06-005105RP Chicago Title Insurance Company, Fidelity National Title Insurance Company, Security Union Title Insurance Company, Ticor Title Insurance Company And Ticor Title Insurance Company Of Florida vs. Office Of Insurance Regulation And The Financial Services Commission Status: Closed DOAH Final Order on Monday, June 25, 2007.

Summary: Petitioners consented to dismissal of their petition based on Respondent`s representations that no final public hearing has been conducted and that Petitioners would have an opportunity to challenge the proposed rule when a final hearing takes place.

Case No. 06-5105RP

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CHICAGO TITLE INSURANCE ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

COMPANY, FIDELITY NATIONAL

TITLE INSURANCE COMPANY, FINAL ORDER OF DISMISSAL

SECURITY UNION TITLE INSURANCE

COMPANY, TICOR TITLE INSURANCE

COMPANY AND TICOR TITLE

INSURANCE COMPANY OF FLORIDA,

Petitioners,

vs.

OFFICE OF INSURANCE

REGULATION AND THE

FINANCIAL SERVICES COMMISSION,

Respondent.

This case is before the undersigned on Respondent's Motion

to Dismiss for Lack of Subject Matter Jurisdiction, filed June 7,

2007, and Petitioners' Consent to Dismissal of Proceeding Based

on Representations Contained in Respondent's Motion to Dismiss

for Lack of Jurisdiction. Also pending is Respondent's Motion

for Reconsideration of the Order On Pending Motions Dated May 25,

2007, filed June 1, 2007. The matter was considered by Lisa

Shearer Nelson, Administrative Law Judge.

APPEARANCES

For Petitioners: Joy M. Ryan, Esquire

Miriam O. Victorian, Esquire

Blank, Meenan, and Dunphy, P.A.

204 South Monroe Street

Tallahassee, Florida 32301

Kathryn Baxter, Esquire

Todd L. Padnos, Esquire

LeBoef, Lamb, Greene & MacRae, LLP

One Embarcadero Center, Suite 400

San Francisco, California 94111-3639

For Respondent: S. Marc Herskovitz, Esquire

Office of Insurance Regulation

Department of Financial Services

612 Larson Building

200 East Gaines Street

Tallahassee, Florida 32399-0333

STATEMENT OF THE ISSUE

Whether proposed Rule 69O-186.013 is an invalid exercise of

legislatively delegated authority as defined in Section

120.52(8), Florida Statutes.

PRELIMINARY STATEMENT

This case originated with the filing of a Petition to

Determine Invalidity of Proposed Rule on December 15, 2006,

challenging proposed Rule 69O-186.013. The case was assigned to

the undersigned on December 19, 2006, and that same day, the

matter was scheduled for hearing January 18, 2007.

On January 10, 2007, the Respondent filed a Motion for

Continuance, asserting that the Department intended to publish a

Notice of Change with respect to the proposed rule, which could

address Petitioners' objections in their entirety or change the

scope of issues to be presented for hearing. Petitioners did not

object to the motion and the case was rescheduled for hearing on

May 7, 2007, in order to accommodate both the publication of any

changes and the conduct of any hearings or workshops on those

changes.

On March 9, 2007, Petitioners filed a Motion for

Continuance, asserting that the Department had not published any

Notice of Change, and requesting that the case be continued until

after August 7, 2007. After a telephone conference call on the

motion, the hearing scheduled for May 7, 2007, was canceled and

the case was rescheduled for June 27, 2007.

