28 Fla. L. Weekly Supp. 157a

Online Reference: FLWSUPP 2802GREE

Insurance — Personal injury protection — Application — Misrepresentations — Where PIP insurer breached policy by failing to timely pay or deny claim and waited 85 days after learning of alleged material misrepresentation to invoke rescission right, insurer’s overt acts of continuing to send out letters pursuant to PIP statute after learning of rescission right waived that right

PHYSICIANS GROUP, L.L.C., a/a/o James Greene Sr., Plaintiff, v. CENTURY-NATIONAL INSURANCE COMPANY, a foreign profit corporation, Defendant. County Court, 12th Judicial Circuit in and for Sarasota County. Case No. 2018 SC 004549 NC. March 25, 2020. Maryann Boehm, Judge. Counsel: Nicholas A. Chiappetta, Marten | Chiappetta, Lake Worth, for Plaintiff. Cameron Ringo, for Defendant.

ORDER GRANTING PLAINTIFF’SMOTION FOR SUMMARY DISPOSITION

THIS CAUSE having come before the Court for hearing on March 09, 2020 upon Plaintiff’s Motion for Final Summary Disposition and Defendant’s Motion for Summary Disposition and the Court, having reviewed the motions, the Court file, the case law presented, and having heard argument of counsel and being otherwise fully advised in the premises, the Court makes the following findings of fact and conclusions of law:

1. The Court has been asked to determine whether Earl Worthy (“Mr. Worthy”), made a material misrepresentation on his insurance policy application by failing to disclose James Greene, Sr. (“Mr. Greene”) as driver of the insured vehicle, and if so, whether the Defendant’s unilateral rescission of the policy was proper.

2. On or about July 03, 2017, Mr. Worthy executed an application for insurance with the Defendant (“Application”). In response, the Defendant, Century-National Insurance company (“C-N”) issued an automobile insurance policy under policy number: PGA06949300 for his 2014 Nissan Sentra, for policy period July 03, 2017 through January 03, 2018 (the “Policy”). The Policy period premium was $1,034.00.

3. Mr. Greene did not live with, nor was he a household member of Mr. Worthy’s household. [D.E. 132, Worthy EUO].

4. Prior to the July 19, 2017, motor vehicle accident, Mr. Worthy sustained injuries to his leg, which required him to wear a brace. [D.E. 132, Worthy EUO]. As a result of this injury, Mr. Greene volunteered to run errands for, and drive Mr. Worthy to his doctor(s) appointments. [D.E. 132, Worthy EUO].

5. On or about July 19, 2017, while the insurance policy was in full force and effect, Mr. Greene was involved in an automobile accident in the State of Florida while operating Mr. Worthy’s insured 2014 Nissan Sentra.

6. C-N first received written notice of Mr. Greene’s claim on August 11, 2017. [D.E. 132, Mejia Tr. P. 14, In. 22-24]. Pursuant to section 627.736(4)(b), Florida Statutes, C-N was required to respond to the claim within thirty (30) days.

7. C-N did not invoke section 627.736(4)(i), Florida Statutes, which would have extended the deadline by sixty (60) days. Therefore, under section (4)(b), C-N was required to respond by September 11, 2017. This they did not do. C-N was in breach at this time.

8. On October 26, 2017, the C-N took the EUO of Mr. James Greene. [D.E. 113, JPTS, section II, ¶11]. At that time, C-N became aware of its rescission-right. [D.E. 132, Mejia Tr. P. 18, IN. 17-20, P. 22, In. 23-25, P. 23, In. 10-13; P. 32, In. 4-16].

9. C-N mailed out a rescission letter on or about January 17, 2018. [D.E. 132, Mejia Tr P. 24, In. 10-22]. The Defendant mailed the policy premium refund in the amount of $1,273.79 on or after January 19, 2018. [D.E. 132, Mejia Tr. P. 25, 14-17]. Interest was not included in the policy premium refund. [D.E. 113, JPTS, section II, ¶20]

10. From October 26, 2017, the date C-N first learned of its rescission-right to January 19, 2018, eighty-five (85) days past. That is, the Defendant with knowledge or notice of a basis for rescission, waited eighty-five (85) days to unilaterally rescind the Policy.

11. This Court heard arguments on March 09, 2020.

12. The Plaintiff argued that C-N’s failure to deny the claim within thirty (30) days violated the PIP Statute — and as a result of the violation, the insurer waived its ability to investigate or deny the claim for material misrepresentation.

13. In contrast, C-N argued that it was entitled to rescind the Policy under section 627.409, Florida Statutes and that Cont’l Assur. Co. v. Carroll, 485 So. 2d 406, 407 (Fla. 1986) was controlling case law. Additionally, C-N argued that the statutory thirty (30) day time requirement to process medical bills under section 627.736(4)(i) does not exist. Lastly, C-N argued that the penalty for an insurer who fails to comply with the statutory time frame set forth in section (4)(b) is interest. [See D.E. 129]

14. C-N’s argument is belied by the fact that the cases C-N cited to were decided prior to the 2012/2013 PIP amendment. The 2012/2013 PIP amendments added portions to the statute which strengthened the statutory deadlines. See Century National Ins. Co. v. Halifax Chiropractic & Injury Clinic a/a/o Rantanen Bloodworth, (Fla. 9th Jud. Cir. Ct., Orange Cty., [Appellate] Case No.: 2018-CV-000019-A-O, January 22, 2020, Patricia A. Doherty, Judge) [28 Fla. L. Weekly Supp. 30a].

