24 Fla. L. Weekly Supp. 770a
Online Reference: FLWSUPP 2409DUPEInsurance — Personal injury protection — Application — Misrepresentations — Named insured made misrepresentation on application for PIP policy by failing to list his wife and her sister as residents of household — Policy is void where unrebutted affidavit of insurer’s underwriter established that misrepresentation was material to risk assessed and that provision of correct information would have resulted in higher premium and modification of policy terms — Because policy is void ab initio, no coverage is afforded to medical provider despite fact that provider’s patient/assignor was not resident of insured’s household and was not party to misrepresentation
HOLLYWOOD PAIN & INJURY MEDICAL CENTER, INC., (a/a/o Anne Dupervil), Plaintiff, v. WINDHAVEN INSURANCE COMPANY, Defendant. County Court, 17th Judicial Circuit in and for Broward County. Case No. CONO-15-006034, Division 70. June 21, 2016. John D. Fry, Judge. Counsel: Benjamin Silvanic and Michael Shifrin, Doral, for Defendant.
ORDER GRANTING DEFENDANT’SMOTION FOR SUMMARY FINAL JUDGMENTRE: MATERIAL MISREPRESENTATION
This Cause, having come before the Court upon Defendant’s Motion for Summary Final Judgment Re: Material Misrepresentation on May 12, 2016. The Court heard argument of counsel, reviewed the file, and was otherwise fully advised. The Court makes the following findings of fact and conclusions of law:
BACKGROUND
On September 24, 2015, Duhamel Charles (“named insured”), Ava Cotterell, Anne Dupervil, along with two minors were involved in a car accident and sought treatment from Plaintiff for injuries sustained in the accident, and subsequently made claims for personal injury protection (“PIP”) benefits with Windhaven Insurance Company (“Windhaven”).
Windhaven denied all payment because the policy was voided ab initio due to a material misrepresentation. Specifically, the named insured failed to list all residents of his household age fifteen (15) years or older on the application for insurance, and had they been disclosed, the policy would not have been issued or would have been issued at a higher premium rate.
Plaintiff filed a Petition for Declaratory Relief seeking a declaration of coverage under the subject policy of insurance.
UNDISPUTED FACTS
The undisputed evidence before the Court reflects that Duhamel Charles (“named insured”) applied for a policy of insurance with Windhaven through Eaglemax Insurance on January 23, 2014. Mr. Charles listed only himself on the policy application.
The policy application required that the applicant disclose all household residents, and contained a warning that failure to provide the information could result in coverage being void. The application stated:
“Please list all residents of your household. Residents include any and all persons 15 years or older who reside full or part-time at the applicant’s residence, including any and all students living away from home within the State of Florida and persons in the Armed Services stationed within the State of Florida. Failure to provide this information may constitute a material misrepresentation, which may result in all insurance coverage being void. . .”
In support of the misrepresentation, Defendant proffered the EUO of Duhamel Charles wherein he admits that his wife, Ava Cotterell, and his sister, Loutchkendie Dupervil, were residents of the insured’s household on the date of policy inception.
Plaintiff filed the affidavits of Duhamel Charles and Loutchkendie Dupervil which confirmed that the unlisted household members resided at the named insured’s household at policy inception, but sought to avoid the misrepresentation based on additional facts.
Defendant filed the affidavit of Carmen Valdes, an Underwriting Manager within Windhaven’s Underwriting Department. This affidavit swore that the misrepresentation was material to the risk and attested that had the true facts been disclosed, and Ava Cotterell and Loutchkendie Dupervil been listed as household residents on the policy application, Bodily Injury coverage would have been added to the policy, and the policy would have been issued at a higher premium rate. Finally, the affidavit attested that Windhaven returned all policy premiums paid to date to the named insured at the policy address.
ANALYSIS
Fla Stat. § 627.409 (2014) provides for rescission of an insurance policy if an insured makes a material misrepresentation in the application for the insurance policy.
(1) Any statement or description made by or on behalf of an insured. . . in an application for an insurance policy. . .is a representation and not a warranty. . . [A] misrepresentation, omission, 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 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.
