by

applicationWhenever an insured makes a claim, one of the first things every insurance company does is try to figure out ways to deny the claim. Common methods are to assert that the loss is not covered under the policy or that the insured has failed to cooperate with the carrier. Another popular practice is to rescind the insurance contract based on charges of misrepresentation, omission, concealment of fact or incorrect statement in an application for insurance. This method is authorized by Section 627.409(1) of the Florida Statutes, and can even be based on non-intentional misstatements.

While the law does not favor the forfeiture of rights under an insurance policy, see Johnson v. Life Insurance Company of Georgia, 52 So.2d 813, 815 (Fla. 1951), beating back 627.409 charges can be difficult. To prevail under 627.409, the carrier need only show any of the following:

(a) The misrepresentation, omission, concealment, or statement is fraudulent or is material either to the acceptance of the risk or to the hazard assumed by the insurer.

(b) If the true facts had been known to the insurer pursuant to a policy requirement or other requirement, 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.

These are not especially difficult standards for carriers to meet. Moreover, while carriers sometimes prey on the vulnerable by rescinding based on flimsy or non-existent evidence, not expecting the insured to fight back, more frequently their evidence contains some modicum of substance. Notwithstanding these hurdles, insureds do have a fighting chance under Florida law.

Waiver. “[W]hen an insurer has knowledge of the existence of facts justifying a forfeiture of the policy, any unequivocal act which recognizes the continued existence of the policy or which is wholly inconsistent with a forfeiture, will constitute a waiver thereof.” Johnson at 815. The elements of waiver are: (1) the existence at the time of the waiver of a right, privilege, advantage, or benefit which may be waived; (2) the actual or constructive knowledge of the right; and (3) the intention to relinquish the right. Capital Bank v. Needle, 596 So.2d 1134 (Fla. 4th DCA 1992); Taylor v. Kenco Chemical & Mfg. Corp., 465 So.2d 581 (Fla. 1st DCA 1985).

Johnson involved a life insurance policy. Following the insured’s death, the carrier sought to rescind the policy based on misrepresentation. It was clear that the insurance application contained material misrepresentations concerning the insured’s health and medical treatment before issuance of the policy. It was also uncontroverted that the insurance agent became aware of the misrepresentations only two months after the date of the issuance of the policy, yet the carrier continued to accept and collect premiums with constructive notice of these facts. (The carrier did not challenge that the knowledge acquired by the agent was imputable to it, the principal, even though the agent might not have communicated the information to the company. On this issue, the Johnson court wrote: “[U]nder the circumstances here present the knowledge of the agent is imputable to his principal whether disclosed by him to it or not, and the company will be bound by such knowledge. See National Life & Accident Ins. Co., Inc., v. Travis et al., Tex. Civ.App., 128 S.W.2d 867; Poole v. Travelers Ins. Co. et al., 130 Fla. 806, 179 So. 138.”)

Failing to take acts necessary to effectuate rescission. In Leonardo v. State Farm Fire & Casualty Company, 675 So.2d 176 (Fla. 4th DCA 1996), a case involving a theft policy, the court of appeal reversed summary judgment for the carrier in a rescission case because, in part, the carrier did not remit, or even make a tender of, any premiums paid by the insured for the allegedly void policy. (The appeal court also reversed on waiver grounds, because State Farm continued to bill the insured and accept payment of premiums for a considerable period of time after denying his claim, and after notifying him of its intent to void the policy.)
Continue reading

by

dollars.jpgThe Medicare Secondary Payer Act of 1980 (“MSP”) — Link to the MSP Manual — was enacted to limit the financial burden on taxpayers for the medical expenses of Medicare beneficiaries whose medical needs are the primary responsibility of some other source.

