Summary
explaining that a policy provision voiding coverage "if the [insureds] made any material misrepresentations or concealed any material facts either before or after a loss" was "fully enforceable"
Summary of this case from Anchor Prop. & Cas. Ins. Co. v. TrifOpinion
Case No. 2D18-3520
03-13-2020
Charles SVETLANOVICH and Sharon Svetlanovich, Appellants, v. STATE FARM FLORIDA INSURANCE COMPANY, Appellee.
Nicholas E. Karatinos of Law Office of Nicholas E. Karatinos, Lutz, for Appellants. Scot Samis and Christopher Shand of Traub Lieberman Straus & Shrewsberry LLP, St. Petersburg, for Appellee.
Nicholas E. Karatinos of Law Office of Nicholas E. Karatinos, Lutz, for Appellants.
Scot Samis and Christopher Shand of Traub Lieberman Straus & Shrewsberry LLP, St. Petersburg, for Appellee.
VILLANTI, Judge.
In May 2008, Charles and Sharon Svetlanovich filed a sworn proof of loss with State Farm Florida Insurance Company for the loss of a diamond ring they had insured with State Farm. Based on its investigation, State Farm denied the claim after deeming the insurance contract void due to alleged material misrepresentations made by the Svetlanoviches relating to the purchase of the ring and the circumstances surrounding its loss. The Svetlanoviches then sued State Farm for breach of contract. After extended proceedings, including a referral to nonbinding arbitration, the trial court entered final summary judgment in favor of State Farm. Because our review of the record evidence reflects that any determination as to whether the Svetlanoviches made misrepresentations hinges on credibility assessments that are solely the province of the trier of fact, we conclude that summary judgment was inappropriate, and we reverse and remand for further proceedings.
Background
The undisputed record evidence established that Mr. Svetlanovich, who fled the former Yugoslavia and emigrated to the United States in 1967, has been in the jewelry business all of his life. In early 2007, he visited his State Farm agent to request that State Farm issue an insurance policy to cover a diamond ring. The agent inspected the ring itself and received an appraisal of it from Mr. Svetlanovich dated February 9, 2007, which valued the ring at $88,495. State Farm then issued the requested policy, and the Svetlanoviches paid the premium in full. The policy, called a Personal Articles Policy, contained a "fraud or concealment" clause, which provided that "[t]he entire policy will be void if, whether before or after a loss, you have intentionally concealed or misrepresented a material fact relating to this insurance."
In August of 2007, Mrs. Svetlanovich gave the ring to her husband and asked him to repair it because the center diamond was loose in the mounting. Mr. Svetlanovich testified that he placed the ring in a grey pouch, along with two other jewelry items from his business, and that he planned to take all three items to his shop later that evening. Because he had an errand to run before going to his shop, Mr. Svetlanovich put the grey jewelry pouch under the driver's seat of his van when he left for the shop. However, on the way to his shop, Mr. Svetlanovich was pulled over for a traffic stop. Mr. Svetlanovich stated in his sworn proof of loss that the stop occurred around 7:00 p.m. on the evening of August 23, 2007.
During the stop, which police records show occurred at 9:59 p.m., misunderstandings arose between law enforcement and Mr. Svetlanovich, and he was arrested based on his alleged attempt to flee from police. Officers and a canine were called to search Mr. Svetlanovich's van for drugs; none were found. Because of Mr. Svetlanovich's arrest, his van was impounded, and it was towed from the scene of the stop by an independent towing company. Having been informed of his Miranda rights, including the right to remain silent, Mr. Svetlanovich did not tell the officers about the grey jewelry pouch under the seat of the van.
Miranda v. Arizona, 384 U.S. 436, 86 S.Ct. 1602, 16 L.Ed.2d 694 (1966).
The next day, when Mr. Svetlanovich picked up his van from the towing company, he found the inside "trashed," a tire slashed, and the grey jewelry pouch and its contents missing. Rather than confronting the police about the missing jewelry, Mr. Svetlanovich asked his attorney to do so. After his attorney was unable to find out whether the police had recovered the grey jewelry pouch and its contents, Mr. Svetlanovich filed the sworn proof of loss with State Farm on May 1, 2008.
During State Farm's ensuing investigation, Mr. Svetlanovich gave a recorded statement, testified at an Examination Under Oath (EUO), and testified at deposition. Each time, he testified that he purchased the ring from a jeweler in New York City in 1986 or 1987 in exchange for $45,000 in cash plus a Patek Phillipe watch. Mr. Svetlanovich testified that no one wore the ring at that time and that he kept it in his business safe, intending to give it to one of his children when they were old enough to marry. Because the ring was kept in the safe rather than being worn, Mr. Svetlanovich did not insure the ring at that point. Mr. Svetlanovich testified that he had received an appraisal of the ring when he bought it, and that appraisal was subsequently located and provided to State Farm during the course of the litigation.
