MARIANA GRACIA vs SECURITY FIRST INSURANCE COMPANY

• Court: District Court of Appeal of Florida
• Decided: September 9, 2022
• Docket: 21-1456
• Status: Published

Opinion

IN THE DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA FIFTH DISTRICT

NOT FINAL UNTIL TIME EXPIRES TO FILE MOTION FOR REHEARING AND DISPOSITION THEREOF IF FILED

MARIANA GRACIA,

Appellant,

v. Case No. 5D21-1456 LT Case No. 2018-CA-000942-O

SECURITY FIRST INSURANCE COMPANY,

Appellee.

________________________________/

Opinion filed September 9, 2022

Appeal from the Circuit Court for Orange County, Kevin B. Weiss, Judge.

Melissa A. Giasi, of Giasi Law, P.A., Tampa, for Appellant.

Angela C. Flowers, of Kubicki Draper, P.A., Ocala, for Appellee.

PER CURIAM.

Mariana Gracia appeals the trial court’s grant of final summary

judgment in favor of Security First Insurance Company (“Security First”). The

trial court found Gracia had made affirmative misrepresentations regarding the pre-loss condition of her property, warranting forfeiture of coverage under

the concealment or fraud provision of her homeowner’s insurance policy. We

reverse.

In 2016, Security First issued an insurance policy to Gracia for her

home located in Orlando, Florida. The policy was effective from May 2016 to

May 2017. Gracia reported a loss due to roof damage allegedly caused by a

storm that occurred in April 2017. Security First investigated the claim and

extended approximately $11,000 in coverage for damages. However, Gracia

then submitted a sworn proof of loss, claiming more damages than what

Security First had covered. After Security First denied the full amount, Gracia

filed suit alleging breach of contract and seeking additional damages to cover

roof repairs and interior water damage.

During her deposition, Gracia revealed that a home inspection had

been performed in 2015, prior to her purchasing the property. When asked

the results of the inspection, she stated, “Everything was good” and that the

“roof was in good condition.” After Security First obtained the 2015 inspection

report, it amended its affirmative defenses to include the concealment or

fraud provision of the policy, as the inspection report indicated that the

property had roof and interior ceiling damage in 2015. The inspection report

contained photographs revealing the damage and specifically noted roof

2 leaks around the chimney, water damage in the attic, and interior ceiling

damage caused by water—areas consistent with those noted by Gracia in

her instant claim.

Security First moved for summary judgment on several grounds but

focused exclusively on its concealment or fraud defense at the summary

judgment hearing. It argued that forfeiture of coverage was warranted

because Gracia had made false material statements during her deposition

concerning the pre-loss condition of her home. Gracia countered that to the

best of her knowledge, the damages sought in her instant claim arose from

the 2017 storm and were different than the damages reflected in the 2015

inspection report. She also argued that the existence of the inspection report

did not automatically establish that she had made intentional

misrepresentations.

The trial court agreed with Security First. In applying the new summary

judgment standard, the court found that it was permitted to “weigh the

credibility of the evidence presented,” and in doing so, found that Gracia’s

explanation was not credible in light of the 2015 inspection report and its

photographs of the property. As such, it found that Security First was entitled

to summary judgment as a matter of law. This appeal followed.

3 The issue on appeal is whether, to justify forfeiture of coverage under

the policy’s concealment or fraud provision, Security First was required to

establish that Gracia’s statements regarding the pre-loss condition of her

property were made with the intent to mislead. Our standard of review is de

novo. Chandler v. Geico Indem. Co., 78 So. 3d 1293, 1296 (Fla. 2011)

(noting de novo standard of review when trial court’s summary judgment

ruling turns on interpretation of insurance contract).