Until 2010, the MSP’s main focus was on workers’ compensation cases. (Florida’s workers’ compensation laws are contained in Chapter 440 of Florida’s statutes.) Injured workers who receive a lump sum settlement in a workers’ compensation case are required to pay all or a portion of those proceeds for the medical care related to their job accident injuries before Medicare will pay penny-one. While third-party civil liability plaintiffs have always been expected to reimburse Medicare for benefits paid in the past, the same regulations with regard to future coverage was never applied. In other words, Medicare was not expecting these Medicare beneficiaries to cover the expenses of future medical care resulting from their accidents from settlement proceeds.

For some time, The Centers for Medicare and Medicaid Services (“CMS”), the federal agency responsible for administering Medicare and Medicaid (as well as a host of other federal programs ) within the Department of Health and Human Services, has been hinting that the Medicare Secondary Payer Act applied to future medical services in third party liability cases, pointing out that the statutory language is the same for workers’ compensation and liability cases. With regard to liability cases, Barbara Wright of CMS stated: “So where future medicals are a consideration in arriving at the settlement, appropriate arrangements should be made for appropriate exhaustion of the settlement before Medicare is billed for related services.”

One consequence of this new thinking is that insurers and self-insured entities are currently required to report claims made by Medicare-eligible claimant/plaintiffs to the Centers for Medicare and Medicaid Services (“CMS”). This suggests that “appropriate exhaustion of the settlement before Medicare is billed for related services” is required “before Medicare is billed for related services” in personal injury cases. Interestingly, as of the posting of this blog, Medicare has not taken the next step of denying the payment of bills where the care is related to injuries sustained in an accident for which future medicals were considered in arriving at a settlement.
Continue reading

by

people.jpgOur client was a passenger in a Dodge Dakota truck owned and leased by Enterprise Leasing Company, when it overturned two to three times on the highway at high speed. The driver, who had rented the truck from Enterprise, had fallen asleep at the wheel. Our severely injured client was airlifted to Shands Hospital, in Gainesville, Florida.

We filed suit against the uninsured driver and Enterprise. We alleged that Enterprise negligently entrusted its truck to the driver. The facts forming the basis of this allegation against Enterprise:

  • The driver had a suspended Florida drivers license at the time of the lease transaction. While the driver presented to the Enterprise agent what appeared to be a facially valid Texas drivers license, it is unlawful to operate a vehicle in Florida when that driver has a suspended license in any state. Enterprise failed to perform a simple and inexpensive computer search to determine if the driver had a suspended license.
  • The credit card the driver presented to the Enterprise agent was rejected. Enterprise nevertheless rented the vehicle, in violation of its own policies and procedures, which called for the production of other forms of proof of personal responsibility.

Once upon a time, rental car companies could be held vicariously liable for injuries caused by the negligent operation of their vehicles by authorized drivers. (Whether vicarious liability applied in a state was a matter of state law. Florida is a vicarious liability state. Vicarious liability has been recognized in Florida since 1920. Southern Cotton Oil Co. v. Anderson, 80 Fla. 441, 86 So. 629 (1920). Under this doctrine, a vehicle owner is liable without fault for damages caused by the negligent operation of his or her vehicle by a consensual driver.) As to rental agencies, this standard ended in 2005, when a Republican Congress, at the urging of then-President George Bush, passed the so-called Graves Amendment. The Graves Amendment substituted federal law for state law, providing blanket immunity to rental companies from vicarious liability. (So much for states’ rights!)

While the Graves Amendment relieved rental companies from vicarious liability, it allowed to remain in place actions against agencies for negligent entrustment. The distinguishing feature of negligent entrustment from vicarious liability is that the owner is independently at fault in granting consensual use of the vehicle. Florida courts consistently hold that one who negligently entrusts a car to someone is liable for damages flowing from the misuse of that car. Clooney v. Geetting, 352 So. 2d 1216 (Fla. 2nd DCA 1977) (“we see no reason why this theory is not available to claimants injured in automobile accidents in this state.”) The Florida Supreme Court long ago held that because the use of a dangerous instrumentality involves such a high degree of risk of serious injury or death, the highest degree of care is required. Skinner v. Ochiltree, 5 So. 2d 605 (Fla. 1941).

