14 Fla. L. Weekly Supp. 317a
Insurance — Personal injury protection — Application — Misrepresentations — Insurer that failed to return premiums to insured in timely manner waived right to raise material misrepresentation defense
UNITED AUTOMOBILE INSURANCE COMPANY, A Florida corporation, Appellant, v. CRANIOFACIAL PAIN THERAPEUTICS, INC. A/A/O NATALIA HERNANDEZ, Appellee. Circuit Court, 11th Judicial Circuit (Appellate) in and for Miami-Dade County. Case No. 05-236 AP. L.C. Case No. 02-11536 SP 23. June 27, 2006. An appeal from the County Court for Miami-Dade County, Myriam Lehr, Judge. Counsel: Michael Neimand, for Appellant. Stuart B. Yanofsky, for Appellee.
(Before STANFORD BLAKE, VICTORIA SIGLER, and DAVA J. TUNIS, JJ.)
(PER CURIAM.) Appellant, United Auto Insurance Company, (hereinafter “United”), appeals the lower court’s granting of summary judgment in favor of Appellee, Craniofacial Pain Therapeutics, Inc., (hereinafter “CPT”). Specifically, United argues the trial court erred in granting summary judgment in light of their affirmative defense of material misrepresentation, which under §627.409, Florida Statutes (2001), Appellant believes entitled them to rescind the policy, even though a return of premiums was not effectuated. In contrast, CPT argues United’s failure to refund said premiums was tantamount to a waiver of their right to cancel and therefore, the lower court properly ruled in their favor. Based on the foregoing reasons, this Court finds the trial court did not err in granting summary judgment, and thus, the ruling below is affirmed.
MATERIAL MISREPRESENTATION AND RESCISSION
Section 627.409, Florida Statutes (2001), in part, provides:
1. Any statement or description made by or on behalf of an insured or annuitant in an application for an insurance policy or annuity contract, or in negotiations for a policy or contract, is a representation and is not a warranty. A misrepresentation, omission, or concealment of fact, or incorrect statement may prevent recovery under the contract or policy only if any of the following apply:
a. The misrepresentation, omission, concealment, or statement is fraudulent or is material either to the acceptance of the risk or to the hazard assumed by the insurer.
b. If the true facts had been known to the insurer pursuant to a policy requirement or other requirement, the insurer in good faith would not have issued the policy or contract, would not have issued it at the same premium rate, would not have issued a policy or contract in as large an amount, or would not have provided coverage with respect to the hazard resulting in the loss.
While §627.409 permits a defense of material misrepresentation, the statute provides that the insurance policy may become voidable, but not automatically void, upon discovery of the misrepresentation. See Continental Assurance Co. v. Carroll, 485 So. 2d 406, 408 (Fla. 1986) (emphasis added). A party fraudulently induced may repudiate an agreement by unilaterally rescinding the contract. See Mazzoni Farms, Inc., et al., 761 So. 2d 306, 313 (Fla. 2000). However, the rescinding principal must take affirmative steps to place the other party back to his or her original status quo. Id; See Lang v. Horne, 156 Fla. 605, 615, 23 So. 2d 848, 853 (Fla. 1945); See Bass v. Farish, 616 So. 2d 1146, 1147 (Fla. 4th DCA 1993). In general, a contract will not be rescinded even for fraud when it is not possible for the opposing party to be put back into his or her pre-agreement status. Id.
In the case at bar, United’s position of misrepresentation and policy rescission required a return of premiums to the policy holder within a timely manner. See Pino v. Union Bankers Ins. Co., 627 So. 2d 535, 537 (Fla. 3d DCA 1994). Because they failed to do this, Appellant lost itsrights to raise this argument as a defense. Id. (holding that a mere expression of repudiation by one party to a contract, without anything more, does not constitute a valid rescission). Therefore, this Court finds no error and declines to disturb the ruling below.
AFFIRMED.
