requires the arbitration of disputes arising out of the “business activities” of a member or an associated person and is between or among members, members and associated persons, or associated persons. Accordingly, [NYSE] Rule 600 will be amended to provide that [NYSE] Rule 347 will apply only to claims filed before the Effective Date.

Prager Sealy also relies on In re NEXT Financial Group, Inc., 271 S.W.3d 263, 268 (Tex.2008), for the proposition that section 13200(a) covers employment and termination of employment claims for NASD members. In NEXT, the Texas Supreme Court found that a securities broker’s wrongful discharge claim was required to be arbitrated under the NASD Arbitration Code because, “although [the securities broker’s] retaliatory discharge claim [was] premised on NEXT’S allegedly illegal activities, the alleged conduct involve[d] ‘significant aspects’ of NEXT’S legitimate business activities, bringing the dispute within the scope of the NASD arbitration clause.” Id. at 269. The wrongful discharge claim was predicated upon NEXT having allegedly “fired [the securities broker] for refusing to conceal a trader’s fraudulent ‘churning’ transactions.” Id. at 265.

Although NEXT may be some authority in support of Prager Sealy’s position, it does not take them far. The Texas Supreme Court’s decision in NEXT was based upon its finding that NEXT’S “alleged conduct involve[d] ‘significant aspects’ of NEXT’S legitimate business activities, bringing the dispute within the scope of the NASD arbitration clause.” Id. at 269. This comes very close to “nexus.” In NEXT, the alleged discharge for a failure to conceal fraudulent churning related to NEXT’S regulated business activities in the securities industry. In this case, the failure to pay Eppinger certain sums under the MSA has no connection to Prager Sealy’s regulated business activities.

In Singer v. Gaines, 896 So.2d 851, 854-55 (Fla. 3d DCA 2005), the Third District Court of Appeal addressed whether a claim for fraudulent inducement presented an arbitrable issue under a prior version of the NASD Arbitration Code that explicitly provided for arbitration of claims arising out of employment or termination of employment. The appellant argued that his claim for fraudulent inducement was based on false representations made by the ap-pellees prior to his entry into the employment contract and that, as such, it fell outside the scope of the arbitration provision. Id. at 854. The Third District Court of Appeal said:

Rule 10201(a) requires that claims “arising out of the employment or termination of employment of such associated person(s)” be submitted to arbitration. This requirement does not mean that the controversy must arise from an employment contract; it simply requires that the controversy arise from employment or termination of employment. Bielfeldt v. Nims, 805 N.E.2d 415, 420 (Ind.Ct.App.2004). In determining whether a controversy arises out of employment or termination, “ ‘the proper question is whether resolution of the claim depends upon evaluation of a party’s performance either as a broker or as an employer of brokers during the time of the contractual relationship.’ ” Northwestern Mut. Life Ins. Co. v. Stinnett, 698 N.E.2d 339, 342 (Ind.Ct.App.1998) (quoting Zandford v. Prudential-Bache Secs., Inc., 112 F.3d 723, 729 (4th Cir.1997)).

Id.

Here, resolution of Eppinger’s claims does not appear to involve evaluation of either Prager Sealy’s performance as an employer of brokers or Eppinger’s performance as a broker-employee. To the contrary, Prager Sealy contends it has no contractual relationship giving rise to a duty to employ Eppinger. This is not a Form U-4 arbitrable issue.

REVERSED and REMANDED.

PALMER and JACOBUS, JJ., concur.

      . In July of 2007, NASD’s name was changed to FINRA "in connection with the consolidation of the member firm regulatory functions of NASD and NYSE Regulation." Order Granting Accelerated Approval of Proposed Rule Change and Amendment No. 1 Thereto Relating to Proposed Amendments to Rule 600, 72 Fed. Reg. 45077-02 n. 7 (Aug. 10, 2007).

      . See FINRA, Industry Professionals, Regulation, Notices, 2008, Information Notice-December 8, 2008, Continuing Application of NASD Rules and Incorporated NYSE Rules, http://www.finra.org/Industry/Regulation/ Notices/2008/P 117507.

      . NASD Code of Arbitration Procedure for Industry Disputes § 13200(a) (effective Apr. 16, 2007), available at http://finra.complinet. com/en/display/display main.html?rbid=2403&element id= 8043.

      .The language of FINRA section 13200(a) mirrors the language of NASD section 13200(a).

      . Order Granting Accelerated Approval of Proposed Rule Change and Amendment No. 1 Thereto Relating to Proposed Amendments to Rule 600, 72 Fed. Reg. 45077-02 n. 11 (Aug. 10, 2007).

      . Id.


author: PER CURIAM.

text:
    Justin K. HOUSER, Appellant, v. COUNTY OF VOLUSIA, etc., Appellee.
    No. 5D08-926.
    District Court of Appeal of Florida, Fifth District.
    Dec. 18, 2009.
    Robert N. Reynolds of Robert N. Reynolds, P.A., Winter Park, for Appellant.
    Nancye R. Jones, DeLand, for Appellee.
   PER CURIAM.

We review this case to determine if the trial court abused its discretion when it dismissed this negligence action as a sanction for dilatory behavior by Appellant’s counsel, Appellant, or both. Although the record is replete with allegations of dilatory behavior, because the trial court did not make the requisite findings of fact to support the dismissal, pursuant to Kozel v. Ostendorf, 629 So.2d 817 (Fla.1993), we are constrained to reverse and remand for further consideration.

Appellant filed a negligence action against Appellee on November 9, 2004, concerning an incident that occurred four years earlier. After Appellant failed to timely respond or lodge objections to Ap-pellee’s discovery requests, the trial court granted Appellee’s motion to compel and ordered Appellant to respond to the requests within ten days. Although Appellant obtained two extensions of time to respond to the requests, nearly a year after the court ordered a response, Appellant still had not responded fully. Appel-lee, therefore, filed a motion for order to show cause based on Appellant’s failure to comply with the order compelling discovery. Appellee acknowledged that Appellant responded to its request to produce, but alleged that he had yet to submit answers to interrogatories. It is unclear whether Appellant eventually complied as there was no hearing on the motion and the court did not enter an order to show cause.

On April 4, 2007, the trial court issued an order requiring that the parties file a joint status report within thirty days, or notice the case for trial within ten days. The parties failed to comply with the order and the trial judge issued an order to show cause why the case should not be dismissed. Appellee then filed a letter to the trial judge explaining that it had sent a proposed status report to Appellant’s counsel for approval, but never received a response. Appellee informed the court that it had no objection to dismissal.

