Third District Court of Appeal State of Florida
Opinion filed January 12, 2022. Not final until disposition of timely filed motion for rehearing.
________________
No. 3D19-1656 Lower Tribunal No. 17-12003 ________________
Yolanda Vargas, Appellant/Cross-Appellee,
vs.
Safepoint Insurance Company, Appellee/Cross-Appellant.
An Appeal from the Circuit Court for Miami-Dade County, Reemberto Diaz, Judge.
Giasi Law, P.A., and Melissa A. Giasi and Erin M. Berger (Tampa), for appellant/cross-appellee.
Bickford & Chidnese, LLP, and Andrew L. Bickford and Patrick M. Chidnese (Tampa); Bressler, Amery & Ross, P.C., and Hope C. Zelinger and Krista L. Elsasser, for appellee/cross-appellant.
Before EMAS, LOGUE and SCALES, JJ.
LOGUE, J. Yolanda Vargas appeals the trial court’s entry of final summary
judgment for Safepoint Insurance Company. This first-party property
insurance case turns on the interpretation of an insurance policy’s
“Concealment or Fraud” provision providing for forfeiture of coverage when
an insured makes “false statements relating to this insurance.” The insured’s
statement at issue arose post-loss: she denied making prior similar claims
when, in fact, she had made and been reimbursed for a similar claim from
another insurance company. Yet the insured maintains that her
misstatement was innocent because she had forgotten the prior claim. The
question is whether the term “false statement” in this post-loss context
means (1) “incorrect statement” or (2) “intentionally incorrect statement.” We
conclude the term “false statement” in this post-loss context includes an
element of intent to mislead, which, in this case, involves a genuine issue of
material fact. Accordingly, we reverse.
Factual and Procedural Background
Vargas and Safepoint entered into a property insurance contract.
Pertinent to this appeal, the contract included the following provision:
3. Concealment or Fraud. With respect to all persons insured under this policy, we provide no coverage for loss if, whether before or after a loss, one or more persons insured under this policy have:
2 a. Intentionally concealed or misrepresented any material fact or circumstance;
b. Engaged in fraudulent conduct; or
c. Made material false statements relating to this insurance.
Vargas reported a loss to Safepoint resulting from water damage due
to a plumbing leak. Safepoint’s corporate representative testified that
Safepoint immediately requested repair invoices from any prior claims and
photographs of the pre-loss condition of the property. Vargas never provided
this information. Instead, Vargas submitted a sworn proof of loss with an
itemized estimate of her damages prepared by a claim consultant.
After conducting its own investigation, Safepoint denied coverage and
Vargas initiated this suit. Safepoint served Vargas with its first set of
interrogatories asking Vargas to disclose any previous claim made on the
property. Vargas responded by recalling a roof claim made ten years prior.
Vargas did not disclose any prior claims involving water damage. In her
deposition, Vargas stated that she had not made any prior insurance claims
involving a plumbing leak on the property.
After receiving these answers, Safepoint added an affirmative defense
based on the “Concealment or Fraud” provision of the insurance policy. To
support this affirmative defense, Safepoint deposed Christina Crossway, the
3 corporate representative of Citizens Property Insurance Company.
Crossway testified that Vargas made a prior claim on the property in 2013
for “a broken water pipe under the kitchen sink” resulting in “water damage
to the kitchen cabinets.” The damaged areas listed under this prior claim
included many of the same areas in the claim Vargas had submitted to
Safepoint.
Safepoint moved for summary judgment based on the “Concealment
or Fraud” affirmative defense. 1 The motion asserted that Vargas had violated
the concealment or fraud provision in the contract by failing to disclose the
previous water leak in her deposition and interrogatory answers and by
including damages from the previous claim in her sworn proof of loss. While
there were other grounds asserted in the motion, the summary judgment
hearing centered entirely on Safepoint’s “Concealment or Fraud” defense.
Vargas argued that while Safepoint had submitted evidence of a prior claim,
it had submitted no evidence to counter Vargas’s statement under oath that
she did not recall the prior claim when giving her interrogatory answers and
1 Safepoint also moved to dismiss Vargas’s lawsuit asserting that Vargas’s interrogatory and deposition responses constituted a fraud upon the court. The trial court conducted an evidentiary hearing on this motion at which Vargas testified, under oath, that she had simply forgotten the prior claim. The trial court denied Safepoint’s motion to dismiss.
