The opinion
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
CMR CONSTRUCTION AND ROOFING,
LLC,
Plaintiff,
v. Case No. 2:20-cv-00416-JLB-NPM
AMERICAN CAPITAL ASSURANCE
CORPORATION,
Defendant.
/
ORDER
Under Federal Rules of Civil Procedure 12(b)(6) and 12(f)(2), Defendant
American Capital Assurance Corporation (“AmCap”) moves to: (1) dismiss Count IX
of Plaintiff CMR Construction and Roofing LLC’s (“CMR”) complaint for violation of
the Florida Deceptive and Unfair Trade Practices Act (“FDUTPA”), Fla. Stat. §§
501.201–501.23 (2020); and (2) strike CMR’s requests for attorneys’ fees in Counts I
through VIII of the complaint. (Doc. 9.) CMR requests leave to address the
attorneys’ fees issue but opposes dismissal of Count IX. (Doc. 14.) The Court agrees
with AmCap that Count IX must be dismissed with prejudice because AmCap is
exempt from FDUTPA liability. Accordingly, AmCap’s motion is GRANTED.
BACKGROUND
CMR executed separate agreements with four condominium associations in
Lee County to repair damage the associations’ buildings sustained from Hurricane
Irma. (Doc. 1 at ¶¶ 1, 16.) In exchange, CMR would become the payee for any
benefits under the associations’ property insurance policies. (Id. at ¶ 20.) AmCap
was the insurer for all four associations. (Id. at ¶ 9.) After CMR had already begun
work, AmCap retained a competitor contractor to make the same repairs. (Id. at ¶
25.) Counts I–VII of CMR’s complaint are for tortious interference, and the
wherefore clause of each count requests attorneys’ fees. In Count IX of the
complaint, CMR claims that AmCap violated FDUTPA by: (1) interfering in the
associations’ agreements with CMR, (2) engaging in unfair settlement practices, (3)
coercing or intimidating the associations into breaching their agreements with
CMR, and (4) unlawfully acting as a “construction manager” without the license
Florida law requires. (Id. at ¶¶ 107a–107e.)
AmCap moves to dismiss Count IX, arguing it is statutorily exempt from
FDUTPA liability. (Doc. 9 at 5–7); Fla. Stat. 501.212 (2020). Specifically, AmCap
argues that it is exempt from FDUTPA because it is an insurance company
regulated by the administrative agencies listed in sections 501.211(4)(a) and (4)(d).
AmCap also moves to strike CMR’s requests for attorneys’ fees in Counts I–VIII
because there is no legal basis to award attorneys’ fees for tortious interference.
(Doc. 9 at 12.) CMR requests leave to amend the complaint and address the fee
issue, but it also argues that Count IX should not be dismissed because AmCap does
not qualify for the statutory exemption. (Doc. 14 at 4–13, 19.)
LEGAL STANDARD
“At the motion to dismiss stage, all well-pleaded facts are accepted as true,
and the reasonable inferences therefrom are construed in the light most favorable to
the plaintiff.” Bryant v. Avado Brands, Inc., 187 F.3d 1271, 1274 n.1 (11th Cir.
1999) (citing Hawthorne v. Mac Adjustment, Inc., 140 F.3d 1367, 1370 (11th
Cir.1998)). A complaint must provide “a short and plain statement of the claim
showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). Under this
standard, the complaint “must contain sufficient factual matter, accepted as true, to
‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
A court “may strike from a pleading an insufficient defense or any redundant,
immaterial, impertinent, or scandalous matter.” Fed. R. Civ. P. 12(f). A motion to
strike “is a drastic remedy to be resorted to only when required for the purposes of
justice” and “should be granted only when the pleading to be stricken has no
possible relation to the controversy.” Augustus v. Bd. of Pub. Instruction, 306 F.2d
862, 868 (5th Cir. 1962) (quoting Brown & Williamson Tobacco Corp. v. United
States, 201 F.2d 819, 822 (6th Cir. 1953)).
DISCUSSION
I. Count IX Must be Dismissed Because, as CMR concedes, AmCap is
regulated under the laws administered by the Department of
Financial Services.
“The express legislative purpose of FDUTPA is to protect individual
consumers and certain defined business activities from deceptive, unfair, or
unconscionable methods of business competition and trade practice.” Diamond
Aircraft Indus., Inc. v. Horowitch, 107 So. 3d 362, 367 (Fla. 2013). To achieve this
purpose, FDUTPA provides a civil remedy to consumers who have been aggrieved
by unlawful trade practices. See Fla. Stat. § 501.211 (2020). But the plain
language of FDUPTA also excludes certain persons and activities from civil liability.
At issue in this case is section 501.212(4), Florida Statutes, which states:
This part does not apply to: . . .
