Third District Court of Appeal
State of Florida
Opinion filed September 10, 2014.
Not final until disposition of timely filed motion for rehearing.
________________
Nos. 3D11-2905 & 3D12-506
Lower Tribunal No. 06-4689
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Geico General Insurance Company,
Appellant,
vs.
Edelmida and Paulino Rodriguez, et al.,
Appellees.
Appeals from the Circuit Court for Miami-Dade County, Lester Langer,
Judge.
Shutts & Bowen, LLP, and Frank A. Zacherl and Stephen T. Maher, for
appellant.
Deutsch & Blumberg, P.A., and James C. Blecke, for appellees Edelmida
and Paulino Rodriguez; Kuvin & Stettin, LLC, and Eric Stettin (Weston); Joel S.
Perwin, P.A., and Joel S. Perwin, for appellee William Pruitt.
Before FERNANDEZ, LOGUE and SCALES, JJ.
SCALES, J.
Geico General Insurance Company (Geico) appeals a Final Summary
Judgment holding Geico responsible for a sanctions judgment rendered against
Geico’s insured during the course of a personal injury lawsuit in which Geico’s
insured was the defendant. Because we conclude the sanctions judgment
constituted a cost charged to Geico’s insured in a covered lawsuit as contemplated
in Geico’s vehicle liability policy, we affirm.
I. Relevant Factual and Procedural Background
A. The Insurance Policy and the Accident
On November 2, 2005, Geico issued a renewal automobile liability policy
for its insured, Oswaldo St. Blanchard (Blanchard). The Geico policy provided
liability limits to Blanchard in the amounts of $10,000 for each claimant, with a
limit of $20,000 per occurrence. Additionally, the policy covered all court costs
charged to an insured in a covered lawsuit.
On December 22, 2005, Blanchard, while operating a motor vehicle covered
under the Geico policy, struck pedestrians, Edelmida and Paulino Rodriguez—
Appellees here and the plaintiffs below—near the intersection of SW 72nd Street
and SW 97th Avenue in Miami. At the time of the accident, Blanchard was
eighty-three years old.
2
B. Geico’s Tender of Policy Limits and Subsequent Dispute
While Geico immediately tendered its $20,000 policy limits, a dispute arose
between Geico and the Rodriguezes’ counsel regarding indemnification of Geico
for medical liens resulting from the Rodriguezes’ medical treatment.1
Unable to resolve this dispute, the Rodriguezes filed a negligence action
against Blanchard in March 2006. Pursuant to the policy, Geico provided defense
counsel for Blanchard.
C. Blanchard Deposition and Subsequent Discovery
On March 7, 2007, approximately one year after the lawsuit was filed, the
Rodriguezes deposed Blanchard. At his deposition, Blanchard testified that, at the
time of the accident, Blanchard had no physical impairments that would prevent
him from being a safe driver. Blanchard also testified he had no impairments that
would have affected his vision at the time of the accident.
Shortly after the March 7 deposition, medical records produced in the case
indicated that, contrary to Blanchard’s deposition testimony, Blanchard was, at all
times material, legally blind, had experienced significant vision problems, and had
been advised by his treating physicians that he should not be driving.
1While not relevant to this appeal, the Rodriguezes assert that the dispute centered
around Geico’s insistence that the Rodriguezes’ attorney personally execute a hold
harmless/indemnity agreement as part of the settlement documents.
3
D. Sanctions Motion
In April 2007, the Rodriguezes filed a motion for sanctions against
Blanchard, asserting that Blanchard’s misrepresentations in his deposition
constituted a fraud on the court. The Rodriguezes sought an order striking
Blanchard’s pleadings. The Rodriguezes also sought, as additional sanctions, the
costs and attorney fees incurred by the Rodriguezes as a result of Blanchard’s
misrepresentations.2
In August 2007, the trial court held a hearing on the Rodriguezes’ motion
for sanctions, and in November 2007 entered an order detailing the significant
discrepancies between Blanchard’s deposition testimony, and the contrary facts
established through the Rodriguezes’ discovery. In its order, the court struck
Blanchard’s pleadings and granted the Rodriguezes leave to file an amended
complaint to assert a claim for punitive damages. The trial court scheduled a
hearing for April 21, 2008 to determine whether the Rodriguezes would be entitled
to monetary sanctions.
