Full Opinion

FIRST DISTRICT COURT OF APPEAL STATE OF FLORIDA _____________________________ No. 1D20-2595 _____________________________ COMPASS POINT CONDOMINIUM ASSOCIATION, INC., Appellant, v. FLORIDA OFFICE OF INSURANCE REGULATION, Appellee. _____________________________ On Appeal from a Final Consent Order of the Florida Office of Insurance Regulation. July 16, 2021 BILBREY, J. Compass Point Condominium Association, Inc., appeals the consent order entered by the Florida Office of Insurance Regulation (OIR) and Citizens Property Insurance Corporation. Compass Point was not a party to the consent order but asserts it has standing to appeal because it filed a rate complaint authorized by section 627.371(1), Florida Statutes (2018), and because of the substantial effect of the consent order on Compass Point’s economic interests. Compass Point argues that it is entitled to judicial review of the consent order as a party who is adversely affected by that final agency action. See § 120.68(1), Fla. Stat. (2019). We disagree and dismiss this appeal. Under these circumstances, Compass Point is not a party, as defined by section 120.52(13), Florida Statutes (2019), entitled to judicial review of the consent order. Compass Point held commercial residential windstorm insurance policies issued by Citizens from 2003 to 2012. The roof construction of Compass Point’s property qualified it for loss mitigation windstorm insurance premium credits under section 627.0629, Florida Statutes. In 2009, Compass Point sought and received a premium adjustment from Citizens for the loss mitigation credits for policy year 2008 to 2009. Thereafter, Compass Point received the loss mitigation credits towards its windstorm premiums until 2012 when Compass Point stopped carrying windstorm coverage through Citizens. Under the procedure provided by section 627.371, Compass Point requested that Citizens review the premium rates it charged Compass Point for the years 2003 to 2009. In March 2019, after Citizens failed to provide satisfactory relief, Compass Point filed its written complaint with OIR. See § 627.371(1), Fla. Stat. Compass Point asserted that Citizens’ rate filings for those years violated statutory requirements, including section 627.0629, and that Citizens had failed to apply the loss mitigation credits to Compass Point’s premiums for those years. OIR found Compass Point’s complaint sufficient under the statute. OIR then notified Citizens in writing “in what manner and to what extent noncompliance is alleged to exist” and invited Citizens to correct the noncompliance by providing Compass Point an appropriate premium adjustment by December 9, 2019. See § 627.371(2). OIR also informed Citizens of its right to “file a petition for administrative hearing regarding this letter.” Citizens timely filed its petition for administrative hearing under sections 120.569 and 120.57(1), Florida Statutes, and rule 28-106.201, Florida Administrative Code. As the complainant who “would be aggrieved if the violation is proven,” under section 627.371(1), Compass Point was mentioned several times in both OIR’s notice to Citizens and Citizens’ petition for administrative hearing. However, Compass Point was not formally served with either document or informed of any right to other participation in OIR’s administrative regulatory proceeding against Citizens. 2 In December 2019, before Citizens’ petition for formal hearing was transmitted to the Division of Administrative Hearings for assignment of an administrative law judge as provided by section 120.569(2), OIR and Citizens engaged in settlement discussions. See § 120.57(4), Fla. Stat. (2019). Compass Point was not provided notice or invited to participate in the settlement discussions. OIR and Citizens reached a settlement, and OIR issued the consent order in August 2020. Based on documents submitted by Citizens during the settlement discussions, OIR found that in 2009, Compass Point successfully applied to Citizens for loss mitigation credits for its 2008 to 2009 premium. OIR noted the ten-year time span between that proceeding and Compass Point’s rate complaint filed with OIR in 2019. Under the terms of the consent order, Citizens dismissed its request for administrative hearing, OIR dismissed its notice of noncompliance brought under section 627.371, and OIR found that Citizens had shown compliance with the rate filing requirements under section 627.0629. OIR also found that Citizens had not been directed to pay Compass Point retroactive mitigation premium credits under any previous consent order. The consent order concluded with OIR’s notice that the regulatory proceeding initiated by Compass Point’s complaint under section 627.371 was closed. This court has recognized the remedy for policyholders, provided by section 627.371, “to seek a probable-cause determination as to the legality of rates applied with respect to insurance afforded to them.” Fair