24 Fla. L. Weekly Supp. 886a

Online Reference: FLWSUPP 2410ORIDInsurance — Personal injury protection — Application — Material misrepresentations — Evidence — Examination under oath of insured is admissible evidence in support of motion for summary judgment — Hearsay — Exceptions — EUO is admissible as admission of party opponent — Where evidence establishes that insured misrepresented on application for PIP policy the existence of other residents of her household age 15 and older and that this misrepresentation was material to risk assessed, policy was void ab initio and no coverage is afforded

QUANTUM IMAGING HOLDINGS, LLC, a/a/o Lisa Oridge, Plaintiff, v. WINDHAVEN INSURANCE COMPANY, Defendant. County Court, 17th Judicial Circuit in and for Broward County. Case No. 15-005319 CONO 72. November 2, 2016. John D. Fry, Judge. Counsel: Chris Tadros, Quantum Imaging Holdings, LLC, Fort Lauderdale, for Plaintiff. Tricia Neimand, Windhaven Insurance Company, Miami, for Defendant.

ORDER GRANTING DEFENDANT’S MOTIONFOR FINAL SUMMARY JUDMGENTRE: MATERIAL MISREPRESENTATION

This Cause, having come before the Court upon Defendant’s Motion for Summary Final Judgment Re: Material Misrepresentation on September 13, 2016. The Court after reviewing the motions, the record, the applicable case law and after hearing argument of counsel for the parties, and being otherwise fully advised in the premises, makes the following findings of fact and conclusions of law:FACTS

On or about March 10, 2014, Annie Edwards applied for an insurance policy with Windhaven Insurance Company (“Windhaven”). Pursuant to the Defendant’s policy application, all residents age 15 or older must be disclosed on the application, even if later excluded from the policy. The insurance application contained three (3) separate provisions for Ms. Edwards to disclose all household residents 15 years of age or older. On the application, Ms. Edwards listed only Lisa Oridge as an additional driver and household resident. In reliance on the information that Ms. Edwards provided in this signed application, Defendant issued the subject policy to run from March 10, 2014 to September 10, 2014 at a premium of $1,014.00.

On June 12, 2014, Lisa Oridge was 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”).

During Windhaven’s investigation of the claim, Windhaven discovered that on the date of policy inception, Tyrone Oridge and Lisa Harris were residents of Ms. Edwards’ household and were 15 years of age or older. However, Ms. Edwards neither disclosed Tyrone Oridge nor Lisa Harris as household members age 15 or older. Accordingly, Ms. Edwards was set for an Examination Under Oath (“EUO”). During the EUO, Ms. Edwards confirmed that Tyrone Oridge and Lisa Harris were residing at the policy address on the date of inception. She further confirmed that Tyrone Oridge and Lisa Harris were age 15 or older at the time the policy application was completed. Pursuant to Windhaven’s Underwriting Guidelines had Ms. Edwards disclosed Tyrone Oridge and Lisa Harris on the application for insurance the premium would have not been issued at the same rate thus constituting a material misrepresentation. Specifically, had Tyrone Oridge and Lisa Harris been disclosed on the policy application as household residents age 15 or older, Windhaven would have charged $1,020.00 for the initial six month premium rate.

Defendant’s policy application as well as its policy jacket expressly provide that the Defendant may deny coverage where there is a material misrepresentation on the application of insurance. Pursuant to section 627.409, Florida Statutes (2014), a Notice of Flat Cancellation, along with a policy refund check in the amount of $1,100.38 (representing the premium that had been paid to date) was mailed to Ms. Edwards on September 19, 2014.

The parties argued several points during hearing, which this court will address seriatim.ANALYSIS

First, the Court considered the admissibility of the EUO as summary judgment evidence. Plaintiff contends that the EUO is not proper summary judgment evidence, relying on Eduardo J. Garrido, D.C. P.A. (Huegett Garay) vs. Star Casualty Insurance Company, (Fla. 11th Judicial Circuit, Miami-Dade County, May 16, 2016) [24 Fla. L. Weekly Supp. 386a] (Gonzales-Meyer, J.) and Coral Gables Family Chiropractic Center (a/a/o Milagritos Pena & Renzo Bossio) v. Star Casualty Insurance Company, ((Fla. 11th Judicial Circuit, Miami-Dade County, July 8, 2016) [24 Fla. L. Weekly Supp. 222a] (Demetris, J.). This Court finds these cases unpersuasive.

1. EUO ADMISSIBILITY

a. An EUO is no different than an affidavit and may be considered on summary judgment.

The Fourth District Court of Appeal has previously addressed a similar situation. In Avampato v. Markus, 245 So. 2d 676, 678 (Fla. 4th DCA 1971), the Fourth District allowed a sworn statement of a party to be considered on summary judgment stating

[t]he sworn statement of the defendant is not in a form usually employed to support a motion for summary judgment and appears to contain a series of leading and suggestive questions posed by defendant’s counsel, affirmed or negated by the defendant. The statement was taken as upon an oral deposition, but without the presence of plaintiff’s counsel. Although unusual, when taken as a whole, it is probably no more nor less reliable than an affidavit written in narrative form, usually by counsel, which is then read and sworn to by the party whose statement it purports to be. We do not find the form of the defendant’s statement to be invalid. . .

