27 Fla. L. Weekly Supp. 1037b

Online Reference: FLWSUPP 2712FEIJInsurance — Personal injury protection — Cancellation of policy — Notice — Although insurer represented throughout discovery that one-page document was entire certificate of mailing of notice of cancellation of policy, when actual certificate was more than 300 pages long, and insurer destroyed complete document during litigation, motion to strike insurer’s pleadings is denied — Trial court is reluctant to find that destruction was malicious — Even if destruction were inadvertent, document was relevant evidence material to insured’s ability to counter insurer’s cancellation defense, and insured was prejudiced by its destruction — Certificate of mailing is stricken

FEIJOO, MANUEL V. (MD), Plaintiff, v. GEICO INDEMNITY CO., Defendant. County Court, 11th Judicial Circuit in and for Miami-Dade County. Case No. 2011-013139-SP-25, Section CG01. November 13, 2019. Linda Diaz, Judge. Counsel: Kenneth B. Schurr, Law Offices of Kenneth B. Schurr, P.A., Coral Gables, for Plaintiff. Vivian Lasaga, for Defendant.

ORDER ON PLAINTIFF’S MOTION TO STRIKEDEFENDANT’S PLEADINGS OR IN THE ALTERNATIVETO STRIKE DEFENDANT’S CERTIFICATE OF MAILING

This cause having come before the Court on November 1, 2019, on Plaintiff’s Motion to Strike Defendant’s Pleadings or in the Alternative to Strike Defendant’s Certificate of Mailing, and the Court having reviewed the motion and having carefully considered the arguments of counsel as well as all matters of record, it is hereby ordered and adjudged as follows:

Plaintiff seeks to recover unpaid medical bills due and owing under an insurance policy issued by Defendant. While Defendant concedes that the claimed medical bills are reasonable, related to the subject accident, and medically necessary, Defendant denied payment alleging that the subject insurance policy was canceled for non-payment of an insurance premium. Specifically, Defendant claims that on August 9, 2006, it mailed a notice of cancellation to the named insured advising that the policy would be canceled effective August 20, 2006 unless it received payment from the insured.

After Plaintiff filed this action, Defendant asserted an affirmative defense that the policy was canceled for non-payment of the policy premium. During the litigation that followed, Plaintiff sought to prove that Defendant failed to comply with Florida law relative to sending a cancellation notice to a policy holder.

When an insurer seeks to cancel an automobile insurance policy for non-payment of an insurance premium, it must comply with Florida Statute 627.728(5), which provides:

(5) United States postal proof of mailing or certified or registered mailing of notice of cancellation, of intention not to renew, or of reasons for cancellation, or of the intention of the insurer to issue a policy by an insurer under the same ownership or management, to the named insured at the address shown in the policy shall be sufficient proof of notice.

Pursuant to Fla Stat. 627.728(5), the Defendant had the option of sending the Notice of Cancellation to its insured via one of three ways; (1) Certified Mail, or (2) Registered Mail, or (3) United States Postal ‘proof of mail.’ There is no dispute that Defendant did not utilize Certified Mail, nor Registered Mail, and so Plaintiff sought to discover facts surrounding Defendant’s use of United States Postal Proof of Mail / Certificate of Mailing.[¹]

In Boman v. State Farm, 505 So. 2d 445 (Fla. 1st DCA 1987), the court discussed the reasoning behind Fla. Stat. 627.728(5) and why ordinary mailing is insufficient when it comes to canceling an insurance policy. Section 627.728(5), as amended, limits the presumption of sufficient notice to mailings made in conformance with the statutory requirements, and that less restrictive policy provisions regarding any kind of mailing do not take precedence over, and thus do not relax the statutory requirements. “Its purpose is analogous to that of the statute of frauds. Written proof of mailing is a higher order of proof and gives far better assurance that actual mailing has occurred than does proof based on usual custom and practice or often-unreliable recall testimony. Moreover, we would have to shut our eyes to the reality of experience not to recognize that the reliability of mail delivery in recent years has often left much to be desired. The restrictive methods of mailing now specified by the statutory change are more likely to assure actual delivery to, and thus receipt by, the insured. This statutory change indicates a legislative intent that the act of mailing will no longer be treated as sufficient proof of notice to the insured unless accomplished in the specified manner. Since the statutory amendment has effectively left the risk of non-delivery with the insurer when notice is not mailed in conformity with the statute, it follows that inconsistent policy provisions providing that mere mailing is sufficient are rendered invalid and thus ineffective to shift the risk of non-delivery to the insured.” See, Boman, supra.

During the litigation in the instant case, Plaintiff served multiple discovery requests seeking to discover information and documents surrounding Defendant’s policy cancellation defense and the materials relied upon by Defendant as its proof of mail or ‘Certificate of Mailing.’ In fact, Plaintiff repeatedly requested that Defendant produce a ‘complete copy’ of its Certificate of Mailing upon which Defendant is relying to prove its policy cancellation defense. Below is a list of the relevant discovery requests served by Plaintiff, along with the materials requested.