Ins. Rates in Monroe, Inc. v. Office of Ins. Regulation, 244 So. 3d 396, 403 (Fla. 1st DCA 2018). The remedy under section 627.371 is a prerequisite to judicial action in circuit court by a policyholder involving insurance premium rates. Asseff v. Citizens Prop. Ins., 159 So. 3d 327 (Fla. 1st DCA 2015) (affirming dismissal of declaratory relief action for plaintiff’s failure to avail herself of the remedy under § 627.371); Serchay v. State Farm Fla. Ins. Co., 25 So. 3d 652 (Fla. 4th DCA 2010) (same). Here, unlike the plaintiffs in Asseff and Serchay, 3 Compass Point did exhaust the remedy provided by section 627.371(1). * The purpose of the insurance Rating Law is “to protect policyholders and the public against the adverse effects of excessive, inadequate, or unfairly discriminatory insurance rates, and to authorize the office to regulate such rates.” § 627.031(2), Fla. Stat. (2018). The OIR has “the powers and authority expressly conferred upon it by” the Insurance Code and must “enforce the provisions of this code . . . as provided by law.” § 624.307, Fla. Stat. (2018). When OIR has reason to believe an insurance rate is excessive, it may “take the necessary action to cause such rate to comply with the laws of this state.” § 627.031(2). The penalties available when OIR finds that an insurer has violated the Rating Law and failed to comply with an order issued by OIR, are “an administrative fine” and suspension of “the license or authority” of the insurer. § 627.381, Fla. Stat. (2018). * Compass Point’s reliance on Progressive Express Insurance Co. v. Reaume, 937 So. 2d 1120 (Fla. 2d DCA 2006), and State Farm Mutual Automotive v. Gibbons, 860 So. 2d 1050 (Fla. 5th DCA 2003), for its status as a party is unavailing. Both opinions granted certiorari relief to the insurers and directed dismissal of the policyholders’ civil lawsuits for relief related to rates paid. But both plaintiffs failed to first seek relief under section 627.371. Compass Point’s position that this statutory prerequisite to a civil action qualifies Compass Point as a party when OIR settles with the insurer and issues a consent order exceeds the terms of section 627.371. The gratuitous remarks in Gibbons that “the exclusive remedy” to challenge the automobile premium rate in that case was administrative review under section 627.371, and that once “administrative review is completed, the exclusive jurisdiction for judicial review” was in the District Court of Appeal, addressed matters not necessarily involved in those cases or essential to the court’s determination on certiorari review. Gibbons, 860 So. 2d at 1052. The descriptions of full, formal administrative proceedings and appeals in Gibbons and quoted in Reaume were non-binding obiter dicta, “pure and simple.” See Doherty v. Brown, 14 So. 3d 1266, 1267 (Fla. 1st DCA 2009). 4 The public purpose of OIR’s rate regulation is the protection of insurance consumers. § 627.031(2). But OIR enforcement actions determine the substantial interests of the regulated insurers in the ability to do business in this state. Any adverse financial effect of the consent order entered here upon the former insured, Compass Point, does not qualify Compass Point as a “party who is adversely affected by” the consent order with standing to appeal. § 120.68(1), Fla. Stat. Adverse financial effect of final agency action is not enough to entitle the entity so affected to judicial appellate review. The entity must also be a “party” to the agency action. See Louis Del Favero Orchids, Inc. v. Fla. Dep’t of Health, 290 So. 3d 165, 168 (Fla. 1st DCA 2020) (holding that company’s financial interests were not sufficient to confer standing to administrative party status to appeal joint settlement agreement and resulting dismissals; company never appeared as party in licensing action). Here, Compass Point’s economic interest is merely a collateral effect of the consent order and does not qualify Compass Point as a “party” to the administrative regulatory action by OIR against Citizens, as defined by section 120.52(13)(a) or (b). A complaint filed by an “aggrieved person” under section 627.371 does not make the person a party whose substantial interests are determined when OIR settles an administrative regulatory action against the license of the insurer. Compass Point’s status as the complainant is like the patient complainant in Stolar v. Florida Department of Health, 298 So. 3d 1205 (Fla. 3d DCA 2020). There, after Stolar filed a complaint with the regulating agency about a licensed podiatrist, the agency investigated but found no probable cause to pursue disciplinary action. Id. at 1206. Stolar appealed the agency’s final action, but the appeal was dismissed because the substantive interest at stake in the administrative action was the podiatrist’s license to practice. Id. at 1207. Like Compass Point here, Stolar was thus not a “party” whose substantive interests were