8 Fla. L. Weekly Supp. 474a
Insurance — Misrepresentations on application — Claim that insurer accepted premiums with actual or constructive knowledge of prior motor vehicle accidents that insured failed to disclose in application for insurance and cannot now seek to escape liability on basis of same facts it knew or should have known when it issued policy — Insurer is entitled to rely on representations of insured in insurance application without checking all of its files to determine if insured is committing a fraud, even where the fact or condition falsely represented by the insured is easily discernible by the insurer — Summary judgment in favor of insurer affirmed
RAMON FUNDORA, Appellant, vs. FORTUNE INSURANCE COMPANY, Appellee. Circuit Court, 11th Judicial Circuit (Appellate) in and for Miami-Dade County. Case No. 00-203 AP. Lower Court Case No. 99-14922-CC-05. Opinion filed May 15, 2001. An Appeal from County Court, Miami-Dade County, Florida, Judge Harvey Goldstein. Counsel: William K. Terry, Jr., for Appellant. Elizabeth J. Laffitte & Diane H. Tutt, for Appellee.
(Before MARGARITA ESQUIROZ, GERALD HUBBART AND CELESTE HARDEE MUIR, JJ.)
(ESQUIROZ, J.) Appellant raises one point on appeal from the lower court’s order granting the insurer’s motion for summary judgment and entering final summary judgment for the insurer Fortune. Appellant argues that the insurer accepted premiums with actual or constructive knowledge of the prior motor vehicle accidents at issue, which admittedly appellant did not disclose in his application for insurance. According to appellant, the insurer cannot now seek to escape liability on the basis of the same facts — ostensibly sufficient to avoid the policy — of which it either knew or should have known when it issued the policy. Appellant relies inter alia on Security Life & Trust Co. v. Jones, 202 So. 2d 906 (Fla. 2d DCA 1967) and Johnson v. Life Ins. Co. of Georgia, 52 So. 2d 813 (Fla. 1951). For the reasons that follow, this Court would affirm the lower court’s final summary judgment in favor of the insurer Fortune.
Generally, an insurer is entitled to rely, as a matter of law, upon the accuracy of an applicant’s representations in an insurance application and has no duty to make additional inquiry, unless it has actual or constructive knowledge that such representations are incorrect or untrue. North Miami General Hospital v. Central National Life Insurance Company, 419 So. 2d 800, 802 (Fla. 3d DCA 1982). See also, Independent Fire Insurance Company v. Arvidson, 604 So. 2d 854, 856 (Fla. 4th DCA 1992). What is more, it has been held that an insurance company’s underwriting division is not charged with knowledge of information contained in the files covering group insurance (a different division within the same company), particularly where the application for insurance is processed by the insurer in the usual, customary manner and in accordance with company policy. Hence, as a matter of law, “. . .the insurer is entitled to rely on the representations of an insured, without checking all its files to determine if the insured is committing a fraud.” Schrader v. Prudential Insurance Company of America, 280 F.2d 355, 362 (5th Cir. 1960). This principle holds true even where the fact or condition which is falsely represented by the insured is “easily discernible” by the insurer. See, New York Life Insurance Company v. Nespereira, 366 So. 2d 859, 860 (Fla. 3d DCA 1979). See also, Great Northern Life Insurance Co. v. Vince, 118 F.2d 232, 236 (6th Cir. 1941) (“. . .[E]ven its own earlier records do not put the insurer upon notice of the falseness of statements in an application unless there is some circumstance which directs attention to them.”)
AFFIRMED. (HUBBART, J. Concurs.)
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(MUIR J., dissenting.) This appeal is from an order granting summary judgment in favor of Fortune, the insurance company, in a case in which the insured, when asked to disclose prior accidents and motor vehicle related convictions put “N/A” instead of “none” — “none” being specifically requested on the application for insurance.
The directions to the applicant for insurance were brief: Write “NONE” if applicable. (The meaning being if there were no prior accidents or convictions, “none” is the right answer; however, “not applicable” would never be a correct answer to a universally applicable question.) Would the instruction have been clearer if the directions were to write “NONE” if not applicable? Or to write “NONE” only if there were no prior accidents or convictions?
The appellant insured seeks to demonstrate at the trial level that the misrepresentation was not material so as to justify denial of coverage. See 627.409(1)(a). If found to be a material misrepresentation, the insured contends that Fortune had actual or constructive knowledge that the representation “not applicable” regarding prior accidents was incorrect or untrue. Fortune had provided coverage for a previous accident for the same insured.
The plain meaning of the statute, 627.409(1)(a), controls and the insurance company need not prove an intentional misrepresentation in order to void the policy. See, Continental Assurance Co. v. Carroll, 485 So. 2d 406 (Fla. 1986).
The trial court initially denied the motion for summary judgment, but on rehearing, entered an order granting summary judgment; however, there are issues of fact remaining. Specifically, whether the insurance company, when faced with a “not applicable” answer to a universally applicable question, should have inquired further as to whether the non-responsive “not applicable” meant there were no previous accidents or convictions.
The majority opinion concludes that the application for insurance is crystal clear and cites case in which a fact or condition (marriage) is falsely represented by the insured and a medical insurance case involving a “first manifest” clause. The insured in this case gave a non-responsive answer (“not applicable”) on the application instead of “none” as requested. The majority opinion assumes thereby, a misrepresentation has occurred.
This is not necessarily a case of fraud, however, but could be mere confusion. The testimony of the insured would resolve the matter.
The insured should have his day in court on the issue of misrepresentation, and an opportunity to prove that the facts within the knowledge of an authorized representative of the insurer were constructive knowledge to the insurance company. The trial court, not an appellate court, should consider whether missing information on an application for insurance is a misrepresentation or simply a mistake. Accordingly, I would reverse the order on appeal and remand this case for proceedings consistent with this opinion. See, Almerico v. R.L.I. Insurance Co., 716 So. 2d 774 (Fla. 1998).
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