Date	Title	Documents Request
8/25/11	First Request for Production	#3. Contents of the insurance policy file.
8/6/12	Second Request for Production	#1. Any and all proof of mailing Notice of Cancellation of the subject policy
10/13/14	Third Request for Production	#1. Any and all Certificate of mailing and proof of mail for the Defendant’s Notice of Cancellation inclusive of all pages.#10. Complete copy of the list of names and addresses referenced in the Defendant’s Certificate of Bulk Mailing or U.S. Postal Proof of Mail.
6/21/18	Fourth Request for Production	#1. Any and all Certificate of mailing and proof of mail for the Defendant’s Notice of Cancellation inclusive of all pages.

The Court’s review of the docket reveals more than one dozen court orders between 2011 and 2019 compelling Defendant to respond to Plaintiff’s discovery requests, including orders compelling Defendant to produce the complete Certificate of Mailing to the Plaintiff.

On July 31, 2012, this Court ordered Defendant to produce the documents responsive to item #3 of Plaintiff’s First Request for Production (contents of the insurance policy file). In response, Defendant produced an un-redacted single sheet of paper which defendant referred to as its “Certificate of Mailing.’ This document did not contain a postage stamp nor a signature or acknowledgement from anyone in the spaces provided.

On August 12, 2015 this Court overruled Defendant’s objection to item #10 of Plaintiff’s Third Request for Production seeking a ‘complete copy of the list of names and addresses referenced in the Defendant’s Certificate of Bulk Mailing or U.S. Postal Proof of Mail. Three years later, on June 26, 2018, the Defendant served its Amended Response to Plaintiff’s Third Request for Production and reasserted the exact same objection (overbroad. vague, etc.) that this Court had previously over-ruled. Defendant thereafter produced the same single sheet of paper it had previously produced and represented that the single sheet of paper was its complete Certificate of Mailing as requested by Plaintiff.

Each and every time Plaintiff requested the complete Certificate of Mailing with all pages, names and addresses, Defendant responded by claiming that the one-page document had already been produced, or Defendant would simply produce another version of the same one-page document. Over the course of this litigation, Defendant eventually produced 3 or 4 iterations of the same one-page document (some included a postage stamp while others did not; some included a stamped name while others did not; some were redacted while others were not; and some were dated August 9, 2006 and at least one was dated August 8, 2006). Notwithstanding the different versions of the same document, Defendant steadfastly maintained that the Certificate of Mailing upon which it was relying to support its policy cancellation defense consisted of a single page. Defendant’s responses to Plaintiff’s second set of admissions confirms that Defendant’s Certificate of Mailing consisted of a single piece of paper listing just 15 persons designated to receive mail from Defendant.

On January 8, 2018, Defendant filed its motion for summary judgment seeking to establish that it canceled the subject insurance policy for non-payment of the premium. Attached to Defendant’s motion as Exhibit ‘B’ was a redacted version of the one-page Certificate of Mailing dated Aug. 8, 2006 (not Aug. 9, 2006), which did not include a postage stamp nor a signature or acknowledgement of anyone. Defendant later supplemented its motion for summary judgment with the Affidavit of Christopher Smith, which included a different version of the one-page Certificate of Mailing, followed by the Affidavit of Donna Truslow which is nearly identical to the certificate attached to the Smith affidavit.

Irrespective of which version of the one-page Certificate of Mailing Defendant relies upon, it is undisputed that at all times material, Defendant always represented to Plaintiff and to the Court that there were no other pages; that the certificate consisted of a single page with just 15 names of persons destined to receive a cancellation notice from Geico. See Defendant’s responses to Plaintiff’s multiple Requests for Production of the Certificate of Mailing, coupled with Defendant’s Responses to Plaintiff’s Second Request for Admissions, referenced above.

On October 16, 2019, Plaintiff deposed Ms. Donna Truslow, Defendant’s Output Manager, who testified that the one-page document which had been bandied about throughout this litigation as Defendant’s full and complete Certificate of Mailing was actually a one-page excerpt taken from a much larger document, which consisted of more than 300 pages. Apparently, the complete Certificate of Mailing was more than 300 pages and contained the names of thousands of policy holders who’s policies Geico sought to cancel. It now appears that Plaintiff and the Court have been misled about the nature of Defendant’s Certificate of Mailing. Worse, Ms. Truslow testified that the full 300+ page document which comprised Defendant’s complete Certificate of Mailing was destroyed by Defendant during the pendency of this litigation.

The Court finds that the destruction of the complete 300+ page document has prejudiced Plaintiff by effectively eliminating Plaintiff’s ability to conduct a meaningful cross-examination and impeachment of Defendant’s witnesses and evidence. Without the complete document, Plaintiff has been denied the opportunity to demonstrate that the number of pieces of mail allegedly mailed by Defendant on August 9, 2006 (or Aug. 8, 2006) is inconsistent with the number of pieces of mail acknowledged as having been received by the United States Post Office.

