VOLUME XVI, NUMBER 3
March, 2004

FROM THE CORNER OFFICE

Anna D. Torres was invited to speak on The Automobile Injury Case for Paralegals in Florida. The presentation was provided by NBI, Inc., in West Palm Beach on February 13, 2004.

Although we have not had our annual seminars, we are available at any time to address the possibility of a customized seminar at your office to answer questions of concern to your claims personnel.

We are currently in the process of receiving approval to provide adjusters with continuing education credits and will keep you updated on any future lectures.

A DECLARATORY ACTION CANNOT BE USED BY AN INSURER TO AVOID A JURY DECISION AS TO DISPUTED FACTUAL ISSUES

The Fourth District Court of Appeal held that a court may dismiss a suit for declaratory judgment if the action lacks any useful purpose or might impair or defeat the rights of the parties. In the case of Legion Insurance Company v. Frances Moore, et al., 28 FLW D1195 (May 14, 2003), James Moore was driving a truck owned by his employer while on business. That truck left the roadway and rolled over, killing James Moore. No other vehicles were found at the scene of the accident. A witness traveling about one and one-half miles behind Moore did not see any impact or collision, but saw a speeding car in the vicinity at the time of the accident. When Moore’s truck rolled over, the witness saw multiple sets of tail lights. There were no other known eyewitnesses.

Moore’s employer had a policy of insurance with Legion that covered the truck and driver and also provided uninsured motorist (“UM”) coverage. The UM coverage applied to accidents caused by unidentified hit-and-run vehicles, but not to “single-vehicle” accidents caused by an insured. The specific relevant policy language is:

“‘Uninsured Motor Vehicle’ means a land motor vehicle or trailer...that is a hit-and-run vehicle and neither the driver nor owner can be identified. The vehicle must...cause an ‘accident’ resulting in ‘bodily injury’ to you or any ‘family member’ without hitting you, [or] a covered...vehicle you...are ‘occupying’.”

“If there is no physical contact with the hit-and-run vehicle, the facts of the ‘accident’ must be proved. We will only accept competent evidence other than the testimony of a person making claims under this or any similar coverage.”

Frances Moore, the widow of James Moore, made a claim to Legion for benefits under the policy’s UM coverage. Legion denied the claim and then filed an action for declaratory relief, naming the employer and Frances Moore. Legion asserted that the accident was not covered by the UM provision because it was a single-vehicle accident caused by the insured, with insufficient evidence that it was caused by another vehicle.

Frances Moore answered Legion’s declaratory action and alleged that the accident was caused by an unidentified vehicle. The speeding car described by the eyewitness, she argued, thus fell within the UM provision. Additionally, as part of her answer she included a claim for benefits under the UM policy. She also moved to strike Legion’s declaratory action as against her, arguing that it could not be used to try a disputed factual issue as to how the accident was caused. The trial judge agreed and struck the declaratory action as to her.

Legion sought review by the District Court of Appeal of the order ending the declaratory judgment action.

The court pointed out that the necessity to determine a factual issue does not alone defeat an action for a declaratory judgment. This position was based upon the holding in the case of State Farm and Fire & Casualty Co. v. Higgins, 788 So. 2d 992 (Fla. 4th DCA 2001) where the court held, ìthe more recent trend in the case law is to accord broader scope to the declaratory judgment act in reaching fact issues.”

The court held, however, that an insurance carrier cannot avoid a jury trial by simply filing a declaratory judgment action first in which the judge alone is to determine a disputed fact. As a result, while the necessity to determine a factual dispute does not alone defeat an action for declaratory judgment, if the purpose for filing a declaratory action by an insurer is simply to have the judge determine the disputed fact instead of a jury, it is the position of the Fourth District that the declaratory action must be stricken. Determining disputed factual issues is a responsibility of a jury and not a judge in a declaratory judgment action.

Andrew S. Deckert

INSURERS AND THEIR EMPLOYEES ARE IMMUNE FROM CIVIL ACTION FOR REPORTING AN INSURED FOR INSURANCE FRAUD

In Barbara Saenz v. State Farm Fire and Casualty Company and Richard Goldsmith 28 FLW D2305 (Fla. 3rd DCA, October 8, 2003), Barbara Saenz made a Hurricane Andrew claim under her State Farm policy. Following inspection of the property in January 1993 State Farm paid $497,405.24. She later made a supplemental claim including additional replacement cost benefits and additional living expense (“ALE”) reimbursement. In July 1993, Saenz produced receipts for the additional $3,466.20 for her personal property. However, State Farm deferred her request for ALE reimbursement requesting additional proof of the claim.

