27 Fla. L. Weekly Supp. 906b

Online Reference: FLWSUPP 2710CHAVInsurance — Personal injury protection — Rescission — Misrepresentation on application — Insurer did not properly rescind policy based on alleged material misrepresentation in insurance application where insurer did not notify claimant in writing within 30 days of submission of claim that claim was being investigated for suspected fraud — Even if insurer provided timely notice as required by statute, insurer failed to pay or deny the claim at the end of 90-day extended period

AJ THERAPY CENTER, INC., (a/a/o Pedro Enrique Chavez), Plaintiff(s), v. CENTURY NATIONAL INSURANCE COMPANY, Defendant(s). County Court, 13th Judicial Circuit in and for Hillsborough County, Civil Division. Case No. 17-CC-051131, Division L. December 31, 2019. Cynthia Oster, Judge. Counsel: Timothy A. Patrick, Patrick Law Group, P.A., Tampa, for Plaintiff.

ORDER GRANTING PLAINTIFF’S AMENDED MOTIONFOR FINAL SUMMARY JUDGMENT ANDDENYING DEFENDANT’S MOTIONFOR FINAL SUMMARY JUDGMENT

THIS CAUSE having come before the court on September 18, 2018, September 20, 2019, and October 14, 2019, respectively on Plaintiff’s Motion for Final Summary Judgment, Defendant’s Motion for Final Summary Judgment and Plaintiff’s Amended Motion for Final Summary Judgment. The court having considered the Motions, the arguments presented by counsel, applicable law, and being otherwise fully advised, finds:

1. This is a Declaratory action wherein the sole issue was whether Defendant properly rescinded the named insured’s policy after learning of an alleged material misrepresentation in the application for insurance.

2. Both parties filed competing Motions for Final Summary Judgment regarding the material misrepresentation defense.

BACKGROUND

3. On June 20, 2017, the named insured, Pedro Enrique Chavez (hereinafter “CHAVEZ”) was involved in an automobile accident and subsequently began receiving medical treatment from Plaintiff on June 23, 2017 for injuries he sustained in the accident. On June 27, 2017, the Defendant opened a PIP claim for Plaintiff. On August 31, 2017, the Defendant conducted a recorded statement of CHAVEZ. On October 20, 2017, Defendant notified the Plaintiff that the subject insurance policy had been rescinded based upon an alleged material misrepresentation and refunded the named insured’s policy premiums.

ANALYSIS

4. Florida Statutes Section 627.736(4)(i) reads:

“If an insurer has a reasonable belief that a fraudulent insurance act, for the purposes of s. 626.989 or s. 817.234, has been committed, the insurer shall notify the claimant, in writing, within 30 days after submission of the claim that the claim is being investigated for suspected fraud. Beginning at the end of the initial 30-day period, the insurer has an additional 60 days to conduct its fraud investigation. Notwithstanding subsection (10), no later than 90 days after the submission of the claim, the insurer must deny the claim or pay the claim with simple interest as provided in paragraph (d).”

5. This Section is clear and unambiguous within the Florida Motor Vehicle No-Fault Law (No-Fault Law). As such, it must be implemented through its plain meaning without judicial intervention. The Legislature’s purposeful inclusion of special constrains into the No-Fault Law clearly and unambiguously prescribe that insurers have the absolute right to investigate and thwart fraudulent insurance acts; however, the duration of the investigation must not prevent undue financial interruption to the claimant. The plain meaning of the language “notify the claimant, in writing, within 30 days after submission of the claim that the claim is being investigated for suspected fraud” and “no later than 90 days after submission of the claim, the insurer must deny or pay the claim. . .” is unmistakable, thus the Court need not attempt any further interpretation of same.

6. This Court adopts the ruling in GEICO Indemnity Co. v. Central Florida Chiropractic Care (a/a/o David Cherry), 26 Fla. L. Weekly Supp. 613a (9th Jud. Cir. Orange County [Appellate], Case No.: 2016-CV-000038-A-O, May 11, 2017, Judge Steve Jewett) wherein the Court noted that the statutory language requiring PIP benefits to be paid within 30 days remained in effect, and that the legislature carved out a way to extend the investigative time under Section 627.736(4)(i), Florida Statutes (2014) for an additional 60 days, but “made sure to indicate that the insurer must pay or deny the claim” at the end of the 60 days. See also Colonial Medical Center (a/a/o Daunte Draper) v. Century-National Ins. Co., 27 Fla. L. Weekly Supp. 71a (Fla. 9th Jud. Cir. Orange Cty. Ct., Case No. 16-CC-13154-O, March 1, 2019, Faye Allen, Judge) citing to GEICO Indemnity Co. v. Central Florida Chiropractic Care (a/a/o David Cherry).

7. It is undisputed that Defendant failed to pay the subject claim within 30 days and did not invoke the additional time limitation under Florida Statutes Section 627.736 (4)(i).

8. It is also undisputed that even if Defendant notified the claimant in writing that the claim was being investigated for suspected fraud, Defendant failed to affirmatively deny or pay the claim within the 90 day time frame.

9. At the end of 90 days after submission of the claim, the insurer must pay or deny the claim. Defendant did neither and is, therefore, in violation of the No Fault Law.

10. A prior breach of contract prohibits an insurer from electing to investigate or deny the claim for material misrepresentation because insurer violated PIP statute by failing to pay or deny claim within 30 days and did not invoke the additional time limitation under section 627.736(4)i). Halifax Chiropractic & Injury Center, Inc. (a/a/o Rantanen Bloodworth) v. Century-National Ins. Co., FLWSUPP 2704BLOO (Fla. 9th Jud. Cir. Orange Cty. Ct., Case No. 16-CC-07170-O, January 16, 2018, David P. Johnson, Judge) [27 Fla. L. Weekly Supp. 392a] citing to “that, because of the special nature of, and protection afforded by, the PIP statute, upon expiration of the 30-day period, the insurer is itself in breach of the contract. . . .” Amador v. United Automobile Ins. Co., 748 So.2d 307 (Fla. 3rd DCA 1999) [24 Fla. L. Weekly D2437a]

11. Defendant violated the aforementioned PIP statute by failing to pay or deny the claim within 30 days and did not invoke the additional time limitation under Florida Statute Section 627.736 (4)(i), as such, it is in breach of contract. Additionally, notwithstanding, had Defendant provided timely notice in writing of its investigation, it failed to pay or deny the claim within the 90 day extended time period. As result, it cannot deny the claim for material misrepresentation.

IT IS ORDERED AND ADJUDGED:

1.

Plaintiff’s Amended Motion for Final Summary Judgment is HEREBY GRANTED and Defendant’s Motion for Final Summary Judgment is HEREBY DENIED.

2.

It should be noted that this Court’s ruling is specific to the particular facts of this case and the applicability of Florida Statutes Section 627.736(4)(i) to those facts.

3.

The court reserves jurisdiction as to attorney’s fees and costs.