The court held a hearing on the order to show cause, and although it did not dismiss the case, it warned that sanctions would be possible if the parties were not prepared for trial, which was scheduled to begin on December 10, 2007. The court entered an order setting the case for trial and directing the pretrial procedures. It ordered that counsel read the order as well as the Uniform Pretrial Procedures in Civil Actions and comply with both. It warned that:

Material non-compliance with this Order or the Uniform Pretrial Procedures in Civil Actions by counsel or any party will subject the offending counsel or parties to appropriate sanctions which may include, but are not limited to, contempt, dismissal, default, the striking of the pleadings, claims or defenses, the exclusion of evidence or witnesses, the assessment of fees or costs, or such other sanctions as may be appropriate.

The order required, among other things, that Appellant’s counsel submit a mediation order to the court by a date certain. It also required that each party submit witness lists, expert witness lists, and exhibit lists, and it set a deadline for discovery.

On November 13, 2007, Appellee filed a motion to dismiss, alleging that Appellant failed to comply with the order compelling discovery because Appellant still had not provided answers to the interrogatories. It also alleged that Appellant failed to comply with the court’s order requiring the submission of a joint status report. Finally, the motion asserted that Appellant violated the order setting the case for trial and directing pretrial procedures because he failed to submit a mediation report, witness list, exhibit list, or expert witness list. The court granted Appellee’s motion finding that:

As stated in the Defendant’s motion, the Plaintiff has willfully violated the orders of this Court. Although properly noticed, neither the Plaintiffs counsel nor the Plaintiff appeared at the hearing on this motion. The Plaintiff did not file any response to the motion and has not otherwise contacted this Court regarding the motion or hearing. The Plaintiff has failed to show any good cause why this case should not be dismissed for failure to comply with this Court’s previous Orders.

Appellant sought rehearing, asserting that he had not received notice of the hearing. Appellant also contended that he in fact had submitted answers to the interrogatories and would provide proof of compliance at a hearing. Furthermore, he asserted that the interrogatories “were of the garden variety type not even germane to the nature of the action,” and thus, there was no showing of prejudice. He concluded that setting a mediation date is a shared responsibility, there was no discovery to be taken in his view, and he had in fact served a witness list on Appellee.

On February 19, 2008, the trial court denied the motion for rehearing finding that “the Plaintiff never served a copy of his motion on the Court, has not requested hearing time on the motion, and has not otherwise notified the Court of the existence of his pending request for rehearing.” This appeal followed.

Before a trial court can dismiss a case with prejudice under these circumstances, it must consider all of the following factors:

1) whether the attorney’s disobedience was willful, deliberate, or contumacious, rather than an act of neglect or inexperience; 2) whether the attorney has been previously sanctioned; 3) whether the client was personally involved in the act of disobedience; 4) whether the delay prejudiced the opposing party through undue expense, loss of evidence, or in some other fashion; 5) whether the attorney offered reasonable justification for the noncompliance; and 6) whether the delay created significant problems of judicial administration.

Kozel, 629 So.2d at 818. When, as here, there is no indication that the court considered these factors because it failed to make findings addressing these factors in its order, reversal is required. Scallan v. Marriott Int’l, Inc., 995 So.2d 1066 (Fla. 5th DCA 2008).

On remand, because there is an issue about whether notice of the hearing was given and because it might be necessary to hear from Appellant, personally, to determine his degree of culpability, if any, the court should set this matter for another hearing. After considering the Kozel factors and making findings, if a sanction is appropriate, the court should consider Ko-zel’s admonition to impose the appropriate sanction, giving due consideration to the purposes for the sanction. The court should also consider whether the sanction should be directed at Appellant, his counsel, or both, depending on who is to blame for the allegedly dilatory behavior. See Kozel, 629 So.2d at 818 (sanction should be directed toward person responsible for delay; court should avoid punishing litigant for misconduct of counsel).

REVERSED AND REMANDED.

GRIFFIN and TORPY, JJ., concur.

MONACO, C.J., dissents, without opinion.

      . Appellant is represented by the same attorney on this appeal as he was below. The attorney has not helped his cause here. Even after we granted four extensions of time, totaling seventy-two extra days, within which to file an initial brief, counsel still failed to timely file his Initial Brief, necessitating that we issue an order to show cause. Only then did Appellant file his Initial Brief. After we granted three more extensions of time for serving the reply brief and directed the filing of the brief by a date certain, Appellant filed the brief three days late.

      . There is nothing in the record indicating that Appellant served a witness list on Appel-lee. Furthermore, Appellant admits that he did not serve the witness list until after the case had been dismissed, and thus, after the deadline set forth in the order directing pretrial procedure. The case was dismissed on December 7, 2007, and the witness list was to be served at least sixty days prior to the docket sounding scheduled for December 5, 2007. Furthermore, trial was set to commence on December 10, 2007, so Appellant would have served his witness list, at the most, three days prior to trial.


text:
    Joshua David BROWN, Petitioner, v. STATE of Florida, Respondent.
    No. 2D09-559.
    District Court of Appeal of Florida, Second District.
    Dec. 18, 2009.
    Joshua David Brown, pro se.
    Bill McCollum, Attorney General, Tallahassee, and Sonya Roebuck Horbelt, Assistant Attorney General, Tampa, for Respondent.
   PER CURIAM.

Joshua David Brown, in his petition filed in accordance with Florida Rule of Appellate Procedure 9.141(c), alleges that his appellate counsel was ineffective when he failed to argue that two of Brown’s three convictions for lewd or lascivious offenses in violation of section 800.04, Florida Statutes (2005), are prohibited by double jeopardy considerations. We agree that appellate counsel was ineffective in failing to raise the double jeopardy issue, and we conclude that Brown is entitled to a belated direct appeal on this issue only.

Brown was charged in a three-count information with one count of lewd or lascivious battery in violation of section 800.04(4)(a) and two counts of lewd or lascivious molestation in violation of section 800.04(5)(a). Following a jury trial, Brown was convicted on count one of the lesser-included offense of attempted lewd or lascivious battery. He was convicted as charged on counts two and three. The judgments and sentences were affirmed on direct appeal. Brown v. State, 974 So.2d 392 (Fla. 2d DCA 2007) (table decision).

The victim testified at trial that she was in Brown’s swimming pool when he stripped down to his boxer shorts and got into the pool with her. Brown pushed the victim against the side of the pool and placed his fingers inside her vagina. After the victim tried to push him off, Brown took the victim’s hand and placed it around his penis, moving her hand up and down. When the victim attempted to get out of the pool, Brown pulled her back in, turned her on her back, moved her bathing suit aside, and placed his mouth on her sexual organ. This whole episode, which ended when the victim kicked Brown in the stomach, lasted about five minutes. The alleged oral contact was the basis of the charge in count one of the information. The digital penetration and the placement of the victim’s hand on Brown’s penis were charged in counts two and three, respectively.