For reasons not entirely clear from Mr. Svetlanovich's testimony, he changed his mind many years later and decided to give the ring to his wife. According to Mr. Svetlanovich, Mrs. Svetlanovich first wore the ring on New Year's Eve—December 31, 2006. Shortly thereafter, knowing that his wife was going to be wearing the ring, he had it appraised by Joyce Butterfield, and he provided her appraisal to his State Farm agent. He initially denied that any other appraisals were done on the ring other than the one he provided to his State Farm agent; however, he later testified that he remembered having the ring appraised in the early 1990s by a jeweler on "Kennedy Avenue" in Tampa, but that appraisal had been lost when his house sustained flood damage.
Mrs. Svetlanovich testified at her EUO that she works for Progress Energy full-time; she does not work in her husband's business and never has. She testified that she has "a lot" of jewelry and that she wears different pieces at different times. She testified that she was unaware that her husband had the diamond ring at issue until sometime around 2007, when he gave it to her to wear. She testified that she discovered on August 23, 2007, that the diamond was loose in its mounting, so she gave the ring to her husband that night to fix. He took it with him as he left that evening to run an errand and then return to his shop. She never saw the ring again.
As part of its investigation, State Farm also deposed Joyce Butterfield, the appraiser who wrote the appraisal used by the Svetlanoviches to insure the ring. She testified that when Mr. Svetlanovich called her, he told her that he wanted her to appraise a ring that he was interested in buying from a customer. According to Butterfield, when she was at the store, an unidentified woman came in and gave Mr. Svetlanovich the ring to be appraised. Butterfield prepared an appraisal dated January 25, 2007, in which she appraised only a diamond—not an entire ring. Butterfield described the diamond as having an "exact weight" of 4.59 carats, being E to F in color, having a clarity of VVS1 to VVS2, and having an "excellent" cut. She did not appraise the mounting, and this appraisal does not mention any other diamonds in the ring. According to Butterfield, Mr. Svetlanovich returned the ring to the same woman after the appraisal was done, and the woman then left with the ring.
Butterfield also testified that Mr. Svetlanovich asked her to return to the store to do another appraisal of the ring on February 9, 2007. On that date, Butterfield appraised what she testified was the same ring; however, the three appraisals she prepared on that date value the entire ring and contain two different descriptions of the main diamond, including significant alterations in the described weight of the stone, the described color of the stone, and the assessment of the quality of its cut. Butterfield testified that she changed the color description of the diamond after Mr. Svetlanovich removed the center diamond from the mounting; however, all of the appraisals (including the January 25 appraisal of only the diamond) contain the same photo of the intact ring. Notably, each of the four appraisals prepared by Butterfield contains a different value for the ring, ranging from $68,070 to $113,705.
Mr. Svetlanovich testified that he asked Butterfield to provide "an appraisal" of the ring. Butterfield testified that Mr. Svetlanovich asked her to appraise the ring at liquidation value, retail value, and insurance value. While Butterfield produced three appraisals of the ring dated February 9, only two of the three are signed.
During its investigation, State Farm also deposed the police officers involved in the stop of Mr. Svetlanovich on August 23, 2007. One officer testified that Mr. Svetlanovich was stopped because his license plate light was out. Another testified that he was stopped because he was leaving an area of high drug trafficking activity. A trainee officer testified that Mr. Svetlanovich did not immediately pull over when he activated his lights and pulled over only after a slow-speed chase that ended when officers bumped Mr. Svetlanovich's van. They ordered Mr. Svetlanovich out of the van, but he was slow to respond. Ultimately, he was arrested for fleeing to elude. A search of his van revealed no contraband; however, the van was impounded because Mr. Svetlanovich was taken to jail. At deposition, each of the officers denied finding a grey jewelry pouch under the driver's seat.
However, at Mr. Svetlanovich's EUO, State Farm briefly questioned Mr. Svetlanovich's attorney about his attempts to recover the jewelry from the police. In that testimony, the attorney testified that he had spoken with one Deputy McClane on February 19, 2008, and at that time McClane recalled having found a black pouch under the driver's seat, which he turned in to property. Repeated calls to the property section, however, were met with denials that anything had ever been turned in to them. At his subsequent deposition, McClane denied ever having said that he found a black pouch.
