27 Fla. L. Weekly Supp. 391a
Online Reference: FLWSUPP 2704CORBInsurance — Personal injury protection — Coverage — Affirmative defenses — Material misrepresentations on application — Materiality — Marital status and garaging address — Listing of marital status as “single,” per agent’s instruction after insured told agent she was “separated” was not a material misrepresentation in and of itself — Claim that garaging location was misrepresented was refuted by insured’s undisputed sworn testimony — Further, insurer was itself in breach of policy at time it denied claims because it failed to notify claimant in writing within 30 days of date of claim that they were investigating the claim for fraud and failed to pay or deny claim within 90 days of claim being initiated — Plaintiff’s motion for partial summary judgment granted
ACTIVE BODY REHAB & CHIROPRACTIC, LLC, a/a/o Takierra Corbitt, Plaintiff, v. DIRECT GENERAL INSURANCE COMPANY, Defendant. County Court, 9th Judicial Circuit in and for Orange County. Case No. 2016-SC-16398-O. October 12, 2018. David P. Johnson, Judge. Counsel: Matthew C. Quattrochi, MCQ Law, Longwood, for Plaintiff. Dina O. Piedra, Kubicki Draper, for Defendant.
ORDER ON PLAINTIFF’S MOTIONFOR PARTIAL SUMMARY JUDGEMENT
THIS MATTER came to be heard on 9/18/2018, on Plaintiff’s Motion for Partial Summary Judgment. The Court has reviewed the pleadings, sworn testimony filed with the Court and the record evidence; heard argument of counsel; and been otherwise advised in the premises. ORDERED AND ADJUDGED that:
1. Plaintiff’s Motion For Partial Summary Judgement is GRANTED.FACTUAL BACKGROUND
2. The Court finds that the following facts are uncontroverted as Defendant did not file any evidence which could create a question of fact.
3. This matter is predicated on an alleged failure to reimburse Personal Injury Protection (“PIP”) Benefits pursuant to Fla. Stat. 627.736.
4. Plaintiff filed a lawsuit against Defendant in Orange County Court. In Defendant’s answer to Plaintiff’s lawsuit, their First Affirmative Defense states:
FIRST AFFIRMATIVE DEFENSE
As it’s first Affirmative Defense, the Defendant states that the insured made material misrepresentations in the application of insurance by failing and/or refusing to disclose to this Defendant relevant important information at the time insured applied for insurance. Had Defendant known about, or been advised of, this relevant and important information, Defendant would either not have, in good faith, issued the subject insurance policy, 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 alleged loss
5. On 11/10/2015, Takierra Corbitt (“Assignor”) completed and executed an application for the purchase of Personal Injury Protection (“PIP”) auto insurance with DIRECT GENERAL INSURANCE COMPANY (the “Defendant”).
6. On 11/21/2015, Assignor was involved in motor vehicle accident in which she sustained personal injuries.
7. As a result of the injuries, Assignor received chiropractic medical treatment performed by ACTIVE BODY REHAB & CHIROPRACTIC, LLC (“Plaintiff’) from 11/24/2015 – 1/12/2016.
8. On 11/24/2015, Assignor assigned all rights, claims and causes of action against Defendant arising out of the medical treatment Assignor received from Plaintiff.
9. On or about 11/21/2015, Defendant initiated an investigation into Plaintiff’s PIP claim for suspected fraud.
10. Defendant has not submitted any evidence that they notified the Assignor/claimant, in writing, within 30 days after submission of the claim, that the claim is being investigated for suspected fraud.
11. On 2/16/2016, Defendant conducted an Examination Under Oath of the Assignor. The EUO was filed by the Defendant as evidence in opposition to Plaintiff’s Motion. In the Examination Under Oath, Assignor confirms that she lives at [editor’s note: address omitted], the address listed on the 11/10/2015 application. (Corbitt Dep. Pg. 9, Ln. 21-25) When asked about her marital status being listed as “single” on the application, Assignor states that she told Defendant’s agent that she was “separated” and the Defendant’s agent instructed her to “put single.” (Corbitt Dep. Pg. 43, Ln. 24-25 through Pg. 44, Ln. 1-9)
12. On 3/7/2016, Defendant sent Assignor, a correspondence notifying Assignor that Defendant had rescinded their PIP policy ab initio due to “fraud and misrepresentation”. The 3/7/2016 correspondence was attached as an Exhibit to Defendant’s PIP Litigation Claims Specialist, Amy Skunda’s Affidavit in opposition to Plaintiff’s Motion.
13. On 4/20/2016, Defendant mailed Assignor’s already incurred policy premiums back to the Assignor. The 4/20/2018 check was attached as an Exhibit to Defendant’s PIP Litigation Claims Specialist, Amy Skunda’s Affidavit in opposition to Plaintiff’s Motion.