Because this case was decided under the new Florida Rule of Civil

Procedure 1.510, summary judgment is appropriate when “the evidence is

such that a reasonable jury could not return a verdict for the nonmoving

party.” In re Amends. to Fla. R. Civ. P. 1.510, 317 So. 3d 72, 75 (Fla. 2021)

(citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). The trial

court interpreted this new standard as allowing it to weigh and judge the

credibility of the evidence. While no longer an absolute prohibition—

depending on the nature of the evidence—the general rule remains intact:

credibility determinations and weighing the evidence “are jury functions, not

those of a judge,” when ruling on a motion for summary judgment. Anderson,

477 U.S. at 255; see also A.L. ex rel. D.L. v. Walt Disney Parks & Resorts

US, Inc., 900 F.3d 1270, 1289 (11th Cir. 2018) (noting that under federal

summary judgment rule, “[t]he court does not weigh conflicting evidence or

4 determine the credibility of witnesses” (citations omitted)). This case is not

an exception to that general principle. 1

The insurance provision at issue provides:

3. Concealment or Fraud

a. The entire policy will be void if, whether before or after a loss, any “insured” has:

(1) Intentionally concealed or misrepresented any material fact or circumstance;

(2) Engaged in fraudulent conduct; or

(3) Made false material statements;

relating to this insurance.

Gracia argues that where Security First relied upon subsection (3) of

the concealment or fraud provision, it was required to meet its initial burden

of establishing that her statements were made with an intent to mislead and

were material. She contends there was no such showing and that the trial

court effectively decided these fact questions when it granted summary

judgment. We agree.

1 Only when the record evidence blatantly contradicts a litigant’s version of the facts will a court be allowed to weigh conflicting evidence or determine the credibility of a witness. See Scott v. Harris, 550 U.S. 372, 380 (2007) (“When opposing parties tell two different stories, one of which is blatantly contradicted by the record, so that no reasonable jury could believe it, a court should not adopt that version of the facts for purposes of ruling on a motion for summary judgment.”).

5 First, it is important to highlight the distinction between

misrepresentation during the insurance application process and

misrepresentation in the post-loss context. With respect to the former, the

law in Florida is clear: an insurer can later void a policy based on an insured’s

false statement without a showing of intent to mislead. See Privilege

Underwriters Reciprocal Exch. v. Clark, 174 So. 3d 1028, 1031 (Fla. 5th DCA

2015); Universal Prop. & Cas. Ins. Co. v. Johnson, 114 So. 3d 1031, 1037

(Fla. 1st DCA 2013) (“[A] misrepresentation ‘need not be fraudulently or

knowingly made but need only affect the insurer’s risk or be a fact which, if

known, would have caused the insurer not to issue the policy or not to issue

it in so large an amount.’” (citations omitted)).

But a different standard is applied to false statements in the post-loss

context, requiring proof of intent to mislead, as the Third and Fourth District

Courts recently held. See Vargas v. Safepoint Ins. Co., 333 So. 3d 752, 755–

56 (Fla. 3d DCA 2022) (interpreting “false statement” in concealment or fraud

provision of insurance policy as including element of intent); Anchor Prop. &

Cas. Ins. Co. v. Trif, 322 So. 3d 663, 671 (Fla. 4th DCA 2021) (“[W]e hold

that, for post-loss conduct, the policy requires proof of knowing or intentional

fraudulent conduct by the insureds to trigger the application of the

‘Concealment or Fraud’ provision to void the policy.”); see also Reyes v.

6 United Prop. & Cas. Ins. Co., 336 So. 3d 782 (Fla. 3d DCA 2022); Universal

Prop. & Cas. Ins. Co. v. Quintero, 333 So. 3d 752 (Fla. 3d DCA 2022).

In Trif, the Fourth District interpreted a concealment or fraud provision

identical to the one at issue here. 322 So. 3d at 666. In that case, the false

statement at issue centered on the insureds’ sworn proof of loss, which

included an estimated repair cost that was inaccurate and inflated. Id. at

667–69. After discovering the inflated nature of the repair estimate, the

insurer amended its affirmative defenses to include the concealment or fraud

provision. Id. at 667. The case proceeded to trial, where the jury returned a

verdict in favor of the insureds on the basis that the insureds did not

intentionally misrepresent the facts or make false material statements. Id. at

669. The trial court denied the insurer’s motion for judgment notwithstanding

the verdict or for a new trial, finding that the issues of intent and materiality

were properly submitted to the jury. Id. at 669–70.

