Nembhard v. Universal Prop. & Cas. Ins. Co.
| Decision Date | 18 August 2021 |
| Docket Number | No. 3D20-1383,3D20-1383 |
| Citation | 326 So.3d 760 |
| Parties | Jermaine NEMBHARD and Donnette Nembhard, Appellants, v. UNIVERSAL PROPERTY AND CASUALTY INSURANCE COMPANY, Appellee. |
| Court | Florida District Court of Appeals |
Giasi Law, P.A., and Melissa A. Giasi and Erin M. Berger (Tampa), for appellants.
Groelle & Salmon, P.A., and Andrew A. Labbe (Tampa); and Russo Appellate Firm, P.A., and Elizabeth K. Russo, for appellee.
Before HENDON, GORDO, and BOKOR, JJ.
Jermaine and Donnette Nembhard ("Homeowners") appeal from a summary judgment in favor of Universal Property and Casualty Insurance Company ("Universal" or "insurance company"). We affirm.
The Homeowners applied for insurance with Universal in August 2016. The application for insurance required the homeowners to indicate if they had filed any loss claims within the past five years.1 The Homeowners did not disclose on the application that they had two earlier water loss claims with their prior insurer within the past two years and had collected payments for those claims.
In October 2016, the Homeowners filed a claim for water and roof damage allegedly caused by Hurricane Matthew. Universal accepted coverage and issued payment for the claim in the amount of $1,324.60. The Homeowners disputed the amount. In November 2016, the insurance company cancelled the policy, stating the damage claimed by the Homeowners was not a covered hazard, was not a result of any roof opening caused by the windstorm (one of the policy exclusions), and cited the deteriorated condition of the Homeowners’ roof.
The Homeowners subsequently sued Universal for breach of contract. During Universal's investigation of the claim, Universal discovered that at the time the Homeowners applied with Universal, they had had two prior water damage claims in 2015. The underwriting guidelines did not allow an HO3 homeowners policy, such as the one obtained by the Homeowners, to be issued for a property with prior water losses.
Universal then moved for summary judgment alleging there was no policy in effect and thus no future financial recovery was possible for the Homeowners. The Homeowners responded that issues of material fact remained, and that summary judgment was inappropriate as Universal waived the defense of material misrepresentation because it had not raised it as an affirmative defense in its responsive pleading. Further, the Homeowners pointed out that the insurance company paid the claim and accepted further premiums despite its knowledge of the Homeowners’ failure to indicate the two prior water loss claims. At that point, they argued, the insurance company could have elected to exercise its right to rescind the policy pursuant to section 627.409(1), Florida Statutes, but did not. The Homeowners argued that Universal's post-loss behavior amounted to waiver of its right to rescind and acted to ratify the Homeowners’ alleged misrepresentation in the insurance application.
At the conclusion of the summary judgment hearing, the trial court granted Universal's motion, stating;
The Homeowners present three issues on appeal. First, they assert that summary judgment was improper because the insurance company did not plead the defense of misrepresentation, raising this for the first time in its summary judgment motion. Next, they argue that summary judgment was improper because genuine issues of material fact remain as to whether Universal's post-loss behavior waived rescission and materiality. Last, the Homeowners argue that the final judgment was improper because the insurance company's affidavit was insufficient as a matter of law and should have been stricken.
Our standard of review of an order granting summary judgment is de novo. See Major League Baseball v. Morsani, 790 So. 2d 1071 (Fla. 2001) ; Volusia Cnty. v. Aberdeen at Ormond Beach, L.P., 760 So. 2d 126 (Fla. 2000).
On December 31, 2020, the Florida Supreme Court amended Florida Rule of Civil Procedure 1.510, aligning Florida's summary judgment standard with that of the federal courts pursuant to Rule 56 of the Federal Rules of Civil Procedure. In re Amendments to Florida Rule of Civil Procedure 1.510, 309 So. 3d 192 (Fla. 2020). Under this new summary judgment standard, effective May 1, 2021, "the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The hearing on Universal's motion for summary judgment was held was held in August 2020 and predated both the amendment and effective date of the new summary judgment rule. We therefore review the order on appeal applying the summary judgment standard that existed at the time of the hearing.
We first address the Homeowners’ argument that it was error to grant summary judgment based on Universal's affirmative defense of misrepresentation raised for the first time in a motion for summary judgment rather than in a responsive pleading, relying on Bank of N.Y. Mellon v. Bloedel, 236 So. 3d 1164, 1166-1167 (Fla. 2d DCA 2018), among others, which holds that issues not raised within the pleadings of a civil controversy are ordinarily deemed waived.
We acknowledge the rule that affirmative defenses must be pleaded either in the answer or as separate affirmative defenses and, if not pleaded, the issue is deemed waived. See Fla. R. Civ. P. 1.140(h)(1). There is, however, an exception to that rule, which is that an affirmative defense can be tried by consent. When an issue is tried by express or implied consent, that issue can be treated in all respects as if it had been raised in the pleadings. Di Teodoro v. Lazy Dolphin Dev. Co., 418 So. 2d 428, 429 (Fla. 3d DCA 1982). More specifically:
When issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings. Such amendment of the pleadings as may be necessary to cause them to conform to the evidence and to raise these issues may be made upon motion of any party at any time, even after judgment, but failure so to amend shall not affect the result of the trial of these issues. If the evidence is objected to at the trial on the ground that it is not within the issues made by the pleadings, the court may allow the pleadings to be amended to conform with the evidence and shall do so freely when the merits of the cause are more effectually presented thereby and the objecting party fails to satisfy the court that the admission of such evidence will prejudice the objecting party in maintaining an action or defense upon the merits.
Fla. R. Civ. P. 1.190(b) ; Twenty-Four Collection, Inc. v. M. Weinbaum Const., Inc., 427 So. 2d 1110, 1112–13 (Fla. 3d DCA 1983) (); Massey-Ferguson, Inc. v. Santa Rosa Tractor Co., 366 So. 2d 90 (Fla. 1st DCA 1979) (same); Paul Gottlieb & Co. v. Alps S. Corp., 985 So. 2d 1, 5 (Fla. 2d DCA 2007) (same).
With that in mind, the record shows that Universal filed its motion for summary judgment on June 12, 2019, in which it asserted the defense of false statement in the insurance application. The summary judgment hearing was held fourteen months later, in August 2020. During that interim, both parties engaged in substantial discovery including the very issue of the Homeowners’ omissions in the insurance application, to which fact the Homeowners admitted in their depositions. Once discovery was complete, and two days before the August 20, 2020 summary judgment hearing, the Homeowners filed their full substantive response on the merits and at that time objected to the affirmative defense having been asserted in the ...
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