Vasques v. Mercury Cas. Co.

• Decision Date: 02 February 2007
• Docket Number: No. 5D06-1705.,5D06-1705.
• Parties: Ernesto VASQUES, Petitioner, v. MERCURY CASUALTY COMPANY, Respondent.
• Court: Florida District Court of Appeals

947 So.2d 1265

Ernesto VASQUES, Petitioner, v. MERCURY CASUALTY COMPANY, Respondent.

No. 5D06-1705.

District Court of Appeal of Florida, Fifth District.

February 2, 2007.

Jamie Billotte Moses, of Fisher, Rushmer, Werrenrath, Dickson, Talley & Dunlap, P.A., Orlando, and Kimberly A. Driggers, of The Nation Law Firm, Longwood, for Petitioner.

Randall A. Wainoris, of Haas, Dutton, Blackburn, Lewis, Longley & Lee, Tampa, for Respondent.

GRIFFIN, J.

Petitioner, Ernesto Vasques ["Vasques"], appellant below, seeks a writ of certiorari to quash the circuit court's appellate decision affirming the Seminole County court's summary judgment in favor of Respondent, Mercury Casualty Company ["Mercury"].

On December 29, 2001, Vasques severely injured his hand while working on an automobile in the garage of Maida L. Shehata. As a result of the accident, Vasques incurred hospital bills and orthopaedic surgery bills in excess of $25,000. Additionally, Vasques lost his job as an electrical helper. Vasques sought personal injury protection ["PIP"] benefits under Shehata's private passenger automobile policy with Mercury. His claim was denied.

After Mercury denied Vasques' claim, Vasques filed suit to establish his entitlement to PIP benefits. Mercury's affirmative defense asserted that Mercury was entitled to deny Vasques' claim because the Shehatas had made material misrepresentations to Mercury regarding facts of the accident. Specifically, during the investigation of this claim by Mercury, the insured, Maida Shehata, her son, George Shehata, and George's girlfriend gave recorded statements to Mercury. In those statements, they denied being aware of the December 29, 2001, incident or even knowing Ernesto Vasques. Subsequently, however, in their depositions taken two years after the claim was denied, both Maida Shehata and George Shehata ["Shehatas"] admitted that they knew Vasques and were aware of the accident on December 29, 2001. They admitted previously telling Mercury otherwise. In their testimony, they suggested they lied to protect themselves from any claim by Vasques.

Mercury moved for summary judgment, contending that condition number 10 of the Mercury policy concerning misrepresentations relieved it of any liability in this case. Mercury has acknowledged that, but for the Shehatas' misrepresentations, Vasques would be entitled to coverage.¹ Mercury also concedes that Vasques made no misrepresentations to Mercury concerning his claim.

The trial court granted Mercury's "Motion for Final Summary Judgment," agreeing that condition 10 relieved Mercury of liability under the policy. From that summary final judgment, Vasques appealed to the circuit court. The circuit court, sitting in its review capacity, affirmed the summary final judgment in favor of Mercury. Vasques now seeks review in this court, contending that the error below is of such a nature and magnitude that it warrants second-tier appellate review. We agree, grant the writ and quash the circuit court's decision.

A district court may exercise its discretion to grant certiorari review when procedural due process has not been afforded or there has been a violation of a clearly established principle of law resulting in a miscarriage of justice. Progressive Express Ins. Co. v. Physician's Injury Care Center, Inc., 906 So.2d 1125, 1126 (Fla. 5th DCA 2005). We agree that the circuit court's decision affirming the judgment in favor of Mercury violated clearly established principles of Florida law resulting in a miscarriage of justice for Vasques.

Although we agree with Vasques that Mercury relies on a misinterpretation of the policy language on which it based its denial of coverage, the principal basis upon which we conclude that jurisdiction lies is that the policy language at issue—if interpreted as Mercury urges—would be inconsistent with the PIP statute and represent a violation of Florida's public policies governing insurance.

The policy language at issue provides:

We may deny coverage of an accident or loss if you or an insured person has concealed or misrepresented any material fact or circumstance, or engaged in fraudulent conduct, in connection with the presentation or settlement of a claim.

Does this language mean a misrepresentation by an insured in connection with his own claim or anybody's claim? Can an insured person engage in fraud "in connection with the presentation or settlement of a claim" if he is neither the presenter nor the settler of the claim? Everyone acknowledges that Vasques did not conceal or misrepresent anything, nor did he engage in any fraudulent conduct regarding his injury and/or claim. The only misrepresentation was on the part of the Shehatas, who denied that the incident that caused Vasques' injury ever occurred. We agree with petitioner that because Vasques, the party making the claim for PIP coverage, did not make any misrepresentations regarding his claim, the above-quoted policy provision does not authorize Mercury to deny coverage. The supreme court has explained that:

As a fundamental proposition, where the language in an insurance policy is subject to differing interpretations, the policy language "should be construed liberally in favor of the insured and strictly against the insurer." Moreover, it is axiomatic that "[i]f the relevant policy language is susceptible to more than one reasonable interpretation, one providing coverage and the other limiting coverage, the insurance policy is ambiguous." Policy provisions that tend to limit or avoid liability are interpreted liberally in favor of the insured and strictly against the drafter who prepared the policy, and exclusions to coverage are construed even more strictly against the insurer than coverage clauses.

Flores v. Allstate Ins. Co., 819 So.2d 740, 744 (Fla.2002) (citations omitted).

Apart from the fact that any doubts in construction of the policy language must be construed in favor of Vasques, an interpretation of this policy language that any misrepresentation by one insured person could support the denial of PIP benefits for another unrelated third party would lead to absurd results. The language has to mean a misrepresentation by the person who is making the claim. Here, the Shehatas, although insureds, did not and could not present or participate in the settlement of a claim to Mercury for this incident. Rather, Vasques as the injured party entitled to coverage under the Shehatas policy, presented the claim to Mercury, and he made no misrepresentation.

The circuit court departed from clearly established principles of Florida law when it failed to uphold Florida's well-established "Innocent Insured Doctrine."² Several Florida cases, including Everglades Marina, Inc. v. American Eastern Development Corp., 374 So.2d 517 (Fla.1979); Overton v. Progressive Insurance Co., 585 So.2d 445 (Fla. 4th DCA 1991); and Auto-Owners Insurance Co. v. Eddinger, 366 So.2d 123 (Fla. 2d DCA 1979), stand for the proposition that fraud committed by a coinsured will not void the coverage of the innocent co-insured unless clearly stated in the policy.³ The lower court said this case is not covered by the "innocent co-insured" doctrine because Vasques was not a "co-insured" but "at best" is a third-party beneficiary of the policy. Leaving aside the question whether Vasques is a "co-insured," the considerations that animate the "Innocent Co-Insured Doctrine" are not based on a category of "insured" but...