Meanwhile, a State Farm representative visited Saenz’s home and determined that the house was in the same condition as it had been during the initial post-loss photographs. Soon after this discovery, State Farm discovered that Saenz’s home had been under renovation since May 1986. A further search in the public records allowed State Farm to realize that there was no indication of the identity of the contractor that Saenz had stated repaired the home. The public records also showed that none of the renovations on the house were complete prior to Hurricane Andrew. At this point, State Farm’s Special Investigative Unit became involved regarding the investigation for a possible fraud. The Special Investigative Unit requested certain documentation that was never provided by Saenz. A meeting had been arranged in order to review bills and receipts, however it was cancelled by Saenz.

Based upon the investigation, State Farmís Special Investigative Unit pursuant to Section 626.989(6), Florida Statutes, referred Saenz’s claim to the Department of Insurance, Division of Insurance Fraud (“DIF”). The DIF assigned an investigator to do an independent investigation. Based upon this independent investigation, the DIF investigator issued a complaint/arrest warrant charging Saenz with violations of certain Florida Statutes related to theft. Based upon that affidavit, the State Attorney’s office concluded that there was probable cause for the issuance of criminal information against Saenz. However, subsequent to that issuance of filing the information in criminal court, the State Attorney’s office decided not to proceed with the criminal prosecution and entered a null pro se of the charges against Saenz, i.e., criminal charges against Saenz were dismissed.

Saenz filed a civil complaint against the Special Investigative Unit, State Farm and its investigator personally for malicious prosecution and negligence on the part of State Farm in the hiring, training, and supervising of the investigator. Saenz filed several amended complaints and the trial court finally granted a motion for summary judgment and entered a final summary judgment, finding as a matter of law that State Farm and Goldsmith were immune from liability under Florida Statute 626.989, the insurance fraud statute, which provides insurers and their employees immunity from civil actions, absent fraud or bad faith, arising out of the furnishing of information required by the statute.

In order for an insured to be successful in a lawsuit against an insurance carrier for notification to the DIF, the insured must show that there was fraud or bad faith arising out of the furnishing of information required by that statute. In the absence of fraud or bad faith, a person is not subject to civil liability for liable, slander, or any other relevant tort by virtue of filing reports, without malice, or furnishing other information, without malice, required by Section 626.989 or required by the department or division under the authority granted in that section. Therefore, no civil cause of action of any nature shall arise against such person for providing information relating to suspected fraudulent insurance acts of an insured. See Florida Statute 626.989. Section 626.989 immunizes specified persons if they have done what the section requires or what the insurance fraud division requires pursuant to its authority under the statute.

The Third District in this case specifically stated that the fact that the State Attorney’s office declined, for whatever reason, to proceed with its prosecution against Saenz does not vitiate its initial probable cause finding in the fraud matter. Since, there was enough evidence for the State Attorney’s office to sustain a probable cause finding, there could be no showing of fraud or bad faith upon State Farm or its investigator personally.

The appellate court specifically found that the undisputed record evidence showed that State Farmís investigator referred the matter to the DIF based upon Saenzís failure to document that her home had been under renovation prior to Hurricane Andrew. At that point, the DIF conducted its own independent investigation and found that there was probable cause to submit the case to the State Attorneyís office, which also found probable cause to bring criminal charges against Saenz. In light of this undisputed record evidence, the trial court properly granted State Farmís motion for summary judgment.

Charles E. Benson

KNOW THY NEIGHBORHOOD

In Michelle Marinacci v. 219 South Atlantic Boulevard, d/b/a Club Atlantis and Atlantis Night Club, 28 FLW D2366 (Fla. 4th DCA October 15, 2003) the Fourth District Court of Appeal reversed a trial court’s dismissal of a complaint for failing to state cause of action. In this case, the plaintiff arrived at the defendant night club at 10:00 p.m., and finding the club parking lot full, a bouncer for the defendant night club advised Marinacci that she could park safely down the street at a municipal parking lot. Upon her return to her parked car at 3:00 a.m., Marinacci was assaulted and sustained injuries. She brought suit against Club Atlantis for negligence alleging that the club knew or should have known of prior violent incidents at the lot. In Holiday Inns, Inc. v. Shelburne, 576 So.2d 322 (Fla. 4th DCA 1991), the Fourth District upheld a motel’s liability to a patron after the motel advised Shelburne to park in an adjacent lot it did not own; apparently the evidence demonstrated a history of violence at the location, and the plaintiff sustained gunshot injuries.

Notwithstanding the similarities in Shelburne, the trial court dismissed the complaint distinguishing Marinacci’s case because the non-owned property (the municipal lot) was owned and operated by the city. However, the Fourth District reversed trial court’s ruling and held that the ultimate non-ownership of the property where the injury occurred is neither dispositive in the analysis, nor does it absolve Club Atlantis of its duty of care to its patrons. Thus, the Fourth District reinstated the action against the night club.

Although it remains to be seen whether Marinacci can demonstrate Club Atlantis’ knowledge of the municipal lot’s history, this case should serve as an important reminder to all businesses that any advice rendered by its employees to its patrons implicates a basic duty of care that may be challenged in subsequent legal proceedings.

Mark A. Kirsch