Florida court sides with policyholder who 'forgot' previous claim
The case, which started with a water damage claim, asks if a false statement must include an element of intent.
The Florida Third District Court of Appeal has reversed a Miami first-party property insurance ruling involving a homeowner accused of lying about making a prior damage claim. The Court found the policyholder’s omission had been unintentional.
It’s a case that relies heavily on the interpretation of an insurance policy’s concealment or fraud provision, which results in the forfeiture of coverage if the insured makes false statements relating to the insurance.
The homeowners policyholder, Yolanda Vargas, denied making a false statement and claimed she made an innocent misstatement and simply forgot about the prior claim.
The big question for the appellate panel was whether the alleged false statement was therefore an incorrect statement or an intentionally incorrect statement.
What happened?
It all started when Vargas reported a loss from water damage due to a plumbing leak to Safepoint Insurance Co. The insurer then requested a repair invoice from prior claims, plus photos of the pre-loss condition of the property.
But Vargas didn’t provide the information, according to the opinion, instead submitting a sworn proof of loss with an itemized estimate of her damages prepared by a claim consultant.
Safepoint denied coverage and Vargas sued. When Safepoint asked Vargas to provide information about any previous claim made on the property, she pointed to a roof claim 10 years prior but did not disclose any prior claims involving water damage. In a deposition, she said she didn’t make any prior insurance claims about a plumbing leak on the property, according to the opinion, issued Wednesday.
Safepoint then added an affirmative defense, arguing Vargas violated the “concealment or fraud” provision of its policy. A corporate representative of Citizens Property Insurance Company testified in a deposition that Vargas did in fact make a prior claim on the property in 2013 for a broken water pipe under a sink that resulted in water damage to cabinets, for which she received reimbursement. The areas listed as damaged in the 2013 claim included many of the same areas in her latter claim.
According to the opinion, Vargas argued that although Safepoint had submitted evidence of a prior claim, it hadn’t countered Vargas’s statement under oath that she didn’t remember the prior claim during her deposition.
What does ‘false’ really mean?
The problem, according to the appellate panel, was that Safepoint’s policy language was somewhat ambiguous on this issue.
The opinion highlighted a recent case, Anchor Property & Casualty Insurance Company v. Trif, in which the Fourth DCA interpreted the use of “false statements” in a similar context and found “the word ‘false’ implies something more than mere untruth: it imports knowledge and a specific intent to deceive.”
Third DCA Judge Thomas Logue wrote the opinion, backed by Judges Kevin Emas and Edwin Scales.
“We agree with the Fourth District and apply this ‘more common’ definition of the term ‘false statement’ to include an element of intent,” Logue wrote in Wednesday’s opinion.
Safepoint had argued the Third DCA should affirm because “even if the policy required the insured’s statement to be intentionally misleading, current and previous claims are so similar that no one could credit her assertion that she forgot about the prior claim.”
“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,” wrote Logue.
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