On appeal, the Fourth District began its analysis by noting that the law

“abhors forfeiture of insurance coverage . . . . ‘especially where, as here, a

forfeiture is sought after the happening of the event giving rise to the insurer’s

liability.’” Id. at 671 (quoting Johnson v. Life Ins. Co. of Ga., 52 So. 2d 813,

815 (Fla. 1951)). Addressing the element of intent, the Fourth District noted

that “[m]ost ‘concealment or fraud’ clauses contain, or have been construed

7 to contain, a requirement that a post-loss concealment or misrepresentation

be intentional.” Id. at 673. The court relied in part on Florida Supreme Court

precedent and a plain language analysis of the provision at issue. Id. at 673–

76. First, the Fourth District noted that “[a] century ago, the Florida Supreme

Court read into a policy the requirement that a post-loss misrepresentation

be intentional to void the policy.” Id. at 673 (citing U.S. Fire Ins. Co. v.

Dickerson, 90 So. 613 (1921)). Second, the Trif court analyzed the ordinary

meaning of the term “false statement” contained in the policy. Id. at 675. It

noted that “false statement” was defined in Black’s Law Dictionary as “an

untrue statement knowingly made with the intent to mislead.” Id. And to the

extent the term “false statement” had two different meanings, the court found

that the term should be construed against the drafter. Id.

Shortly after the Fourth District’s decision in Trif, the Third District

decided Vargas, which reinforced that intent is a required element when

analyzing a concealment or fraud provision in the post-loss stage. See

Vargas, 333 So. 3d at 755. Like in Trif, the Vargas court employed a plain

language analysis of the term “false statement,” agreeing with the Fourth

District that the term includes an element of fraudulent intent. Id. (citing Trif,

322 So. 3d at 675). However, the Vargas court recognized the “difficulties”

of its interpretation:

8 Of course, our interpretation is not without its own difficulties. First, as Judge Edward L. Artau points out in his principled and carefully reasoned dissent in Trif, “because subsection (1) [of the policy] already covers intentional misrepresentations, the majority’s interpretation of the policy language would render subsection (3) to be superfluous or meaningless because it would do nothing more than repeat subsection (1) if we were to read an intent requirement into it.” Judge Artau’s observation cannot be denied. His interpretation of “false statements” as requiring no intent, however, presents the same problem.

As Judge Gross noted, no matter how one interprets the policy, “some portion of the ‘Concealment or Fraud’ provision will be rendered superfluous.” If subsection (3) is read to dispense with an intent requirement as the Trif dissent suggests, then subsections (1) and (2)’s inclusion of an intent requirement are rendered superfluous: mere proof of incorrectness under subsection (3) would forfeit coverage thus eliminating any need for proof of intentional misrepresentation or fraud so prominently featured in subsections (1) and (2).

In these circumstances, where either of the competing interpretations will render some language a nullity, the rule of construction requiring avoidance of interpretations that make any language superfluous loses traction. The fault is not in the rule of construction but in the policy language. We therefore decline to apply the rule in a manner that defeats the common meaning of “false statement” and the other principles of construction discussed above. Thus, while recognizing the accuracy of Judge Artau’s insight, we continue to interpret the reference to “false statements” in the “Concealment or Fraud” provision under review as requiring an element of fraudulent intent.

9 Id. at 755–56 (internal citations omitted). We agree with our sister courts that

the element of intent is required in the post-loss context and now turn to the

instant case.

Despite having maintained below that fraudulent intent was not

required, Security First argues on appeal that affirmance is warranted

because its evidence undoubtedly established Gracia’s intent to mislead.