At the time of the direct appeal, this case was governed by our decision in Gisi v. State, 848 So.2d 1278 (Fla. 2d DCA 2003). Gisi was charged with twelve violations of section 800.04, Florida Statutes (1997). Each of the four separate episodes of sexual activity contained a violation of section 800.04(2) based on penile penetration or union with the vagina of the victim. Each episode also contained two violations of section 800.04(1) based on the union of Gisi’s mouth with the sexual organ of the victim and on Gisi’s digital penetration of the victim’s vagina. Id. at 1280. Gisi alleged that appellate counsel was ineffective in failing to argue that two out of the three convictions in each of the four sexual episodes were barred by double jeopardy considerations. Relying on Morman v. State, 811 So.2d 714 (Fla. 2d DCA 2002), we concluded that each sexual episode occurred in the same temporal and spatial zone (the four episodes all took place in Gisi’s motel room) and consisted of a single continuous course of conduct. Gisi, 848 So.2d at 1280. We noted that in Morman, this court determined that “ ‘the various lewd and lascivious acts were not sufficiently discrete for them to be deemed separate offenses within each episode.’ ” Id. (quoting Morman, 811 So.2d at 717). Accordingly, we held that the failure of Gisi’s counsel to argue the double jeopardy claim constituted deficient performance that undermined confidence in the correctness and fairness of the result of the appeal. We granted Gisi a new appeal on this issue among others. Id. at 1281-82.

In the present case, as in Gisi, Brown committed three lewd or lascivious acts in a single episode. Under the rationale of Gisi, which was the law at the time of the direct appeal, the acts were not sufficiently discrete for them to be deemed separate offenses within the episode. Thus we conclude that appellate counsel’s performance was deficient when he failed to argue that two of Brown’s convictions were prohibited by double jeopardy considerations. However, section 800.04 was extensively redrafted in 1999 and Brown, unlike Gisi, was charged under the amended statute. Subsequent to our decision in Broum, the supreme court in State v. Meshell, 2 So.3d 132 (Fla.2009), considered whether two convictions for lewd and lascivious battery under section 800.04(4)(a), Florida Statutes (2006), that were committed in a single criminal episode were violative of the prohibition against double jeopardy. The court noted that “the same sexual acts proscribed in the sexual battery statute are also proscribed in the lewd and lascivious battery statute, under which Meshell was charged.” Meshell, 2 So.3d at 136. The court further noted that separate convictions for distinct acts of sexual battery that are committed in the course of a single episode are not prohibited by double jeopardy considerations. Id. at 135-36. Accordingly, the supreme court determined that “[bjecause the definitions of the proscribed sexual acts are identical, the same double jeopardy analysis for the sexual battery also applies to [subsection 800.04(4)(a) of] the lewd and lascivious battery statute.” Id. at 136. The court then held that Meshell’s two convictions for violations of section 800.04(4)(a) were not prohibited by double jeopardy considerations. Id. The court, however, specifically stated that its review of the double jeopardy issue was limited only to section 800.04(4). Id. at 134.

Although this court must apply the law in effect at the time of the appeal to determine whether counsel’s performance was deficient, we must apply the current law to determine whether Brown is entitled to relief on the issue raised. See Green v. State, 18 So.3d 656 (Fla. 2d DCA 2009). As noted, Brown was convicted of one count of attempted lewd and lascivious battery pursuant to section 800.04(4)(a) and two counts of lewd and lascivious molestation pursuant to section 800.04(5)(a). The reasoning of Meshell does not apply to convictions under section 800.04(5)(a) because that section prohibits lewd and lascivious touching and proscribes sexual acts that are different from the acts that are proscribed by the sexual battery statute. Because the supreme court has not addressed the double jeopardy issue in the context of section 800.04(5)(a), we conclude that Brown is entitled to legal representation to argue his double jeopardy claim. Accordingly, we award Brown a new appeal on this claim only.

We therefore grant the petition with instructions to the trial court to, within thirty days from the date of the mandate in this case, appoint an appellate attorney to file a brief limited to the issue outlined above. Appellate counsel shall, within thirty days from the date of the appointment, file a new notice of appeal and reference this opinion in the notice of appeal.

Petition granted.

ALTENBERND, WHATLEY, and WALLACE, JJ., Concur.

      . Section 800.04 was extensively redrafted in 1999. Ch. 99-201, § 6, at 1187-89, Laws of Fla.

      . There is no difference between the 2005 and 2006 versions of section 800.04(4)(a).

      . "The ineffectiveness of appellate counsel cannot be based upon the failure of counsel to assert a theory of law which was not at the time of the appeal fully articulated or established in the law.” Alvord v. State, 396 So.2d 184, 191 (Fla.1981).


text:
    DEPARTMENT OF REVENUE, on behalf of Sharon M. SIMMONS, Appellant, v. Bryant WARDLAW, Jr., Appellee.
    No. 4D09-2206.
    District Court of Appeal of Florida, Fourth District.
    Dec. 23, 2009.

      Bill McCollum, Attorney General, Tallahassee, and Toni C. Bernstein, Assistant Attorney General, Tallahassee, for appellant.
    No appearance for appellee.
   PER CURIAM.

The Department of Revenue, on behalf of Sharon M. Simmons, appeals the trial court’s non-final order granting Biyant Wardlaw, Jr.’s motion for temporary injunction and ordering that the Department’s administrative support order be abated for thirty days. Because the trial court lacked jurisdiction, we reverse.

On January 15, 2009, the Department of Revenue entered a Final Order of Paternity and Administrative Support, which required Wardlaw to pay child support. On February 18, 2009, Wardlaw appealed the final order to the First District Court of Appeal. Wardlaw failed to move for a stay either in the lower tribunal or in the first district.

Thereafter, on April 22, 2009, Wardlaw filed a Complaint to Vacate Order of Child Support in the Broward County Circuit Court and requested the court vacate the Department of Revenue’s final order. The same day, Wardlaw also filed a Motion for Temporary Injunction in that court, requesting the court grant “an immediate temporary injunction against [the Department of Revenue] prohibiting [the Department] from making any further deductions from [Wardlaw’s] pay until the Court can hear and decide his Complaint.” On May 4, 2009, the trial court heard the motion for temporary injunction, treated it as a motion to stay, and abated the Department’s administrative order of support for thirty days. The Department appealed.

