Reconco v. Integon Nat'l Ins. Co., 4D20-887

• Decision Date: 27 January 2021
• Docket Number: No. 4D20-887,4D20-887
• Citation: 312 So.3d 914
• Parties: Ethel RECONCO, Appellant, v. INTEGON NATIONAL INSURANCE COMPANY, Appellee.
• Court: Florida District Court of Appeals

312 So.3d 914

Ethel RECONCO, Appellant,

v.INTEGON NATIONAL INSURANCE COMPANY, Appellee.

No. 4D20-887

District Court of Appeal of Florida, Fourth District.

[January 27, 2021]

William Terry of William Terry, P.A., Vero Beach, for appellant.

Joseph W. Gelli and George M. Duncan of Garrison, Yount, Forte & Mulcahy, L.L.C., Tampa, for appellee.

Forst, J.

Appellant Ethel Reconco appeals the trial court's dismissal of her complaint with prejudice and the resulting final judgment in favor of Integon National Insurance Company ("the Insurer"). Appellant asserts the trial court erred in finding that she lacked standing as a third-party beneficiary under a "force-placed" casualty insurance policy on her home. We disagree and therefore affirm the dismissal of her complaint and the trial court's entry of final judgment.

Background

In 2013, Appellant purchased a home in Fort Pierce, Florida ("the Property"), with Bank of America ("the Bank") as the mortgage holder of the Property. Under the terms of the mortgage, Appellant agreed to maintain acceptable and continuous hazard insurance on the Property. If Appellant failed to do so, the mortgage allowed the Bank to obtain force-placed insurance at Appellant's expense that "might or might not protect [Appellant], [Appellant's] equity in the Property, or the contents of the Property, against any risk, hazard or liability and might provide greater or lesser coverage than was previously in effect."

Appellant failed to maintain the requisite hazard insurance. Therefore, the Bank purchased an insurance policy ("the Policy") from the Insurer to protect its interest in the Property. The Policy listed the Bank as the Named Insured, and the father of Appellant's two minor children ("the father") as the Borrower.¹ Further, the Policy provided as follows:

The contract of insurance is only between the NAMED INSURED and [the Insurer]. There is no contract of insurance between the BORROWER and [the Insurer]. The insurance purchased is intended for the benefit and protection of the NAMED INSURED, insures against LOSS only to the dwelling and OTHER STRUCTURES on the DESCRIBED LOCATION, and may not sufficiently protect the BORROWER'S interest on the property.

...

Appraisal. If YOU and WE fail to agree on the amount of LOSS, either can make a written demand upon the other that the amount of LOSS be determined by appraisal.

...

LOSS Payment. WE will adjust each LOSS with YOU and will pay YOU. If the amount of LOSS exceeds the UNPAID PRINCIPAL BALANCE, the BORROWER may be entitled, as a simple LOSS payee only, to receive payment for any residual amount due for the LOSS, not exceeding the lesser of the applicable Limit of Liability indicated on the NOTICE OF INSURANCE and the BORROWER's insurable interest in the damaged or destroyed property on the DATE OF LOSS. Other than the potential right to receive such payment, the BORROWER has no rights under this RESIDENTIAL PROPERTY FORM.

"YOU," "YOUR," and "YOURS" referred to the Bank, and "WE," "US," "OUR," and "OURS" referred to the Insurer.

In 2017, Hurricane Irma damaged the Property. The Insurer determined that the Irma-attributable loss was covered by the Policy and issued payment to the Bank. However, Appellant was unsatisfied with the payment amount. Consequently, after the father assigned his rights under the Policy to Appellant, Appellant filed a complaint for declaratory relief against the Insurer.

In the complaint, Appellant alleged that she had made several demands for both the Insurer and the Bank to participate in appraisal under the Policy's appraisal clause. She stated, however, that the Insurer refused and that the Bank "failed and refused to demand appraisal under the Policy or to otherwise pursue full recovery on all amounts owed."

Appellant therefore sought judicial declarations that she: (1) had standing to enforce the Policy's appraisal provision; (2) had standing to compel payment of an additional $60,000 allegedly still owed to the Bank; and (3) properly invoked the Policy's appraisal clause. Appellant asserted standing as a third-party beneficiary under the Policy pursuant to section 627.405, Florida Statutes (2018), and alleged that—at the time of the complaint—$105,000 remained outstanding on her mortgage loan.

Shortly thereafter, the Insurer filed a motion to dismiss. The Insurer argued that Appellant's complaint should be dismissed because Appellant was not a named insured, an additional insured, nor an intended third-party beneficiary under the Policy, and because Appellant's loss did not exceed the unpaid principal balance under the Policy's loss payment provision.²

In response, Appellant relied upon our opinion in Ran Investments, Inc. v. Indiana Insurance Co. , 379 So. 2d 991 (Fla. 4th DCA 1980), for the proposition that a homeowner has standing to enforce an insurance policy due to his or her insurable interest in the property.

