First District Court of Appeal Reverses Prior Ruling in Secure Door Windstorm Mitigation Discounts Case

Oct 23, 2013


On October 11, 2013, the First District Court of Appeal reversed the previous ruling in the case of Office of Insurance Regulation v. Secure Enterprises, LLC, which addressed the validity of forms used to afford windstorm mitigation discounts to Florida homeowners’ insurance policyholders. 

Section 627.0629(1), Florida Statutes requires homeowners’ insurers to provide windstorm mitigation discounts to insureds who install or implement fixtures and construction techniques that meet Florida Building Code minimum requirements.  In the underlying case, the Administrative Law Judge (“ALJ”) held that the Florida Office of Insurance Regulation’s (“OIR”) adoption of Rules 69O-170.017 and 69O-170.0155, Florida Administrative Code (collectively referred to as “Rules”), which incorporated Form OIR-B1-1655 (Notice of Premium Discounts for Hurricane Mitigation) and Form OIR-B1-1699 (Windstorm Mitigation Discounts; Single Family Residences) constituted an invalid exercise of delegated legislative authority.  The OIR appealed the ALJ’s ruling.

Secure Enterprises, LLC (“Secure”), the Appellee in the case, manufactures and distributes the Secure Door® residential garage door bracing system.  The OIR argued that the ALJ erred in ruling that Secure had standing to initiate the Rule challenge.  The First District Court agreed. 

Pursuant to section 120.56, Florida Statutes, “Any person substantially affected by a rule or proposed rule may seek an administrative determination of the invalidity of the rule on the ground that the rule is an invalid exercise of delegated legislative authority.”  The Court held that Secure lacked standing to challenge the Rule because it failed to show it had a “real or immediate” injury in fact, and fell within the zone of interest to be protected or regulated by section 627.0629, Florida Statutes, or the pertinent Rules.

Citing other rulings in which parties were found to have established an injury in fact, the Court distinguished this case by stating that Secure is claiming economic harm from the absence of an insurance credit that never existed.  The Court acknowledges that “Had this been a situation where OIR eliminated an existing insurance credit for garage doors, Appellee’s [Secure] injury in fact argument would be much stronger.”  Yet, the Court ultimately held that Secure had no economic protected right that had been harmed by the Rules. 

Further, the Court held that the Legislature expressly provided that the intent of section 627.0629, Florida Statutes was to protect consumers who chose to strengthen their homes and insurers by lessening their financial exposure.  The statute was not intend to increase manufacturer’s sales; thus, Secure failed to satisfy the zone of interest element to establish that it had standing to challenge the Rules.

The Court included a footnote at the end of its opinion, noting that if Secure had standing in this case, it would have reversed the previous ruling on the merits because “the rules and forms at issue do not contravene or modify section 627.0629(1) and, therefore do not constitute an invalid exercise of delegated legislative authority.”  Judge Osterhaus concurred in the result for the reason outlined in the majority opinion’s footnote.

A copy of the October 11, 2013 ruling is attached for review.


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