The Department argues that the circuit court lacked jurisdiction to abate the administrative support order pending a hearing on Wardlaw’s complaint to vacate the support order. Whether the trial court had jurisdiction is a legal question subject to de novo review. See Amerus Life Ins. Co. v. Lait, 2 So.3d 203, 205 (Fla.2009).

“|W]hen an appeal is perfected, the cause becomes one for the cognizance of the appellate court, and for that court alone. The authority of the lower court is terminated, and it cannot proceed in the cause, at least as to the subject-matter of the appeal, until the appeal is heard and determined.” Thursby v. Stewart, 103 Fla. 990, 138 So. 742, 751 (1931). Further, if a matter is on appeal, “the test to determine loss of jurisdiction is not whether the trial court is proceeding in matters related to the final judgment, but rather the proper test is whether the trial court is proceeding in a matter which affects the subject matter on appeal.” Casavan v. Land O’Lakes Realty, Inc. of Leesburg, 526 So.2d 215, 215-16 (Fla. 5th DCA 1988) (citing Bernstein v. Berrin, 516 So.2d 1042, 1043 (Fla. 2d DCA 1987)) (emphasis in original).

Here, Wardlaw sent a letter to the Department “requestpng] a hearing, right to an appeal and modification” regarding the Final Order of Paternity and Administrative Support. The Department then sent a letter to the first district “acknowledging] receipt of the Notice of Appeal.” Following this correspondence, Wardlaw filed the complaint in the trial court to vacate the Department’s final order. This complaint related to the same subject matter as the appeal — the Department’s final order. Because the trial court’s proceeding on this complaint would affect the subject matter of the appeal in the first district, proper jurisdiction lay with the first district, not the trial court.

Accordingly, we reverse the order of the circuit court that granted the motion for temporary injunction and abated the administrative order.

Reversed.

GROSS, C.J., TAYLOR and STEVENSON, JJ., concur.

      . On May 21, 2009, the first district dismissed Wardlaw’s appeal because he failed to pay the proper filing fee or obtain an order of insolvency.


author: WARNER, J.

text:
    NOVA SOUTHEASTERN UNIVERSITY, INC., a Florida Corporation, Petitioner, v. Patricia JACOBSON, Respondent.
    No. 4D09-683.
    District Court of Appeal of Florida, Fourth District.
    Dec. 23, 2009.

      Richard A. Beauchamp, Tanya M. Reed and Alison F. Smith of Panza, Maurer & Maynard, P.A., Fort Lauderdale, for petitioner.
    Chris Kleppin of Glasser, Boreth & Kleppin, Plantation, for respondent.
   WARNER, J.

Petitioner, Nova Southeastern University, Inc., seeks review of an order denying its motion for protective order asserting an attorney-client privilege claim as to a letter faxed from Nova’s counsel to Nova, which respondent read and copied after discovering it in the fax machine. We grant the petition, concluding that the court did not apply the correct law in evaluating the privilege claim. We remand for further proceedings on the issue.

Respondent, Patricia Jacobson, was an Associate Director at the University School Middle School of Nova. Nova terminated her employment in 2005 for failure to comply with an earlier written final warning and for negligence and inefficiency, as well as other grounds. Jacobson sued Nova in 2007, alleging that she was terminated in a discriminatory manner on the basis of a disability in violation of the Florida Civil Rights Act, section 760.01, Florida Statutes, and that her termination was retaliatory and thus violative of the Florida Whistleblower Act, section 448.101, Florida Statutes. She alleged that Nova had commenced a course of conduct to create a record sufficient to document its desire to terminate her.

Jacobson was being deposed on February 13, 2008, when she testified that in June 2005 she was at the fax machine at the middle school receiving some papers on an insurance claim for her son. Mixed in with some insurance company papers was a letter from Nova’s law firm to the head master of the school, the human resources department and the director of the middle school. She read the letter, which stated that the university “did not have enough performance issues to fire me, and that it would have to be a business decision whether I was going to remain an employee of NSU.” Counsel for Nova said at the deposition that he was recording his objection to the letter as attorney-client privilege, noting that “it was obviously communicated accidentally.” No letter was produced at the time of the deposition.

About ten days later during depositions of Dr. Chermak and Dr. Blinder, two persons copied on the attorney-client letter, each was asked about the letter. Counsel objected to any questions about it on the grounds of attorney-client privilege.

Nova moved for a protective order in May 2008 to prevent Jacobson from referring to the letter, because it was protected by attorney-client privilege. At the time of the filing of the motion, Nova did not know that Jacobson had retained a copy of it. Because of various reasons, including the recusal of the original trial judge, tropical storm Fay, and illness of counsel, the motion was not heard until January 2009. It does not appear that the letter was referenced or used in the proceedings subsequent to the filing of the motion for protective order.

At the hearing, Nova filed affidavits from each of the persons to whom the letter was sent, indicating that they did not intend for third persons to see the communication. Further underscoring the letter’s confidentiality, counsel produced a cover sheet which had accompanied the faxed letter, which stated that the attached communication was protected by attorney-client privilege. Counsel told the court that he did not know whether Jacobson had made a copy of the letter, but sought to prohibit her from using its contents in any manner. If Jacobson had retained a copy, he demanded that it be returned to Nova.

Jacobson’s attorney admitted that he had a copy of the letter provided to him by Jacobson. He maintained that he had used the letter since “day one” to construct his strategy in the case. He claimed it would be unfair to prevent them from using it at this juncture because it showed that Nova was being untruthful about its reasons for terminating Jacobson.

The court applied the five-factor test outlined in General Motors Corp. v. McGee, 837 So.2d 1010, 1040 (Fla. 4th DCA 2002), to determine whether inadvertent disclosure of privileged material waives the privilege. Those criteria are: 1) the reasonableness of the precautions taken to prevent inadvertent disclosure; 2) the number of inadvertent disclosures; 3) the extent of the disclosure; 4) the delay in measures taken to rectify the inadvertent disclosures; and 5) whether overriding interests of justice will be served by relieving the party of its error.