The trial court conducted a hearing on the matter, wherein the parties repeated their respective arguments. Appellant asserted that the motion to dismiss was "entirely determined and controlled" by Ran Investments . Moreover, as it related to the loss payment provision and any potential residual amount, Appellant's counsel stated: "We're not suggesting – in fact we've pled quite clearly, that the amount of [Appellant's] claim is less than the amount of her unpaid mortgage balance. She has no residual claim." In contrast, the Insurer asserted that for Appellant to constitute a third-party beneficiary, she must prove that the contracting parties—here, the Bank and the Insurer—had a clear and manifest intent that the contract directly benefit her. The Insurer asserted that, based on the express language of the Policy, Appellant could not meet this requirement.

At the conclusion of the hearing, the trial court found Ran Investments distinguishable, granting the Insurer's motion and dismissing Appellant's complaint with prejudice. The trial court subsequently reduced its findings to a written "Order Granting Defendant's Motion to Dismiss, Dismissing the Complaint and Entering Final Judgment for the Defendant" ("Order"). The Order found that the Policy in the instant case "contains the clear or manifest intent not to primarily and directly benefit the third-party beneficiary." The Order also stated that Appellant is not a loss payee under the Policy, as Appellant herself acknowledged that her claim was less than the unpaid principal amount. Following the written Order, Appellant timely appealed.

Analysis

"A de novo standard of review applies when reviewing whether a party has standing to bring an action." Wilmington Sav. Fund Soc'y, FSB v. Stevens , 290 So. 3d 115, 117 (Fla. 4th DCA 2020) (quoting Matthews v. Fed. Nat'l Mortg. Ass'n , 160 So. 3d 131, 132 (Fla. 4th DCA 2015) ).

A party seeking to enforce a contract as a third-party beneficiary must allege four elements: "(1) existence of a contract; (2) the clear or manifest intent of the contracting parties that the contract primarily and directly benefit the third party; (3) breach of the contract by a contracting party; and (4) damages to the third party resulting from the breach." Mendez v. Hampton Ct. Nursing Ctr., LLC , 203 So. 3d 146, 148 (Fla. 2016) (quoting Found. Health v. Westside EKG Assocs. , 944 So. 2d 188, 194–95 (Fla. 2006) ). When construing an insurance policy, "[w]here the language in an insurance contract is plain and unambiguous, a court must interpret the policy in accordance with the plain meaning so as to give effect to the policy as written." Allstate Ins. Co. v. Orthopedic Specialists , 212 So. 3d 973, 975–76 (Fla. 2017) (quoting Wash. Nat'l Ins. Corp. v. Ruderman , 117 So. 3d 943, 948 (Fla. 2013) ).

In Goins v. Praetorian Insurance Co. , 302 So. 3d 478 (Fla. 5th DCA 2020), our sister court considered an insurance contract that stated: "The contract of insurance is only between the NAMED INSURED and Praetorian Insurance Company. There is no contract of insurance between the BORROWER and Praetorian Insurance Company." Id. at 479. Based on this language, the court found that "Goins, the borrower, was not intended to primarily and directly benefit from the policy of insurance" and that "it is not the role of this Court to rewrite the terms of the contract." Id. Accordingly, the court declined to hold that the borrower was a third-party beneficiary of the contract. Id. at 478–79. And in Veloz v. Integon National Insurance Co. , 304 So. 3d 22 (Fla. 4th DCA 2020), we issued a per curiam affirmance, citing to Goins . Id. at 23.

Here, the Policy states: "The contract of insurance is only between the NAMED INSURED and [the Insurer]. There is no contract of insurance between the BORROWER and [the Insurer]." Thus, the language is identical to that of the applicable provision in Goins , differing only in the name of the insurance company. Further, even beyond this language, the Policy in the instant case also states that it is "intended for the benefit and protection of the NAMED INSURED " (emphasis added). It is therefore evident that the Policy did not evidence a "clear or manifest intent ... that the contract primarily and directly benefit" Appellant. Mendez , 203 So. 3d at 148. Instead, the Policy expressed a "clear or manifest intent" in clear and unambiguous language that the Policy was intended not to benefit Appellant. Allstate , 212 So. 3d at 975–76.

To the extent the Policy provides that "[i]f the amount of LOSS exceeds the UNPAID PRINCIPAL BALANCE, the BORROWER may be entitled, as a simple LOSS payee only, to receive payment for any residual amount due for the LOSS," Appellant conceded that the amount of her claim was less than the unpaid mortgage balance and that she has no residual claim. Consequently, even if the loss payment provision of the Policy can be interpreted as primarily and directly benefiting Appellant, that provision is inapplicable in the instant case.

Nonetheless, despite the seemingly clear authority of Mendez , Goins , and Velo...