14. Plaintiff argued that Defendant did not meet their burden of establishing that a material misrepresentation exists, did not a create a question of fact concerning the alleged misrepresentation and Defendant’s investigation into the misrepresentation violated Florida Statute 627.736(4)(i).
15. Defendant argued that a material misrepresentation existed in the application, which allowed for them to void the policy back to its inception date. Due to the policy being rescinded, there was no policy in force on the date of the accident. Defendant further argued that a question of fact is created by the application, which listed the Assignor’s marital status as “single”, when in fact the Assignor’s actual marital status is “separated”.
ANALYSIS
16. The Court finds that the Defendant failed to establish the existence of a material misrepresentation, failed to establish a question of fact concerning the nonexistence of a material misrepresentation and failed to conduct their investigation of the alleged material misrepresentation in compliance with Florida Statute 627.736(4)(i). Defendant’s failure to comply with time constraints stated within Section (4)(i) amount to a waive of their right to deny Plaintiff’s claim for material misrepresentation.Whether A Material Misrepresentation Exists
17. The Court finds that it was Defendant’s burden to support their Affirmative Defense and prove either the existence of a material misrepresentation committed by the Assignor or the existence of a question of fact concerning the nonexistence of a material misrepresentation. Holl v. Talcott, 191 So. 2d 40, 43 (Fla. 1966); and Volusia County v. Aberdeen at Ormond Beach, L.P., 760 So. 2d 126 (Fla. 2000) [25 Fla. L. Weekly S390a] Neither Defendant’s Affidavit or the EUO transcript supports the existence of a material misrepresentation. To the contrary, Defendant claims that Assignor misrepresented her marital status and garaging address on the application, but there is no sworn testimony from any party with personal knowledge to support this argument. The Assignor states in the EUO that she lives at [editor’s note: address omitted], which is the address listed on the application. Further, the Assignor states in the EUO that she told the Defendant’s agent that she was “separated” and that the Defendant’s agent instructed her to list her marital status as “single”.
18. The Assignor’s EUO testimony is entirely undisputed and the existence of a differing answer on the application does not establish a material misrepresentation or the existence of a question of fact. Gulf Life Ins. Co. v. Shelton, 155 Fla. 586, 21 So. 2d 39 (1945); Graham v. Lloyd’s Underwriters at London, 964 So. 2d 269 (Fla. Dist. Ct. App. 2d Dist. 2007) [32 Fla. L. Weekly D2212c]; and Flores v. Allstate Ins. Co., 819 So. 2d 740, 742, 2002 Fla. LEXIS 1093, *1, 27 Fla. L. Weekly S499a Defendant had the opportunity to conduct the deposition of the Assignor, the agent that the assisted with the application or any of the relevant parties involved in the matter, but they did not take such action.
19. The contradiction between the application and the Assignor’s marital status does not constitute a material misrepresentation in and of itself and it does not create a question of fact. Further, Defendant’s disagreement with the Assignor, without the existence of sworn testimony, does not create a question of fact. It was Defendant’s burden to support their position and establish a question of fact; this burden has not been met. Conroy Chiropractic, Inc. a/a/o Simmie Brown v. Infinity Auto Insurance Company, 25 Fla. L. Weekly Supp. 638b, (9th Judicial Circuit, March 27, 2017); Affirmative Insurance Co. v. Bayview Medical & Rehab Center, Inc. a/a/o Felipe Posas, 16 Fla. L. Weekly Supp 213c,; Florida Dep’t of Fin. Servs. v. Associated Indus. Ins. Co., 868 So. 2d 600, 602 (Fla. DCA 2004) [29 Fla. L. Weekly D568a]; Thompson v. Citizens Nat. Bank of Leesburg, Fla., 433 So. 2d 32, 33 (Fla. 5th DCA 1983)Whether Defendant’s Claims InvestigationViolated Florida Statute 627.736(4)(i)
20. The Court finds that Defendant did not produce any evidence that they notified the Assignor (Claimant) in writing with 30 days of the claim being initiated. Defendant did produce evidence that they denied the claim on 3/7/2016 and returned the policy premiums on 4/20/2016. Based upon Defendant’s evidence, Defendant was itself in breach of the policy at the time of 3/7/2016 claims denial because the Defendant failed to notify the claimant in writing within 30 days of the date of the claim being initiated that they were investigating the claim for a Fraudulent Insurance Act and failed to pay or deny the claim within 90 days of the claim being initiated.