being determined in the administrative proceeding. Id. Informal dispositions including settlements and consent orders are recognized under section 120.57(4), “[u]nless precluded by law.” No provision in the Rating Law in sections 627.011 to 627.381, Florida Statutes, prohibits OIR from settling a rate 5 compliance proceeding with a regulated insurer without the participation or approval of a complainant under section 627.371. While the complaining policyholder’s complaint might lead to further regulatory action by OIR under section 627.371 and could result in an order by OIR requiring the insurer to adjust a premium to the financial benefit of the person aggrieved, section 627.371 does not afford the complainant the procedural process due a “party,” as defined by section 120.52(13), to any ensuing administrative regulatory proceeding or settlement of such proceeding. Compass Point fails to show that its substantial interests were being determined in OIR’s regulatory proceeding against Citizens and the settlement of that matter. Although Compass Point’s complaint filed under section 627.371 prompted an investigation by OIR and preliminary administrative action, Compass Point was not a party adversely affected by final agency action entitled to judicial review of the consent order entered by OIR and Citizens. See § 120.68(1). For these reasons, this appeal is DISMISSED. OSTERHAUS, J., concurs; TANENBAUM, J., concurs with opinion. _____________________________ Not final until disposition of any timely and authorized motion under Fla. R. App. P. 9.330 or 9.331. _____________________________ TANENBAUM, J., concurring. A district court has jurisdiction to directly review administrative action only to the extent “prescribed by general law.” Art. V, § 4(b)(2), Fla. Const. In other words, if the Legislature does not expressly provide for our direct review of an agency action, we do not have jurisdiction to review that action in an appeal from the agency. According to the Legislature, only a “party who is adversely affected by final agency action” can seek this type of 6 direct review. § 120.68(1), Fla. Stat. (emphasis supplied). If the appellant here was not a party to the administrative proceeding that produced the order to be reviewed, then we do not have jurisdiction to review it. Simple as that. As it turns out, there is no ambiguity here. While the appellant was mentioned in connection with the administrative action initiated by the Office of Insurance Regulation (“OIR”) against Citizens Property Insurance Corporation, the appellant most certainly was not a party. The Legislature specifically tells us who a “party” is under the Administrative Procedure Act. See § 120.52(13), Fla. Stat. (defining the term “party” as used throughout chapter 120). In pertinent part, for a person to be a “party” entitled to seek judicial review under section 120.68(1), a person must be (1) “[s]pecifically named” in the administrative proceeding as someone whose “substantial interests are being determined” therein; (2) a person otherwise entitled to participate in the proceeding “and who makes an appearance as a party”; or (3) anyone else permitted to intervene or participate as a party. Id. (13)(a)–(c). I agree with the upshot of the main opinion. An administrative proceeding pursuant to section 627.371 is in essence an enforcement action by the OIR against an insurer, conducted as part of its responsibility to regulate rates for the protection of consumers. In any administrative enforcement or disciplinary action, a complainant may be affected in some indirect way by the outcome, but only the target of that action could be a party, because it is the one “specifically named” in such an action as the person whose “substantial interests are being determined.” See § 120.52(13)(a), Fla. Stat.; cf. Stolar v. Fla. Dep’t of Health, 298 So. 3d 1205 (Fla. 3d DCA 2020) (using close treatment of APA’s definition of “party” to reach similar conclusion regarding a complainant who initiated disciplinary proceeding against a podiatrist). In a proceeding pursuant to section 627.371, those targets could include only the insurer and an organization involved in rating, advising, or joint underwriting or joint reinsurance. See § 627.371(2), (3), Fla. Stat. Because the appellant was not (and could not be) the target of OIR’s proceeding under section 627.371, and because the appellant did not appear or participate in the proceeding as a party, it is not a person expressly permitted by the 7 Legislature to seek our direct review of the resulting consent order. For this straightforward reason, we lack jurisdiction. See Art. V, § (b)(2), Fla. Const. I in turn agree that we should dismiss the appeal. _____________________________ Jeremy C. Sahn of Becker & Poliakoff, P.A., Fort Lauderdale, for Appellant. Michael G. Lawrence, Jr., Chief Legal Counsel, Office of Financial Regulation, Tallahassee, for Appellee. 8