(4) Any person or activity regulated under laws administered by:
(a) The Office of Insurance Regulation of the Financial Services
Commission;
(b) Banks, credit unions, and savings and loan associations regulated
by the Office of Financial Regulation of the Financial Services
Commission;
(c) Banks, credit unions, and savings and loan associations regulated
by federal agencies; or
(d) Any person or activity regulated under the laws administered by
the former Department of Insurance which are now administered by
the Department of Financial Services.
(Emphasis added.)
Section 501.212(4) states that “[a]ny person or activity” regulated under laws
administered by certain entities is not covered by FDUTPA. (Emphasis added.)
Generally, “the use of a disjunctive in a statute indicates alternatives and requires
that those alternatives be treated separately.” Brown v. Budget Rent-A-Car Sys.,
Inc., 119 F.3d 922, 924 (11th Cir. 1997) (quoting Quindlen v. Prudential Ins. Co. of
Am., 482 F.2d 876, 878 (5th Cir. 1973)). The disjunctive “or” in section 501.212(4)
indicates that there are two separate and distinct exclusions from liability under
FDUTPA—either “persons” regulated under laws administered by certain
administrative agencies, or “activities” regulated under the same.
AmCap argues that it is exempt from FDUTPA because it is an insurance
company regulated by the administrative agencies listed in sections 501.211(4)(a)
and (4)(d). CMR responds that the applicability of section 501.211(4) depends on
two questions. As CMR explains:
The first question is whether [AmCap] is an insurance company that is
regulated by [the Department of Financial Services]. Generally, the
answer is yes. Then, the Court must resolve questions about the
applicability of the FDUTPA exemption by looking to the activity
which is the subject of the lawsuit, and whether the activity is subject
to the regulatory authority of the agency.
(Doc. 14 at 4) (emphasis added). In other words, CMR concedes that AmCap is a
“person” that is “regulated under the laws administered by . . . the Department of
Financial Services.” § 501.211(4)(d). But, in CMR’s view, this is not enough;
AmCap must also be engaged in an “activity” covered by section 501.211(4).
The Court disagrees with CMR’s reading because it is not consistent with the
text of the statute. “When statutory text is unambiguous, this Court must apply
that language as written.” Stansell v. Revolutionary Armed Forces of Colom., 704
F.3d 910, 915 (11th Cir. 2013) (citing Albernaz v. United States, 450 U.S. 333, 336
(1981)). “Indeed, a statute's plain language controls unless it is inescapably
ambiguous.” Id. (internal quotations and citation omitted).
The unambiguous text of section 501.212(4) covers both “person[s]” or
“activit[ies]” regulated under laws administered by certain administrative agencies.
The exemptions enumerated in the statute apply to any “person or activity,” not any
person and activity. CMR concedes that AmCap—an insurance company—is a
“person” regulated by “the former Department of Insurance which are now
administered by the Department of Financial Services.” § 501.212(4)(d). This
concession necessarily means that AmCap is not subject to FDUTPA, and therefore
Count IX of CMR’s complaint must be dismissed.
The Court’s reading of the statute is also supported by how other exceptions
listed in section 501.212(4) are treated. For example, in Regions Bank v. Legal
Outsource PA, this Court noted that there was “some ambiguity in regard to
whether being regulated by a federal agency is sufficient in and of itself to be
exempt under [section] 501.212(4)(c) or if, in addition to being federally regulated,
the activity at issue must be subject to the federal regulatory authority.” 2:14-cv-
476-FtM-29MRM, 2015 WL 7777516, at *5 (M.D. Fla. Dec. 3, 2015). But after
analyzing the relevant case law, the Court concluded that “[t]he majority of Florida
courts take the former position.” Id.
The Sixth Circuit recently agreed with the Court’s view in an unpublished
opinion that applied Florida law. See Nino v. Flagstar Bank, FSB, 766 F. App'x
199, 202 (6th Cir. 2019) (“‘By its express terms,’ the FDUTPA does not apply to
federally regulated banks, regardless of the activity at issue.” (quoting Wilson v.
EverBank, N.A., 77 F. Supp. 3d 1202, 1221 (S.D. Fla. 2015))). The Court sees no
textual or logical reason why sections 501.212(4)(a) or (4)(d) would not work the
same way.
CMR insists that its two-step approach is supported by a bevy of federal
decisions applying Florida law. (Doc. 14 at 4.) These decisions all rely on a single
opinion by the Florida First District Court of Appeal: W.S. Badcock Corp. v. Myers,
696 So. 2d 776 (Fla. 1st DCA 1996). After reviewing Myers, however, it is wholly
distinguishable from the facts here.