4 deposition testimony. The trial court granted Safepoint’s motion for summary
judgment. This appeal followed.
Discussion
This Court reviews a trial court’s ruling on a motion for summary
judgment de novo. Volusia Cnty. v. Aberdeen at Ormond Beach, L.P., 760
So. 2d 126, 130 (Fla. 2000). “Summary judgment is proper if there is no
genuine issue of material fact and if the moving party is entitled to a judgment
as a matter of law.” Id.
“Insurance contracts are construed according to their plain meaning
and, if a policy provision is clear and unambiguous, it should be enforced
according to its terms.” Universal Prop. & Cas. Ins. Co. v. Johnson, 114 So.
3d 1031, 1035 (Fla. 1st DCA 2013) (citing Taurus Holdings, Inc. v. U.S. Fid.
& Guar. Co., 913 So. 2d 528 (Fla. 2005)).
Subsection (c) of the “Concealment or Fraud” provision states that
Safepoint will not provide coverage for loss where an insured “[m]ade
material false statements relating to this insurance.” Because the policy does
not define “false statements,” we look to the ordinary, dictionary meaning of
the term. This brings us to the first problem in this dispute: the term “false”
has two distinct meanings. It has been defined as either “[c]ontrary to fact or
truth” or as “deliberately untrue.” American Heritage Dictionary (2d ed. 1985);
5 see also Merriam-Webster’s Ninth New Collegiate Dictionary 447 (9th ed.
1987) (defining “false” as “intentionally untrue,” “tending to mislead,”
“adjusted or made so as to deceive,” or “not true”).
This problem is not as serious as it first appears. While “false” includes
both meanings, the more common usage of the word, certainly in the legal
context, carries the connotation of an intentionally deceptive statement.
“Only when the context strongly suggests mere error is the connotation of
being deceived absent . . . false has an overlay of perfidy that is absent from
wrong: false advice is both incorrect and two-faced, while wrong advice is
simply incorrect.” Bryan A. Garner, Garner’s Dictionary of Legal Usage 352
(3d ed. 2011).
In Anchor Property & Casualty Insurance Company v. Trif, 322 So. 3d
663 (Fla. 4th DCA 2021), the Fourth District recently interpreted the use of
“false statements” in a similar concealment or fraud provision of an insurance
policy. Judge Robert M. Gross, writing for the majority, found that “in
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Third District Court of Appeal State of Florida
Opinion filed January 12, 2022. Not final until disposition of timely filed motion for rehearing.
________________
No. 3D19-1656 Lower Tribunal No. 17-12003 ________________
Yolanda Vargas, Appellant/Cross-Appellee,
vs.
Safepoint Insurance Company, Appellee/Cross-Appellant.
An Appeal from the Circuit Court for Miami-Dade County, Reemberto Diaz, Judge.
Giasi Law, P.A., and Melissa A. Giasi and Erin M. Berger (Tampa), for appellant/cross-appellee.
Bickford & Chidnese, LLP, and Andrew L. Bickford and Patrick M. Chidnese (Tampa); Bressler, Amery & Ross, P.C., and Hope C. Zelinger and Krista L. Elsasser, for appellee/cross-appellant.
Before EMAS, LOGUE and SCALES, JJ.
LOGUE, J. Yolanda Vargas appeals the trial court’s entry of final summary
judgment for Safepoint Insurance Company. This first-party property
insurance case turns on the interpretation of an insurance policy’s
“Concealment or Fraud” provision providing for forfeiture of coverage when
an insured makes “false statements relating to this insurance.” The insured’s
statement at issue arose post-loss: she denied making prior similar claims
when, in fact, she had made and been reimbursed for a similar claim from
another insurance company. Yet the insured maintains that her
misstatement was innocent because she had forgotten the prior claim. The
question is whether the term “false statement” in this post-loss context
means (1) “incorrect statement” or (2) “intentionally incorrect statement.” We
conclude the term “false statement” in this post-loss context includes an
element of intent to mislead, which, in this case, involves a genuine issue of
material fact. Accordingly, we reverse.
Factual and Procedural Background
Vargas and Safepoint entered into a property insurance contract.
Pertinent to this appeal, the contract included the following provision:
3. Concealment or Fraud. With respect to all persons insured under this policy, we provide no coverage for loss if, whether before or after a loss, one or more persons insured under this policy have:
2 a. Intentionally concealed or misrepresented any material fact or circumstance;
b. Engaged in fraudulent conduct; or
c. Made material false statements relating to this insurance.