15. The purpose of the No-Fault Act described in section 627.736, Florida Statutes, is to provide “swift and virtually automatic payment so that the injured insured may get on with his life without undue financial interruption.” See Custer Med. Ctr. v. United Auto. Ins. Co., 62 So. 3d 1086 (Fla. 2010) [35 Fla. L. Weekly S640a]. To effectuate the PIP Statute’s purpose Florida courts have strictly construed the time limitations set forth in the PIP Statute. See January v. State Farm Mut. Ins. Co., 838 So. 2d 604, 607 (Fla. 5th DCA 2003) [28 Fla. L. Weekly D484a] (“It is clear that an insurer is not freed from the statutory time constraints of a PIP claim payment simply by raising a coverage issue.”). Section 627.736(4)(b), Florida Statutes makes clear that payments which are not made within thirty (30) days after an insurer is furnished written notice of the claim are overdue. §627.736(4)(b), Fla. Stat. (2017). As such, the burden is on the insurer to timely authenticate the claim within the time constraints set forth in section (4)(b). See Amador v. United Automobile Insurance Co., 748 So.2d 307 (Fla. 3d DCA 1999) [24 Fla. L. Weekly D2437a] (insurer’s failure to adhere to statutorily mandated time frame constituted a breach of contract), review denied, 767 So.2d 464 (Fla.2000). The deadline to verify, and pay, a claim is not tolled. Superior Ins. Co. v. Libert, 776 So. 2d 360, 363 (Fla. 5th DCA 2001) [26 Fla. L. Weekly D381a].

16. More recently, in Central Fla. Chiropractic Care a/a/o David Cherry v. GEICO Indemnity Co., 24 Fla. L. Weekly Supp. 152a (Fla. 9th Cir. April 22, 2016) affirmed on appeal, 26 Fla. L. Weekly Supp. 613a (Fla. 9th Jud. Cir. May 11, 2017), the trial court addressing the PIP Statute time constraints in an EUO case, found that a prior breach prohibited an insurer from denying a claim for breach of contract. The appellate court, in affirming the trial court, stated “[a] party who first commits a material breach cannot enforce the contract.” (quoting Williston on Contracts §63.34th Ed. & May 2016 update).

17. In Halifax Chiropractic & Injury Clinic a/a/o Rantanen Bloodworth, (Fla. 9th Jud. Cir. Ct., Orange Cty., [Appellate] Case No.: 2018-CV-000019-A-O), the appellate court was asked to determine whether Century-National’s unilateral rescission of the policy was proper in light of its failure to comply with the time constraints set forth in the PIP Statute. Relying on Amador, January, and David Cherry, the appellate court stated that “the statute under which the rescission took place is irrelevant, the threshold question was whether invocation of the rescission-right was proper.”(internal quotations omitted). The appellate court went on to state that “[i]t is indisputable that thirty days past. . .[since C-N had notice of the claim, and] had not rescinded the policy, paid or denied or asked for more time to investigate under 62.736(4)(i). Rather, C-N continued to send out EOBs and notice letters pursuant to the PIP statute, at the same time it was aware that a rescission-right existed. These overt acts, while in breach of the PIP statute, waived its right to rescission.”¹ (emphasis added).

18. The Court’s finds Halifax Chiropractic & Injury Clinic a/a/o Rantanen Bloodworth, (Fla. 9th Jud. Cir. Ct., Orange Cty., [Appellate] Case No.: 2018-CV-000019-A-O) persuasive.

19. The Court finds based on the evidence presented, that this case is factually similar the Rantanen Bloodworth case. C-N had not paid or denied the claim, nor had it requested more time to investigate under section (4)(i) or (6)(b) prior to September 11, 2017. As such, C-N was in breach of contract. C-N had notice or knowledge of a basis to invoke its rescission-right on October 26, 2017 — the date of Mr. Green’s EUO. C-N waited eighty-five (85) days to invoke its rescission-right and rescind the Policy. Furthermore, C-N mailed out multiple letters pursuant to the PIP statute from August 22, 2017 through February 06, 2018. But most importantly, C-N mailed multiple letters pursuant to the PIP statute, after October 26, 2017. Additionally, the Plaintiff submitted circumstantial evidence that leads to the inference that C-N may have accepted additional policy premiums after October 26, 2017.² 

These overt acts, while in breach of the PIP statute, waived its right to rescission.

20. This Court also finds that C-N also failed to pay statutorily required interest.

21. A forfeiture of rights under an insurance policy is not favored in Florida, especially when the forfeiture is sought after the happening of the event giving rise to the insurer’s liability. Johnson v. Life Ins. Co. of Ga., 52 So. 2d 813, 815 (Fla. 1951). Furthermore, “when an insurer has knowledge of the existence of facts justifying a forfeiture of the policy, any unequivocal act which recognizes the continued existence of the policy or which is wholly inconsistent with a forfeiture, will constitute a waiver thereof.” Id.

Accordingly, it is hereupon ORDERED and ADJUDGED, as follows:

1. The Plaintiff’s Motion for Final Summary Disposition is GRANTED; and

2. The parties are directed to submit a proposed final judgment within thirty (30) days.

__________________

¹The appellate court determined that C-N had notice of its rescission-right for “[m]ore than sixty (60) days prior to its invocation of that right Halifax Chiropractic & Injury Clinic a/a/o Rantanen Bloodworth, (Fla. 9th Jud. Cir. Ct., Orange Cty., [Appellate] Case No.: 2018-CV-000019-A-O, P. 2).

²The policy period ended on January 03, 2018. C-N did not refund the policy premiums until January 19, 2018. C-N admitted that it had not included interest in the premium refund. C-N’s overpayment in the policy premium refund leads to the logical conclusion that the extra $239.79 dollars refunded was paid for the January 03, 2018 renewal policy period before C-N’s alleged rescission.