2 The Rodriguezes claimed that Blanchard committed a fraud on the court by
falsely testifying that his vision was fine despite evidence establishing that
Blanchard was legally blind. The Rodriguezes deposed approximately ten
witnesses to prove the falsity of Blanchard’s deposition testimony.
4
E. Geico’s Purported Reservation of Rights
In December 2007, Blanchard died, and in February 2008, William Pruitt
(Pruitt) was substituted into the lawsuit for Blanchard as the personal
representative of Blanchard’s estate.
On April 17, 2008, just four days before the scheduled hearing on the
Rodriguezes’ request for monetary sanctions, Geico sent Pruitt a reservation of
rights letter (ROR). In its April 2008 ROR, Geico stated:
As a result of the conduct of Mr. Blanchard in this claim and/or during
the accident lawsuit, there may be no coverage under GEICO’s policy
for this claim, for damages claimed in the accident lawsuit, for
sanctions, and/or for fees or costs awarded in connection with
sanctions.
Geico cited to the “Fraud and Misrepresentation” provision of the “General
Conditions” of the Geico policy as the basis for its purported reservation of rights.
F. Monetary Sanctions Imposed
Shortly after Geico issued its April 2008 ROR, on April 21, 2008, the trial
court conducted the hearing on the Rodriguezes’ motion to recover the costs and
attorney fees incurred by the Rodriguezes as a result of Blanchard’s
misrepresentations. On May 13, 2008, the trial court entered an order granting the
Rodriguezes’ motion and ordering Pruitt, as the personal representative of
Blanchard’s estate, to pay the Rodriguezes sanctions in the amount of $22,050 for
attorney fees and an additional $5,293.45 in costs.
5
On May 29, 2008, the trial court reduced its order into a judgment against
Geico’s insured (sanctions judgment).
Shortly thereafter, on June 6, 2008, Geico filed a lawsuit against the estate in
federal court seeking a declaration that there is no insurance coverage available to
the estate because of Blanchard’s misrepresentations.
G. Estate Hires New Counsel
Pruitt (the personal representative for Blanchard’s estate) initially filed an
appeal with this court of the sanctions judgment. However, after a dispute arose
between Pruitt and defense counsel which Geico had provided to Pruitt, Pruitt
retained new counsel and dismissed the estate’s appeal of the sanctions judgment.
Geico offered Pruitt several choices to replace defense counsel, but Pruitt
insisted that Geico retract its April 2008 ROR as a condition to Pruitt allowing
Geico to control the estate’s defense and agreeing to new counsel’s representation
of the estate. Geico would not agree to withdraw its April 2008 ROR, and,
therefore, the estate proceeded with legal counsel selected solely by Pruitt.
After the entry of the sanctions judgment, the Rodriguezes filed an amended
complaint against the estate and added Geico as a party defendant. In their
amended complaint, the Rodriguezes sought an order requiring Geico to pay the
sanctions judgment.
6
Pruitt, now represented by new counsel (and obviously not counsel retained
by Geico), filed a cross-claim against Geico, seeking a declaration requiring Geico
to provide indemnity to the estate for the sanctions judgment.
H. Geico’s Second ROR and the Stipulated Consent Judgments
On September 5, 2008, Geico issued to Pruitt a second ROR. The second
ROR alleged that Pruitt’s failure to agree to Geico’s suggested replacement
counsel constituted a breach of the estate’s contractual duty to cooperate with
Geico in the handling and defense of the Rodriguezes’ liability claim against the
estate.
Shortly thereafter, on October 1, 2008, at a calendar call on the underlying
negligence action (i.e., the Rodriguezes’ negligence claim against the estate),
Pruitt’s independent counsel and the Rodriguezes’ counsel presented the trial court
with a stipulation for the entry of two final judgments against the estate (consent
judgments). The consent judgments totaled $750,000 ($500,000 consent judgment
for Paulino Rodriguez and $250,000 consent judgment for Edelmida Rodriguez).
Subsequently, on October 31, 2008, Geico sent a letter to the estate
refusing to defend the estate under the policy.
I. Summary Judgment Motion and Resulting Final Summary Judgment
In August 2011, the Rodriguezes filed a motion for final summary judgment
directed against Geico, alleging that Geico, pursuant to its policy, was responsible
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to pay the sanctions judgment. The trial court heard argument in September 2011
and entered a Final Summary Judgment in favor of the Rodriguezes on October 19,
2011.
