STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

AMERICAN PIONEER TITLE INSURANCE ) COMPANY, )

)

Petitioner, )

)

vs. )

) STATE OF FLORIDA, OFFICE OF ) TREASURER, INSURANCE )

COMMISSIONER, )

)

Respondent, )

and ) CASE NO. 80-1686

) PIONEER NATIONAL TITLE INSURANCE ) COMPANY, )

)

Intervenor, )

and )

) AMERICAN TITLE INSURANCE COMPANY,)

)

Intervenor. )

)

RECOMMENDED ORDER

Pursuant to notice an administrative hearing was held before P. Michael Ruff, duly designated Hearing Officer of the Division of Administrative Hearings, on the petition of American Pioneer Title Insurance Company for approval of its transacting the business of title insurance underwriting under the name American Pioneer Title Insurance Company.

APPEARANCES

For Petitioner: Thomas F. Lang, Esquire and

James G. Willard, Esquire Swann & Haddock

Post Office Box 7838 Orlando, Florida 32854

For Respondent: S. Strom Maxwell, Esquire

State of Florida Department of Insurance 428-A Larson Building

Tallahassee, Florida 32301

For Intervenor: Jill Nexon, Esquire

(American Title Arky, Freed, Stearns, Watson & Greer Insurance Company) One Biscayne Tower, Suite 2800

Miami, Florida 33131

For Intervenor: Theodore C. Taub, Esquire and (Pioneer National Gregory E. Mierzwinski, Esquire Title Insurance Taub & Williams

Company) Post Office Box 2312 Tampa, Florida 33601

On January 29, 1980, the Department of Insurance of the State of Florida authorized American Pioneer Title Insurance Company (American Pioneer) to do business in Florida. The Intervenors, American Title Insurance Company (American Title) and Pioneer National Title Insurance Company (Pioneer National), objected to the award of the right to American Pioneer to do title insurance business under that name in Florida and complained of its similarity to their names and of not being notified of American Pioneer's pending application for that right. See Section 624.405, Florida Statutes.

American Pioneer petitioned for formal hearing pursuant to Section 120.57(1), Florida Statutes, on August 25, 1980, after the Department/Respondent initiated the present proceedings by filing a Notice of Public Hearing on August 1, 1980. On December 5, 1980, Hearing Officer William E. Williams, to whom the cause was originally assigned, granted the Petitions to Intervene filed by American Title and Pioneer National. The cause ultimately proceeded to final hearing.

At the hearing seven witnesses testified live or by deposition on behalf of American Title and Pioneer National and five witnesses testified on behalf of Petitioner. Petitioner presented nine exhibits and the Intervenors presented eight exhibits. The essential issue to be resolved in this proceeding is whether the name American Pioneer Title Insurance Company is so nearly similar to the name American Title Insurance Company or Pioneer National Title Insurance Company, or both, as to cause or tend to cause confusion or tend to mislead as to the nature of American Pioneer Title Insurance Company. Section 624.405, Florida Statutes.

FINDINGS OF FACT

1. On January 29, 1980, the Department of Insurance approved the use of the name American Pioneer Title Insurance Company for the Petitioner. On February 4, 1980, American Pioneer Title Insurance Company was authorized to do business as a corporation in the State of Florida by the Secretary of State. American Pioneer Title Insurance Company is a wholly owned subsidiary of American Pioneer Life Insurance Company which has been doing life insurance business in Florida since 1961. American Pioneer Life Insurance Company holds valid federal and Florida trademark registrations for the name "American Pioneer." The American Pioneer Life Insurance Company has duly authorized its subsidiary American Pioneer Title Insurance Company, the Petitioner, to use and market itself under the name "American Pioneer." The American Pioneer Corporation, the holding company for American Pioneer Life Insurance Company, American Pioneer Title Insurance Company (Petitioner) and other related companies using the name American Pioneer, seeks to market and establish in Florida the name "American Pioneer" as representing a related family of insurance companies offering multi-lines insurance service including the title insurance service offered by the Petitioner.

   
   

2. This unified marketing effort resulted in the use of the name American Pioneer in the name of the Petitioner. This is part of an effort to create in the public a recognition of the wide spectrum of insurance services offered by

   these affiliated companies and was the primary reason for the use of the words "American Pioneer" in the Petitioner's name rather than an effort to create confusion and some unfair business advantage vis-a-vis the names of the Intervenors.

