14 Fla. L. Weekly Supp. 1018b
Insurance — Personal injury protection — Application — Misrepresentations — Failure to disclose licensed driver of household over age 14 — Rescission — Where insured failed to disclose that nephew resided in household, and misrepresentation altered premium, insurer could rescind policy as defense based on material misrepresentation — Waiver — Error to enter final summary judgment based on finding that insurer waived right of rescission by waiting unreasonable time, 14 months after examination under oath, to cancel policy where there is no evidence in record that insurer continued to bill or accept payment from insured after learning of material misrepresentation — Moreover, material issues of fact exist as to when insured was notified of policy’s rescission and whether misrepresentation regarding nephew. who lived with insured for a year and half but who was not residing with insured at time of application or at time of EUO. was material
UNITED AUTOMOBILE INSURANCE COMPANY, Appellant, vs. PRIORITY MEDICAL REHABILITATION, INC., a/a/o MAYKEL COROAS, Appellee. Circuit Court, 11th Judicial Circuit (Appellate) in and for Miami-Dade County. Case Nos. 06-069 AP & 06-094 AP (Consolidated). L.C. Case No. 2004010325SP25. August 28, 2007. An Appeal from the County Court for Miami-Dade County, Mercedes Bach, J. Counsel: June G. Hoffman and Josiane D. Abel, Fowler, White, Burnett P.A., for Appellant. Armando A. Brana and Christian Carrazana, Panter, Panter & Sampedro, P.A., for Appellee.
(Before WILLIAM JOHNSON, ROSA I. RODRIGUEZ, and ORLANDO A. PRESCOTT, JJ.)
(JOHNSON, J.) This is an appeal from a final summary judgment for personal injury protection (PIP) benefits and a final judgment for attorney’s fees and costs entered by the county court. The judgments related to an automobile insurance policy issued by Appellant United Automobile Insurance Company to the insured, Evelio Fernandez. The standard of review of the final summary judgment and fee judgment is de novo. Sierra v. Shevin, 767 So. 2d 524, 525 (Fla. 3d DCA 2000). We find that material issues of fact remain to be resolved which preclude summary judgment as a matter of law.
FINDINGS OF FACT
As a result of an automobile accident on November 13, 2003, medical services were provided by Appellee Priority Medical Rehabilitation, Inc. to Maykel Coroas. He sustained injuries while operating a vehicle owned by Pedro Coroas, his father. At the time of the accident, Maykel Coroas was residing with the insured, his uncle. He sought coverage under the PIP benefits of his uncle’s automobile policy.
Appellant sought to rescind the policy on the ground that a material misrepresentation existed on the insurance application dated February 14, 2003. The insured failed to disclose as required by the policy application that Maykel Coroas was a licensed driver of his household over the age of 14. Appellant learned of this misrepresentation during an examination under oath (EUO) of Maykel Coroas on February 5, 2004.
Appellee filed suit for PIP benefits and declaratory relief on October 19, 2004. Appellant sent a notice of policy rescission on March 29, 2005 under §627.409, Fla. Stat. Appellant returned the premiums to the insured on April 13, 2005. All other issues were disposed of below and are not on appeal.
CONCLUSIONS OF LAW
The Appellant argues that its defense of rescinding a policy void ab initio isbased on a material misrepresentation involved §627.409, Fla. Stat. (2006) and not the cancellation statute of §627.7283(2), Fla. Stat. (2006). The Appellee’s motion for partial summary judgment had erroneously characterized the rescission as subject to §627.7283(2), Fla. Stat. (2006) which governs statutory cancellation. (R. 56-59). Statutory cancellation does not require the restoration of all premiums paid to the insured. U.S. Sec. Ins. Co. v. Figueroa, 917 So. 2d 901, 903 (Fla. 3d DCA 2005).