State Farm also deposed the customer, Gorgio Aristo, whom Mr. Svetlanovich had said he was going to meet the night of his arrest. Mr. Svetlanovich testified that he was supposed to meet Aristo that evening to deliver a ring that he had made on commission for Aristo's wife. Aristo testified that Mr. Svetlanovich was supposed to have a ring ready for him by August 23 but that they did not have a specific appointment date or time. Notably, as a long-time customer of Mr. Svetlanovich, Aristo described Mr. Svetlanovich as "a great jeweler, but dates and times I don't think exist in his Serbian hemisphere." He also testified that Mr. Svetlanovich called him within a few days of the incident, told him the ring for Aristo's wife had been lost, and refunded Aristo's money to him. For his part, Mr. Svetlanovich testified that he planned to meet Aristo at his shop between 6:30 p.m. and 7:00 p.m. on August 23, but he also testified that he did not have a cell phone at the time of the incident and that he intended to call Aristo to come get the ring when he got to the shop that evening.
After taking the EUOs of both of the Svetlanoviches, State Farm denied the claim, deemed the policy void, and refunded the Svetlanoviches' premium. The Svetlanoviches then filed this action for breach of the insurance contract. After extended litigation between the parties, State Farm filed a motion for summary judgment, contending that the record evidence showed no genuine issues of material fact as to whether the Svetlanoviches had made material misrepresentations concerning the date the ring was purchased and the events of the evening of August 23, 2007. After reviewing the evidence filed in support of State Farm's motion for summary judgment, the trial court apparently agreed. It entered final summary judgment in favor of State Farm without providing any basis for its decision. The Svetlanoviches now appeal that decision.
Analysis
As mentioned above, the State Farm policy insuring the Svetlanoviches' ring provided that State Farm would not cover any loss, and in fact could void the entire policy, if the Svetlanoviches made any material misrepresentations or concealed any material facts either before or after a loss. This type of policy provision is fully enforceable in Florida. See, e.g., Flores v. Allstate Ins. Co., 772 So. 2d 4, 6 (Fla. 2d DCA 2000) ("The law in Florida is clear that a policy provision which voids the insurance policy for misrepresentations of a material fact is given full force and effect."), quashed on other grounds, 819 So. 2d 740 (Fla. 2002) ; Schneer v. Allstate Indem. Co., 767 So. 2d 485, 490 (Fla. 3d DCA 2000) (holding that insureds' postloss fraudulent misrepresentations as to their contents claim voided their homeowner's policy in its entirety); Wong Ken v. State Farm Fire & Cas. Co., 685 So. 2d 1002, 1003 (Fla. 3d DCA 1997) ("There is no question that the clause which voids coverage if the insured makes an intentional misrepresentation ‘after a loss’—that is, as here, in making a claim—is valid and enforceable."); Am. Emp'rs' Ins. Co. v. Taylor, 476 So. 2d 281, 282, 284 (Fla. 1st DCA 1985) (finding policy provision that stated "[t]his policy is void if any insured has intentionally concealed or misrepresented any material fact or circumstance relating to this insurance" valid and enforceable to void coverage based on misrepresentations made by the insured during the claims process). Moreover, when the insurer is acting to enforce a contract provision that voids coverage based on willful postloss misrepresentations concerning material facts, the insurer need not demonstrate either reliance or prejudice. See Prudential Ins. Co. of Am. v. Whittington, 98 So. 2d 382, 388 (Fla. 2d DCA 1957) (holding that "honesty and fair dealing are essential and that even without requiring proof of prejudicial reliance by the insurer, if there was a willful false statement of a material fact, liability does not attach to the company" (citing Chaachou v. Am. Cent. Ins. Co., 241 F.2d 889, 894 (5th Cir. 1957) )); see also Mich. Millers Mut. Ins. Corp. v. Benfield, 140 F.3d 915, 923 (11th Cir. 1998) (holding that the insurer was not required to "demonstrate that it relied on the insured's misrepresentations when asserting a policy defense based on fraud"; the insured perpetrating a material fraud in pursuing an insurance claim was sufficient); Lopes v. Allstate Indem. Co., 873 So. 2d 344, 347 (Fla. 3d DCA 2004) ("[U]nder Florida law, if there is a willful false statement of a material fact, there is no requirement that an insurer show prejudicial reliance in order to enforce the contract provision."). Instead, the sole question is whether the statements constitute misrepresentations and whether they are material. And, in general, "[t]he question of whether an insured has made a material misrepresentation is a question for the jury to determine." Lopes, 873 So. 2d at 347 ; see also Haiman v. Fed. Ins. Co., 798 So. 2d 811, 811-12 (Fla. 4th DCA 2001) (holding that it was for the trier of fact to determine whether the insured's misstatements constituted material misrepresentations).