After hearing argument, the court addressed the five factors. It thought that the reasonableness of the precautions against disclosure, “is a bit gray there. Where it is sent to a public fax machine with simply a notice on the cover letter becomes a little bit gray.” Otherwise, the court found it to be protected by the attorney-client privilege. The court noted that only one disclosure had occurred. Where the court had the most difficult time, which it stated was “two-fold huge problems,” was in the delay from the deposition to the filing of the motion and the delay between the filing of the motion and the hearing. The court stated that Nova had unduly delayed taking corrective measures, because it had not made a motion to the court immediately after Jacobson mentioned the letter at the deposition, even though Nova’s attorney pointed out that he had objected to every reference to the letter at the depositions, and that the delay in securing a hearing on the motions was due to several factors. As to the overriding interests of justice, the court was impressed that Jacobson had built her entire case strategy around the letter to prove that the school had made a determination to fire Jacobson when it had no grounds to do so and merely developed a “paper trail” after being told by its lawyers that it had insufficient grounds to terminate her. The trial court ultimately entered a written order determining that the letter was not protected by attorney-client privilege, denying the motion.

Certiorari lies from an order denying the return of privileged documents inadvertently disclosed. See Abamar Hous. & Dev., Inc. v. Lisa Daly Lady Decor, Inc., 698 So.2d 276, 278-79 (Fla. 3d DCA 1997). Permitting the opposing party to use such documents may result in prejudice which cannot be fully rectified upon appeal from a final judgment. See id.; see also Gen. Accident Ins. Co. v. Borg-Warner Acceptance Corp., 483 So.2d 505 (Fla. 4th DCA 1986).

As we said in BNP Paribas v. Wynne, 967 So.2d 1065, 1067 (Fla. 4th DCA 2007), “[t]he attorney-client privilege is the oldest confidential communication at common law and ... is ‘traditionally deemed worthy of maximum legal protection.’ ” (citation omitted). The privilege is codified and protects confidential communications:

(c) A communication between lawyer and client is “confidential” if it is not intended to be disclosed to third persons other than:
(1) Those to whom disclosure is in furtherance of the rendition of legal services to the client.
(2) Those reasonably necessary for the transmission of the communication.

§ 90.502(l)(e), Fla. Stat. (2008). The privilege belongs to the client, see Neu v. Miami Herald Pub. Co., 462 So.2d 821, 825 (Fla.1985), and may be claimed by the client or the lawyer on behalf of the client.

Florida courts do not apply a strict rule that counsel’s inadvertent production alone waives the attorney-client privilege. Instead, courts consider the following factors in determining whether the privilege has been waived:

(1) the reasonableness of the precautions taken to prevent inadvertent disclosure in view of the extent of the document production;
(2) the number of inadvertent disclosures;
(3) the extent of the disclosure;
(4) any delay and measures taken to rectify the disclosures; and
(5) whether the overriding interests of justice would be served by relieving a party of its error.

Abamar, 698 So.2d at 278-79. This “relevant circumstances test” is the “better-reasoned rule,” in contrast to the rule of some jurisdictions in which mere disclosure is a strict and automatic waiver of privilege. See id.; see also Lightbourne v. McCollum, 969 So.2d 326, 333 (Fla.2007) (citing Abamar with approval); McGee, 837 So.2d at 1040-41 (applying relevant circumstances test).

The relevant circumstances analysis is most often applied in cases where privileged documents have been sent to opposing counsel as part of discovery. See, e.g., Abamar, 698 So.2d at 278-79; McGee, 837 So.2d at 1040-41. However, the line of cases represented by Abamar and McGee involved one party intentionally sending the documents to a third person (the lawyer for the other party) but unintentionally including privileged material. In this case, the lawyer sent the letter to the client, not a third person. That letter was intercepted by a third person to whom it was not addressed.

Closer to these facts are those cases involving overheard conversations, where the client knew or should have known that the conversation was overheard by a third person. See Mobley v. State, 409 So.2d 1031 (Fla.1982). In such cases, the courts have held that where the communication is made in the presence of others, it does not evince an intent to keep the conversation confidential, and the privilege is lost. See also Proffitt v. State, 315 So.2d 461 (Fla.1975), aff'd by Proffitt v. Florida, 428 U.S. 242, 96 S.Ct. 2960, 49 L.Ed.2d 913 (1976); Black v. State, 920 So.2d 668 (Fla. 5th DCA 2006). Nevertheless, the fact determination in the overheard conversation cases is similar to the first step of the Abamar/McGee inquiry regarding the reasonableness of the precautions to prevent inadvertent disclosure. Therefore, despite the factual difference, we apply the relevant circumstances test.

The court did not make a determination regarding the first factor of the reasonable precautions to prevent inadvertent disclosure. The court found the sending by fax machine a “gray area.” The fax machine to which the letter was sent was a machine used by at least some of the teaching staff. In the depositions, one person testified that anyone could use the machine, but one of the letter’s recipients testified that teachers were supposed to have the secretary do the faxing for them. We have found no case deciding this issue. In Chase v. City of Portsmouth, 236 F.R.D. 263, 268 (E.D.Va.2006), in determining whether reasonable precautions were taken to maintain confidentiality of an attorney-client communication, the court noted that although fax and e-mail messages are entitled to protection, the fact that the client’s husband and daughter had access to the fax machine “shows that third parties could potentially intei’cept such communications when they are not sent to a properly monitored machine.” The court did not, however, deny the protection to the privileged communication on that ground. Moreover, we are not sure of the persuasiveness of this comment for Florida attorney-client privilege law because, contrary to Florida law, “[t]he attorney-client privilege is not favored in the federal courts.Id. at 267.

In its application of the five-factor test, the trial court considered that Nova’s delay in filing its motion for protective order and obtaining a hearing on the issue constituted the most important factor showing a waiver by inadvertent disclosure. The court opined that Nova waited too long in filing its motion for protective order some three months after Jacobson’s deposition. Even more important to the court was the time from the filing of the motion to the actual hearing on it. However, the court completely ignored the fact that Nova’s counsel had objected to every question asked regarding the letter and asserted attorney-client privilege.

Where the party who inadvertently produced the documents objects or demands return of the documents as soon as the disclosure is discovered, the party has not unduly delayed seeking measures to rectify the inadvertent disclosure. Aba-ntar is factually similar to this case. There, attorney-client privileged documents were inadvertently included in response to a request to produce. The attorney for Abamar, the petitioner, promptly requested return of the documents when their disclosure was discovered. The respondents refused. The respondents introduced the documents and attached them as exhibits at several depositions. The petitioners then filed a motion directing the return of the documents on the grounds of attorney-client privilege. The trial court denied their return. The Third District granted certiorari and ordered the return of the documents. Applying the five-part test, the court concluded that the petitioners were not negligent in attempting to protect the privileged documents. As soon as the attorney discovered that he had inadvertently sent privileged documents, he asked for their return. Whenever the documents were referred to at depositions, an objection was lodged.

