3 Fla. L. Weekly Supp. 379c
Insurance — Credit life — Error to rule that wife of decedent lacked standing individually to bring action for breach of contract and declaratory relief against credit life insurer which denied coverage under the policy — Wife was joint obligor on note which was to be paid by insurer; co-applicant for policy; co-payor of policy premiums; joint insured under policy until decedent’s death at which time she became sole insured; and joint owner until decedent’s death, at which time she became sole owner — Wife suffered real and tangible loss by virtue of having paid insurance premiums for coverage that was not subsequently provided to her
LAURA EARY, Appellant, v. ARCADIA NATIONAL LIFE INSURANCE COMPANY, Appellee. 5th Judicial Circuit in and for Marion County. Appeal Case No. 94-4775-CA. County Case No. 93-300-CCH. Opinion filed July 28, 1995. Appeal from the County Court for Marion County. The Honorable Janet W. Behnke. Counsel: Tommy E. Roberts, Jr., Tallahassee, for Appellant. Douglas J. LaPointe, Ocala, for Appellee.
OPINION
(SAWAYA, T.) On August 21, 1991, the Appellant, Laura Eary, and her now deceased husband, Ray Eary, borrowed $6,350.76 from Mid-State Federal Savings Bank of Ocala. When they executed the promissory note to Mid-State, they applied for and purchased a credit life insurance policy from appellee, Arcadia National Life Insurance Company. The policy, which was purchased through Mid-State, provided for the payment of benefits upon the death of either of the named insureds in the amount of the outstanding indebtedness under the note at the time of death.
When the Earys applied for the policy, they provided certain information concerning their health. They verbally told the assistant branch manager of Mid-State that Ray Eary was being treated for lymphoma, a form of cancer, which was then in remission. They were advised by the branch manager that this condition did not have to be declared on the application form because “it was not life threatening”. Therefore, they indicated in the application form that they both were in good health and had not been treated for, among other things, cancer during the six months preceding the date of the application. Arcadia issued the credit life policy to the Earys and they paid the premiums until Ray Eary’s death on May 16, 1992.
The policy provided that any payment under the policy would be made directly to the creditor to reduce the debt by the amount of the payment. If the amount of the payment is more than the amount of the debt, the excess would be paid to the second beneficiary or the insured’s estate. Pursuant to the policy provisions, Ray Eary was the insured/debtor, Laura Eary was the joint insured/debtor, the creditor was Mid-State which was designated as the first beneficiary, and the second beneficiary was designated as the Estate.
When the Appellant demanded payment to Mid-State of the benefits of the policy, Arcadia refused contending that the misrepresentation concerning Mr. Eary’s health in the application form voided the coverage under the policy.
The Appellant, individually, filed a breach of contract action against Arcadia which was subsequently dismissed by the trial court on the basis that Laura Eary lacked standing to sue individually. The Appellant filed her first amended complaint wherein she alleged that she had standing to sue as a third party beneficiary under the policy. The Appellant then filed a motion to amend the first amended complaint to set forth a claim for declaratory relief. The trial court dismissed the first amended complaint, again finding that she lacked standing to sue individually, and also denied her motion to amend the first amended complaint. The Appellant filed this appeal contending that the trial court erred in ruling that she did not have standing to sue individually to enforce the policy or to seek declaratory relief and that the trial court abused its discretion in refusing her request to amend her first amended complaint.
The courts have held that the concept of standing, in its broadest sense, is no more than having “a sufficient stake in an otherwise justiciable controversy to obtain judicial resolution of that controversy”. Kumar Corp. v. Nopal Lines, Ltd., 462 So.2d 1178, 1182 (Fla. 3rd DCA 1985). But standing also incorporates the equally important requirement that the claim be brought by or on behalf of the real party in interest who is the person in whom rests by substantive law the claim sought to be insured. Id. The “real party in interest” requirement is addressed in Fla. R. Civ. P. 1.210(a) which states in pertinent part that:
Every action may be prosecuted in the name of the real party in interest, but . . . a party with whom or in whose name a contract has been made for the benefit of another . . . may sue in that person’s own name without joining the party for whose benefit the action is brought.
This is a rule of enlargement rather than limitation. St. Martin’s Episcopal Church v. Prudential-Bache Securities, Inc., 613 So.2d 108 (Fla. 4th DCA 1993). Thus in the final analysis, standing to sue is having a sufficient interest in the outcome of the litigation which will warrant the court in entertaining it. Id.
Under the facts of this case, the Appellant has standing to sue because she has a sufficient stake in the litigation and because she is a real party in interest. Laura Eary was a joint obligor on the note; she was a co-applicant for the policy; she was a co-payor of the policy premiums; she was a joint insured under the policy until Ray Eary’s death at which time she became the sole insured; she was a joint owner of the policy until Ray Eary’s death, and thereafter became the sole owner. Furthermore, the Appellant was in privity with Arcadia. Because Arcadia denied coverage under the policy, she subsequently had to pay the promissory note in full to Mid-State. She has suffered a real and tangible loss by virtue of having paid insurance premiums for coverage that was not subsequently provided to her.
The lower court’s reliance on §222.13, Fla. Stat., as a basis for concluding that the Appellant lacked standing is misplaced. This is a statute primarily intended to protect the proceeds of a life insurance policy against the claims of creditors of the insured’s estate by recognizing that the proceeds of the policy do not become an asset of the insured’s estate unless the estate is the named beneficiary. This statute is not intended to deny standing to an individual such as the Appellant who has suffered a substantial and direct loss as a result of the Appellee’s denial of insurance coverage under a policy she applied for and paid premiums for.
Thus we find under the facts and circumstances of this case that the lower court erred in ruling that the Appellant lacked standing to sue. We further find that the lower court erred in denying the Appellant’s motion to amend her complaint. Accordingly, the order of dismissal is reversed and this case is remanded to the lower court for further proceedings. (HILL, M., and THURMAN, J., concur.)
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