When analyzing choice of law issues, Florida courts traditionally apply the doctrine of lex loci contractus to the interpretation of contracts. In United States Fidelity & Guaranty Company v. Liberty Surplus Insurance Corporation, the U.S. Court of Appeals for the Eleventh Circuit certified to the Florida Supreme Court an “unsettled” question of whether the doctrine of lex loci contractus or the law of the situs of the risk applies to an insurance coverage dispute.

The underlying dispute involved a Florida apartment complex owner’s construction defect claims against a Massachusetts-based contractor. The contractor purchased comprehensive general liability coverage from Liberty Surplus in Massachusetts. Liberty Surplus ultimately denied coverage when the complex’s owner demanded arbitration with the contractor. After the contractor and the surety settled with the complex’s owner, the contractor subrogated its contractual interests to the surety. The surety then filed an action against Liberty Surplus to recover the total settlement amount. The district court determined that the Florida Supreme Court would apply Massachusetts law under the doctrine of lex loci contractus, thus barring coverage under the policy. The surety appealed arguing that the law of the situs applied and the policy provided coverage under Florida law.

Based on the existing case law, the Eleventh Circuit determined that the choice of law question is unsettled. In one case, the Eleventh Circuit held that the Florida Supreme Court would depart from the doctrine of lex loci contractus and would apply the law of the situs of the risk when interpreting a contract that insured a stationary risk. In a recent automobile insurance dispute, however, the Florida Supreme Court broadly reiterated its adherence to the doctrine of lex loci contractus and also restated its rejection of the most significant relationship test. To resolve the choice of law issue, the Eleventh Circuit certified the question to the Florida Supreme Court.