In United Auto. Ins. Co. v. Salgado, 22 So.3d 594, 599-601 (Fla. 3d DCA 2009) [34 Fla. L. Weekly D1578a] the Court held that Fla. Stat. § 627.409 applies to the Florida Motor Vehicle No-Fault Law and that, “where a misstatement or omission materially affects the insurer’s risk, or would have changed the insurer’s decision whether to issue the policy and its terms, the statute may preclude recovery.”
The record reflects that the named insured made a misrepresentation on the application of insurance by failing to list his wife and sister as residents of the insured’s household.1
Plaintiff here relied on factually distinguishable case law to conclude there is a genuine issue of material fact that a misrepresentation occurred. In Fresh Supermarket Foods, Inc. v. Allstate Ins. Co., 829 So. 2d 1000 (Fla. 2d DCA 2002) [27 Fla. L. Weekly D2477c], the Court held that notice to the agent at the time of the application for insurance of facts material to the risk is notice to the insurer. In the present case there is no record evidence, including the policyholder’s own affidavit, that indicates that the agent was aware of the fact that there were other people living in the insured’s household at the time of policy inception. Further, there is no record evidence of a discernable nexus between the agent who sold the policy and the Defendant. See Almerico v. RLI Ins. Co., 716 So. 2d 774 (Fla. 1998) [23 Fla. L. Weekly S431a] (As a general principle, an insurance broker is an agent of the insured.); see also Goldschmidt v. Holman, 571 So. 2d 422 (Fla. 1990)(Because the complaint failed to set forth any ultimate facts that establish either actual or apparent agency or any other basis for vicarious liability, the [Plaintiff] did not allege any grounds entitling them to relief.)
The Defendant presented the unrebutted affidavit of its Underwriter establishing that the misrepresentation was in fact material to the risk assessed. Plaintiff argued that because Bodily Injury coverage was added to the policy the increase in premium was not limited to PIP coverage only. However, the underwriting guidelines, applicable to the subject policy and approved by the State of Florida, required Bodily Injury coverage when excluding a driver from the policy. Thus, the misrepresentation would have resulted not only in the policy being issued at a higher premium rate, but a modification of the policy terms as originally contemplated by the parties due to the mandatory additional coverage. See New York Life Ins. Co. v. Nespereira, 366 So. 2d 859, 861 (Fla. 3d DCA 1979) (“The law is well settled that if the misrepresantation of the insured were material to the acceptance of the risk by the insurer or, if the insurer in good faith would not have issued the policy under the same terms and premium, then rescission of the policy by the insurer is proper.”).
The Court considered that in the present case Plaintiff’s Assignor was not a resident of the named insured’s household at the time of policy inception and thus was not a party to the material misrepresentation. However, Fla. Stat. § 627.409, is based on the common law principle that in order for a contract to be formed there must be a meeting of the minds, and when a policy is rescinded, it is treated as if it had never been written. See Singer v. Nationwide Mut. Fire Ins. Co., 512 So.2d 1125, 1128-9 (Fla. 4th DCA 1987). As noted by the Court in Salgado, the Florida Supreme Court has explained that Fla. Stat. 627.409 is an unambiguous codification of the principle of law that, “a contract issued on a mutual mistake of fact is subject to being voided and defines the circumstances for the application of this principle.” Salgado, 22 So.3d at 599 citing Continental Insurance Co. v. Carroll, 485 So.2d 406, 409 (Fla. 1986). Thus, when a policy is voided pursuant to Fla. Stat. 627.409, the Contract is voided ab initio, that is, to the beginning, and no coverage is afforded to anyone under the policy.
CONCLUSION
Accordingly, based on the foregoing analysis, Defendant’s Motion for Final Summary Judgment is hereby GRANTED. The subject policy is voided due to the insured’s material misrepresentation in the insurance application. Plaintiff shall take nothing by way of this action and Defendant shall go hence without day. The Court reserves jurisdiction to award attorney fees and costs.
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1The Court declines to rule on the admissibility of the EUO and finds that the affidavits of Charles Duhamel and Loutchkendie Dupervil establish that the unlisted household members were residents of the named insured’s household at policy inception.
