In The Open MRI Guys of Palm Beach, LLC v. Progressive Am. Ins. Co., No. 3D23-2008 (Fla. 3d DCA Sept. 25, 2024), Kubicki Draper attorneys Michael Clarke and Joye Walford obtained an affirmance of an order granting Progressive’s motion to transfer venue based on the insurance policy’s venue clause. The Third District Court of Appeal held that the venue clause is mandatory, and not permissive, because its plain language establishes the exclusivity of the chosen venue. The clause provides, “Unless we agree otherwise, any legal action against us must be brought in a court of competent jurisdiction for the county and state where the person seeking coverage from this policy lived at the time of the accident.” The plaintiff/appellant argued that the chosen venue is not exclusive because the clause gives the insurer the ability to agree to a different venue. The Court rejected this argument, concluding that the plain language of the clause mandates where an action against the insurer “must be brought.” The Court held that the non-mutuality of the clause does not make it permissive and unenforceable.

This case emphasizes the importance of the wording of a venue clause to its enforceability. To be enforceable, it must require that the insured bring an action in a specified venue. Use of terms like “must” and “shall” indicates a mandatory clause while terms like “may” or “should” indicates a permissive clause. Insurers may want to examine the language of their policies’ venue selection clauses to ensure the use of the mandatory language. This holding will apply to venue clauses in any insurance policies, not just PIP.

It is also notable that the venue clause was enforced against a PIP provider/assignee with the Court finding that the plaintiff “stands in the shoes” of the insured/assignor. The trial court rejected arguments by the assignee that the venue clause should be interpreted using the assignee’s information instead of the insured/assignor’s. Thus, the business entity assignee could not argue that the venue clause did not apply to it because it was not a “person seeking coverage.” The court also rejected arguments that the venue clause was not enforceable because it was (1) included in an adhesion contract, and (2) unauthorized by the PIP statute and contrary to its purpose. These arguments had been accepted by some trial courts to invalidate venue clauses in PIP policies around the state. Insurers should therefore be prepared to rely on this case as binding precedent against these challenges to venue selection clauses in PIP policies.