28 Fla. L. Weekly Supp. 79a
Online Reference: FLWSUPP 2801TAVI
Insurance — Personal injury protection — Application — Misrepresentations — Although PIP policy states that insurer has right to recompute premium based on subsequently obtained information and allow policy to continue, there is nothing in policy that requires insurer to exercise that right rather than rescind the policy — Nothing in policy required insurer to afford insured an opportunity to pay additional premium before it could rescind policy for material misrepresentation that occurred when insured failed to disclose existence of licensed household resident
CEDA HEALTH OF SOUTH MIAMI, LLC., as assignee of Carmen Tavia, Plaintiff, v. THE RESPONSIVE AUTO INSURANCE COMPANY, Defendant. County Court, 11th Judicial Circuit in and for Miami-Dade County. Case Nos. 14-7056 SP 23 (2) and 14-7057 SP 23, Consolidated Cases. February 14, 2020. Natalie Moore, Judge. Counsel: Lisa Hasselmann-Arana, Landau & Associates, Sunrise, for Plaintiff. Charles L. Vaccaro, The Vaccaro Law Firm, P.A., Davie, for Defendant.
ORDER ON THE PARTIES’ CROSS-MOTIONSFOR SUMMARY JUDGMENT ANDFINAL JUDGMENT FOR DEFENDANT
This cause, having come before the Court for hearing on November 6, 2019, on the Plaintiffs’ Motion for Summary Judgment Regarding Affirmative Defense of No Coverage Due to Material Misrepresentation and the Defendant’s Motion for Summary Judgment, and the Court having reviewed the motions and affidavits and the evidence and case law filed by the parties is support of their respective motions, and having heard the argument of counsel and being otherwise advised in the premises, it is hereby ORDERED AND ADJUDGED:
This action is a claim for PIP benefits. This case (Case No. 14-7056) was consolidated with case number 14-7057 SP23(02) by order dated December 18, 2014. The only pending issue in both cases is coverage.
The underlying facts of the matter are undisputed. The subject policy of insurance was initially issued to Carmen Tavia by RESPONSIVE AUTO INSURANCE COMPANY (hereinafter “RESPONSIVE”) pursuant to an application for insurance signed by Carmen Tavia on December 14, 2012. On page 1 of the application, Carmen Tavia was asked to “List all persons 14 years or older, licensed or not, residing with the applicant(s), whether or not they drive/operate the listed vehicle. … Failure to provide this information may constitute a material misrepresentation, which may result in all insurance coverage being void.” In response to this question, Carmen Tavia listed only herself. Additionally, on page 3 of the application, Carmen Tavia was asked the following questions:
Are there any residents of your household that are 14 years or older that have NOT been disclosed on this application.
Have you failed to list any drivers such as children away from home or in college, who operate your vehicle(s) at any time. This includes anyone who may be away for military service.
Carmen Tavia answered “No” in response to both questions and signed the following declaration attesting to the truthfulness of her answers:
I have read each of the questions (numbered 1-12) above and answered all questions truthfully. I realized that any incorrect information may constitute a material misrepresentation, which may result in my insurance coverage being voided or my claim denied.
Immediately after the questions on page 3 of the application, Carmen Tavia signed the following declaration stating:
I understand this application is not a binder unless indicated as such on this form by the brokering agent. I acknowledge my responsibility to inform the company, by signed endorsement, of anyone in the future that becomes eligible as an operator described above and of any change or use of my vehicle from personal use to business use. I further acknowledge my responsibility to inform the company by signed endorsement of anyone in the future that becomes a resident of my household and eligible for benefits if involved in an accident. I understand that a resident of my household includes but is not limited to anyone who lives in my home, including relatives, friends, tenants, or anyone else who lives at my place of residence, whether licensed to drive or not. I acknowledge my obligation to notify the company of any changes identified in this paragraph within 30 days of such change.
Finally, at the time of the application, Carmen Tavia signed an Additional Resident Verification Form certifying that Jessica L. Mendez “does not reside in [her] household” and further, that her statement and certification was “accurate and true” with the acknowledgement that if the information was incorrect, “it may constitute a material misrepresentation which may result in all insurance coverage being void.”
Following the subject accident, Carmen Tavia admitted for the first time that Jessica L. Mendez did in fact did reside with her on the date of the application. It was also discovered that Jessica Mendez had an active driver’s license on the date of the application for which Jessica L. Mendez had listed her home address as the same address as Carmen Tavia, which was 2528 W 65th Street, Hialeah, Florida 33016. Had RESPONSIVE known that Jessica L. Mendez lived with Carmen Tavia at the time of policy inception, the policy would have increased by $1,919.00. It is undisputed that the failure to disclose Jessica L. Mendez on the application was a material misrepresentation. As a result of the material misrepresentation, RESPONSIVE rescinded the policy and returned all premiums to Carmen Tavia.
Plaintiff argues Defendant’s Policy requires the insured to be given notice of, and an opportunity to cure, any misrepresentations before any cancellation or rescission of the policy occurs. Plaintiff further argues RESPONSIVE was required to provide Carmen Tavia an opportunity to pay the additional premium before it could rescind the policy. In support of its argument, Plaintiff cited to a number of cases which involved the interpretation of a policy of insurance and application issued by Windhaven Insurance Company. The Court finds that the Windhaven Insurance Company policy and application are substantially different than RESPONSIVE’S policy, and therefore, those cases are inapplicable to this matter.