21. The Court finds Amador v. United Auto Ins. Co. 748 So. 2d 307 (3d DCA 1999) [24 Fla. L. Weekly D2437a] persuasive. In Amador, the court found that the “burden is clearly on the insurer to authenticate the claim within the statutory time period.” Further, that “where the insurer did not pay by the statutory 30-day period, on the 31st day the insurer was itself in violation of the PIP statute and the insured was free to initiate a lawsuit. Appellee’s right to request information did not extend beyond the statutory time period.” Id. Although the statutory time period has changed between the Amador decision and the instant case, the reasoning remains the same.
22. The Court relies on Central Florida Chiropractic Care (a/a/o David Cherry) v. GEICO Indemnity Company, 24 Fla. L. Weekly Supp. 152a (9th Cir. April 22, 2016), which encompasses Plaintiff’s Section (4)(i) argument. In Cherry, the ninth judicial circuit, sitting in its appellate capacity, found that when the statutory investigatory period is at an end, the insurer must either deny or pay the claim. Nothing in the PIP statute allows for that statutory time period to be arbitrarily increased by the insurer for an indefinite amount of time. Id. Multiple Orange and Volusia county courts have ruled that Defendant’s failure to comply with the time constraints of Florida Statute 627.736(4)(i) constitutes a breach of contract. In the present case, Defendant was in breach of the contract before they denied the Assignor’s overall claim. This argument is also supported by Lensey Armstrong v. GEICO Indemnity Company, 2016-CC-012397-O; Halifax Chiropractic and Injury Clinics Inc. a/a/o Rantanen Bloodworth v. Century-National Insurance Company, 2016-CC007170-O [27 Fla. L. Weekly Supp. 392a]; and Spine Recovery Clinic, Inc. a/a/o Nicole Cassaro v. Windhaven Insurance Company, 26 Fla. L. Weekly Supp. 225a (7th Judicial Cir. May 8, 2018).
23. As a direct result of Defendant’s failure to produce evidence that they notified the claimant in writing within 30 days of the initiation of the claim, Defendant waived the right to investigate the overall claim for the full 90 days pursuant to Florida Statute 627.736(4)(i). Further, due to Defendant’s failure to pay or deny the claim within 90 days of the initiation of the claim, Defendant waived their right to deny Plaintiff’s claim for PIP benefits and is estopped from asserting a material misrepresentation defense to avoid reimbursement of Plaintiff’s medical bills. Central Florida Chiropractic Care (a/a/o David Cherry) v. GEICO Indemnity Company, 24 Fla. L. Weekly Supp. 152a (9th Cir. April 22, 2016); Amador v. United Auto Ins. Co. 748 So. 2d 307 (3d DCA 1999) [24 Fla. L. Weekly D2437a]; Lensey Armstrong v. GEICO Indemnity Company, 2016-CC-012397-O; Halifax Chiropractic and Injury Clinic, Inc. a/a/o Rantanen Bloodworth v. Century-National Insurance Company, 2016-CC-007170-O; and Spine Recovery Clinic, Inc. a/a/o Nicole Cassaro v. Windhaven Insurance Company, 26 Fla. L. Weekly Supp. 225a (7th Judicial Cir. May 8, 2018).
24. The Court rejects Defendant’s argument that they did not conclude that fraud exists, therefore, Section (4)(i) does not apply. The Defendant’s determination that they rescinded the PIP policy under 627.409 does not relieve the Defendant from compliance with 627.736(4)(i). Defendant’s denial letter states that the claim is being denied for “Fraud and Misrepresentation”. Any assertion that the Defendant is entitled to side step the plain language of Section (4)(i) through the determination that their rescission is based upon a material misrepresentation and not fraud, would lead to absurd consequences.
25. The purpose of Florida Statute 627.409 is to prohibit carriers from voiding insurance policies for immaterial misstatements or omissions in a policy application under the guise of warranties. The time constraints prescribed by Section (4)(i) seek to protect against the injuries incurred by the Plaintiff. Due to Defendant’s failure to investigate and deny the overall claim pursuant to Section (4)(i), Plaintiff was unaware of the overall compensability of the claim. As a direct result of Defendant’s breach of contract and failure to comply with Florida Statute 627.736(4)(i), Plaintiff was unable to properly determine the compensability of their treatment.
CONCLUSION
26. Defendant failed to submit evidence which supports the existence of a material misrepresentation or the existence of a material fact preventing Plaintiff’s Motion for Summary Judgement. Defendant’s failure to notify the claimant in writing that they were investigating an alleged fraudulent insurance act is a violation of Florida Statute 627.736(4)(i) and a breach of contract. Defendant’s failure to pay or deny the claim within 90 days of the claim being initiated is a violation of Florida Statute 627.736(4)(i) and a breach of contract. Defendant’s failure to comply with Florida Statute 627.736(4)(i) constitutes a waiver of their right to deny Plaintiff’s PIP claim for material misrepresentation.
