Phoenix Ins. Co. v. McCormick, 88-02154
| Decision Date | 07 April 1989 |
| Docket Number | No. 88-02154,88-02154 |
| Citation | 542 So.2d 1030,14 Fla. L. Weekly 885 |
| Parties | 14 Fla. L. Weekly 885 The PHOENIX INSURANCE COMPANY, Appellant, v. Kathleen B. McCORMICK and Richard McCormick, her husband, Appellees. |
| Court | Florida District Court of Appeals |
Raymond T. Elligett, Jr., and Lee Delton Gunn, IV, of Shackleford, Farrior, Stallings & Evans, Tampa, for appellant.
James E. Deakyne, Jr., of Nunez & Deakyne, St. Petersburg, for appellees.
The Phoenix Insurance Company appeals a final summary judgment which awards damages to Kathleen B. McCormick and Richard McCormick under their liability insurance coverage because Phoenix failed to comply with the Claims Administration Statute, section 627.426, Florida Statutes (1985). Since the McCormicks and their attorney had actual written notice of the denial of coverage by Phoenix and the reasons for that denial within thirty days of the insurer's receipt of the claim, we reverse.
The McCormicks own a winter home in St. Petersburg, Florida. When they purchased the home in 1980, according to a statement given by Mr. McCormick to Phoenix, a Mother's Tongue tree was growing near their property line. They understood that this tree had been planted by the prior owner of their house. Because the tree required constant maintenance, the McCormicks hired a tree service to remove the tree. The tree was removed in May 1987.
Shortly after the tree was removed, the McCormicks' neighbors protested and claimed that it was their tree. On June 8, 1987, the neighbors sued Mr. and Mrs. McCormick in the small claims division of county court. The statement of claim simply alleges:
Defendants Richard & Kathleen McCormick hired Defendant William B. Carroll to come onto Plaintiff's property and cut down a large shade tree that was clearly inside Plaintiff's property with neither Plaintiff's knowledge or permission, knowing that Plaintiffs would not be home at that particular time.
The county court action was served on Mr. and Mrs. McCormick in Pinellas County on June 17, 1987. The summons notified them that the first county court hearing would occur on July 15, 1987.
The McCormicks immediately sent the lawsuit to Phoenix, the insurance carrier that provided their homeowners liability coverage. On June 24, 1987, Mr. McCormick gave a recorded statement to Phoenix providing the information described in this opinion.
The homeowners insurance policy contained a standard exclusion for "property damage expected or intended by an insured." On July 9, 1987, the claims supervisor at Phoenix called the McCormicks and advised them that the insurance company would not handle the claim because of the exclusion. On July 10, this information was reconfirmed over the telephone, and the insurance company mailed a letter to Mr. McCormick advising that the insurance company was "unable to defend you" in the county court action because the removal of the tree was "an intentional act on your part and the damages were not accidental." It is undisputed that Mr. and Mrs. McCormick actually received the letter on July 13, 1987. The McCormicks hired an attorney to represent them on July 10, 1987. The insurance company communicated with him over the telephone and also sent him a copy of the letter denying coverage. The McCormicks' attorney represented them at the hearing on July 17, 1987, and ultimately at the trial. The county court entered judgment against the McCormicks for $934.09.
Section 627.426(2)(a), Florida Statutes (1985), states:
A liability insurer shall not be permitted to deny coverage based on a particular coverage defense unless:
(a) Within 30 days after the liability insurer knew or should have known of the coverage defense, written notice of reservation of rights to assert a coverage defense is given to the named insured by registered or certified mail sent to the last known address of the insured or by hand delivery.
Likewise, section 627.426(2)(b)1, Florida Statutes (1985), requires that the insurance carrier's refusal to defend the insured be provided by registered or certified mail. The trial court believed that strict compliance with the statute was required in light of the Fifth District's decision in Auto Owners Ins. Co. v. Salvia, 472 So.2d 486 (Fla. 5th DCA 1985). Thus, the trial court held that the insurance company was estopped to deny coverage to the McCormicks because the notice the McCormicks actually received was not sent by registered or certified mail and was delivered by the hand of a mailman rather than an insurance agent.
At least two federal district courts have rejected the requirement of strict...
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