14 Fla. L. Weekly Supp. 360b
Insurance — Personal injury protection — Application — Misrepresentation — Error to find that insurer’s only remedy for material misrepresentation on application for PIP policy was prospective cancellation because retroactive right to rescission of PIP policy under section 627.409 was abrogated by passing of Florida Automobile Reparations Act, which mandated certain types of no fault insurance coverage for all drivers — Precedent case law construes section 627.409 as applying to PIP policies, and there is absence of express legislative intent to abrogate remedy of rescission — However, judgment in favor of insured is affirmed — Although premium charge for failure to list additional driver may constitute material misrepresentation, where failure to disclose additional driver was only misrepresentation made, insurer would still have issued policy at minimally higher premium if additional driver had been disclosed, claim does not relate to undisclosed driver, and there was seven-month delay in returning premium after discovery of misrepresentation, failure to disclose is not material so as to void coverage
UNITED AUTOMOBILE INSURANCE COMPANY, a Florida Corporation, Appellant, v. MIAMI CHIROPRACTIC ASSOCS., Appellee. Circuit Court, 11th Judicial Circuit (Appellate) in and for Miami-Dade County. Case No. 05-418 AP. L.T. Case No. 03-8773 SP 25 (2). February 20, 2007. An Appeal from the County Court for Miami-Dade County, Lawrence D. King, Judge. Counsel: Michael J. Neimand, for Appellant. Christian Carrazana, for Appellee.
[Editor’s note: Lower court order published at 13 Fla. L. Weekly Supp. 94a]
(Before PINEIRO, LOPEZ and SCHLESINGER, JJ.)
ON MOTION FOR REHEARING
[Original Opinion at 14 Fla. L. Weekly Supp. 16a]
(LOPEZ, J.) Upon consideration of Appellant’s motion for rehearing and Appellee’s response thereto, we grant Appellant’s motion, withdraw our previous opinion dated November 17, 2006, and substitute the following opinion in its place.
Appellant, United Automobile Insurance Co. seeks review of a Final Summary Judgment entered by the trial court finding that the Florida Automobile Reparations Act has preempted the right of an insurer to rescind a PIP policy based on a material misrepresentation by the insured in the application for insurance. Additionally, the trial court granted Plaintiff’s Motion for Summary Judgment on the issue of reasonable, necessary and related and issued Final Judgment for Plaintiff. Appellant does not appeal the reasonable, related and necessary order, or alternatively, has waived such claim by not arguing the issue in its brief.
The undisputed facts of this case show that the insured, George Brice, entered into a contract of insurance for personal injury protection benefits governed by section 627.736, Fla. Stat. (2003), with the Appellant, United Automobile Insurance Co. The policy had an effective date of April 9, 2003 for one year. The insured was involved in an accident on May 3, 2003, suffering personal injuries which resulted in chiropractic care with the Appellee, Miami Chiropractic Association. The insured assigned his rights and benefits under the insurance policy to Appellee.
Miami Chiropractic filed suit to recover unpaid PIP benefits on July 30, 2003. During suit, Appellant requested the insured submit to an examination under oath (EUO) on September 8, 2003. During said EUO, Appellant discovered that the insured failed to list a licensed household member on the application of insurance which allegedly created an additional premium. On April 8, 2004, some seven months later, the Appellant forwarded a notice of cancellation due to the alleged material misrepresentation. The effective date of cancellation was April 9, 2003, the original issue date of the policy. On April 29, 2004, the premium was eventually returned to the insured. The trial court heard arguments on Plaintiff’s Motion for Summary Judgment on October 4, 2005 and entered Final Judgment in Plaintiff’s favor.
In its order, a copy of which is attached hereto as Appendix “A”, the trial court found that the Appellant’s retroactive right of rescission under § 627.409, Fla. Stat. (2003) was abrogated by the passing of the Florida Automobile Reparations Act, §§ 627.730-7405, which mandated certain types of no fault insurance coverage for all drivers. The trial court believed that Appellant’s only remedy was prospective cancellation under § 627.728, Fla. Stat. (2003). We disagree with the trial court’s conclusion on this abrogation issue. Rescission under § 627.409 for a material misrepresentation in the application process has been applied to compulsory PIP and property damage policies. Flores v. Allstate Ins. Co., 819 So. 2d 740 (Fla. 2002); Independent Fire Ins. Co. v. Arvidson, 604 So. 2d 854 (Fla. 4th DCA 1992). Accordingly, we hold that pursuant to the clear and unambiguous language of § 627.409, retroactive recission and or voiding “ab initio” a policy for material misrepresentations in policy applications, is available as a defense in PIP and property damage cases. In the absence of express legislative intent abrogating the remedy of rescission under § 627.409, the trial court’s conclusion cannot be sustained. The legislature upon passing the Florida Automobile Reparations Act could have easily written into the act a statement that abrogates any right of rescission provided under § 627.409, or excluded applicability of § 627.409 to automobile policies by amending § 627.401. This course it chose not to take. We do not find this surprising, especially in light of this State’s strong discouragement of insurance fraud.
