State Farm Mutual Automobile Insurance Company v. Cockram et al
Filing
50
OPINION AND ORDER denying 38 Motion for summary judgment. Signed by Judge John E. Steele on 8/3/2012. (RKR)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
STATE
FARM
MUTUAL
INSURANCE COMPANY,
AUTOMOBILE
Plaintiff,
vs.
Case No.
2:11-cv-161-FtM-29DNF
RICHARD E. COCKRAM, ERIC POWERS,
Defendants.
___________________________________
OPINION AND ORDER
This matter comes before the Court on plaintiff’s Motion for
Summary Judgment as it Pertains to Defendant/Counter-Plaintiff Eric
Powers (Doc. #38) filed on July 3, 2012.
Defendant Eric Powers
filed a Response (Doc. #44) and Plaintiff filed a Reply (Doc. #45).
State Farm seeks a declaration that it is not required to defend
and indemnify Richard E. Cockram for any damages caused to Eric
Powers in a September 28, 2008 automobile accident.
For the
reasons set forth below, the motion is denied.
I.
Summary
judgment
is
appropriate
only
when
the
Court
is
satisfied that “there is no genuine issue as to any material fact
and that the moving party is entitled to judgment as a matter of
law.”
Fed. R. Civ. P. 56(c).
“An issue of fact is ‘genuine’ if
the record taken as a whole could lead a rational trier of fact to
find for the nonmoving party.”
Baby Buddies, Inc. v. Toys “R” Us,
Inc., 611 F.3d 1308, 1314 (11th Cir. 2010)(quoting Hickson Corp. v.
N. Crossarm Co., 357 F.3d 1256, 1260 (11th Cir. 2004)).
A fact is
“material” if it may affect the outcome of the suit under governing
law.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
In ruling on a motion for summary judgment, the Court views all
evidence and draws all reasonable inferences in favor of the nonmoving party.
Scott v. Harris, 550 U.S. 372, 380 (2007); Tana v.
Dantanna’s, 611 F.3d 767, 772 (11th Cir. 2010).
II.
State Farm Mutual Automobile Insurance Company (State Farm)
filed a Supplement to Complaint for Declaratory Judgment (Amended
Complaint) against Richard E. Cockram (Cockram) and Eric Powers
(Powers) seeking a determination of its obligations under an
insurance policy issued to Cockram relating to a motor vehicle
accident that occurred on September 28, 2008, in Labelle, Florida.
(Doc. #17, ¶ 1.)1
State Farm claims it has no obligations under
the insurance policy because it rescinded the policy based upon
false information provided by Cockram in his application for
insurance.
Cockram completed his application for insurance on August 29,
2008.
The Application for State Farm Mutual Automobile Insurance
(Doc. #47) specifically asked, and Cockram responded, as follows:
1
The facts derived from the Amended Complaint are deemed
undisputed based on the admissions in Eric Powers’s Answer (Doc.
#20). The facts are otherwise based on the uncontested documents
submitted by plaintiff in support of the motion for summary
judgment.
-2-
During the past 6 years, have you, the applicant, any
household member, or any regular driver:
A.
B.
C.
Had license suspended, revoked, or refused?
Had accident or loss?
Been fined, convicted, or forfeited
bail for traffic violations?
. . .
Number of
Number of
Number of
Number of
. . . .
(Doc.
#47,
at-fault accidents in the past 3 years
minor violations in the past 3 years
major violations in the past 3 years
major violations in the past 3-5 years
Exh.
B.)
The
application
did
not
No
Yes
No
1
0
0
0
define
“minor
violations” or “major violations”.
Cockram had been arrested for DUI on August 15, 2008, in
Labelle, Florida, but did not disclose the arrest because he did
not believe he was guilty.
A jury convicted him in March, 2009.
(Doc. #46, pp. 8, 30, 32.)
Cockram received an Order of License
Revocation,
Cancellation
Suspension
or
effective May 25, 2009, for one year.
revoking
his
license
(Id., pp. 89, 90; Exh. 1,
3.)
By correspondence dated July 29, 2009, State Farm advised
Cockram that his insurance policy would be rescinded based on
“material misrepresentations” voiding the policy.
Exh. C, ¶ 15.)
(Doc. #38-3,
The letter enclosed all amounts paid in connection
with the application for insurance.
(Doc. #38-4, Exh. D.)
State
Farm submitted the Affidavit of Kristin Batilla (Doc. #38-3), an
Underwriter of the Underwriting Department with State Farm Mutual
Automobile Insurance Company, providing that Cockram should have
-3-
answered “1” to the questions regarding minor or major violations
in the past 3 years, and that the policy for insurance would not
have
been
issued
if
the
application for insurance.
DUI
arrest
had
been
stated
in
the
(Doc. #38-3, Exh. C, ¶¶ 13, 14.)
On or about September 7, 2010, Powers filed a negligence suit
against Cockram in state court claiming $250,000 in damages for
personal injuries stemming from the motor vehicle accident caused
by Cockram on September 28, 2008.
(Doc. #17, ¶¶ 10-11.)