On March 16, 2007, a Motion to Appear Pro Hac Vice was

filed, asking that out-of-state counsel be permitted to appear

along with local counsel on behalf of the Petitioners. On

May 11, 2007, Petitioners filed a Motion for Relief on Account of

Respondent's Failure to Satisfy Its Discovery Violations (Motion

for Relief). No response was filed to either motion. The Motion

for Relief alleged that the Department had failed to respond to

Petitioners' Request for Production and had filed insufficient

responses to interrogatories and requests for admissions. The

motion requested that the matter be continued for at least 60

days following compliance with the discovery requests. The

Motion for Relief was filed almost three months after receiving

the incomplete responses to discovery. Accordingly, on May 25,

2007, an Order on Pending Motions was entered granting the Motion

to Appear Pro Hac Vice; requiring compliance with Petitioners'

discovery requests no later than June 4, 2007; and denying

Petitioners' request for a continuance of the final hearing.

On June 1, 2007, the Department filed a Motion for

Reconsideration of the Order on Pending Motions Dated May 25,

2007, asserting that due to a miscommunication in counsel's

office, he did not receive the Motion for Relief in time to file

a response. Petitioners did not file a response to this motion,

most likely because of the events detailed in the Findings of

Facts and Conclusions of Law. On June 7, 2007, Respondent filed

a Motion to Dismiss for Lack of Subject Matter Jurisdiction,

asserting that the Petition to Determine Validity of Proposed

Rule was not timely filed.

On June 8, 2007, Petitioners filed a Consent to Dismissal of

Proceedings Based on Representations Contained in Respondent's

Motion to Dismiss for Lack of Subject Matter Jurisdiction

(Consent to Dismissal). Both the Motion and the Consent to

Dismissal have been considered in the preparation of this Final

Order of Dismissal. Those matters contained in the Findings of

Fact below are those matters for which there appears to be no

dispute.

FINDINGS OF FACT

1. Pursuant to Section 20.121(3), Florida Statutes, the

Financial Services Commission (the Commission) serves as the

agency head for the Office of Insurance Regulation for the

purpose of rulemaking.

2. On May 26, 2006, the Office of Insurance Regulation

issued a Notice of Development of Rulemaking to amend existing

Florida Administrative Code Rule 69O-186.013. A workshop was

held pursuant to this notice on June 15, 2006.

3. On August 15, 2006, the Commission approved for

publication a notice of proposed rule amendments to Rule 69O-

186.013.

4. A Notice of Proposed Rulemaking was published in the

Florida Administrative Weekly on October 6, 2006. A public

hearing was held October 31, 2006.

5. On November 22, 2006, a second notice of hearing was

published in the "Notices of Meetings, Workshops and Public

Hearings" section of the Florida Administrative Weekly, advising

of "an additional public hearing on the proposed amendments to

Rule 69O-186.013, Title Insurance Statistical Gathering,

published on October 6, 2006, in Vol. 32, No. 40, of the F.A.W."

6. A public hearing was conducted as noticed December 5,

2006.

7. Petitioners filed their Petition to Determine Invalidity

of Proposed Rule December 21, 2006.

8. On June 7, 2007, the Respondent filed its Motion to

Dismiss for Lack of Subject Matter Jurisdiction. Included in its

Motion are several statements relevant to the Petitioners'

position regarding dismissal of these proceedings:

5. [The December 5, 2006, hearing] of

course, was not the "final public hearing,"

was not noticed as a hearing at which any

action would be taken and never intended to

be the "final public hearing" as that term is

used in Section 120.56(2)(a), Florida

Statutes. In fact, the "final public

hearing" would have been held before the FSC

as the collegial body responsible for

rulemaking for the Office.

6. When it is appropriate, the FSC will hold

such a "final public hearing" prior to

adoption of a proposed rule. As in every

other instance in which the FSC intends to

adopt a rule, notice will be provided in the

Florida Administrative Weekly (sample

attached as Exhibit E). In this instance,

the final hearing has not yet been held, or

even scheduled.

* * *

11. Therefore, this case must be dismissed

as the Petition to Determine Invalidity of

Proposed Rule was untimely filed. The

Petitioners may, if they desire, challenge

the proposed rule after the final public

hearing. Nevertheless, they may not maintain

this action at this time.