We agree that the Appellant could rescind the policy as a defense based on a material misrepresentation under §627.409(1)(b), Fla. Stat. (2006) as the misrepresentation altered the premium. Nationwide Mut. Fire Ins. Co. v. Kramer, 725 So. 2d 1141, 1142 (Fla. 2d DCA), rev. denied, 732 So. 2d 327 (Fla. 1999) and Miami Chiropractic Associates v. United Auto. Ins. Co., 13 Fla. L. Weekly Supp. 273a (Fla. 11th Cir. Ct. Jan. 25, 2006). The trial court never mentioned any particular statute as the basis for its decision but it erroneously labeled the rescission by the Appellant as a cancellation of the policy. Nor is there any indication by the trial court that it understood that §627.409, Fla. Stat (2006) controlled as a matter of law rather than the Florida cancellation statute.
Next, Appellant argues that it did not waive its right of rescission relying on United Auto. Ins. Co. v. Quiroga, 12 Fla. L. Weekly Supp. 919b (Fla. 11th Cir. Ct. July 19, 2005). Appellee argues relying on Leonardo v. State Farm Fire & Cas. Co., 675 So. 2d 176 (Fla. 4th DCA 1996) that Appellant’s intent to waive its right is inferred as a matter of law because the rescission occurred 14 months after the EUO which is an unreasonable amount of time to restore the insured to the status quo. The trial court granted the Appellee’s motion on the basis that Appellant waived its right to rescind the policy where it unreasonably delayed in canceling the policy ab initio.
Appellee argued that all three elements of waiver existed, while the Appellant argued that no waiver existed as only two elements were met. It is well established that the elements of waiver are 1) the existence of a right which may be waived; 2) the actual or constructive knowledge of the right; and 3) the intention to relinquish the right. Capital Bank v. Needle, 596 So. 2d 1134, 1138 (Fla. 4th DCA 1992). We find that material issues of fact exist as to the last element of whether the Appellant intended to waive its right to rescind the policy.
The trial court determined that the timeliness of the act of canceling the policy of the insured a year and half later was unreasonable as a matter of law, namely “the act of canceling the policy within a reasonable time was not met.” This was based on one of the factors in Leonardo as to whether a waiver existed, namely whether the premium was returned within a reasonable time after payment came to the attention of the insurer. Leonardo, 675 So. 2d at 178 n.1.
We find the trial court and Appellee’s reliance upon Leonardo on this record is misplaced. Unlike in that case, no evidence exists in this record that Appellant continued to bill or accept payment from the insured after learning of the material misrepresentation.
According to legal authority, whether two months is a reasonable amount of time to return the premium to the insured after learning of the grounds for rescission is a question for the trier of fact. United Auto. Ins. Co. v. Quiroga, 12 Fla. L. Weekly Supp. 919b (Fla. 11th Cir. Ct. July 19, 2005). On the other hand, 19 months has been held to be an unreasonable amount of time as a matter of law to give a notice of rescission and return premiums after learning of the material misrepresentation. Fortune v. United Auto. Ins. Co., 13 Fla. L. Weekly Supp. 383a (Fla. 17th Cir. Ct. Jan. 23, 2006). No legal authority exists holding that 14 months or a year and a half is an unreasonable amount of time to rescind a policy as a matter of law.
Upon examining this record, we find that unlike the above cases dealing with an unreasonable amount of time, a material issue of fact exists as to when the insured was notified of the existence of the policy’s rescission. Appellee relies on United Auto. Ins. Co. v. Vila, 13 Fla. L. Weekly Supp. 552a (Fla. 11th Cir. Ct. Mar. 15, 2006) which is factually distinguishable as Appellant returned the premiums after rescinding the policy ab initio before the summary judgment hearing below.
We also find that a material issue of fact exists on the record as the evidence is conflicting as to whether the misrepresentation was material itself. Evidence shows that Maykel Coroas was not residing with the insured at the time of the application because the address of the nephew is different. In contrast, the evidence also shows that Maykel Coroas was residing with the insured at the time of the accident. Before that time, he was residing with the insured for a year and a half. At the time of the EUO, he was residing at a different address.
Accordingly, based on the record, we reverse the final summary judgment and fee judgment entered below and remand for further proceedings consistent herein. Appellee’s motion for appellate attorney’s fees is hereby denied. (RODRIGUEZ and PRESCOTT, JJ., concur.)