Enterprise denied that it negligently entrusted its vehicle to the at-fault driver. Enterprise argued that section 322.38, Florida Statutes, limited the scope of its duty to our client, that it had no responsibility to investigate the status of the driver’s driver’s license beyond “facial validity,” contending that one’s driving record or background should not influence its decision to rent one a car, and that a declined credit card is irrelevant to a negligent entrustment claim under section 322.38 as a matter of law. (We presented evidence that poor credit is an indicia of risk recognized by rental agencies and insurance companies.) The trial court agreed with Enterprise, granting summary judgment in its favor.
Continue reading

by

valentin crash.JPGFor two weeks in November of 2013, I had the privilege of participating in a uniquely American experience. I participated in a civil jury trial in Orlando, Florida (in the Orange County Courthouse, the same courthouse in which Casey Anthony was on trial for first degree murder in the death of her daughter). I was joined in this priceless experience by my brother-in-law, Sean Domnick, the managing partner of Domnick & Shevin, PL, and Jennifer Lipinski, one of his law partners.

On March 23, 2013, a Mears Transportation Services driver stopped her motor coach in the right lane of Epcot Center Drive, approximately 1000 feet from the Epcot Theme Park vehicle entrance, to inspect the outside of the coach for the source of a “new” noise she claimed to be hearing. After activating the coach’s four-way flashers, the driver, who had no mechanical training, exited the vehicle to perform the inspection. While her testimony was that the noise might mean a wheel base fire, she did not take the vehicle’s fire extinguisher with her on the inspection. After slowly circling the motor coach, the driver then walked down to the tree line alongside the roadway to make a personal phone call. (An independent eyewitness saw her on the telephone down by the tree line.) Ten seconds into this personal call — confirmed by cell phone records — our client, a Walt Disney World bus driver, crashed his Disney bus into the back of the Mears motor coach at approximately 30 mph.

The accident happened at 2:00 pm on a clear and sunny day. Our client testified that he first observed the Mears motor coach from about 1000 feet off, when approaching from behind on Epcot Center Drive, but did not perceive that it was stopped. When he finally perceived that the coach was stopped, it was too late for him to avoid the crash.
Continue reading

by

us supreme court.jpgMedicaid will sometimes pay the medical expenses incurred by a person injured in an accident, albeit at rates substantially below the medical provider’s usual and customary charges. When Medicaid does pay, beneficiaries must reimburse Medicaid from third party payments for medical care. See section 409.910(11)(f), Florida Statutes (2013). The goal of the statute is to protect tax dollars while preventing Medicaid beneficiaries from receiving a windfall. Tristani v. Richman, 652 F.3d 360, 370, at 372 (3d Cir. 2011).

In Arkansas Department of Health & Human Services v. Ahlborn, 547 U.S. 268 (2006), the U.S. Supreme Court confirmed that the Medicaid lien was limited to payments for medical care. Id. at 284. At issue in Ahlborn was a North Carolina Medicaid lien statute similar to Florida’s.

In spite of Ahlborn, AHCA, which administers Florida’s Medicaid system, insisted that its payments could be recovered from the entire settlement without regard to the various other damage elements typically constituting the basis of a settlement. (In addition to incurred medical expenses, personal injury cases usually also involve claims for lost wages, future medical expenses, mental anguish, and pain. According to Ahlborn, Medicaid’s lien only attaches to the payments made for medical care.) Moreover, ACHA refused to negotiate or even concede that any court had a say in the matter. AHCA’s brazenness was challenged.

