Bankers Ins. Co. v. Macias

• Decision Date: 29 August 1985
• Docket Number: No. 65740,65740
• Citation: 10 Fla. L. Weekly 424,475 So.2d 1216
• Parties: 10 Fla. L. Weekly 424 BANKERS INSURANCE COMPANY, Petitioner, v. Caridad MACIAS, Respondent.
• Court: Florida Supreme Court

Page 1216

475 So.2d 1216

10 Fla. L. Weekly 424

BANKERS INSURANCE COMPANY, Petitioner, v. Caridad MACIAS, Respondent.

No. 65740.

Supreme Court of Florida.

Aug. 29, 1985.

Rehearing Denied Oct. 21, 1985.

Richard M. Gale, and Weinstein and Bavly, Miami, for petitioner.

Henry H. Harnage, and Stabinski & Funt, Miami, for respondent.

McDONALD, Justice.

We have for review Macias v. Bankers Insurance Co., 452 So.2d 1020 (Fla. 3d DCA 1984), which expressly and directly conflicts with Tiedtke v. Fidelity & Casualty Co., 222 So.2d 206 (Fla.1969). We have jurisdiction. Art. V, § 3(b)(3), Fla. Const. The issue here is whether a presumption of prejudice to an insurer arises where an insured fails to give timely notice of an accident to the insurer. We hold that such presumption does arise and quash Macias.

Caridad Macias was injured in an automobile accident on September 7, 1980 while covered by a personal injury protection (PIP) policy issued by Bankers Insurance Company (Bankers). In 1982 Macias sued to have the $8,000 deductible in the PIP policy declared inoperative because the policy had been improperly sold to her when she had no other insurance benefits available. After a nonjury trial, the trial court entered a final judgment in favor of Bankers because Macias had pled and failed to prove that she gave notice of the accident and provided proof of claim to Bankers. The trial court held that this failure to notify created a presumption of prejudice to Bankers, which Macias did not dispel. The district court reversed, holding that "the defense of lack of notice and other breaches of a cooperation clause by an insured require a showing of substantial prejudice to the rights of the insurer." 452 So.2d at 1020-21. We disagree.

The district court has confused the insured's breach of the notice requirement with the insured's breach of a cooperation clause. These contractual duties are imposed on the insured for different reasons and must be considered separately. The notice requirement enables the insurer to conduct a timely and adequate investigation of all circumstances surrounding an accident. 8 Appleman, Insurance Law and Practice § 4731 (1981). The cooperation requirement, on the other hand, arises to prevent fraud and collusion in proceedings to determine liability once notice has been given. Id. at § 4771.

In Florida different presumptions arise depending on which duty has been breached. If the insured breaches the notice provision, prejudice to the insurer will be presumed, but may be rebutted by a showing that the insurer has not been prejudiced by the lack of notice. National Gypsum Co. v. Travelers Indemnity Co., 417 So.2d 254 (Fla.1982); Tiedtke. In a breach of cooperation clause case, however, the insurer must show a material failure to cooperate which substantially prejudiced the insurer. Ramos v. Northwestern Mutual Insurance Co., 336 So.2d 71 (Fla.1976); American Fire & Casualty Co. v. Vliet, 148 Fla. 568, 4 So.2d 862 (1941). We quash Macias because the district court applied the breach of cooperation presumption against the insurer when it should have applied the lack of notice presumption against the insured. To the extent that they conflict with our holding here, we disapprove Donnell v. Industrial Fire & Casualty Insurance Co., 439 So.2d 974 (Fla. 3d DCA 1983), and Travelers Insurance Co. v. Jones, 422 So.2d 1000 (Fla. 4th DCA 1982), review denied, 431 So.2d 990 (Fla.1983).

Macias urges us to abandon the Tiedtke presumption of prejudice rule as out of step with the modern trend requiring the insurer to show substantial prejudice resulting from the lack of notice. See 32 A.L.R.4th...