13 Fla. L. Weekly Supp. 383a
Insurance — Personal injury protection — Rescission of policy — Misrepresentations on application — Failure to list all residents of household — Where insurer learned of misrepresentation during examination under oath of insured, which was obtained four months after accident giving rise to claim, but did not return premiums to premium finance company and notify insured of rescission of policy until 19 months later, insurer does not have clean hands — Court finds as matter of law that 19 months cannot be considered a reasonable amount of time to rescind insurance policy — Since insurer stipulated it would exhaust policy limits in the event court finds coverage, plaintiff is entitled to summary judgment — Jurisdiction reserved to award attorney’s fees and costs to insured
MARIE FORTUNE, Plaintiff, vs. UNITED AUTOMOBILE INSURANCE COMPANY, Defendant. County Court, 17th Judicial Circuit in and for Broward County. Case No. 04-16046 COCE (54). January 23, 2006. Lisa Trachman, Judge. Counsel: Cris E. Boyar, for Plaintiff. Kevin Jones, for Defendant.
ORDER GRANTING PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT
This matter coming on to be heard on Plaintiff’s Motion for Final Summary Judgment, and the Court having heard argument of counsel, and being otherwise fully advised in the premises, it is
ORDERED AND ADJUDGED that:
1. The Plaintiff filed a lawsuit against the Defendant for breach of contract, failing to provide the Plaintiff with explanations of benefits in response to receiving the medical bills at issue, declaratory relief and failure to return premiums to the Plaintiff.
2. The Plaintiff filed a Motion for Summary Judgment as to the issues of coverage (the Defendant’s affirmative defense of material misrepresentation) or, in the alternative, for confession of judgment as the Defendant returned the premiums after suit was filed.
3. The Defendant stipulated this matter should be resolved by way of Summary Judgment in open Court in a hearing on November 21, 2005. The Defendant stated if the Court found there was coverage the Defendant would exhaust the policy of insurance.
4. The evidence reflected the plaintiff was injured in a car accident on 9/5/03. The Plaintiff submitted her medical bills to the Defendant for payment. The Plaintiff’s medical bills clearly exceed the $10,000 limits. The Defendant did not pay said bills.
5. On 2/14/05, the Defendant filed its Answer and Affirmative Defenses alleging at paragraph 11 the policy holder (the Plaintiff’s husband) submitted material misrepresentations on the application for insurance by failing to list all residents of the household in violation of Florida Statute 627.409, making the policy void from the inceptions. At paragraph 13 of the Defendant’s Answer the Defendant alleged the Plaintiff was not entitled to a return of the premiums as the Defendant has not cancelled the policy of insurance.
6. In this case, there is no question the Defendant is claiming rescission and not cancellation.
7. At the hearing, the Plaintiff argued the Defendant is not entitled to rescission for numerous reasons such as: the Defendant failed to return the premiums in a reasonable time; rescission, as a matter of law, is not available to the Defendant in a case involving PIP benefits; the Defendant did not return the correct amount of money to the insured; and the misrepresentation did not apply to the Plaintiff as the Plaintiff was properly listed on the application so there would be coverage for the Plaintiff.
8. The Court will only needs to address the first argument as the undisputed evidence, as it relates to the time it took for the Defendant to return the premiums, reflects the Defendant waited 19 months to return the money after learning of the alleged material misrepresentations.
9. The undisputed evidence in this case demonstrates the automobile accident was on 9/5/03. The accident was reported to the Defendant on 9/23/03. The Defendant obtained an examination under oath of the Plaintiff on 1/20/04 which is more than four months after the accident. It was during the statement of the Plaintiff the Defendant learned of the alleged material misrepresentation. As of 8/5/05, the date of the deposition of the adjuster, the Defendant did not determine there was a material misrepresentation and the Defendant did not return the money to the policy holder. Ultimately, the premiums were returned to the premium finance company and the Plaintiff was notified of the rescission in a letter dated August 5, 2005. This means the Defendant waited from January 20, 2004 until August 5, 2005 to return the premiums which represents 19 months.
10. The evidence also reflects when the adjuster was asked why the money was not returned by the time of her deposition she stated the money did not have to be returned because there was fraud. The Court finds and the adjuster ultimately admitted in the deposition there was no evidence of actual fraud. The Defendant did not plead fraud. The Defendant did not ask to amend its affirmative defenses to plead fraud. The Defendant’s insurance underwriter, Mr. Jorge Delao, admitted in his deposition that he was informed of the alleged material misrepresentation in November of 2004. When he was asked why it took 9 months from November of 2004 to return the money he stated “I don’t know.”
11. Under no interpretation of the facts of this case can this Court determine this was a return of the premiums within a reasonable time after the discovery of the grounds for avoiding the policy of insurance.
12. The Court finds the defendant in this case does not have clean hands. United allegedly knew of the accident on 9/23/03. The Defendant waited for months to take the EUO. Then Defendant waited 19 months, which is clearly after the policy of insurance expired, to rescind the policy of insurance.
13. The Court finds, as a matter of law, this cannot be considered a reasonable amount of time to rescind the policy of insurance. The Court relies on the holding of Bankers v. General No-Fault Insurance, 814 So.2d 1119 (Fla. 4th DCA 2002). See also Presgar Medical Imaging, Inc. v. United Automobile Insurance Company, 12 Fla. L. Weekly Supp. 156b (Fla. 11th Jud. Cir., Miami-Dade County Ct., Nov. 22, 2004); Pino v. Union Bankers Ins. Co., 627 So.2d 535 (Fla. 3rd DCA, 1993, rehearing denied 1994); Almeida v. United Automobile Ins. Co., 9 Fla. L. Weekly Supp. 626a (Fla. 11th Jud. Cir., Miami-Dade County Ct., 2002); See Tiedke, et al., v. Fidelity & Cas. Co., of New York, 222 So.2d 206, 209 (Fla. 1969) (“If an insurer intends to stand on any forfeiture reservation, it should inform the insured as soon as practicable after it has ascertained facts upon which it bases its forfeiture.”) (emphasis added).
14. Since the Defendant has stipulated it would exhaust the policy of insurance in the event the Court finds there is coverage, the Plaintiff is entitled to a final Summary Judgment.
15. The Plaintiff is ordered to submit a final Summary Judgment to the Court for signature.
16. The Court reserves the right to award the Plaintiff attorney’s fees and costs pursuant to Florida Statute §627.428.
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