Florida Insurance Matters is a monthly update on Florida insurance-related legal developments by the Colodny Fass Insurance Litigation Practice, recently recognized as the Insurance Litigation Department of the Year in South Florida by the Daily Business Review.

ABOUT THE AUTHOR

Amy L. Koltnow, a Colodny Fass Shareholder, focuses her practice on representing insurance companies in complex insurance litigation and counseling insurers on claims resolution. She has represented insurers in connection with property damage and first-party coverage litigation, claims of “bad faith,” high-risk exposures, class actions and multi-district litigation.

For more information about Ms. Koltnow, click here.

Insureds’ Failure to Disclose Prior Claims in Insurance Application Voided Policy Even After Insurer Afforded Coverage for the Loss 

The homeowners filed a claim for property damage caused by Hurricane Matthew. The insurer accepted coverage and issued payment for the claim. The homeowners disputed the payment amount. During the claim investigation, the insurer discovered the homeowners had two prior water damage claims which they did not previously disclose on their application. The insurer then cancelled the policy. The homeowners sued the insurer for breach of contract. The insurer did not assert the insureds’ material misrepresentation in the application as an affirmative defense but raised it in a motion for summary judgment. The trial court entered summary judgment in the insurer’s favor finding the policy void due to material misrepresentations in the application. The appellate court upheld judgment in the insurer’s favor finding this issue was “tried by consent”. Nembhard v. Universal Prop. & Cas. Ins. Co. (3d DCA, Aug. 18, 2021).

Tips and Lessons

• The court relied on well-settled law that false statements in the application need not be fraudulently or knowingly made but must only materially affect the insurer’s risk.
• To avoid procedural arguments that detract from the legal issues in a case, counsel must pay attention to the pleadings, raise defenses as soon as they are apparent, and timely raise objections to procedural and evidentiary errors. 

Homeowner’s Expert Opinion Sufficient to Create an Issue of Fact Regarding Cause of Damage—Even Though Roof Inspected 4 Years Later, and After Repairs

A homeowner reported a claim to his insurer for roof damage caused by windstorm. The insurer denied coverage based on its determination there was no opening in the roof caused by a covered peril and the damage was due to long-term wear and tear and deferred maintenance. The homeowner then filed suit for breach of contract. The insurer sought a summary judgment based on its expert’s affidavit who concluded the damage was not caused by a one-time wind event. The homeowner filed an expert affidavit in opposition attesting the damage was caused by a windstorm. The homeowner’s expert inspected the roof four years after the roof was replaced, but he also relied upon photographs taken by the insurer’s expert taken shortly after the claim was reported. The trial court entered summary judgment in favor of the insurer finding no genuine issues of material fact regarding the cause of the damage. The appellate court reversed and held the homeowner presented sufficient evidence to rebut the insurer’s position that there was no opening in the roof. Vega v. SafePoint (3d DCA, Aug. 18, 2021).

Tips and Lessons

• The dissenting judge found the opposing expert affidavit insufficient as a matter of law. This case clearly demonstrates the ultimate success of a motion for summary judgment rises and falls on the specific facts of the case.
• This case was argued under the prior summary judgment standard. The appellate court seems to implicitly acknowledge in a footnote the outcome may be different under the new summary judgment standard.