Notwithstanding our disagreement with the trial court’s reasoning for granting Appellee’s Motion for Summary Judgment, we affirm under the longstanding principle referred to as the “Tipsy Coachman Doctrine.” See Robertson v. State, 829 So. 2d 901, 906 (Fla. 2002) (quoting Dade Sch. Bd. v. Radio Station WQBA, 731 So. 2d 638, 645 (Fla. 1999)) (the “Tipsy Coachman Doctrine” allows an appellate court to affirm a trial court that reaches the right result, but for the wrong reason so long as there is any basis in the record which would support the judgment).
In the case at bar, there is deposition testimony from Appellant’s Underwriting Supervisor Jorge De La O and PIP litigation adjuster Yvette Blackwell, that had the true facts been known, Appellant would have issued the policy, but at a higher premium. The additional unknown risk resulting in a higher premium stems from the additional licensed family member residing in the household who may drive the insured vehicle. Obviously, timely disclosure and payment of the additional premium in this case would have covered such risk and would have afforded coverage to the formerly non-disclosed resident driver in the household as well as the insured Appellee.
Appellant seeks rescission of the policy from its inception pursuant to § 627.409, Fla. Stat. (2003) arguing that there was a material misrepresentation in the application by the insured. Pursuant to § 627.409, Fla. Stat. (2003), all statements and descriptions in applications for insurance policies are deemed representations and not warranties. Any misrepresentations may prevent recovery under the policy if, (a) “the misrepresentation, omission, concealment, or statement is fraudulent or is material either to the acceptance of the risk or to the hazard assumed by the insurer,” or (b) “if the true facts had been known to the insurer pursuant to a policy requirement or other requirement the insurer in good faith would not have issued the policy or contract, would not have issued it at the same premium rate, would not have issued a policy or contract in as large an amount, or would not have provided coverage with respect to the hazard resulting in the loss.” Each of the cases cited by the Appellant in its brief concerning automobile policies, Arvidson, 604 So. 2d at 854, and Government Employees Ins. Co. v. Decheona, 610 So. 2d 480 (Fla. 3d DCA 1992), allowed voiding of the policies for misrepresentations in failing to disclose additional drivers who were actually injured and seeking benefits. In the case at bar, the insured who applied and paid for the policy is the one seeking benefits. Thus, the insurer, Appellant, has incurred no additional risk or hazard other than that which was negotiated between the parties. In our original opinion we found that the case before this Court was controlled by Martinez v. General Ins. Co., 483 So. 2d 892, 894 (Fla. 3d DCA 1986). In Martinez, the Third District held that the insured’s failure to list a licensed household member on the insurance application did not invalidate the policy from its inception for claims unrelated to the omission. Based on the argument of the parties in the motion for rehearing and response thereto, we recede from that finding. A closer reading of Martinez, indicates that an insurer’s retention of a part of the “earned” premium of the policy holder affirmed coverage for the policy holder, but did not result in a waiver of the carrier’s right to assert material misrepresentation as a defense against a claim by the unlisted household member who was actually involved in an accident. On rehearing, the Appellant cites the cases of Progressive American Insurance Co. v. Papasodero, 587 So. 2d 500 (Fla. 2d DCA 1991) as well as a decision of a sister panel of this Court in United Automobile Co. v. Huerta, 11 Fla. L. Weekly Supp. 196b (Fla. 11th Cir. Ct. Jan 13, 2004) as controlling precedent. In Papasodero, the trial court found that the numerous misrepresentations of the applicant (failure to list additional driver, co-ownership of insured vehicle by unlisted driver, unlisted driver being the one involved in accident, 57% change in premium had disclosure been made) were all material misrepresentations, but nonetheless granted Summary Judgment in favor of insured for insurer’s failure to comply with the Administrative Claims Statute. The Second District Court in Papasodero, reversed the finding of applicability of the Claims statute and affirmed on the material misrepresentations findings. We agree that the numerous misrepresentations in Papasodero, were material, but find that case to be distinguishable from the singular misrepresentation in the case at bar. Additionally, our sister panel in Huerta, read Papasodero as factually requiring a 57 cents (not percent) premium change in the policy. Whether this factual inconsistency affected the decision of our sister panel, or its construction of Papasodero, we cannot speculate. We do not take issue with the holdings of Papasodero and Huerta, that a premium change for failure to disclose an unlisted driver may be a material misrepresentation. However, based on the facts of this case and the record (minimal premium change, unlisted driver not seeking benefits, 7 months delay in returning premium), the failure to disclose simply is not material so as to void coverage.
We hold that based on the record before us there is no genuine issue of material fact, and the alleged misrepresentation is not material as a matter of law. Accordingly, the Summary Judgment entered in favor of the Appellee is AFFIRMED. Furthermore Appellee’s Motion for Appellate Fees & Taxable Cost is GRANTED. (PINEIRO, J., concurs. SCHLESINGER, J., dissents.)
__________________
(SCHLESINGER, J.) I would grant the Motion for Rehearing and reverse the trial court’s order granting summary judgment to the Plaintiff. The reasoning of Progressive American Insurance Co. v. Papasodero, 587 So. 2d 500 (Fla. 2d DCA 1991) and the opinion of a sister panel of this Court in United Automobile Insurance Co. v. Huerta, 11 Fla. L. Weekly Supp. 196b (Fla. 11th Cir. Ct. Jan. 13, 2004) compel this result. The Appellant, United Automobile Insurance Co. had the discretion to nullify the policy and deny coverage under § 627.409 and Papasodero. I therefore respectfully dissent.