In Myers, two plaintiffs brought a class action under FDUTPA against the
W.S. Badcock Corporation (“Badcock”), a well-known furniture retailer. Id. at 777–
78. The crux of plaintiffs’ claims was that Badcock charged them a seven-dollar
“non-filing fee” in connection with purchases of furniture that were financed by
Badcock itself. Id. at 780. Badcock represented that the fee would help it purchase
“non-filing insurance” to protect it from losses resulting from failure to file a
financing statement (and thereby perfect its security interest in the financed
furniture). Id. at 781. But Badcock never needed a financing statement—and
therefore never needed insurance—because its purchase money security interest
was automatically perfected. Id. And ninety percent of the “premiums” that
Badcock paid to its insurer under its policy were remitted back to Badcock as
“losses.” Id. The plaintiffs claimed that Badcock’s seven-dollar fee was a deceptive
and unfair trade practice under FDUTPA. Id. at 780. In turn, Badcock argued that
it was subject to the exemption in section 501.212(4)(d) because “the conduct at
issue involves insurance,” and FDUTPA “does not apply to activity regulated by the
Department of Insurance.” Id. at 779 (emphasis added).
Under this framing of the issue, the First District stated, “To resolve the
question, we must determine whether the service provided to Badcock by [its
insurance company] constituted insurance, subject to the regulatory authority of the
Department of Insurance.” Id. at 782. Ultimately, after analyzing several factors
enumerated in Florida case law, the First DCA concluded that the activity at issue
was not “insurance,” and therefore Badcock was not covered by the exemption in
section 501.212(4)(d). But the Myers court never addressed whether Badcock was a
“person” subject to the statutory exemption—likely because it was unnecessary or
Badcock never argued it. Indeed, it seems rather obvious that Badcock could not
also qualify as a “person” subject to the exemption because Badcock is a furniture
retailer, not an insurance company.
Later, in another case that also did not involve an insurance company as a
defendant, the Eleventh Circuit cited Myers for the following proposition:
The express language of Fla. Stat. § 501.212(4)(a) creates a specific
exemption from suit under FDUPTA for “[a]ny person or activity
regulated under laws administered by ... [t]he Office of Insurance
Regulation of the Financial Services Commission.” Florida courts
resolve questions about the applicability of this provision by looking to
the activity which is the subject of the lawsuit, and whether that
activity is subject to the regulatory authority of the Office of Insurance
Regulation.
State Farm Mut. Auto. Ins. Co. v. Physicians Inj. Care Ctr., Inc., 427 F. App'x 714,
723 (11th Cir. 2011) (citing Myers, 696 So.2d at 782–83), rev'd in part sub nom.
State Farm Mut. Auto. Ins. Co. v. Williams, 824 F.3d 1311 (11th Cir. 2014). But
this unpublished Eleventh Circuit case (which was later partially reversed on other
grounds), did not involve a “person” that could have potentially been covered by the
exception—the defendant was an auto accident clinic that allegedly billed an
insurance company for sham treatments. Id. at 717. Thus, the applicability of the
exception again turned on the “activity,” not the “person.”
In this case, it is undisputed that AmCap is an insurance company that is
regulated by the Department of Financial Services. (Doc. 14 at 4.) Therefore,
AmCap is a “person” covered by section 501.212(4)(d). And while CMR claims that
there are factual issues to be resolved about the nature of AmCap’s activity, it has
already given away the game by conceding that AmCap is covered by section
501.212(4)(d)’s exemption. Under the plain and unambiguous language of the
statute, Nino, and Regions Bank, no further analysis is necessary.
In sum, for this Court to interpret section 501.214 as CMR wishes, it would
have to rewrite section 501.212(4) by striking the “persons or” from the phrase
“persons or activity.” That way, the statute would only apply to “activity” regulated
by the enumerated agencies. The Court declines CMR’s invitation. Rewriting
statutes is the Florida Legislature’s job, not this Court’s.
II. The Requests for Attorneys’ Fees in Counts I through VIII are
Stricken Without Prejudice for CMR to Amend.
AmCap also moves to strike CMR’s requests for attorneys’ fees in Counts I
through VIII of the complaint because there is no basis to justify attorneys’ fees for
common-law claims of tortious interference. (Doc. 9 at 12.) Because CMR requests
leave to amend the complaint and address this issue, the Court grants AmCap’s
motion to strike without prejudice. (Doc. 14 at 19.)
For the above reasons, it is ORDERED:
1. AmCap’s motion to dismiss Count IX of the complaint and motion to
strike (Doc. 9) is GRANTED.
2. Count IX of the complaint is thus DISMISSED WITH PREJUDICE.
3. CMR’s requests for attorneys’ fees under Counts I—-VIII are
STRICKEN without prejudice for CMR to amend no later than
February 16, 2021.
ORDERED in Fort Myers, on February 2, 2021.
JOHN L. BADALAMENTI
UNITED STATES DISTRICT JUDGE
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