Thus, Abamar found that raising the objection at the earliest opportunity was sufficient to show no delay. Just as in this case, a motion for protective order was not filed when the disclosure was first discovered but after several depositions where the documents were referred to. Similarly, in Jenney v. Airdata Wiman, Inc., 846 So.2d 664 (Fla. 2d DCA 2003), the court held that where an objection was interposed in depositions as soon as the confidential nature of the communication became apparent, the attorney-client privilege was not waived. See also United States v. Pepper’s Steel & Alloys, Inc., 742 F.Supp. 641 (S.D.Fla.1990) (raising objection at deposition as to disclosed documents preserved issue). These cases show that it is the assertion of the privilege at the earliest time through objection or motion which is the important measure in evaluating efforts to rectify the disclosure. It is not the delay in securing hearing time. In failing to recognize that the timely assertion of an objection constituted an appropriate measure to rectify the inadvertent disclosure, the court departed from the essential requirements of law.

Furthermore, Nova’s trial counsel did not know that Jacobson had a copy of the letter at the time the depositions proceeded. Nova’s attorney could not have moved to exclude what he did not know was in possession of his opponent. In fact, Jacobson did not reveal that she had a copy of the letter until after the motion for protective order was filed. Nova’s timely objection showed that it did not delay in taking appropriate measures to prevent further use of the letter’s contents. And when Nova discovered at the hearing that Jacobson had a copy of the letter, Nova asked for its return.

The court also considered the fifth factor of the overriding interests of justice in concluding that it would be unfair to prevent use of the letter, because Jacobson’s attorney had built his entire case around the privileged communication. While it may be that the attorney developed the case strategy based upon the letter’s contents, it is not also true that the letter itself is essential to pursuing that strategy. Nothing alleged in the complaint need only be proved by use of the letter’s contents. What Jacobson’s attorney wishes to use the letter for is to prove improper motive and impeach the credibility of several of Nova’s witnesses. As the court said in Jenney, permitting waiver of the attorney-client privilege simply because a party’s credibility could be impeached with use of those communications “would essentially create a ‘credibility exception’ to the attorney-client privilege that would swallow the entire rule.” Id. at 668. We agree with the Second District that this is an improper reason to waive the privilege. See also Cuillo v. Cuillo, 621 So.2d 460 (Fla. 4th DCA 1993).

The overriding interests of justice support returning the letter to Nova, if it is determined that the attorney-client privilege was not waived by the method of its delivery by fax. Jacobson’s attorney clearly had to know that the letter was intended to be a confidential communication in that it provided legal analysis regarding the Nova/Jacobson employment relationship. The Rules of Professional Responsibility require that he notify the other attorney of this inadvertent disclosure. See Fla. R. Prof. Conduct 44.4(b) (“A lawyer who receives a document relating to the representation of the lawyer’s client and knows or reasonably should know that the document was inadvertently sent shall promptly notify the sender.”). Instead of following the rule, this attorney held onto the letter for years. The interests of justice require that the Rules of Professional Responsibility be honored.

Because the trial court departed from the essential requirements of law in evaluating the relevance test factors for waiver of attorney-client privilege based upon inadvertent disclosure, we remand for the trial court to conduct a new hearing on the issue.

At the hearing, the court should reanalyze all five factors, consistent with our rulings in this opinion. In particular, the court must make further findings regarding the first factor, namely what measures were taken to protect against inadvertent disclosure. The inquiry must focus on whether the client knew or should have known that the letter sent by the attorney would be viewed by third parties. Whether the use of the fax machine to send the communication negates a claim that the matter was sent in confidence requires a fact-intensive determination. Such an inquiry might include, but would not be limited to: whether the client authorized the attorney to use that fax machine to send confidential letters; the extent to which the fax machine was used generally by the staff without assistance from the secretaries; the extent to which the intended recipients knew that the fax was used by other personnel; and finally whether the letter was accompanied by an attorney-client privilege notice, a fact which Jacobson denies in her affidavit but is undermined by other documents produced in the case.

For the foregoing reasons, we grant the petition and quash the order under review, with directions to conduct further proceedings consistent with this opinion.

STEVENSON and MAY, JJ., concur.

      . The lawyer representing Nova at the deposition is not the same lawyer as the one who authored the opinion letter.

      . Nova has also sought the disqualification of Jacobson's counsel. Such relief may be appropriate, see General Accident Insurance Company v. Borg-Warner Acceptance Corporation, 483 So.2d 505 (Fla. 4th DCA 1986), depending upon the results of the analysis required by this opinion.


author: STEVENSON, J.

text:
    LLOYDS UNDERWRITERS AT LONDON, Appellant, v. KEYSTONE EQUIPMENT FINANCE CORP., Ricardo Milan d/b/a Milan Transportation, Aida Milan, and Martin-Argote Insurance Group, Inc., Appellees.
    Nos. 4D08-2520, 4D09-111.
    District Court of Appeal of Florida, Fourth District.
    Dec. 23, 2009.

      Richard A. Sherman, Sr., of the Law Offices of Richard A. Sherman, P.A., Fort Lauderdale, and Gregg J. Pomeroy of Gregg J. Pomeroy & Associates, P.A., Deerfield Beach, for appellant.
    David B. Pakula of David B. Pakula, P.A., Pembroke Pines, and Chad M. Mu-ney, Plantation, for appellee Ricardo Milan d/b/a Milan Transportation.
   STEVENSON, J.

Lloyds Underwriters at London (“Lloyds”) challenges a final summary judgment finding the company estopped from relying upon a policy provision that would have provided a ground for denial of the insured’s claim. Lloyds contends that the summary judgment was improper because genuine issues of material fact remain and the application of the doctrine of estoppel resulted in an impermissible creation or extension of coverage. We reject both arguments and affirm the summary judgment.

The Summary Judgment Proceedings Below

Through its agent, Martin-Argote Insurance Group, LLC, Ricardo Milan d/b/a Milan Transportation obtained an insurance policy from Lloyds providing liability coverage on a commercial tractor-trailer. The policy’s effective date was November 30, 2004. The tractor-trailer was stolen on December 18, 2004. It is undisputed that the policy in question provided coverage for loss due to theft. Nonetheless, Lloyds denied the claim, relying upon the insurance policy’s “Garaging or Secured Yard Warranty” (“garaging warranty”). The garaging warranty required the insured to “warrant” that the vehicle would be kept in a closed garage, in an enclosed or 24-hour guarded lot, or parked adjacent to the insured’s residence and provided a breach of such warranty “shall result in denial of claim or any rights of recovery hereunder.”

