26 Fla. L. Weekly Supp. 759b
Online Reference: FLWSUPP 2609CALIInsurance — Personal injury protection — Application — Misrepresentations — Resident of household — Where insured failed to disclose licensed son living with her on application for PIP policy, and insurer would not have issued policy or would have issued policy at higher premium due to increased risk if it had known that son was living with insured, policy was void ab initio
ADVANCED 3-D DIAGNOSTIC a/a/o Caliendo, Joseph, Plaintiff, v. MGA INSURANCE COMPANY, Defendant. County Court, 9th Judicial Circuit in and for Orange County. Case No. 2016-SC-001173-O. June 25, 2018. Faye L. Allen, Judge. Counsel: Kelly M. Arias, Arias Law Group, P.A., Hollywood, for Plaintiff. Drew A. Stoller, Roig Lawyers, West Palm Beach, for Defendant.
ORDER GRANTING DEFENDANT’S MOTIONFOR FINAL SUMMARY JUDGMENT
THIS CAUSE having come before the Court on Defendant’s Motion for Final Summary Judgment and the Court having heard argument of counsel, and being otherwise advised in the Premises, it is hereupon,
INTRODUCTION
Defendant, MGA Insurance Company, Inc., moves for final summary judgment on the basis that the policy of insurance at issue is void ab initio due to the insured’s material misrepresentations on the policy application. Specifically that Mercedes Santiago failed to list her son and licensed driver, Joseph Caliendo, as a household resident, and that such a failure was material to the decision to issue the policy or to that it would have resulted in a higher premium.
UNDISPUTED MATERIAL FACTS
The injured patient and purported assignor of MGA’s policy benefits is Joseph Caliendo. Mr. Caliendo’s date of birth is May 13, 1992. He is the son of Mercedes Santiago. Mr. Caliendo was issued a Florida driver’s license C453-xxx92-xxx-x on May 14, 2010. Four months later, on or about September 16, 2010, Ms. Santiago applied for PIP insurance with MGA.
The insurance application specifically requires the following information from the applicant:
DRIVER AND RESIDENT INFORMATION
All drivers of the insured vehicles must be listed on the application unless they are excluded from the policy. A driver is defined as: 1) any person who drives any of the insured vehicles on a regular basis that does not reside with the insured, 2) any resident of the insured’s residence who drives an insured vehicle whether legally licensed or not, 3) any resident of the insured’s residence who has ever had a driver’s license, and 4) any children or dependents of the insured or the insured’s spouse under the age of 21 who do not reside at the residence of the insured. Please list under DRIVER EXCLUSION any persons listed below that will not drive any vehicle on this policy.
Ms. Santiago failed to list Joseph Caliendo anywhere on the application. The insurance application goes on to state:
The undersigned by signature hereto, represents the statements and answers made herein to be true, complete, and correct, and agrees that any policy may be issues or renewed in reliance upon the truth, completeness and correctness of such statements and answers, and understands that falsity, incompleteness, or incorrectness may jeopardize the coverage under such policy so issued or renewed. Florida Statute 627.409.
During the policy’s effective period, Joseph Caliendo was allegedly involved in a motor vehicle accident and was allegedly injured as a result. MGA assigned claim number FL-385413 to this claim.
Defendant received bills from Plaintiff under claim number FL-385413 for treatment allegedly rendered to Joseph Caliendo as a result of the alleged accident. Following notification of the alleged accident and continuing after the receipt of bills for services rendered to Joseph Caliendo, Defendant conducted an investigation of the subject claim. Through the course of the investigation of the claim, Defendant determined that Ms. Santiago failed or refused to disclose all household residents, specifically her son and driver of the insured vehicle, Joseph Caliendo, who resided at the policy address.
