The opinion of the court was delivered by: TEITELBAUM
On June 9, 1969 defendant, Continental Insurance Co., a New York corporation, issued a policy of insurance upon a "Burger King" fast food restaurant (store 481) in Westmoreland County, Pennsylvania. Plaintiff, Burger King Corporation, seeks to recover under this policy for property loss and loss of business income resulting from damage to store 481 which occurred in September of 1969, allegedly as the result of earth movement. At the time of the occurrence New Kendall Properties, Inc., a wholly-owned subsidiary of plaintiff, held title to the premises. New Kendall had leased the property to Burger King of Pa., Inc., which in turn had subleased to Gregory Kary, an individual, and KBC, Inc. Plaintiff and the others having interests in the premises were named as insureds on defendant's policy.
On March 30, 1971, approximately eighteen months after the damage occurred to the store 481 premises, plaintiff, a Florida corporation, brought this action in the Florida state courts. The action was then removed to the United States District Court for the Southern District of Florida, Miami Division, and by Order dated December 16, 1971, transferred on defendant's motion to this Court, pursuant to 28 U.S.C. § 1404(a).
On November 1, 1972 defendant filed with this Court a motion for summary judgment on three grounds: (1) that this action was not filed within the one-year time limit provided in the insurance policy; (2) that plaintiff has no insurable interest in the premises; and (3) that plaintiff has failed to join indispensable parties. Defendant also seeks partial summary judgment on the ground that business interruption coverage for loss caused by earth movement is not provided in the policy. Each of these issues will be dealt with separately.
Rule 56(c) of the Federal Rules of Civil Procedure provides that summary judgment shall be entered:
". . . if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law."
From the pleadings filed in this action it is clear that plaintiff failed to commence this action until March 30, 1971. The loss is alleged to have occurred during September of 1969. Defendant contends that the following provision in its policy bars plaintiff's suit:
"No suit or action on this policy for the recovery of any claim shall be sustainable in any court of law or equity . . . unless commenced within twelve months next after inception of the loss."
Plaintiff however argues that since the instant action was originally brought in the Florida state courts by a Florida corporation, the issues should be decided as if the forum were the Federal District Court for the Southern District of Florida. Further, plaintiff argues that the Florida District Court would apply § 95.03 of Fla. Stat. Ann. (1969) which reads as follows:
"All provisions and stipulations contained in any contract whatever entered into after May 26, 1913 fixing the period of time in which suits may be instituted under any such contract, or upon any matter growing out of the provisions of any such contract, at a period of time less than that provided by the statute of limitations of this state, are hereby declared to be contrary to the public policy of this state, and to be illegal and void. No court in this state shall give effect to any provision or stipulation of the character mentioned in this section."
The effect of the foregoing provision would be to override the limitation provision of the policy, and to make the Florida five-year statute of limitations (Fla. Stat. Ann. § 95.11(3)) applicable to the present case.
Fla. Stat. Ann. § 95.03 has been the subject of no small amount of litigation concerning its applicability and constitutionality. In Clay v. Sun Insurance Office, Ltd., 363 U.S. 207, 4 L. Ed. 2d 1170, 80 S. Ct. 1222 (1960), an Illinois resident applied in Illinois for a policy of insurance to cover personal property from a British company licensed to do business in Illinois and Florida. Thereafter, plaintiff moved to Florida where a loss occurred. Suit was commenced in Florida more than twelve months after discovery of the loss. Defendant insurance company asserted as its defense a provision in the policy similar to the one involved herein, requiring that suit be filed within one year of the loss. Plaintiff Clay argued for the applicability of § 95.03.
In the 1960 Clay case the Supreme Court reversed the Court of Appeals for the Fifth Circuit which had ruled that Florida could not apply § 95.03 consistently with the requirements of due process. The Supreme Court held that decision on the constitutional issue should have been reached only if decision had been compelled after the two non-constitutional issues involved had been decided. One of the non-constitutional issues which should have been first considered was whether § 95.03 was applicable under the law of Florida. The case was remanded to the Fifth Circuit to take advantage of Fla. Stat. ...