Vargas reported a loss to Safepoint resulting from water damage due
to a plumbing leak. Safepoint’s corporate representative testified that
Safepoint immediately requested repair invoices from any prior claims and
photographs of the pre-loss condition of the property. Vargas never provided
this information. Instead, Vargas submitted a sworn proof of loss with an
itemized estimate of her damages prepared by a claim consultant.
After conducting its own investigation, Safepoint denied coverage and
Vargas initiated this suit. Safepoint served Vargas with its first set of
interrogatories asking Vargas to disclose any previous claim made on the
property. Vargas responded by recalling a roof claim made ten years prior.
Vargas did not disclose any prior claims involving water damage. In her
deposition, Vargas stated that she had not made any prior insurance claims
involving a plumbing leak on the property.
After receiving these answers, Safepoint added an affirmative defense
based on the “Concealment or Fraud” provision of the insurance policy. To
support this affirmative defense, Safepoint deposed Christina Crossway, the
3 corporate representative of Citizens Property Insurance Company.
Crossway testified that Vargas made a prior claim on the property in 2013
for “a broken water pipe under the kitchen sink” resulting in “water damage
to the kitchen cabinets.” The damaged areas listed under this prior claim
included many of the same areas in the claim Vargas had submitted to
Safepoint.
Safepoint moved for summary judgment based on the “Concealment
or Fraud” affirmative defense. 1 The motion asserted that Vargas had violated
the concealment or fraud provision in the contract by failing to disclose the
previous water leak in her deposition and interrogatory answers and by
including damages from the previous claim in her sworn proof of loss. While
there were other grounds asserted in the motion, the summary judgment
hearing centered entirely on Safepoint’s “Concealment or Fraud” defense.
Vargas argued that while Safepoint had submitted evidence of a prior claim,
it had submitted no evidence to counter Vargas’s statement under oath that
she did not recall the prior claim when giving her interrogatory answers and
1 Safepoint also moved to dismiss Vargas’s lawsuit asserting that Vargas’s interrogatory and deposition responses constituted a fraud upon the court. The trial court conducted an evidentiary hearing on this motion at which Vargas testified, under oath, that she had simply forgotten the prior claim. The trial court denied Safepoint’s motion to dismiss.
4 deposition testimony. The trial court granted Safepoint’s motion for summary
judgment. This appeal followed.
Discussion
This Court reviews a trial court’s ruling on a motion for summary
judgment de novo. Volusia Cnty. v. Aberdeen at Ormond Beach, L.P., 760
So. 2d 126, 130 (Fla. 2000). “Summary judgment is proper if there is no
genuine issue of material fact and if the moving party is entitled to a judgment
as a matter of law.” Id.
“Insurance contracts are construed according to their plain meaning
and, if a policy provision is clear and unambiguous, it should be enforced
according to its terms.” Universal Prop. & Cas. Ins. Co. v. Johnson, 114 So.
3d 1031, 1035 (Fla. 1st DCA 2013) (citing Taurus Holdings, Inc. v. U.S. Fid.
& Guar. Co., 913 So. 2d 528 (Fla. 2005)).
Subsection (c) of the “Concealment or Fraud” provision states that
Safepoint will not provide coverage for loss where an insured “[m]ade
material false statements relating to this insurance.” Because the policy does
not define “false statements,” we look to the ordinary, dictionary meaning of
the term. This brings us to the first problem in this dispute: the term “false”
has two distinct meanings. It has been defined as either “[c]ontrary to fact or
truth” or as “deliberately untrue.” American Heritage Dictionary (2d ed. 1985);
5 see also Merriam-Webster’s Ninth New Collegiate Dictionary 447 (9th ed.
1987) (defining “false” as “intentionally untrue,” “tending to mislead,”
“adjusted or made so as to deceive,” or “not true”).
This problem is not as serious as it first appears. While “false” includes
both meanings, the more common usage of the word, certainly in the legal
context, carries the connotation of an intentionally deceptive statement.
“Only when the context strongly suggests mere error is the connotation of
being deceived absent . . . false has an overlay of perfidy that is absent from
wrong: false advice is both incorrect and two-faced, while wrong advice is
simply incorrect.” Bryan A. Garner, Garner’s Dictionary of Legal Usage 352
(3d ed. 2011).