Within a reasonable time after Defendant learned that Ms. Santiago failed or refused to disclose her son on the application of insurance, Defendant notified Ms. Santiago that as a result of this material misrepresentation, the policy was void ab initio. Defendant revoked the policy and refunded the premiums. MGA notified Mercedes Santiago of the rescission and returned all premiums to her. Mercedes Santiago cashed all premium refund payments.
GOVERNING LAW
Chapter 627, Fla. Stat., governs insurance rates and contracts in the State of Florida. Part II of Chapter 627, sections 627.401-627.442, Fla. Stat., is entitled “The Insurance Contract” and lays out the rules governing insurance contracts except those expressly excluded from its scope. The statutory right to rescission is set forth section 627.409, Fla. Stat.
“[A]bsent an express exclusion by the legislature, the right of rescission contained in section 627.409, Florida Statutes, applies to PIP insurance contracts issued pursuant to the Florida Motor Vehicle No-Fault Law. . .” United Auto. Ins. Co. v. Salgado, 22 So. 3d 594 (Fla. 3d DCA 2009) [34 Fla. L. Weekly D1578a] reh’g and reh’g en banc denied.
“Section 627.409, Florida Statutes (2003), provides that misrepresentations, omissions, concealment of facts and incorrect statements shall not prevent a recovery under a policy unless they are: (1) fraudulent; (2) material to the risk assumed by the insurer; or (3) the insurer in good faith would not have issued the policy or would have done so only on different terms if the insurer had known the true facts.” Id.
Substantial controlling case law supports Defendant’s argument that the claim premised upon Mr. Caliendo’s accident is non-compensable. Privilege Underwriters Reciprocal Exchange v. Coy Clark, Tabitha Clark, Brigham Reed Clark, et al, 174 So. 3d 1028 (Fla. 5th DCA, July 31, 2015) [40 Fla. L. Weekly D1810a].
ANALYSIS
MGA acted in reliance upon the representations made by Mercedes Santiago when it issued the policy of insurance. If MGA had known that her son was living with her it would not have issued the subject policy or would have issued it at a higher premium due to the increased risk. MGA notified Mercedes Santiago of the rescission and returned all premiums to her. Mercedes Santiago cashed all premium refund payments.
This evidence is supported by the Affidavit of Mark T. Hall, a Senior Product Manager who testified that MGA would have issued the subject policy to Mercedes Santiago at a higher premium than it did, because of her misrepresentation on the application and that this misrepresentation was material to the underwriting decision made by MGA.
The “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.” N.Y. Life Ins. Co. v. Nespereira, 366 So. 2d 859, 861 (Fla.1979).
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. See section 627.409(1)(a), Fla. Stat. (2003); Carroll, 485 So. 2d at 409; see also Gonzalez v. Eagle Ins. Co., 948 So. 2d 1, 2 (Fla. 3d DCA 2006) [31 Fla. L. Weekly D2287a] (“Florida law indeed gives an insurer the unilateral right to rescind its insurance policy on the basis of misrepresentation in the application of insurance.”); Union Am. Ins. Co. v. Fernandez, 603 So. 2d 653, 653 (Fla. 3d DCA 1992)(reversing and remanding for trial on issue of material misrepresentation in insurance application; stating that “[i]f such a material misrepresentation is established at trial, the subject insurance policy would be void ab initio and, accordingly, there would be no liability insurance coverage for the subject accident”).
CONCLUSION
Ms. Santiago’s failure and/ or refusal to disclose her son, Joseph Caliendo, was material to the risk and/or hazard accepted by MGA in issuing policy 01MGFC1269024-07. If MGA had known the true facts, MGA in good faith would not have issued the policy 01MGFC1269024-07 at all, or would have issued it at a higher premium rate.
For the reasons set forth herein, it is hereby ORDERED AND ADJUDGED that said motion be, and the same is hereby: GRANTED. This case is dismissed and Plaintiff shall go hence without day. This Court reserves jurisdiction to address any authorized post judgment motions including, but not limited to, motions for attorney fees and costs.