9. Petitioners have responded to the Motion to Dismiss by

consenting to dismissal of these proceedings, "in reliance on

representations made by the State of Florida, Financial Services

Commission/Office of Insurance Regulation (the Respondent) in

paragraphs 5, 6, and 11 of Respondent's Motion to Dismiss for

Lack of Subject Matter Jurisdiction (the Motion to Dismiss) filed

on June 7, 2007, that no 'final public hearing' within the

meaning of Section 120.54 . . . has been held . . . and that no

'final public hearing' shall be held unless Respondent has first

provided to Petitioners proper notice and an opportunity to

contest the validity of the Proposed Rule."

10. Petitioners assert, however, that the Petition should

be dismissed without prejudice, and that should Respondent

attempt to promulgate the Proposed Rule without first holding a

"final public hearing" with proper notice, they reserve the right

to reinstate this proceeding.

CONCLUSIONS OF LAW

11. The Division of Administrative Hearings has

jurisdiction over the subject matter and the parties to this

action in accordance with Sections 120.569 and 120.57(1), Florida

Statutes.

12. After review of the pleadings, it is determined that

this proceeding shall be dismissed based on the consent of

Petitioners in response to Respondent's Motion to Dismiss. The

undersigned declines to make any ruling on the merits of

Petitioners' Petition or Respondent's Motion to Dismiss given the

consent of Petitioner to dismissal.

13. While Petitioners reserve the right to reinstate this

proceeding under certain circumstances, they cite no authority

for a dismissal of a rule challenge without prejudice.

Based on the following, it is

ORDERED:

1. Respondent's Motion for Reconsideration of the Order on

Pending Motions Dated May 25, 2007, is denied as moot.

2. Respondent's Motion to Dismiss for Lack of Subject

Matter Jurisdiction is denied as moot.

3. Petitioners' Petition to Determine Invalidity of

Proposed Rule is dismissed based on Petitioners' consent to

dismissal of the proceeding, which is construed as a withdrawal

of their Petition to Determine Invalidity of Proposed Rule. The

file of the Division of Administrative Hearings in the above-

captioned case is hereby closed.

DONE AND ORDERED this 25th day of June, 2007, in

Tallahassee, Leon County, Florida.

S

LISA SHEARER NELSON

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone] SUNCOM 278-9675

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 25th day of June, 2007.

COPIES FURNISHED:

Joy M. Ryan, Esquire

Blank, Meenan, and Dunphy, P.A.

204 South Monroe Street

Tallahassee, Florida 32301

Kathryn H. Baxter, Esquire

Leboeuf, Lamb, Greene & MacRae LLP

One Embarcadero Center, Suite 400

San Francisco, California 94111-3619

Steven H. Parton, General Counsel

Department of Financial Services

Financial Services Commission

200 East Gaines Street

Tallahassee, Florida 32399-4206

S. Marc Herskovitz, Esquire

Office of Insurance Regulation

612 Larson Building

200 East Gaines Street

Tallahassee, Florida 32399-0333

Scott Boyd, Acting Executive Director

and General Counsel

Joint Administrative Procedures Committee

Holland Building, Room 120

Tallahassee, Florida 32399-1300

Liz Cloud, Chief

Bureau of Administrative Code

The Elliott Building, Room 201

Tallahassee, Florida 32399-0250

NOTICE OF RIGHT TO JUDICIAL REVIEW

A party who is adversely affected by this Final Order is entitled

to judicial review pursuant to Section 120.68, Florida Statutes.

Review proceedings are governed by the Florida Rules of Appellate

Procedure. Such proceedings are commenced by filing the original

notice of appeal with the Clerk of the Division of Administrative

Hearings and a copy, accompanied by filing fees prescribed by

law, with the District Court of Appeal, First District, or with

the District Court of Appeal in the Appellate District where the

party resides. The notice of appeal must be filed within 30 days

of rendition of the order to be reviewed.