Additionally, the Second District Court of Appeal has reached a similar outcome. In Stinnett v. Longi, Inc., 460 So. 2d 528, 530 (Fla. 2d DCA 1984), the Second District held that testimony given at deposition of which adverse party received no notice but was made on basis of personal knowledge, contained facts that would be admissible into evidence, and showed that deponent was competent to testify to matters contained in deposition, trial court should have treated deposition as equivalent of affidavit. The Court specifically noted that “[h]aving the contents of the deposition put into affidavit form and resworn to by the deponent would have served no useful purpose.” Stinnett v. Longi, Inc., 460 So. 2d 528, 530 (Fla. 2d DCA 1984).

This position has also been recognized in sister courts. In Dade Injury Rehabilitation Center, Inc. a/a/o Gwendolyn Green v. Equity Insurance Company, Case No. 12-25095 SP 23 (September 8, 2016), the Honorable Judge Dimitrius granted Equity Insurance Company’s motion for summary judgment as to material misrepresentation finding the EUO as admissible evidence. In Millennium Diagnostic Imaging Center a/a/o Alejandro Gonzlaez v. Allstate Property & Casualty Ins. Co., 14 Fla. L. Weekly Supp. 84a (Fla. 11th Cir. October 12, 2006), Plaintiff argued that Defendant had failed to attach an affidavit from the insured declaring the facts laid out in the sworn statement and having the insured swear to same. Defendant argued that the examination under oath was a sworn statement provided before a court reporter while the insured was under oath. The court agreed as a matter of law and granted Allstate’s motion for summary judgment.

The Court strongly agrees with the analysis of the above mentioned courts. The EUO of Annie Edwards was taken under oath, made on the basis of personal knowledge, contained facts that would be admissible into evidence, and showed Ms. Edwards was competent to testify to matters contained therein. This Court agrees that putting the EUO into affidavit form and resworn by Ms. Edwards would have served no useful purpose. Therefore it is the opinion of this Court that an EUO holds the same evidentiary value as an affidavit and may be considered on summary judgment.

b. The EUO is an admission by a party opponent and is therefore an exception to the hearsay rule.

Florida Statute 90.803(18) states:

(18) Admissions. — A statement that is offered against a party and is: (a) The party’s own statement in either an individual or a representative capacity; (b) A statement of which the party has manifested an adoption or belief in its truth; (c) A statement by a person specifically authorized by the party to make a statement concerning the subject; (d) A statement by the party’s agent or servant concerning a matter within the scope of the agency or employment thereof, made during the existence of the relationship; or (e) A statement by a person who was a coconspirator of the party during the course, and in furtherance, of the conspiracy.

§ 90.803, Fla. Stat.

Further, one need not be named in the pleadings or aligned in the pleadings in opposition to the party calling him, to be called as an adverse party witness, Smith v. Fortune Ins. Co., 404 So. 2d 821, 823 (Fla. 1st DCA 1981) (citing Rubin v. Kapell, 105 So.2d 28, 32 (Fla. 3d DCA 1958)). Rather, the test is whether the party sought to be called “occupied an adverse position toward” the party seeking to call him and could have been named as a party. Id. (citing Degelos v. Fidelity and Casualty Company, 313 F.2d 809, 815 (5th Cir. 1963); Chumbler v. Alabama Power Company, 362 F.2d 161, 163 (5th Cir. 1966)).

In Smith v. Fortune Ins. Co., Smith on his claim under a homeowner’s policy issued by Fortune Insurance Company. Smith v. Fortune Ins. Co., 404 So. 2d 821, 822 (Fla. 1st DCA 1981). Nearly one year after the policy was issued, a fire destroyed Smith’s mobile home and its contents. Id. An investigation by the Bradford County Sheriff’s Department revealed that Smith’s 19-year-old daughter, Cathy, acting deliberately, had set fire to the mobile home. Id. Cathy Smith was called by Fortune as an adverse party witness. Id. She denied starting the fire and also denied any knowledge of how or where the fire started. Id. Fortune then called Lieutenant Moore of the Bradford County Sheriff’s Department, who testified about an interview he had with Cathy on the day after the fire. Id. He testified that, during the interview, Cathy told him she had been “playing with matches” in her bedroom and the bed cover caught fire. Id. Lieutenant Moore further stated that Cathy told him she did not attempt to put out the fire and that, although she knew her family was in the trailer, it did not really matter to her because “she had had all she could stand, all she wanted was out.” Id. The Court held Lieutenant Moore’s testimony regarding Cathy’s out-of-court statements came within the “admissions” exception to the hearsay rule. Id. (citing Florida Statutes, Section 90.803(18)(a); Hunt v. Seaboard Coastline Railroad Company, 327 So. 2d 193 (Fla. 1976)).