   
   

3. American Title Insurance Company and Pioneer National Title Insurance Company, the Intervenors, are both authorized title insurers in Florida who contend that their names and their businesses might be adversely effected by the authorization of the Petitioner to use the name American Pioneer Title Insurance Company. American Title Insurance Company has expended substantial sums in promotion and advertising of the name "American" in the last eleven years as an abbreviated form of its name. Pioneer National Title Insurance Company is frequently referred to as "Pioneer" or "Pioneer National." American Title Insurance Company intentionally promotes its name in shortened form as "American."

   
   

4. Petitioner's witness Grant Hunt established that American Pioneer, like other title insurance companies, markets its services to professional clients rather than to the general consumer public. His testimony establishes that he is familiar with the title insurance market and that title insurance companies market their services through attorneys, realtors and various financial intermediaries, such as closing agents or officers of lending institutions who are engaged in the real estate mortgage market. His research and experience in the field of banking and financing real estate transactions shows that people placing title insurance consider previous business relationships with title insurance companies or personal experience and contacts first in choosing a title insurance company. The name of the title insurance company is of substantially less importance. The American Pioneer name was used in forming the new company, the Petitioner, because it is a familiar name in Florida with substantial name recognition, since it has been used by American Pioneer Life Insurance Company since 1961. The remainder of the family of subsidiary companies of American Pioneer Corporation have used that name in Florida for a substantial period of time. The commonalty of name between these companies will assist its marketing a brand new title insurance product and company because the professional type clientele discussed above would readily identify with a name already established in the marketing of other insurance lines. Mr. Hunt established that it is a definite business advantage for the Petitioner to be able to cross-relate its name to the already well-known American Pioneer name. If the Petitioner were denied the use of that name it would, in effect, nullify a great deal of public goodwill emanating from the parent company which has benefited the establishment of the new subsidiary, the Petitioner. The Petitioner has been operating in Florida for approximately fifteen months and no evidence has been adduced that the use of the name American Pioneer has beet confused with either Intervenor or any other company. This witness demonstrated that many companies in the insurance field in Florida have similar names and that no confusion results in the broad sense with the similarity of names of many insurance companies, such as the widespread use of the name "American."

   
   

5. Robert Buchanan Whitehill, a Vice President of Barnett Bank of Seminole County has extensive experience in real estate transactions and the mortgage business. He testified for the Petitioner in corroboration of previous testimony and established the fact that title insurance is normally sold through closing agents in a given real estate transaction. These are the professional people who make decisions about what title insurance to obtain and place orders for title insurance. He corroborated the fact that no confusion has been occasioned by the use of the name American Pioneer Title Insurance Company.

6. Witness James B. Morgan testified in a similar vein. The closing agent selecting title coverage is typically more sophisticated in matters of real estate finance, law and matters pertaining to closing real estate transactions than the general public, and therefore is abundantly aware of the title insurance companies serving the real estate market and the nature of their products and services, as well as being able to differentiate between their names.

   
   

7. In short, the Petitioner established through the testimony of the witnesses as well as James F. Covington, Jr., an attorney with extensive experience in the title insurance industry, that no more than three percent of the title policies in Florida are actually purchased at the request of the buyer or seller in a given real estate transaction, therefore, the consuming public has little contact with title insurance companies directly. Generally, a lender's officer or agent or a party's attorney or sometimes a realtor orders a title insurance policy and is capable of differentiating between the names of the various title insurance companies. Such professional customers will select the company from which they have received the best and most rapid title information service and the company which will give the best expedited service on issuances of policy binders and policies when requested. Additionally, Mr. Dean Tomlinson, the President of Home Owner Title and Abstract Company in St. Petersburg, corroborated the unlikelihood that name confusion will result largely because of the professional and sophisticated nature of the customers these three title insurance companies serve. He is familiar with all three of these companies and in his experience closing agents and other professional customers will not confuse the different companies since they work with title insurance companies on a day-to-day bases as an essential function of their business, as opposed to a member of the real estate transacting public who deals with a title insurance company only once or twice in a life time.

