On March 26, 2021, the Fourth District issued a ruling in the matter of Jennifer Mezadieu v. Safepoint Insurance Company, which critically cemented the principle that ‘intentionality’ on the part of an insured is not a prerequisite for prevailing on material misrepresentations pursuant to the fraud or concealment provisions commonly found in homeowner insurance policies. Most impactful of all, the decision simultaneously established a new, prospective standard of conduct that insureds in Florida should expect to meet when defining their damages in future cases.
The underlying dispute originated from a bathroom plumbing leak in the insured’s home, which was ultimately denied by Safepoint. Dissatisfied with the coverage determination, the insured filed suit asserting a breach of the insurance policy. At the discovery stage, the insured submitted an estimate prepared by her loss consultant that was substantively identical to the one produced to SafePoint pre-suit. Significantly, the estimate sought damages to every room in the home, and most notably included costs to replace the cabinets in the insured’s kitchen, an area not remotely proximate to the site of the subject loss. As part of her sworn interrogatory responses, the insured unequivocally represented that she was relying on the amounts reflected in her loss consultant’s estimate. The insured later testified at her deposition that the kitchen cabinets had been damaged as a result of a separate leak that had been the subject of a prior unrelated claim with a different carrier. Contrary to her estimate, she also testified that none of the other rooms on the first-floor of her home had been damaged by the subject loss. Notwithstanding these admissions, the insured continued to rely on the same estimate without any attempts made to revise or amend it.
Based on the insured’s sworn interrogatory answers and deposition testimony, SafePoint amended its Answer to include an affirmative defense based on the policy’s “concealment or fraud” provision. That provision provided that SafePoint would not provide coverage for an otherwise covered loss if, whether before or after the loss, one or more “insureds”:
(1) Intentionally concealed or misrepresented any material fact or circumstance;
(2) Engaged in fraudulent conduct; or
(3) Made material false statements;
Safepoint ultimately moved for a final summary judgment based on this provision, and prevailed in front of Judge Haimes in Broward County Circuit Court. Following the entry of judgment, the insured appealed to the Fourth District. The insured argued on appeal that issues of material fact remained as to whether the estimate contained false statements, whether such false statements were material, and most importantly, contended that she should not be held responsible for any false statements contained within her loss consultant’s estimate because she had not intentionally relied on them.
The Fourth District affirmed the lower court’s decision and made several critical findings. First, following the well-established principle that a party is bound by his or her admissions under oath, the Court found that through her sworn interrogatory responses and deposition testimony, the insured could not disclaim any false statements in the estimate as she had adopted it as her own statement concerning the amount of damages. Next, the Fourth District joined the Fifth District in adopting the interpretation of the “fraud or concealment” provision in Universal Property & Casualty Ins. Co. v. Johnson, 114 So.3d. 1031, 1036 (Fla. 1st DCA), and held that intent was not required to prove a material false statement. See accord Privilege Underwriters Reciprocal Exch. v. Clark, 174 So. 3d 1028, 1031 (Fla. 5th DCA 2015) (agreeing with the Johnson court’s interpretation of the concealment or fraud provision and holding that “a showing of intent is not required under the provisions of this policy”). In discussing Johnson, the Court echoed the First District’s original rationale that holding otherwise would render superfluous the language of the remaining subsections in the fraud or concealment provision, which make no express mention of intentionality. Irrespective of this, the Fourth District denounced the insured’s lack of intentionality argument as disingenuous under the totality of the circumstances.
The Fourth District powerfully held that: “Simply put, an insured cannot blindly rely on and adopt an estimate prepared by his or her loss consultant without consequence.”
This decision represents a major victory for carriers as it portends a new trend in a direction that should hopefully discourage similar conduct on the part of insureds and their representatives, which until now had long gone unchecked.