In State Farm Mut. Auto. Ins. Co. v. Resnick, 636 So.2d 75 (Fla. 3rd DCA 1994), the jury found that the insurer failed to mail a cancellation notice to the policy holder because the computer printout of policyholders designated to receive cancellation notices showed that 1,655 cancellation notices were issued by the insurer, but the postmaster only verified that 1,587 envelopes were actually delivered to the post office and mailed. Again, in Aries Ins. Co. v. Cayre, 785 So.2d 656 (Fla 3rd DCA 2001) [26 Fla. L. Weekly D1413a], there was evidence that a postal employee placed a postmark on the computer printout and charged postage verifying that only 12 of the 27 names that were on the insurer’s list were actually provided to the postal employee. Hence, the 300+ page Certificate of Mailing destroyed by Defendant during pendency of this this action was a critical piece of evidence needed by Plaintiff to rebut Defendant’s defenses.

Defendant contends that its destruction of the 300+ page document is harmless and that the complete document is irrelevant because the single page document attached to its motion for summary judgment (or one of the other versions attached to the Smith affidavit or the Truslow affidavit) is the only relevant portion of the 300+ page document since that is the only page that referred to the named insured. For the reasons espoused in Aries and Resnick, above, the Court rejects Defendant’s argument.

In Rockwell International Corp. v. Menzies, 561 So.2d 677 (Fla. 3rd DCA 1990), the 3rd DCA affirmed the trial court’s order striking a saw manufacturer’s pleadings in a products liability case when the saw manufacturer altered or destroyed the saw. The court found that the plaintiff could no longer rebut the testimony of the saw manufacturer’s expert and thus the degree of sanctions was related to the degree of prejudice. Id.

In Sponco Mfg., Inc. v. Alcover, 656 So.2d 629 (Fla. 3d DCA 1995) [20 Fla. L. Weekly D1566c], the defendant destroyed critical evidence and suffered a court-ordered default as a result. In affirming the entry of a default as a sanction, the District Court held that the setting of an appropriate sanction for the destruction of evidence in the custody of a litigant depends on the willfulness or bad faith, if any, of the party responsible for the loss of the evidence, the extent of prejudice suffered by the other party or parties, and what is required to cure the prejudice.

Dismissal of claims or defenses may be appropriate where there has been willful or malicious destruction of relevant evidence, but less drastic measures are ordinarily appropriate where relevant evidence was inadvertently destroyed. Metropolitan Dade County v. Bermudez, 648 So.2d 197 (Fla. 1st DCA 1995) [20 Fla. L. Weekly D44b]. Fashioning an appropriate sanction for when a party fails to preserve evidence in its custody depends on the willfulness or bad faith of the conduct (if any) of the party responsible for the loss of evidence, the extent of prejudice suffered by the other party, and what is required to cure the prejudice. Id. In Nationwide Lift v. Smith, 832 So. 2d 824 (Fla 4th DCA 2002) [27 Fla. L. Weekly D2453b], the court found that where evidence is destroyed intentionally or inadvertently, it is still a discovery violation involving the application of Fla.R.Civ.P. 1.380 under which sanctions are reviewed for abuse of discretion. See, Fed. Ins. Co. v. Allister Mfg. Co., 622 So.2d 1348 (Fla. 4th DCA 1993). In Nationwide Lift, the court struck the defendant’s pleadings even though the destruction was deemed inadvertent because the plaintiff was unable to proceed absent the destroyed evidence.

In the instant case, although the Plaintiff repeatedly requested Defendant’s full and ‘complete’ Certificate of Mailing with all names and pages; and although Defendant was ordered by this Court to produce the entire document to the Plaintiff; and although Defendant represented that the complete document was just one page when it was actually more than 300 pages; and although Defendant destroyed the document during this litigation, the Court is reluctant to find that the destruction of the document was malicious on the record presented thus far. Accordingly, the Court hereby denies Plaintiff’s motion to strike Defendant’s pleadings at this time.

However, even if the destruction of the evidence was inadvertent, Court finds that the complete copy of the Defendant’s Certificate of Mailing is relevant evidence which was material to Plaintiff’s ability to counter Defendant’s policy cancellation defense and that Defendant’s actions prejudiced the Plaintiff. The Court finds that Defendant should not benefit from the destruction of relevant and material evidence and in endeavoring to craft an appropriate sanction which is proportional to the prejudice sustained by Plaintiff, the Court finds that striking Defendant’s Certificate of Mailing is an appropriate sanction under the facts and circumstances of this case and is necessary to cure the prejudice caused to Plaintiff. Thus, Plaintiff’s Motion to Strike Defendant’s Certificate of Mailing is Granted. Defendant’s Certificate of Mailing (all versions) is hereby stricken and shall not be used by the Defendant at trial or in summary judgment, for any purpose.

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¹Defendant denied item #2 of Plaintiff’s Second Request for Production, which states: “Admit that the Defendant contends that ti mailed a notice of cancellation of the policy and that the Defendant did so via United States Postal Proof of Mail.”