Redland Ins. Co. v. CEM Site Constructors, Inc.

• Court: Florida District Court of Appeals
• Writing for the Court: KHOUZAM
• Citation: Redland Ins. Co. v. CEM Site Constructors, Inc., 86 So. 3d 1259 (Fla. App. 2012)
• Decision Date: 09 May 2012
• Docket Number: No. 2D11–2349.,2D11–2349.
• Parties: REDLAND INSURANCE COMPANY, Appellant, v. CEM SITE CONSTRUCTORS, INC.; Charles E. McLeod III; Charles E. McLeod Jr.; Arlete Jorge, as parent of John P. Jorge and as Successor Personal Representative of the Estate of John P. Jorge; Auto Owners Insurance Company; Fresh Pack, Inc.; and Jesus J. Torres, Jr., Appellees.

86 So.3d 1259

REDLAND INSURANCE COMPANY, Appellant,

v.CEM SITE CONSTRUCTORS, INC.; Charles E. McLeod III; Charles E. McLeod Jr.; Arlete Jorge, as parent of John P. Jorge and as Successor Personal Representative of the Estate of John P. Jorge; Auto Owners Insurance Company; Fresh Pack, Inc.; and Jesus J. Torres, Jr., Appellees.

No. 2D11–2349.

District Court of Appeal of Florida, Second District.

May 9, 2012.

Susan S. Lerner of Russo Appellate Firm, P.A., Miami; and Luks, Santaniello, Petrillo & Jones, Miami, for Appellant.

James S. Cunha of Law Offices of James S. Cunha, P.A., West Palm Beach, for Appellee Arlete Jorge, as parent of John P. Jorge and as Successor Personal Representative of the Estate of John P. Jorge.

No appearance for remaining Appellees.

KHOUZAM, Judge.

Redland Insurance Company appeals the trial court's order granting summary judgment in favor of the defendants below. Because summary judgment was improperly granted, we reverse and remand for further proceedings.

CEM Site Constructors, Inc. (CEM), is a corporation owned and managed by Charles McLeod Jr. In December 2008, CEM applied for and received a commercial auto insurance policy from Redland with an effective date of December 10, 2008. Included in the application was a “Commercial Auto Drivers List” that did not contain a definition for the term “driver.” The application and accompanying policy also did not indicate who should be named on the list. It was unclear whether the list should include only those employees who regularly drove for the company, or instead anyone who could conceivably be expected to drive for the company at any time.¹ Some CEM employees were included on the drivers list, but Charles McLeod III was not.

On August 3, 2009, McLeod III was involved in an automobile accident while driving one of McLeod Jr.'s personal vehicles on company business. The accident resulted in the death of John P. Jorge, the driver of the other vehicle. Jorge's personal representative sued CEM for his wrongful death, and CEM made a claim with Redland for liability coverage under the policy. Redland denied the claim because of CEM's failure to include McLeod III on the drivers list.

In February 2010, Redland filed a two-count declaratory action against a number of defendants, including CEM, McLeod Jr., McLeod III, and the personal representative of John P. Jorge. In the first count, Redland requested a declaration that it was entitled to rescission of the policy under section 627.409(1), Florida Statutes (2008), alleging that the failure to include McLeod III on the drivers list constituted a fraudulent, material misrepresentation rendering the entire policy void ab initio. Redland's second count sought a declaration that, even if the entirepolicy was not void, McLeod III was excluded from coverage for failure to qualify as an “insured” under the policy's terms because he was an employee driving a vehicle owned by a member of his household.²

Following some discovery, the decedent's personal representative moved for summary judgment, raising three grounds: first, that the terms of the application were ambiguous, specifically because the term “driver” was not defined anywhere in the policy; second, that McLeod III was not an employee at the time CEM completed and submitted the application; and third, that McLeod III qualified as an “insured” under the policy because he was not a member of McLeod Jr.'s household at the time of the collision.

At the summary judgment hearing, argument focused on the first ground. Specifically, the defendants below argued that because the term “driver” was not defined in the application, it was ambiguous, and therefore as a matter of law there could be no misrepresentation regardless of any of the factual issues in dispute. The defendants relied upon Great Oaks Casualty Insurance Co. v. State Farm Mutual Automobile Insurance Co., 530 So.2d 1053 (Fla. 4th DCA 1988), in support of this position, arguing that if there was any ambiguity over the term “driver,” then summary judgment would be appropriate. Redland argued in response that the issue of ambiguity involved material questions of fact not properly resolved by summary judgment.

The court granted the motion, noting that Great Oaks was controlling on the ambiguity issue because of Redland's failure to define “driver” in its own application. After...