This is different from the situation in which an insurer seeks to void coverage pursuant to section 627.409(1), Florida Statutes, which relates to fraud or misrepresentations made in connection with an application for insurance. In that instance, the insurer must establish reliance on the misrepresentation, i.e., that "[i]f the true facts had been known ..., the insurer in good faith would not have issued the policy or contract, would not have issued it at the same premium rate, would not have issued a policy or contract in as large an amount, or would not have provided coverage with respect to the hazard resulting in the loss." § 627.409(1)(b). Here, State Farm did not void the policy based on fraud or misrepresentations in the application; it relied solely on the concealment and fraud provision contained in the policy.
In this case, State Farm moved for summary judgment, contending that the summary judgment evidence conclusively established that the Svetlanoviches made material misrepresentations after the loss. As the moving party, State Farm had the burden to prove that "the pleadings, depositions, answers to interrogatories, admissions, affidavits, and other materials as would be admissible in evidence on file show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Estate of Githens ex rel. Seaman v. Bon Secours-Maria Manor Nursing Care Ctr., Inc., 928 So. 2d 1272, 1274 (Fla. 2d DCA 2006) (quoting Fla. R. Civ. P. 1.510(c) ). Under this standard, "[i]f the record reflects the existence of any genuine issue of material fact, or the possibility of any issue, or if the record raises even the slightest doubt that an issue might exist, summary judgment is improper." Shaw v. Tampa Elec. Co., 949 So. 2d 1066, 1069 (Fla. 2d DCA 2007) (quoting Snyder v. Cheezem Dev. Corp., 373 So. 2d 719, 720 (Fla. 2d DCA 1979) ). And in determining whether a genuine issue of material fact exists, it is wholly improper for the trial court "to consider either the weight of the conflicting evidence or the credibility of witnesses." Bernhardt v. Halikoytakis, 95 So. 3d 1006, 1008-09 (Fla. 2d DCA 2012) (citing Juno Indus., Inc. v. Heery Int'l, 646 So. 2d 818, 822 (Fla. 5th DCA 1994) ).
The problem here is that the evidence submitted by State Farm as summary judgment evidence reflected numerous genuine issues of fact, and the only way to resolve those disputes was for the trial court to weigh the credibility of the various witnesses. State Farm would have the court believe Butterfield's testimony over that of Mr. Svetlanovich concerning when the ring was purchased, and it would have the court believe the police officers over Mr. Svetlanovich concerning the events of the night of August 23. However, the record reflects inconsistencies in the appraisals prepared by Butterfield, as well as inconsistencies between what at least one police officer told Mr. Svetlanovich's attorney six months after the traffic stop and what he testified to at deposition three years later. Resolving these inconsistencies and determining which witnesses' testimony should be credited as believable is improper at the summary judgment stage.
In fact, State Farm essentially admitted in its motion for summary judgment that the trial court would need to weigh the evidence to grant the relief it was seeking. In urging the trial court to ignore the appraisal of the ring from August 1987 produced by Mr. Svetlanovich in support of his testimony concerning when it was purchased, State Farm argued, "State Farm respectfully submits the inept appraisal rife with misspellings and nonsensical telephone number dated August 21, 1987, has no credible evidentiary value." Whether that appraisal was worthy of credence, however, was not a determination properly within the trial court's province at the summary judgment stage. The existence of that appraisal gave rise to a genuine issue of material fact concerning whether Mr. Svetlanovich's testimony concerning the date of purchase of the ring was a misrepresentation; a decision which could only be properly made by a jury.
Moreover, some of the misrepresentations asserted by State Farm were of questionable materiality. The exact timing of Mr. Svetlanovich's stop and whether he was going to meet a client for an existing appointment or was going to call the client when he got to the shop appear to be minor factual discrepancies easily attributable to age, language barriers, and the passage of time. Whether these discrepancies were sufficient to constitute material misrepresentations in an insurance claim was an issue for the jury's consideration that should have precluded entry of summary judgment in favor of State Farm.
In sum, the trial court entered final summary judgment in favor of State Farm after concluding that there were no genuine issues of material fact as to whether the Svetlanoviches made misrepresentations in making their claim for the missing ring. But reaching that conclusion required the trial court to make an assessment of the weight to be given to certain evidence and an assessment of the relative credibility of witnesses, neither of which is proper in the context of a summary judgment. Accordingly, because the record evidence reflects genuine issues of material fact concerning whether the various statements by the Svetlanoviches constituted material misrepresentations, the trial court erred by entering final summary judgment in favor of State Farm. We therefore reverse and remand for further proceedings.
Reversed and remanded for further proceedings.
LUCAS, J., and CASE, JAMES R., ASSOCIATE SENIOR JUDGE, Concur.