   
   

8. The Intervenors' witnesses Robinson and Glover, contended in a general way that the title insurance market is broader based than maintained by the Petitioner. They opined that thousands of consumers will tend to be confused by the similarity of Petitioner's name with that of the Intervenors'. Although they cite instances in their experience of some confusion of phone calls and mail between the Intervenor American Title Insurance Company and First American Title Insurance Company (not a party), and attempted to relate that to the present situation, they failed to refute the Petitioner's evidence that the primary purchasers of title insurance are professional people who work with title insurance on a daily basis and that approximately 97 percent of the title insurance sold is sold to members of this sophisticated professional market.

   The undersigned finds that the names First American Title Insurance Company and American Title Insurance Company are more similar to each other than American Pioneer Title Insurance Company.

   
   

9. The fear expressed by witness Glover that use of the name "American Pioneer" might lead purchasers of title insurance to believe a merger of the three companies had occurred is belied by evidence by all parties that, on the one hand, Petitioner's parent company has long engaged in a comprehensive marketing scheme to sell the name "American Pioneer" as representative of all its companies and insurance lines in order to build up massive name recognition by the Florida insurance-purchasing public. On the other hand, the Intervenors have likewise presented evidence that they have systematically and for a long period of time marketed themselves under the names "American" and "Pioneer" or "Pioneer National," respectively, for purposes of inculcating name recognition to their advantage with the public. Consequently, the evidence of marketing of distinctive names by both parties tends to negate the realization of the fear of

   witness Glover that the professional public who purchase title insurance will mistakenly believe that the two companies have merged.

   
   

10. Witnesses Grady Smith and William Doster merely expressed fear that there might be some confusion among the three subject companies by purchasers of title insurance but offered no competent, substantial evidence to refute the Petitioner's demonstration that the type of customers who purchase title insurance would be unlikely to make such a mistake.

    
    

11. The Intervenors presented testimony of Dr. Richard W. Mizerski, an associate professor of marketing at Florida State University, who has research experience in consumer decision making. The witness prepared several studies for the Federal Trade Commission regarding how people process information in order to make decisions on particular goods or services. This witness testified that where names of companies are similar, persons who are knowledgeable in that industry are likely to assume a relationship exists between the companies, which process is called "attribution." Where persons are not knowledgeable in an industry which includes companies with similar names, those persons may be unable to differentiate between the companies, thus choosing a company at random, a process called "stimulus generalization." The witness also discussed the fact that people typically tend to shorten names of companies, known as "cognitive simplification." Similarly, witness Phillip Durbrow, in his deposition, testified generally that the names of American Title Insurance Company, Pioneer National Insurance Company and the Petitioner are quite similar and that people tend to shorten the names of companies in referring to them and in thinking of them.

    
    

12. The first argument raised by witness Mizerski concerning "attribution" is belied by the consistent marketing effort of the Petitioner and the Petitioner's parent company to instill in the title insurance purchasing customers recognitions of the name "American Pioneer,": as opposed to simply "American." "American" is the only name common to two of these firms and "American Pioneer" is distinct enough from "American" or "Pioneer National" to allow such a sophisticated, professional clientele to differentiate between the firms. "American" is a name common to thousands of firms in this country whether they are banks, insurance companies or other and the unrefuted evidence of the Petitioner's consistent marketing scheme of calling itself "American Pioneer" tends to negate this supposed likelihood of confusion.

    
    

13. Contrary to Dr. Mizerski's thesis that persons who are not sophisticated or knowledgeable in an industry may choose companies at random because they are unable to differentiate between those companies, the unrefuted evidence in this cause demonstrates that a substantially different customer market is involved. Thus, as has been found above, the clientele of the title insurance industry indeed are sophisticated and knowledgeable regarding the products, operations and members of the industry and, since they work with title insurance companies almost on a daily basis, they are likely to be able to differentiate between company names and therefore, not to simply choose a company at random in ordering title insurance service. Thus, Mizerski's concept of "stimulus generalization" is a generalized market principle not shown to apply to the title insurance market.

    
    

14. The third market phenomenon raised by this witness regarding a consumer tendency to shorten names of companies ("cognitive simplification"), which he believes will also result in customer confusion between the names of the three companies was shown to have only tangential relevance. All the

    parties have, for a number of years, recognized this phenomenon and thus held themselves out as doing business under the names "American Pioneer," "American," and "Pioneer National" or "Pioneer." These shortened names are substantially different and unlikely to cause confusion with the educated customers to whom they are directed.