The trial court found that, pursuant to its policy of insurance issued to
Blanchard, Geico was required to pay the sanctions judgment. The trial court
reasoned that Geico’s purported April 2008 ROR constituted a violation of
Florida’s Claims Administrations Statute—section 627.426, Florida Statues (2011)
(the CAS). The trial court determined that Geico violated section 627.426(2)(a),
which requires an insurer to assert a coverage defense within thirty days of the
insurer becoming aware of the coverage defense, since Geico was aware of
Blanchard’s deposition misrepresentations in April 2007, yet Geico waited until
April 2008 to issue its ROR.
The trial court further found that, because of Geico’s violation of the CAS,
the estate owed no duty of cooperation to Geico. Moreover, the trial court found
that the sanctions judgment was a court cost charged to an insured in a covered
lawsuit as contemplated by the Geico liability policy.
Geico timely appeals the Final Summary Judgment entered on behalf of the
Rodriguezes with regard to these issues.3
3 The Rodriguezes and Pruitt filed separate lawsuits against Geico alleging that
Geico is also responsible for payment of the consent judgments. While those
actions were consolidated with this action by the trial court, the trial court abated
those proceedings during the pendency of this appeal. Nothing herein should be
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II. Analysis
The issue in this case is whether the trial court erred by granting the
Rodriguezes’ motion for final summary judgment which determined that Geico
was responsible for the sanctions judgment entered against Geico’s insured. We
review the trial court’s summary judgment de novo. See Sierra v. Shevin, 767 So.
2d 524, 525 (Fla. 3d DCA 2000).
Geico argues there is no insurance coverage available to the estate under its
liability policy. Specifically, Geico asserts that the “Fraud and Misrepresentation”
provision in its policy was implicated by Blanchard’s deposition testimony so as to
give Geico the right to void insurance coverage under the liability policy.
Geico essentially argues that the “Fraud and Misrepresentation” provision of
its policy provides Geico with a “defense of no coverage” which, unlike a
“coverage defense,” does not require compliance with the CAS.
Because we hold that Blanchard’s misrepresentations in his deposition
testimony did not implicate the “Fraud and Misrepresentation” provision of the
Geico policy, we need not decide the issue of whether that provision—if
implicated— would provide Geico with a coverage defense (requiring compliance
with the CAS) or constitute a “defense of no coverage” which would authorize
Geico to void the policy outright.4
construed to, in any way, prejudge these claims, or prevent or foreclose Geico from
presenting any applicable factual or legal defenses in those proceedings.
9
However, to better understand Geico’s argument, and to provide guidance to
insurers and claimants, we first provide the following brief analysis of the
distinction between an insurer’s “defense of no coverage” and an insurer’s
“coverage defense.”
A. Coverage Defense vs. Defense of No Coverage
Under different facts than those in the instant case, whether the “Fraud and
Misrepresentation” provision of Geico’s policy results in a “coverage defense”—as
opposed to a “defense of no coverage”—is potentially significant.
If Blanchard’s misrepresentations in deposition had implicated the
provision, and the provision provided Geico with a “coverage defense,” then Geico
would have been obliged to comply with the provisions of the CAS. On the other
hand, if Blanchard’s deposition misrepresentations implicated the provision, and
the provision provided Geico a “defense of no coverage,” then Geico could void
the policy outright and the CAS would not be applicable. AIU Ins. Co. v. Block
Marina Inv., Inc., 544 So. 2d 998, 1000 (Fla. 1989).5
4 We affirm the trial court’s summary judgment requiring Geico to pay the
sanctions judgment for somewhat different reasons than those articulated by the
trial court. See Dade Cnty. Sch. Bd. v. Radio Station WQBA, 731 So. 2d 638,
644-45 (Fla. 1999) (explaining “tipsy coachman” rule; if a trial court reaches the
right result but for the wrong reason, an appellate court may uphold the result if
there is any basis to support the judgment in the record).
5As articulated in AIU, the rationale for the distinction rests upon the Florida
Supreme Court’s determination that the CAS was “not intended to create coverage
where a claim is made outside the effective date of the policy or where a particular
10
Again, though, since we hold that Blanchard’s misrepresentation did not
implicate the provision, this analysis is academic.