III.
State Farm seeks a declaration that it is not required to
defend and indemnify Cockram for any damages caused to Powers for
the September 28, 2008 accident.2
properly
rescinded
the
policy
State Farm argues that it
issued
to
Cockram
because
of
misrepresentations by Cockram in not disclosing his arrest for a
DUI prior to the issuance of the policy.
Powers seeks the
application of equitable estoppel.
Under Florida Statute 627.409,
(1) Any statement or description made by or on behalf of
an insured or annuitant in an application for an
insurance policy or annuity contract, or in negotiations
for a policy or contract, is a representation and is not
a warranty. A misrepresentation, omission, concealment
of fact, or incorrect statement may prevent recovery
under the contract or policy only if any of the following
apply:
(a) The misrepresentation, omission, concealment, or
statement is fraudulent or is material either to the
2
A Default Judgment (Doc. #28) was entered against Cockram.
-4-
acceptance of the risk or to the hazard assumed by the
insurer.
(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.
(2) A breach or violation by the insured of any warranty,
condition,
or
provision
of
any
wet
marine
or
transportation insurance policy, contract of insurance,
endorsement, or application therefor does not void the
policy or contract, or constitute a defense to a loss
thereon, unless such breach or violation increased the
hazard by any means within the control of the insured.
Fla. Stat. § 627.409.
If the insurer would have altered the terms
of the policy had it known the truth, or the misrepresentation
“materially affects risk”, a “nonintentional misstatement in an
application will prevent recovery under an insurance policy.”
William Penn Life Ins. Co. of N.Y. v. Sands, 912 F.2d 1359, 1362
(11th Cir. 1990).
the
burden
to
The insurer seeking to rescind a policy bears
plead
and
prove
the
misrepresentation,
materiality, and the insurer’s detrimental reliance.
its
Griffin v.
Am. Gen. Life & Accident Ins. Co., 752 So. 2d 621, 623 (Fla. 2d DCA
1999).
The insurer is entitled to rely upon the accuracy of the
information contained in the application, and has no duty to make
additional inquiry. Independent Fire Ins. Co. v. Arvidson, 604 So.
2d 854, 856 (Fla. 4th DCA 1992).
-5-
Under Florida law, ambiguities in insurance contracts are
resolved in favor of the insured. LaTorre v. Connecticut Mut. Life
Ins. Co., 38 F.3d 538, 538, 540 (11th Cir. 1994).
ambiguity is a question of law.
The issue of
GRG Transp., Inc. v. Certain
Underwriters at Lloyd’s, London, 896 So. 2d 922, 925 (Fla. 3d DCA
2005). The Affidavit of Kristin Batilla (Doc. #38-3) provides that
the policy would not have been issued to Cockram under State Farm’s
“underwriting guidelines” had Cockram’s DUI arrest been listed in
the application, that the answer was material to the underwriting
of the policy, and that the affiant was familiar with company
procedures and guidelines for motor vehicle insurance policies.
(Doc. #38-3, ¶¶ 4, 8, 14.)
The unsigned Application submitted by
Cockram does not contain any definitions as to what constitutes
“minor violations” or “major violations”, or whether an arrest
without a conviction must be included as a violation of any kind.
Therefore, an ambiguity does exist and must be resolved in favor of
Cockram.
Additionally, unlike Nationwide Mut. Fire Ins. Co. v.
Kramer, 725 So. 2d 1141, 1142-43 (Fla. 2d DCA 1998), State Farm did
not submit the underwriting guidelines in this case to support a
policy of declining applications based on the failure to include
certain violations, such as an arrest.
The issue of whether a material misrepresentation occurred is
a question of fact for the jury.
Haiman v. Fed. Ins. Co., 798 So.
2d 811, 811-12 (Fla. 4th DCA 2001).
-6-
This is “regardless of how
obviously false or material the representations may be.”
Anderson
v. Armor Ins. Co., 674 So. 2d 174, 175 (Fla. 2d DCA 1996)(citing
Beneby v. Midland Nat’l Life Ins. Co., 402 So. 2d 1193 (Fla. 3d DCA
1981)).
There is a question of fact pertaining to both whether a
misrepresentation occurred and if so whether it was a material
misrepresentation.
The Court cannot determine whether the true
facts “might reasonably have influenced” State Farm in deciding
whether it would have accepted or rejected the risk of issuing a
policy to Cockram.
Singer v. Nationwide Mut. Fire Ins. Co., 512
So. 2d 1125, 1128 (Fla. 4th DCA 1987)(citing 43 Am. Jur. 2d
Insurance § 1014 (1982)).
The issue of equitable estoppel, raised by Powers, appears to
be misplaced. In any event, the motion for summary judgment is due
to be denied.
Accordingly, it is now
ORDERED:
Plaintiff’s Motion for Summary Judgment as it Pertains to
Defendant/Counter-Plaintiff Eric Powers (Doc. #38) is DENIED.
DONE AND ORDERED at Fort Myers, Florida, this
August, 2012.
Copies:
Counsel of record
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3rd
day of
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