    
    

15. Finally, it should be pointed out that this witness was shown to have as his sole experience, studies in mass consumer decision making with no experience whatever with the title insurance industry whose customers are trained and sophisticated in the product they are seeking as opposed to consumers in the more generalized marketplace who buy automobiles or other goods on a rather infrequent basis. Witness Mizerski had done no studies regarding the motivation influencing purchasers of title insurance, nor the degree of sophistication of those customers regarding operation of and members of the industry. He consulted no title companies and has no personal background in marketing title insurance. He therefore did not show that the general marketing principles forming the basis of his expert opinions and testimony could actually be applied to the title insurance industry with a substantial degree of efficacy.

    
    

    CONCLUSIONS OF LAW

    
    

16. The Division of Administrative Hearings has jurisdiction over the Parties to and the subject matter of these proceedings. Section 120.57(1), Florida Statutes.

    
    

17. The pertinent statute involved in this proceeding is Section 624.405, Florida Statutes (1979), and in particular Subsections (1) and (2) which read as follows:

    
    

    1. No insurer shall be formed or authorized to transact insurance in this state under a name which is the same as that of any other authorized insurer or is so nearly similar

       thereto as to cause or tend to cause confusion, or which type of organization of the insurer.

       
       

       Before incorporating under or using any name the insurer or proposed insurer shall submit its name or proposed name to the department for its approval consistent with this provision, and such approval shall be endorsed upon any proposed charter or application for authority which may be submitted to any officer authorized to grant such proposed charter or authority.

       
       

    2. Before approving or disapproving the name or proposed name of an insurer the department shall notify all other authorized insurers whose name night be adversely affected, allowing them 30 days after the date of the notice within which to file their objections with it. If a name is so objected to, the department shall disapprove the name unless it is of the opinion that the objections are not well-founded.

18. The undersigned concludes that the name American Pioneer Title Insurance Company is not so nearly similar to the name American Title Insurance Company as to cause or tend to cause confusion amongst the clientele or potential clientele of the three subject companies who seek to purchase title insurance from then. It is especially persuasive in that all three companies long ago recognized the tendency of the public to shorten corporate names testified to by Dr. Mizorski and acted to obviate any potential confusion by adopting the above-discussed shortened names which are sufficiently different to enable the sophisticated clientele involved to differentiate between them. Therefore, the evidence adduced by both the Petitioners and Intervenors belies the fears expressed about "name-shortening" by the Intervenors' witnesses.

    
    

19. It is even more persuasive that the evidence in the record is unrefuted in establishing that the clientele of title insurance companies and in particular the Petitioner, consists of professional people who are engaged in the business of real estate transactions and who consequently deal with title insurance carriers on practically a daily basis. Such a clientele can tolerate much more similarity in the case of the corporate names of the various insurance carriers without confusing them or the products they offer. Additionally, it is also convincing to note that, with a view toward the statutory standard of ". .

    .cause or tend to cause confusion. . ." that the evidence by any witness was adduced to indicate that the public has been confused or misled by the names of the three subject title insurance companies vis-a-vis each other and only bare opinion testimony by certain witnesses for the Intervenors was offered that the names of the three companies might tend to cause confusion in the future. The only name confusion between title insurance companies described in the record involved the Intervener, American Title Insurance Company and another company, First American Title Insurance Company, which is a more similar name situation than that at bar. Additionally, other than the Intervenors' lay witnesses who presented some vital self-serving opinion testimony regarding their belief that confusion between the three names might result, only the two expert witnesses advanced a cogent rationale based on their training and experience as to how (in a generalized market) such names might cause confusion amongst consumers.

    However, these experts had no experience with the title insurance customer market, title insurance companies, the way in which title insurance is marketed, nor the bases for title insurance buying decisions employed by the professional clientele of title insurance companies. The unrefuted evidence in the case clearly established the fact of a unique market directed only at professional customers. Such a unique market was not considered by the Intervenors' tow expert witnesses. It is not the typical market to which their studies related such that, without supportive empirical data, the general marketing principles which they espoused cannot be fittingly applied. The Intervenors' argument that the use of the name American Pioneer reflects a merger of the two Intervenor companies is inapposite. American contends that American Pioneer will call itself "American" while Pioneer National states that American Pioneer will call itself "Pioneer." Both occurrences cannot result and each Intervenor's claim on that basis merely negates the other. In summary, none of the Intervenors' witnesses presented competent and substantial evidence of confusion or the tendency to confuse.