B. “Fraud and Misrepresentation Provision” of the Geico Policy
Geico’s “Fraud and Misrepresentation” provision reads, in its entirety, as
follows:
FRAUD AND MISREPRESENTATION
Coverage is not provided to any person who knowingly
conceals or misrepresents any material fact or circumstance relating
to this insurance:
1. at the time application is made; or
2. at any time during the policy period; or
3. in connection with the presentation or settlement of a claim.
loss is expressly excluded from coverage.” Id. at 999-1000 (citations omitted).
Put another way, a violation of the CAS cannot create insurance coverage for a
claim that otherwise is not a covered claim. One purpose of the CAS is to provide
a mechanism for an insurer to notify an insured of an insurer’s particular coverage
defense of an otherwise covered claim. As the court expressed in AIU:
[W]e hold that the term “coverage defense,” as used in section
627.426(2), means a defense to coverage that otherwise exists. We do
not construe the term to include a disclaimer of liability based on a
complete lack of coverage for the loss sustained. Under this
construction, for example, if the insurer fails to comply with the
requirements of the statute, it may not declare a forfeiture of coverage
which otherwise exists based on a breach of a condition of the policy.
However, [the insurer’s] failure to comply with the requirements of
the statute will not bar an insurer from disclaiming liability where a
policy or endorsement has expired or where the coverage sought is
expressly excluded or otherwise unavailable under the policy or under
existing law.
Id. at 1000.
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(emphasis added).
Geico argues that Blanchard’s misrepresentations in his deposition
constituted a misrepresentation of material fact in connection with the presentation
or settlement of a claim as contemplated by the provision.
Geico further argues that, based on the first four words of the provision
(“coverage is not provided”), Blanchard’s misrepresentations allowed Geico to
void the policy ab initio, and therefore provided Geico a “defense of no coverage”
not requiring compliance with the CAS.
While Geico might be correct that the provision, if implicated, may allow
Geico to void coverage, Geico cites to no authority which would give an insurer
the ability to void an otherwise valid insurance policy due to an insured’s
deposition testimony elicited during the course of litigation of a covered claim.
Geico suggests that the court should treat Blanchard’s misrepresentation in
the deposition similar to a misrepresentation on an application for insurance upon
which the insurer detrimentally relies in issuing a policy. We decline Geico’s
invitation to read its “Fraud and Misrepresentation” provision so broadly.
At the outset, we are guided by the general rule that where language in an
insurance policy is subject to differing interpretations, the court must construe the
policy liberally in favor of the insured and strictly against the insurer. Flores v.
12
Allstate Ins. Co., 819 So. 2d 740, 744 (Fla. 2002). Hence, we are bound to
interpret the provision in favor of the insured, i.e., the estate.
Geico argues that Blanchard’s misrepresentations in deposition were made
“in connection with the presentation or settlement of a claim,” therefore
implicating the provision. However, pursuant to the plain language of the
provision, for any misrepresentations to implicate the provision, the
misrepresentations must relate to the insurance provided under the policy.
Nothing in the record indicates that Blanchard’s deposition testimony was, in any
way, related to the insurance Geico was providing Blanchard. While, in the
deposition testimony elicited by the plaintiffs, Blanchard misrepresented his vision
capabilities, the record is devoid of any misrepresentation by Blanchard, upon
which Geico, in any way, detrimentally relied.
While the trial court specifically determined that Blanchard’s
misrepresentations went to the heart of Blanchard’s liability for the accident, it
cannot be seriously argued that Blanchard’s misrepresentations in deposition in
any way related to the insurance coverage provided by Geico. Indeed, there has
been no factual finding that Blanchard’s misrepresentations “related to” the
insurance policy—an express condition precedent to implicate the subject
provision.
13
We hold that Blanchard’s misrepresentations during his deposition—even
though they were characterized by the trial court as a “fraud on the court”—are not
the type of misrepresentations contemplated by the “Fraud and Misrepresentation”
provision in the Geico policy which would authorize Geico to void coverage under
the policy ab initio. That provision plainly contemplates the ability of Geico to
void coverage in the event an insured makes a material misrepresentation to Geico
in order to obtain coverage that would otherwise not be available.
For example, if Blanchard had misrepresented the date of the accident in
order to obtain coverage for a claim which occurred outside of the policy period,
such a misrepresentation would have been “in connection with the presentment or
settlement of a claim” and “related to this insurance” so as to trigger the provision.