In Roberts v. Albertson’s Inc., 37 Fla. L. Weekly D2515 (Fla. 4th DCA Oct. 24, 2012), reh’g and reh’g en banc denied, modified on reh’g, No. 4D10-2313 (Fla. 4th DCA June 26, 2013), the Fourth District Court of Appeal issued a decision authorizing the trial court to conduct a hearing to determine the Medicaid lien. The court could consider evidence of payments for such other damages as lost wages, pain, and mental anguish, as well as determine how much less the case settled for than its full value. (Cases are often settled for less than full actual damages due to a variety of factors including comparative fault and limited insurance coverage.)
Continue reading

by

scales.jpgFlorida Statute 440.205 creates a civil remedy for various types of retaliatory misconduct by employers against employees for claiming or attempting to claim workers’ compensation. (Florida’s workers’ compensation statutes are contained in Chapter 440.) 440.205 reads as follows:

Coercion of employees.–No employer shall discharge, threaten to discharge, intimidate, or coerce any employee by reason of such employee’s valid claim for compensation or attempt to claim compensation under the Workers’ Compensation Law.

Traditionally, civil disputes have been handled by trial courts with judges and juries. (Florida’s civil trial court system consists of county and circuit courts.) Trial courts were imagined by America’s Founding Fathers as the most effective way of leveling the playing field in disputes between the small and powerless and the rich and powerful. Juries, composed of citizens from all walks of life, were seen as being in the best position to render fair and impartial verdicts after thoughtfully considering the evidence. Sadly, the recent trend in Florida and nationwide is away from this form of dispute resolution, towards a process known as arbitration:

“Arbitration, a form of alternative dispute resolution (ADR), is a technique for the resolution of disputes outside the courts, where the parties to a dispute refer it to one or more persons (the “arbitrators”, “arbiters” or “arbitral tribunal”), by whose decision (the “award”) they agree to be bound.” From Wikipedia

This movement has been fueled by Big Business to make it more difficult for individuals to pursue civil remedies against them. Public Citizen, a public interest non-profit organization, concluded that arbitration may be just as expensive and time-consuming as litigation. In their report, “The Costs of Arbitration,” the writers found that:

  • The cost to a plaintiff of initiating an arbitration is almost always higher than the cost of instituting a lawsuit.
  • Arbitration costs are high under a pre-dispute arbitration clause because there is no price competition among providers.
  • Arbitration costs will probably always be higher than court costs in any event, because the expenses of a private legal system are so substantial.
  • Arbitration saddles claimants with extra fees they would not be charged if they went to court.
  • Arbitrators tend to favor repeat customers. Naturally, large companies with frequent litigation select the arbitrators who rule in their favor.
  • Taking a case to arbitration does not guarantee that a consumer or employee will stay out of court, making arbitration still more costly. If crucial documents or testimony must come from a third party, court litigation is necessary to enforce subpoenas.
  • The inability to exclude irrelevant evidence since the “Rules of Evidence” are discretionary with the arbitrator
  • The loss of the right to appeal erroneous decisions.

The bottom line is that arbitration is often bad for the little guy. Plaintiffs’ lawyers prefer having matters resolved in trial courts. They don’t always have the choice.
Continue reading

by

banana.jpgOnce upon a time in Florida a person injured by a transitory substance on the floor of a chain store like a Publix, Walmart, or Whole Foods could rely on similar incidents in the chain’s other stores to prove what caused their own accident. The theory was that the similar events tended to show a failure by the entity to remedy a known problem. According to Florida’s Third District Court of Appeals, this evidence is no longer relevant. Publix Supermarkets, Inc. v. Santos, So.3d , 38 FLW D1656 (Fla. 3rd DCA 7-31-2013).
Continue reading

by

IMG_0298.jpgA landowner owes invitees two independent duties: “(1) to maintain the premises in a reasonably safe condition, and (2) to give warning of concealed perils.” Cruz-Haymer v. Festival Food Market, Inc. So.3d , 38 FLW D1581 (Fla. 4th DCA 7-24-2010 and Burton v. MDC PGA Plaza Corp., 78 So. 3d 732, 734 (Fla. 4th DCA 2012).