Following Lloyds’ denial of the claim, Milan brought a claim for breach of the insurance contract. Milan later moved for summary judgment on the claim, arguing that Lloyds was estopped from relying, or had waived its right to rely, upon any breach of the garaging warranty to justify the denial of its insured’s claim. Milan’s primary argument was that this estoppel arose because Lloyds and/or International Brokerage and Surplus Lines (IBSL), the surplus lines agent through whom the insurance had been issued, had failed to comply with the notice and delivery requirements of Florida Statutes sections 627.421 and 626.922, and the insured had not otherwise been provided notice of the garaging warranty. Section 627.421 requires delivery of the insurance policy not more than sixty days after effectuation of coverage. See § 627.421(1), Fla. Stat. (2008). Section 626.922 requires the surplus lines agent to “promptly issue and deliver to the insured” either the policy or, if the policy is not “then available, a certificate, cover note, or other confirmation of insurance” showing, among other things, “coverage, conditions, and term of the insurance.” § 626.922(1), Fla. Stat. Section 626.922(4) provides that “[a] copy of the policy or cover note or confirmation of insurance shall be delivered to the insured within 60 days after the effectuation of coverage.” In support of his motion for summary judgment, Milan filed an affidavit, wherein the insured swore that the loss had occurred on December 18, 2004, that he had not received a copy of the binder or policy prior to the loss, and that he had not otherwise received written or verbal notice of the garaging warranty. Milan also filed a copy of the binder issued by the surplus lines agent, bearing a date of January 2, 2005, and the Lloyds’ policy, listing February 9, 2005, as the date printed on the schedules of equipment and drivers.

In its written response to the summary judgment motion, Lloyds did not challenge Milan’s assertions that he was not provided a copy of the binder or policy until after the loss and, instead, expressly acknowledged the binder was not delivered until after the loss. Lloyds also did not challenge in its written response Milan’s claim that he was not otherwise provided notice of the garaging warranty. Instead, Lloyds argued that it could not be estopped from relying upon the garaging warranty to deny the claim as a consequence of any failure to comply with sections 627.421 and 626.922 because Florida law expressly provides that the doctrines of estoppel and waiver may not be applied to create or extend insurance coverage. The trial court granted summary judgment in favor of the insured. We affirm and write solely to address our dispositive conclusion that the record evidence was sufficient to demonstrate that, as a matter of law, the insurer was estopped from resorting to the garaging warranty to deny the claim.

Provisions of Forfeiture versus Provisions of Coverage

On appeal, Lloyds argues that, regardless of any failure to comply with sections 627.421 and 626.922, or the failure to provide the insured with the binder, the policy or other notice of the garaging warranty prior to the loss, the summary judgment was entered in error because Florida law holds that the doctrines of estoppel and waiver cannot be applied to create or extend insurance coverage. For purposes of application of the doctrines of estoppel and waiver, Florida law draws a distinction between provisions of forfeiture and provisions of coverage. Thus, “while an insurer may be estopped by its conduct from seeking a Forfeiture of a policy, the insurer’s Coverage or restrictions on the Coverage cannot be extended by the doctrine of waiver and estoppel.” Six L’s Packing Co. v. Fla. Farm Bureau Mut. Ins. Co., 268 So.2d 560, 563 (Fla. 4th DCA 1972), aff'd, 276 So.2d 37 (Fla.1973); see also AIU Ins. Co. v. Block Marina Inv., Inc., 544 So.2d 998, 1000 (Fla.1989); Cummins v. Allstate Indem. Co., 732 So.2d 380, 382 (Fla. 4th DCA 1999). The rationale behind the rule is that “ ‘the company should not be required by waiver and estoppel to pay a loss for which it charged no premium.’ ” Unijax, Inc. v. Factory Ins. Ass’n, 328 So.2d 448, 455 (Fla. 1st DCA 1976) (quoting W.C. Crais, III, Comment Note: Doctrine of estoppel or waiver as available to bring within coverage of insurance policy risks not covered by its terms or expressly excluded therefrom, 1 A.L.R.3d 1139, 1144 (1965)).

The distinction between a provision of forfeiture and one of coverage has been said to turn upon whether the loss was covered by the contract in the first instance and is asserted to have been lost or nullified as a consequence of the actions of the insured; if this is the case, then the provision is one of forfeiture. See Peters v. Great Am. Ins. Co., N. Y, 177 F.2d 773, 779 (4th Cir.1949) (“ ‘If by the contract the insured [sic — insurer] assumed a stated risk primarily, and provided for a forfeiture upon the happening of certain conditions, its right to claim such forfeiture may be waived; but, where it expressly and specifically declined to assume such risk, it cannot by its conduct be held to have waived itself into making a contract which had not been entered into.’ ” (quoting Keistler Co. v. Aetna Ins. Co., Hartford, Conn., 124 S.C. 32, 117 S.E. 70, 75 (1923))); Royal Maccabees Life Ins. Co. v. James, 146 S.W.3d 340, 350 (Tex.Ct.App.2004) (“ ‘Whereas waiver and estoppel may operate to avoid forfeiture of a policy and may prevent an insurance company from avoiding payment because of the failure on the part of the insured to comply with some requirement of the policy, waiver and es-toppel cannot enlarge the risks covered by a policy (quoting Minn. Mut. Life Ins. Co. v. Morse, 487 S.W.2d 317, 320 (Tex.1972))).

Generally, “clauses that are inclusionary or exclusionary, that outline the scope of coverage, or that delineate the dollar amount of liability” are described as pertaining to coverage, while “forfeiture clauses often include provisions such as filing a timely notice of claim and submitting proofs of loss, and are invoked to avoid liability for existing coverage.” Creveling v. Gov’t Employees Ins. Co., 376 Md. 72, 828 A.2d 229, 244-45 (2003). Despite Lloyds’ argument to the contrary, we hold that the garaging warranty in the instant case is a provision of forfeiture — not one of coverage. Loss due to theft was plainly covered by the policy and a risk for which a premium was paid. The garaging warranty provides for the loss, or forfeiture, of that coverage should the insured fail to behave in a particular manner and comply with its provisions concerning the storage of the tractor-trailer.