Similarly, if Blanchard, in his application for insurance, had misrepresented
to Geico his vision capabilities, and, as a result of the misrepresentation, Geico
issued the policy which it otherwise would not have issued, that misrepresentation
would also have been considered within the scope of the provision.
However, for Geico to argue the provision allows Geico to void an insurance
policy based on an insured’s misrepresentation in a deposition regarding a claim
that is otherwise covered by the policy, would expand the provision far beyond its
intended scope and could, conceivably, produce absurd results.
14
For example, if during the course of litigation, an insured insists that a
stoplight was green, while a finder-of-fact ultimately determines the light was red,
allowing an insurer to void the policy by suggesting the insured misrepresented a
material fact certainly would undermine liability insurance coverage as we have
come to know it.
Hence, since we have determined that Blanchard’s misrepresentations, albeit
material, did not “relate to” the liability insurance so as to implicate the provision,
we need not reach the issue of whether Blanchard’s misrepresentations in
deposition triggered a “coverage defense”—requiring compliance with the CAS—
or a “defense of no coverage” allowing Geico to void the policy. In sum, we hold
that the policy provision relied upon by Geico to void coverage was not implicated
by Blanchard’s conduct; therefore, Geico’s April 2008 ROR was ineffectual. We,
therefore, do not reach the issue of whether Geico complied with the CAS.
C. Geico’s Second ROR
Geico also argues that Pruitt’s lack of cooperation with Geico constituted a
breach of the duty-to-cooperate provision of the insurance policy, authorizing
Geico’s denial of coverage for the sanctions judgment. Specifically, Geico asserts
that Geico was within its rights to issue the second ROR in September 2008 – and
to ultimately deny coverage on October 31, 2008 – when Pruitt conditioned
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acceptance of replacement defense counsel on Geico’s withdrawal of its April
2008 ROR.
After the withdrawal of initial defense counsel, Geico proffered several
qualified attorneys to defend the estate in the litigation. On September 4, 2008, the
estate’s independent attorney notified Geico that the estate would accept one of the
proffered defense attorneys, and turn over control of the estate’s defense to Geico,
on the condition that Geico “admits to insurance coverage, indemnifies [the estate
for] the fee judgment pursuant to the insurance contract, [and] dismisses the
coverage lawsuit . . . .”
Geico responded to this September 4 letter not by withdrawing the
previously issued ROR, but by issuing a second ROR asserting an additional
coverage defense. In its second ROR, Geico alleged that the estate’s actions – i.e.
conditioning acceptance of replacement counsel on Geico’s withdrawal of its April
2008 ROR – constituted a breach of the insured’s duty of cooperation owed to the
insurer.
Appellees argue that, once Geico issued the April 2008 ROR—whether
improvidently or not—the insured no longer owed any duty to cooperate with
Geico. Appellees suggest that, once the insurer asserts a reservation of rights, even,
as here, when the insurer continues to defend the insured under the reservation of
16
rights, the insured has the right to “buy its own peace,” control its own defense,
and settle with the plaintiffs.
D. Insured’s Duty to Cooperate
Against this factual backdrop, we agree with Appellees that, once Geico
issued its April 2008 ROR, Geico’s insured no longer owed Geico a duty of
cooperation. Taylor v. Safeco Ins. Co., 361 So. 2d 743, 745 (Fla. 1st DCA 1978)
(“[T]he insured is not required to abandon control of his own defense as the price
of preserving his claim, disputed by the insurer, that the insurer pay any
judgment.”); Nationwide Mut. Fire Ins. Co. v. Beville, 825 So. 2d 999, 1003 (Fla.
4th DCA 2002) (“[A] carrier’s unilateral defense under a reservation of rights is
similar to a refusal to provide any defense at all in its effect on the insured. In
either case, the carrier has violated its duties under the policy unconditionally to
defend and indemnify its insured within specified limits.”).
In sum, under the facts of this case, the estate’s conditioning its acceptance
of replacement legal counsel upon Geico’s withdrawal of Geico’s April 2008 ROR
did not constitute a violation of the estate’s contractual duty to cooperate. This is
true especially in light of the fact that, as we have held, Geico’s April 2008 ROR
was based on an inapplicable policy provision, and the fact that Geico had filed a
federal lawsuit against its insured seeking a declaration that there was no coverage
for the estate under the Geico policy.