Landowners like to believe that where a dangerous condition is open and obvious, the victim should not be able to maintain a lawsuit for negligence. The idea relies on the proposition that “[t]he obvious danger doctrine provides that an owner or possessor of land is not liable for injuries to an invitee caused by a dangerous condition on the premises when the danger is known or obvious to the injured party ….” Aaron v. Palatka Mall, L.L.C., 908 So. 2d 574, 576-77 (Fla. 5th DCA 2005) (citing Ashcroft v. Calder Race Course, Inc., 492 So. 2d 1309 (Fla. 1986)).
Continue reading

by

application.jpgSadly, the first thought that crosses the mind of many insurance adjusters when a claim is made is how it can be denied. At the top of the list of the ways to deny claims is rescinding the insurance contract.

Black’s Law Dictionary defines rescission as an act “where a contract is canceled, annulled, or abrogated.” An insurance policy can be rescinded before or after a claim is made. Insurance companies prefer to wait until after a claim is made. The longer they wait, the more money they receive in premium payments. If no claim is made, the carrier keeps all the premiums and pays out nothing. If a claim is made, the carrier rescinds and refunds only those insurance premiums paid to keep the policy in effect after the rescission. Heads we win, tails you lose.

Thanks to favorable legislation and case law, it is surprisingly easy for insurance companies doing business in Florida to rescind policies. Among the more popular excuses is misrepresentation. Florida Statute 627.409 (2010) allows rescission on this basis if the carrier can show the following:

a) The misrepresentation, omission, concealment, or statement is fraudulent or is material either to the acceptance of the risk or to the hazard assumed by the insurer.

(b) If the true facts had been known to the insurer pursuant to a policy requirement or other requirement, 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.

Continue reading

by

truck2.jpgBecause motor vehicles, like guns, in the wrong hands and used improperly are likely to cause great damage, Florida has developed two legal doctrines aimed at holding vehicle owners liable for the harm resulting from the negligent operation of their vehicles by others. The doctrines are vicarious liability and negligent entrustment.

Regarding motor vehicles, vicarious liability has been recognized in Florida since 1920. Southern Cotton Oil Co. v. Anderson, 80 Fla. 441, 86 So. 629 (1920). Under this doctrine, a vehicle owner is liable without fault for damages caused by the negligent operation of his or her vehicle by a consensual driver. (The owner is not liable, for example, if the vehicle is stolen. However, the doctrine may be applied against the owner if a non-consensual driver comes into possession of a vehicle through the owner’s negligence, such as where the owner leaves his car keys out at a house party of unsupervised young drinking adults. This element can bleed into the doctrine of negligent entrustment, explained below.) Damages available from the vicariously liable vehicle owner are capped by Florida Statute 324.021(9)(b)3, which means that actual damages may exceed the owner’s exposure.

The distinguishing element of negligent entrustment from vicarious liability is that the owner is independently at fault in granting consensual use of the vehicle. Florida courts consistently hold that one who negligently entrusts a car to someone is liable for damages flowing from the misuse of that car. Clooney v. Geetting, 352 So. 2d 1216 (Fla. 2nd DCA 1977) (“we see no reason why this theory is not available to claimants injured in automobile accidents in this state.”) The Florida Supreme Court long ago held that because the use of a dangerous instrumentality involves such a high degree of risk of serious injury or death, the highest degree of care is required. Skinner v. Ochiltree, 5 So. 2d 605 (Fla. 1941).
Continue reading

Contact Information
Main Office
9999 NE 2nd Ave, #304
Miami Shores, FL 33138
Phone: 305-758-4900
Fax: 305-758-4949
Email: jgale@jeffgalelaw.com
Palm Beach Gardens
2401 PGA Blvd #140
Palm Beach Gardens, FL 33410
Phone: 305-758-4900
Fax: 305-758-4949
Email: jgale@jeffgalelaw.com

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Please do not include any confidential or sensitive information in a contact form, text message, or voicemail. The contact form sends information by non-encrypted email, which is not secure. Submitting a contact form, sending a text message, making a phone call, or leaving a voicemail does not create an attorney-client relationship.

Copyright © 2015 – 2025, Jeffrey P. Gale, P.A.
JUSTIA Law Firm Blog Design