In Anchor Property & Casualty Insurance Company v. Trif, 322 So. 3d
663 (Fla. 4th DCA 2021), the Fourth District recently interpreted the use of
“false statements” in a similar concealment or fraud provision of an insurance
policy. Judge Robert M. Gross, writing for the majority, found that “in
jurisprudence, ‘the word “false” implies something more than mere untruth:
it imports knowledge and a specific intent to deceive.’” Id. at 675 (quoting
State v. Tedesco, 397 A.2d 1352, 1358 (Conn. 1978)). We agree with the
Fourth District and apply this “more common” definition of the term “false
statement” to include an element of intent. Id.
6 This interpretation not only comports with the plain, dictionary
meaning, it is also compelled by the rule of construction that “[p]olicy
provisions that tend to limit or avoid liability are interpreted liberally in favor
of the insured and strictly against the drafter who prepared the policy . . . .’”
Am. Integrity Ins. Co. v. Estrada, 276 So. 3d 905, 914 (Fla. 3d DCA 2019)
(quoting Bethel v. Sec. Nat’l Ins. Co., 949 So. 2d 219, 223 (Fla. 3d DCA
2006)).
This result is bolstered by the fact that “words are given meaning by
their context.” Antonin Scalia & Bryan A. Garner, Reading Law: The
Interpretation of Legal Texts 56 (2012). Here, the term “false statement”
arises in the context of forfeiture of coverage. As the Supreme Court stated
decades ago, “a forfeiture of rights under an insurance policy is not favored
by the law, especially where, as here, a forfeiture is sought after the
happening of the event giving rise to the insurer’s liability.” Johnson v. Life
Ins. Co. of Ga., 52 So. 2d 813, 815 (Fla. 1951). In the forfeiture context, as
Judge Gross pointed out in Trif, the Supreme Court has long interpreted
similar language (such as “false swearing”) in a concealment or fraud
provision to require not simply incorrectness or untruth but also “the element
of fraud.” 322 So. 3d at 674 (citing U.S. Fire Ins. Co. v. Dickerson, 90 So.
7 613, 618 (Fla. 1921)). Other cases have taken a similar approach. See id. at
671–73 (collecting cases).
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.” Id. at 678. 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.” Id. at 675. 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).
8 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.
The second difficulty with our interpretation concerns “false
statements” in the application process. While this issue is technically not
before us as this case concerns post-loss “false statements,” we make one
observation. Even if the reference to “false statements” in the policy
language at issue includes an element of intent, general principles of contract
formation and recission may provide a basis to set aside an insurance
contract for a merely incorrect statement made in an insurance application.
Illustrative of this point is Universal Property & Casualty Insurance Co. v.
Johnson, 114 So. 3d 1031 (Fla. 1st DCA 2013).
9 Johnson involved statements on an insurance application regarding
the applicant’s status as a convicted felon. The First District concluded that
“a misrepresentation [made on an insurance application] ‘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.’” Id. at 1036 (quoting Fabric v.
Provident Life & Acc. Ins. Co., 115 F.3d 908 (11th Cir. 1997)). This
determination is consistent with well-established Florida law that “a
misstatement in, or omission from, an application for insurance need not be
intentional before recovery may be denied . . . .” Kieser v. Old Line Life Ins.
Co. of Am., 712 So. 2d 1261, 1263 (Fla. 1st DCA 1998).
As stated by the First District, “[t]his case law relating to insurance
policies is consistent with the general principle in contract law that, to obtain
rescission of a contract, based upon misrepresentation, it is not necessary
that ‘the party making the misrepresentation should have known that it was
false. Innocent misrepresentation is sufficient . . . .’” Johnson, 114 So. 3d at
1035 (quoting 27 Williston on Contracts § 69:49 (4th ed.)). We do not
abandon this long-standing precedent regarding contract recission based
upon incorrect information provided in an insurance application. It simply
does not apply here where the incorrect statement was made post-loss.
10 Finally, Safepoint argues that, even if the policy required the insured’s
statement to be intentionally misleading, we should nevertheless affirm
because Vargas’s current and previous claims are so similar that no one
could credit her assertion that she forgot about the prior claim. Because the
trial court did not reach this issue, we similarly decline to consider it. 2
Reversed and remanded.
2 We affirm without extended discussion the denial of Safepoint’s motion to dismiss for fraud on the court. See Leo’s Gulf Liquors v. Lakhani, 802 So. 2d 337, 338 (Fla. 3d DCA 2001) (reviewing the trial court’s ruling on a motion to dismiss for fraud on the court for abuse of discretion).