    
    

20. Petitioner's evidence, on the other hand, establishes without question that American Pioneer only uses that name (or its full name) and intends to continue doing so, as reflected by the recorded trademarks and by the testimony of its President. No evidence was adduced showing that it has ever been called anything but American Pioneer by anyone. Witness Covington and others established, without refutation that title insurance coverage is placed as the

    result of personal and business relationships, or price or service in the past. There is no name competition between companies nor comparative advertising efforts between companies. Thus, the record reflects that there is little opportunity for confusion between company names to arise in the minds of the educated clientele involved. The market that places title insurance coverage will not be confused by the name "American Pioneer" and no competent countervailing, evidence was adduced by the Intervenors to indicate otherwise.

    
    

21. It is enlightening to note, in an analogous vein, as Petitioner's Exhibit Eight demonstrates, that as of April 8, 1980, of insurance companies generally, which were authorized to do business in Florida, there were approximately 134 insurance companies authorized with the word "American" in their name. 95 insurance companies with the word "National" in their name and 6 companies with the word "Pioneer" in their names. Exhibit eight contains a listing of many more names more similar than those involved herein. Obviously those company names authorized were not considered so similar as to cause confusion or to tend to cause confusion within the bounds of the above statute.

    
    

22. Such evidence demonstrates a long standing application of the principle of law governing such disputes that greater latitude is permitted in the use of similar names by financial institutions and insurance companies. The cases of United Life Insurance Company vs. United Insurance Company, 70 So.2d

    310 (Fla. 1954), and First Bank and Trust Company of Jacksonville vs. First Guarantee Bank and Trust Company of Jacksonville, 216 So.2d 22 (Fla. 1st DCA 1968) espoused this principle. The Court in the United case held, in effect, that where the words in a name selected by a corporation are chosen from the public domain and imply a national business, and where the territory in which it operates is one that will naturally and probably be reached by expansion of another established institution or corporation, then that corporation cannot successfully object to and demand a complete exclusion of the second company which bids entry into its territory, but must be content with explanatory matter which will prevent deception regarding the names, although it may not entirely eliminate confusion by the careless. In like manner the Court in the First Bank and Trust Company of Jacksonville case supra, told that the generally accepted rule is that "financial institutions such as banks and insurance companies are allowed greater latitude in the matter of simulative names than is permitted to mercantile or manufacturing concerns." The Court then cited an earlier case first establishing this principle, Lumberman's Mutual Casualty Insurance Company vs. Lumber Mutual Casualty Insurance Company of New York, 154 Fla. 367, 17 So.2d 615 (1944); and the United case, supra.

    
    

23. Accordingly, in consideration of the above authority and discussion it is concluded that the name American Pioneer Title Insurance Company is not so clearly similar to the name American Title Insurance Company nor to the name Pioneer National Title Insurance Company as to cause or tend to cause confusion by customers or potential customers of those firms.

RECOMMENDATION

Having considered the above findings of fact, conclusions of law, the evidence in the record, the candor and demeanor of the witnesses and the pleadings and arguments of counsel, it is

RECOMMENDED that a final order be issued by the Department of Insurance granting the petition herein and authorizing American Petitioner Title Insurance Company to engage in the business of selling title insurance in the State of Florida under that name.

DONE AND ENTERED this 30th day of September, 1981, in Tallahassee, Leon County, Florida.

P. MICHAEL RUFF, Hearing Officer Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 30th day of September, 1981.

COPIES FURNISHED:

Thomas F. Lang, Esquire and James G. Willard Post Office Box 7838 Orlando, Florida 32854

S. Strom Maxwell, Esquire State of Florida Department of Insurance 428-A Larson Building

Tallahassee, Florida 32301

Jill Nexon, Esquire

One Biscayne Tower, Suite 2800 Miami, Florida 33131

Theodore C. Taub, Esquire and Gregory E. Mierzwinski, Esquire Post Office Box 2312

Tampa, Florida 33601

Docket for Case No: 80-001686

Orders for Case No: 80-001686