Plaintiff also argues that the language in RESPONSIVE’s policy supports their argument. Plaintiff points to two provisions in the policy as a basis for their claim.
The first provision is found on page 18 of the policy under the section titled “OUR” RIGHT TO RECOMPUTE PREMIUM, and states in relevant part:
The premium for this policy has been established in the reliance upon the statements made by “you” in the application for insurance. “We” shall have the right to recompute the premium payable for this policy if information material to the development of the final premium is subsequently obtained.
The second provision relied upon by Plaintiffs is found on page 19, paragraph 3 under the sub-heading “Termination; A. “Cancellation”, which states:
In the event “we” determine that “you” have been charged an incorrect premium for coverage requested in “your” application for insurance, “we” shall immediately mail “you” notice of any additional premium due “us.” If within 10 days of the notice of additional premium due (or a longer time period as specified in the notice), “you” fail to either:
a. Pay the additional premium and maintain this policy in full force under its original terms; or
b. Cancel this policy and demand a refund of any unearned premium;
Then this policy shall be canceled effective fourteen days from the date of the notice (or a longer time period as specified in the notice).
The Claimant confirmed at her deposition that she was not aware of any request for an additional premium.
Defendant asserts the policy was rescinded pursuant to F.S. 627.409 and section on page 17 of RESPONSIVE’S Insurance Policy which states:
MISREPRESENTATION AND FRAUD.
Any claim may be denied or this policy may be void if an “insured”: . . .
A. Conceals or misrepresents any material facts or circumstances concerning this insurance or the subject thereof.
Plaintiff argues that the policy provisions, when read together, either require RESPONSIVE to provide the insured an opportunity to cure a material misrepresentation or result in an ambiguity that should be resolved in favor of the insured.
The Court finds Plaintiffs’ arguments unpersuasive. Although RESPONSIVE does have a right to re-compute the premium and allow the policy to continue, there is nothing in the policy that requires RESPONSIVE to exercise that right. Instead, RESPONSIVE chose to rescind the policy.
The terms “cancellation” and “rescission” refer to two separate and distinct actions that operate to create different legal consequences. United Auto Insurance Company v. Salgado, 22 So.3d 594, 603 (Fla. 3d DCA 2009) [34 Fla. L. Weekly D1578a]. The term “cancellation” has been defined to mean “the termination by the insured or by the insurer or both of insurance in accordance with the specific terms of a policy.” The term “rescission,” however, has been defined to mean “[a]nnulling or abrogation or unmaking of [a] contract and the placing of the parties to it in status quo.” Id. at 604.
As the policy was not cancelled but rather was rescinded, the policy language relied upon by Plaintiff set out in the Cancellation provisions on page 18-19 of the policy do not apply. An insurance company’s alleged failure to rescind a policy in accordance with any cancellation procedures does not preclude or abrogate an insurer’s ability to void the policy ab initio. United Automobile v. Salgado, supra at 602.
The rescission provision in RESPONSIVE’S policy is clear and unambiguous, and is line with the language of F.S. 627.409. After having discovered Carmen Tavia made a material misrepresentation in the application, there is nothing in that section of the policy that required RESPONSIVE to provide her an opportunity to pay the additional premium before RESPONSIVE could rescind the policy. It is well-settled that a Court is powerless to re-write a contract to make it more reasonable or advantageous for one of the contracting parties. Hill v. Deering Bay Marina Ass’n, Inc., 985 So.2d 1162, 1166 (Fla. 3d DCA 2008) [33 Fla. L. Weekly D1654d]; Fernandez v. Homestar at Miller Cove, Inc., 935 So. 2d 547, 551 (Fla. 3d DCA 2006) [31 Fla. L. Weekly D1756a]. Therefore, pursuant to F.S. 627.409 and the terms of the policy itself, RESPONSIVE was within its right to rescind the subject policy based upon the incorrect and false statements made by Carmen Tavia.
Accordingly, it is hereby ORDERED and ADJUDGED that Plaintiffs’ Motion for Summary Judgment Regarding Affirmative Defense of No Coverage Due to Material Misrepresentation is hereby DENIED. It is further hereby ORDERED and ADJUDGED that Defendant’s Motion for Final Summary Judgment is hereby GRANTED.
FINAL JUDGMENT FOR DEFENDANT
It is hereby ORDERED that FINAL JUDGMENT be entered in favor of Defendant, THE RESPONSIVE AUTO INSURANCE COMPANY and against the Plaintiffs, CEDA HEALTH OF SOUTH MIAMI, LLC, as assignee of Carmen Tavia and CEDA HEALTH OF HIALEAH, LLC., as assignee of Carmen Tavia, that Plaintiffs take nothing by this action, and that Defendant shall go hence without day.
The Court retains jurisdiction over this matter to hear all appropriate post judgment motions including Defendant’s Motion(s) for Attorneys’ Fees and Costs.