First District Court of Appeal in Florida Overturns Summary Judgment in Favor of Auto Insurer Despite That Applicant Made Material Misrepresentations

OLYMPUS DIGITAL CAMERAIn Echo v. MGA Insurance Co., Inc., a Florida woman purchased an automobile using another individual’s name. Despite doing so, she obtained a motor vehicle insurance policy on the vehicle in her own name. In her application, the woman stated she was the owner of the insured vehicle and the only licensed driver in the household. About one year after purchasing the insurance policy, the woman was involved in a traffic wreck while driving the car. Following the crash, the woman apparently sought medical care from a number of physicians. After that, she submitted a personal injury protection (“PIP”) claim related to her medical expenses to her auto insurer.

In response to the woman’s medical benefits claim, the auto insurer denied coverage as a result of the purportedly material misrepresentation she made on her vehicle insurance application. According to the insurance company, it would have chosen not to issue the automobile policy or it would have charged a higher premium if the woman had been truthful on her application. In addition to denying the woman’s accident claim, the insurer stated the policy was void ab initio, or from the beginning, and refunded all premiums that were paid to it by the woman. The woman apparently did not cash the refund check.

Next, the woman filed a breach of contract lawsuit against her automobile insurance company. In her complaint, the woman sought reimbursement for her property damage, PIP benefits, and legal representation in the event she was required to defend herself in a lawsuit. In response, the insurer argued that the woman’s purported misrepresentation entitled the company to cancel the insurance contract pursuant to Section 627.409 of the Florida Statutes. Despite this, the company later paid the woman’s medical providers more than $10,000.

Later, the insurer claimed the woman lacked standing to pursue PIP benefits. The woman amended her complaint to eliminate her PIP request and filed a motion for partial summary judgment. In her motion, the woman argued the insurer waived its claim that the insurance contract was void ab initio. The woman also claimed the confession of judgment doctrine applied to the case, since the insurance company made PIP payments after the lawsuit was filed but before a judgment was entered.

Following a hearing, the trial court ruled that the auto insurance contract was based on material misrepresentations that were relied upon by the insurer. Because of this, the court held that it was appropriate for the insurance company to rescind the agreement under Section 627.409(1). In addition, the court found that the woman did not have standing to pursue a claim for PIP benefits and stated the insurer’s medical payments did not constitute admissible evidence under Section 90.409 of the Florida Statutes. As a result, the trial court issued a summary judgment order in favor of the insurance company. The woman then appealed the trial court’s decision to Florida’s First District Court of Appeal.

On appeal, Florida’s First District agreed with the trial court’s holding that rescission of the insurance contract was merited by the woman’s material misrepresentations. Despite this, the appellate court stated the trial court committed error when it refused to consider her waiver and confession of judgment claims. The Court of Appeal also dismissed the insurer’s assertion that the contract was void ab initio without regard to the company’s inconsistent actions.

According to the First District, a material misrepresentation does not mean that an insurance contract never existed. Instead, Section 627.409(1) states that an insurer may rescind such an agreement in certain circumstances. The court also said Florida case law establishes that an insurer may forfeit its right of rescission if it engages in “any unequivocal act which recognizes the continued existence of the policy or which is wholly inconsistent with a forfeiture.”

Since the trial court committed error when it held the woman lacked standing to raise her waiver claim, the appellate court remanded the case for further consideration of the woman’s argument. Similarly, the Court of Appeal ruled that the woman’s confession of judgment claim must also be reconsidered. Florida’s First District also found that the trial court committed error when it held that the woman’s PIP evidence was inadmissible. Because of this, the Court of Appeal reversed the trial court’s summary judgment order stating the woman lacked standing to pursue her waiver and confession of judgment claims and overturned its holding that the company’s PIP payments were not admissible as evidence.

If you were injured in a Florida car accident, you need an experienced personal injury lawyer on your side to help you protect your rights. To discuss your case with a dedicated Miami personal injury attorney today, call the skilled lawyers at Friedman, Rodman & Frank, P.A. at (305) 448-8585 or contact us through our website.

Additional Resources:

Echo v. MGA Insurance Co., Inc., Fla: Dist. Court of Appeals, 1st Dist. 2015

More Blog Posts:

Florida’s Fourth District Holds Information Prepared in Anticipation of Litigation is Not Discoverable in Slip and Fall Case, February 18, 2015, South Florida Personal Injury Lawyers Blog

Middle District of Florida Denies Motion for Summary Judgment in Bad Faith Insurance Case, February 16, 2015, South Florida Personal Injury Lawyers Blog

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