AIU Insurance Co. v. Block Manna Investment, Inc., 544 So.2d 998 (Fla.1989), a case upon which Lloyds heavily relies, is not dispositive. There, AIU issued a commercial general liability policy to Block Marina with a marina operator’s legal liability endorsement that would have provided coverage for the incident in question. Prior to the loss, this endorsement was eliminated from the policy. Nonetheless, the insurer agreed to provide a defense subject to its reservation of the right to assert a coverage defense as a consequence of the endorsement’s elimination. Two weeks before trial, AIU refused to provide further defense and, in so doing, violated section 627.426(2)(a), which provides that an insurer cannot deny coverage based on a coverage defense unless at least thirty days prior to trial the insurer provides written notice to its insured of its refusal to defend. Our supreme court held that the insurer’s violation of the statute’s notice requirements could not estop the insurer from denying coverage, reiterating the long-standing rule that “while the doctrine of estoppel may be used to prevent a forfeiture of insurance coverage, the doctrine may not be used to create or extend coverage.” Id. at 1000. Allowing estoppel to be applied in AIU would have created or extended coverage for an endorsement that was no longer a part of the policy. In the instant case, payment for the loss of the tractor-trailer due to theft was clearly within the bounds of the policy and application of the doctrine of estoppel would not serve to create or extend coverage.

Existence of Disputed Issues of Material Fact

Having concluded that the garaging warranty is a forfeiture provision and thus one that Lloyds may be estopped from resorting to in order to deny its insured’s claim, the issue becomes whether the record evidence before the trial court on summary judgment established the elements of estoppel as a matter of law. “The essential elements of estoppel are ‘(1) a representation as to a material fact that is contrary to a later-asserted position, (2) reliance on that representation, and (3) a change in position detrimental to the party claiming estoppel, caused by the representation and reliance thereon.’ ” Curci Village Condo. Ass’n v. Maria, 14 So.3d 1175, 1177 (Fla. 4th DCA 2009) (quoting State v. Harris, 881 So.2d 1079, 1084 (Fla.2004)). The “representation” upon which an estop-pel may be predicated may consist of words, conduct, or, if there is a duty to speak, silence. See Head v. Lane, 495 So.2d 821, 824 (Fla. 4th DCA 1986); see also Thomas v. Dickinson, 158 Fla. 819, 30 So.2d 382, 384 (1947) (“[I]n order to work an ‘estoppel,’ ‘silence[]’ must be under such circumstances that there are both a specific opportunity and a real apparent duty to speak.”).

We have no trouble finding that, here, the insurer had a duty to speak and to inform the insured of the garaging warranty prior to any attempt on its part to resort to this provision to deny the insured’s claim under the policy. Insurance contracts are unusual in that, at the onset of the contractual relationship, one of the contracting parties, i.e., the insured, has not yet had the opportunity to review the terms of the insurance contract. On the other hand, as the drafter of the contract, the insurer is in a unique position to know the contents and requirements of the insurance policy. For this reason, logic and fairness dictate that while an insurer is free to require its insured to warrant or promise to behave in a particular manner, the insurer has a duty to inform the insured of such warranty or promise before the insurer can insist upon compliance with the same and impose the penalty of a forfeiture of all coverage for the insured’s noncompliance. The undisputed evidence at the summary judgment hearing established that the insurer failed to make the garaging warranty known to its insured. The first element of estoppel is thus present as the insurer’s silence in the face of a duty to speak is contrary to its subsequent insistence upon its insured’s compliance with the garaging warranty.

This, then, brings us to the second and third elements of estoppel, reliance and a detrimental change in position. Of course, there can be no reliance or detrimental change in position if, prior to the loss, Milan had knowledge of the garaging warranty. In support of his motion for summary judgment, Milan filed an affidavit attesting that he had previously been insured by Canal Insurance, which had no provision like the garaging warranty in the Lloyds’ policy; that he was unaware of the garaging warranty prior to the loss; and that he would have parked the tractor-trailer in compliance with the warranty had he known of the same. Despite Lloyds’ argument to the contrary, there was no competent evidence offered to rebut Milan’s claim of lack of knowledge.

Among the documents filed by Milan was “Lloyds Amended Response to Third Party Plaintiffs First Interrogatories,” which included an assertion that Martin-Argote was aware of the garaging warranty and that Martin-Argote informed the insured of the same prior to the loss. This amended response was signed only by Lloyds’ counsel. The day before the summary judgment hearing, Lloyds sought to file a set of responses signed by Jeff Washburn, who investigated the loss and is employed by a company that selves as a third-party administrator for Lloyds. Lloyds insists that these answers to interrogatories are sufficient to create an issue of fact on the issue of whether the insured had notice of the garaging warranty prior to the loss. Lloyds is incorrect. Rule 1.510 specifically requires that the evidence offered in support of, and in opposition to, a motion for summary judgment must be admissible in evidence. See Fla. R. Civ. P. 1.510(c). Plainly, neither Lloyds’ counsel nor Washburn had personal knowledge of whether Martin-Argote informed the insured of the garaging warranty, and their hearsay statements on the matter would not be admissible in evidence and could not be relied upon to create an issue of fact and avoid summary judgment. See Topping v. Hotel George V, 268 So.2d 388, 389 (Fla. 2d DCA 1972) (recognizing interrogatories sworn to only by counsel, not the appropriate agents or employees with knowledge of the facts, could not support entry of summary judgment); see also Fla. R. Civ. P. 1.340(b) (providing that answers to interrogatories may be used at trial to the extent permitted by the rules of evidence).

We have considered the other arguments raised on appeal, but find no error. Accordingly, we hold that the trial court was correct in granting summary judgment in favor of Milan since Lloyds’ failure to provide its insured a binder, a copy of the policy, or any other notice of the garaging warranty prior to the loss is alone sufficient to estop it from resorting to a breach of the garaging warranty to deny the claim.

Affmned.

GERBER, J., and BROWN, LUCY CHERNOW, Associate Judge, concur.

      . Where insurance coverage is not available through "authorized” insurers, Florida's “Surplus Lines Law" is intended to provide Florida's citizens "access” to such insurance through unauthorized insurers via qualified and licensed "surplus lines agents.” § 626.913(2), Fla. Stat. (2008). " ‘Surplus lines agent’ means an individual licensed as provided in this part to handle the placement of insurance coverages with unauthorized insurers and to place such coverages with authorized insurers as to which the licensee is not licensed as an agent.” § 626.914(1), Fla. Stat. (2008).

      . This circumstance is typically addressed by the issuance of a binder to the insured. Section 627.420, Florida Statutes (2009), provides that binders "shall be deemed to include all the usual terms of the policy as to which the binder was given together with such applicable endorsements as are designated in the binder, except as superseded by the clear and express terms of the binder.” The undisputed record evidence established that no binder was issued to the insured until January 2, 2005, more than a month after the effectuation of coverage and a couple of weeks after the loss. The garaging warranty was not included or described in the binder.