This exception was also recognized in Eduardo J. Garrido, D.C., P.A. a/a/o Francisco J. Garay v. Star Casualty Insurance Co., 23 Fla. L. Weekly Supp. 557c (Fla. 11th Cir. June 21, 2016), where the Court considered Francisco and Huguett Garay’s Examination Under Oath (“EUO”) testimony and found it was admissible, relying on Millenium Diagnostic Imaging Center a/a/a Alejandro Gonzalez v. AllState Property & Casualty Ins. Co., 14 Fla. L. Weekly Supp. 84a (Fla. 11th Cir. October 12, 2006); Fla. Stat. § 90.803(18) and Smith v. Fortune Ins. Co., 404 So. 2d 821 (Fla. 1st DCA 1981).

Here, although Ms. Edwards was not named in the pleadings she is an adverse party to Windhaven. Therefore, her out of court statements come within the admissions exception to the hearsay rule.

2. DEFENDANT ESTABLISHED MATERIAL MISREPRESENTATION UNDER FLA. STAT. § 627.409

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.

a. The Court finds Defendant established misrepresentation.

As discussed above, the EUO of Ms. Edwards is admissible as summary judgment evidence. The Court has reviewed the EUO attached to Defendant’s Motion for Summary Judgment which affirmatively established that 1. Tyrone Oridge and Lisa Harris were residents of the Ms. Edward’s household and were 15 years of age or older and 2. Ms. Edwards neither disclosed Tyrone Oridge nor Lisa Harris as household members age 15 or older. Further, the record evidence attached to Defendant’s motion establishes that Defendant’s policy application requests this information in three different places. This evidence is undisputed as Plaintiff failed to file one scintilla of evidence to rebut these facts. Therefore, Defendant has established its burden that a misrepresentation under Florida Statute § 627.409 occurred.

b. The Court finds Defendant established materiality as a matter of law.

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.” Additionally, “[t]he law is well settled that if the misrepresentation 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.” New York Life Ins. Co. v. Nespereira, 366 So. 2d 859, 861 (Fla. 3d DCA 1979).

Accordingly, where the evidence is clear and uncontradicted the materiality of the misrepresentation shall be decided as a question of law. de Guerrero v. John Hancock Mut. Life Ins. Co., 522 So. 2d 1032, 1033 (Fla. 3d DCA 1988) (citing Continental Assur. Co. v. Carroll, 485 So. 2d 406, 409 (Fla.1986); 7 Couch on Insurance 2d, § 35:94 (rev. ed. 1985)). Thus, an affidavit of an underwriter averring as to the materiality of the risk is sufficient to establish materiality. GRG Transp., Inc. v. Certain Underwriters at Lloyd’s, London, 896 So. 2d 922, 925 (Fla. 3d DCA 2005) [30 Fla. L. Weekly D600a] (affirming the award of summary judgment where Lloyd’s introduced of the uncontradicted affidavit of one its underwriters who averred that Lloyd’s would not have issued the policy if it would have known of the non-renewal and cancellation).

Here, Windhaven introduced the affidavit of its underwriter which averred that “[p]er the applicable Underwriting Guidelines which govern the underlying policy, the Underwriting Department determined that had Annie Edwards disclosed Tyrone Oridge and Lisa Harris on the policy application as residents age 15 or older, the policy would have been issued at a higher premium or would not have been issued at all.” Again, this affidavit was uncontroverted as Plaintiff did not introduce a single piece of evidence to rebut this affidavit. Therefore, Windhaven established materiality under Florida Statute § 627.409 as a matter of law.CONCLUSION

After review and consideration of the record evidence and Defendant’s motion for summary judgment, the Court finds that Ms. Edwards made a misrepresentation on the application of insurance by not listing all residents of the household age 15 and over. The Defendant presented an unrebutted affidavit establishing that this misrepresentation was material to the risk assessed. Pursuant to § 627.409 Florida Statutes (2014), the subject policy was voided ab initio and therefore no coverage is afforded. See United Auto. Ins. Co. v. Salgado, 22 So. 3d 594, 599601 (Fla. 3d DCA 2009) [34 Fla. L. Weekly D1578a] New York Life Ins. Co. v. Nespereira, 366 So. 2d 859, 861 (Fla. 3d DCA 1979); Fla. Stat. § 627.409 (2014). Based upon the foregoing analysis, the Defendant is entitled to Summary Judgment as a matter of law.

IT IS HEREBY ORDERED AND ADJUDGED that Defendant’s Motion for Final Summary Judgment is hereby GRANTED. Plaintiff shall take nothing by way of this action and Defendant shall go hence without day. The Court retains jurisdiction for the purpose of determining any motions by the Defendant for entitlement to fees and costs.