Specifically, it maintains that, because Gracia was admittedly in possession

of the 2015 inspection report before her deposition, her statements that

“everything was good” and that the roof was in “good condition” must have

been made with an intent to mislead, because that is the only conclusion one

can reach upon comparing her statements to the inspection report. However,

Gracia’s affidavit filed in opposition to summary judgment stated that, to the

best of her knowledge, the damages alleged in her instant claim arose from

the April 2017 storm and were different than the damages detailed in the

inspection report. While Security First contends that such allegations were

insufficient to create a disputed fact, it still remains that Security First initially

failed to meet its summary judgment burden of providing evidence of each

element of its affirmative defense.2 See Chaplin v. NationsCredit Corp., 307

2 Although Trif and Vargas were decided after Security First had moved for summary judgment, that did not preclude Security First from asserting

10 F.3d 368, 372 (5th Cir. 2002) (“To obtain summary judgment, if the movant

bears the burden of proof on an issue because as a defendant he is asserting

an affirmative defense, he must establish beyond peradventure all of the

essential elements of the defense to warrant judgment in his favor.”); see

also Blue Cross & Blue Shield of Ala. v. Weitz, 913 F.2d 1544, 1552 (11th

Cir. 1990) (noting that in summary judgment context, defendant raising

affirmative defense has initial burden of proof). 3

Simply put, factual questions relating to fraudulent intent or state of

mind are generally not ripe for summary judgment determination. 4 See

that Gracia had knowingly and intentionally made false material statements during her deposition. See Trif, 322 So. 3d at 673 (recognizing that “[a] century ago, the Florida Supreme Court read into a policy the requirement that a post-loss misrepresentation be intentional to void the policy.” (citing Dickerson, 90 So. at 618)). 3 Security First relies on Mezadieu v. Safepoint Insurance Co., 315 So. 3d 26 (Fla. 4th DCA 2021). In that case, summary judgment was entered after the insurer established by unrefuted evidence that the insured had submitted a claim for $11,000 in damages the insured “clearly knew” were not caused by the subject loss. Id. at 27–30. Because the insured had “all but conceded” that her statements were false, it was not necessary to reach the issue of intent. Id. at 27–28. Here, there was no such concession of knowledge. 4 As to the materiality of Gracia’s statements, that, too, is generally a fact question reserved for the jury’s resolution. Trif, 322 So. 3d at 672 (“The materiality of a misrepresentation is a question for the jury.”); see also Lopes v. Allstate Indem. Co., 873 So. 2d 344, 347 (Fla. 3d DCA 2004) (“The question of whether an insured has made a material misrepresentation is a question for the jury to determine.”).

11 Bowman v. Barker, 172 So. 3d 1013, 1017 (Fla. 1st DCA 2015) (finding that

material issues of fact as to vendor’s intent precluded summary judgment on

purchaser’s fraudulent misrepresentation claim); Fleming v. Peoples First

Fin. Sav. & Loan Ass’n, 667 So. 2d 273, 274 (Fla. 1st DCA 1995) (noting that

fact issues relating to intent generally do not lend themselves to summary

judgment). Accordingly, we reverse the trial court’s grant of summary

judgment in favor of Security First on its concealment or fraud affirmative

defense.

REVERSED AND REMANDED.

EVANDER and COHEN, JJ., concur. EISNAUGLE, J., concurs in result only, with opinion.

12 Case No. 5D21-1456 LT Case No. 2018-CA-000942-0

EISNAUGLE, J., concurring in result only, with opinion.

I agree we must reverse the final summary judgment in this case.

However, I find it unnecessary to decide whether a false statement, as used

in the concealment or fraud provision in the insurance policy, requires proof

of intent.

The trial court granted summary judgment finding that Gracia made

material false statements by testifying that “[e]verything was good” and the

“[r]oof was in good condition” when asked about the results of a home

inspection report. However, Security First did not meet its summary

judgment burden to establish that there is no “genuine dispute” that these

statements were false. See Fla. R. Civ. P. 1.510(a). Given their context,

these statements were too generalized and vague to establish falsity for

purposes of summary judgment. This is especially so considering the

purpose of a home inspection report and the ill-defined questions to which

Gracia was responding. Importantly, on our record, the inspection report

itself does not establish, via its descriptions or its difficult-to-decipher

photographs, that these deposition statements were false.