17
E. The Estate’s Dismissal of the Sanctions Judgment Appeal
As referenced earlier, the estate initially appealed the sanctions judgment.
Geico argues that the estate’s insistence that Geico withdraw its April 2008 ROR,
and the estate’s refusal to consent to replacement counsel, ultimately resulting in
the dismissal of the appeal of the sanctions judgment, constituted a lack of
cooperation severely prejudicing Geico.
Put another way, Geico argues it would be inequitable to hold Geico
responsible for the sanctions judgment when Geico was effectively precluded from
prosecuting the appeal of same. However, under Taylor and Beville, the estate had
the right to control the defense of the case given (i) Geico’s improvidently issued
April 2008 ROR and Geico’s steadfast refusal to withdraw same and (ii) Geico’s
initiation of litigation against its insured.
Hence, any prejudice suffered by Geico as a result of the coverage dispute
between Geico and the estate was invited by Geico’s insistence on conditioning
any defense of the estate on maintaining its reservation of rights to deny coverage
to its insured.
F. Coverage for the Sanctions Judgment Under the Geico Policy
Having held that the trial court correctly determined that Geico’s April 2008
ROR was ineffectual and improvidently issued, resulting in the ability of the estate
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to exercise control of the defense of this case, we now turn to the ultimate issue of
whether the Geico policy covered the sanctions judgment.
The relevant portion of the Geico policy reads as follows:
ADDITIONAL PAYMENTS WE WILL MAKE UNDER THE
LIABILITY COVERAGES
....
2. All court costs charged to an insured in a covered law suit.
(first emphasis added).
Hence, pursuant to the unambiguous language of the policy, Geico agrees to
pay all court costs charged to an insured in a lawsuit which is covered under
Geico’s policy.
Since we have determined that the underlying negligence action was a
“covered lawsuit,” we turn to the issue of whether the sanctions judgment
constituted a “court cost” as contemplated in the policy.6
Given this court’s precedent that (i) costs may be chargeable to a liability
insurance carrier7 and (ii) insurance policies are to be liberally interpreted in favor
of coverage,8 coupled with the fact that the instant policy does not define court
6 We note the term “court costs” is not defined in the policy.
7See Tri-State Ins. Co. of Minn. v. Fitzgerald, 593 So. 2d 1118 (Fla. 3d DCA
1992); Pac. Employers Ins. Co. v. Hofrichter, 670 So. 2d 1023 (Fla. 3d DCA
1996).
8 See Bethel v. Sec. Nat’l Ins. Co., 949 So. 2d 219, 223 (Fla. 3d DCA 2006)
19
costs, we cannot find error in the trial court’s holding that the Geico policy
provides coverage for sanctions entered against the insured as an additional cost of
the litigation.
G. Geico’s Equitable/Public Policy Argument
Finally, we are not unsympathetic towards Geico’s argument that, as a
matter of public policy, a liability insurer should not be responsible for monetary
sanctions imposed when an insured makes misrepresentations during discovery.
However, during the year that elapsed between Blanchard’s deposition and Geico’s
issuance of its April 2008 ROR, Geico controlled Blanchard’s defense, and,
therefore, was in a better position than Blanchard (or the Rodriguezes) to mitigate
any effects of its insured’s misrepresentations. Also, since the Rodriguezes’ claim
was covered under the Geico policy, Geico stood to potentially benefit from
Blanchard’s misrepresentations as Blanchard’s testimony plainly addressed
Blanchard’s liability for the accident, rather than any issue regarding insurance.
Finally, we are aware of no impediment which would have prohibited Geico from
clarifying in its liability policy that monetary sanctions resulting from an insured’s
intentional misrepresentations during discovery made without the knowledge or
(stating insurance policies are to be constructed in favor of the insured and
insurance coverage); Rabatie v. U.S. Sec. Ins. Co., 581 So. 2d 1327, 1329 (Fla. 3d
DCA 1989); Shelby Mut. Ins. Co. of Shelby, Ohio v. Manchester, 376 So. 2d 266,
268 (Fla. 3d DCA 1979) (“[W]hen the terms of an insurance policy are capable of
two or more constructions, the construction permitting recovery is to be given
effect.”).
20
consent of Geico are not considered a “court cost” under the “additional payments”
provision of the Geico policy.
III. Conclusion
The insurance policy issued by Geico to Blanchard covered the automobile
accident. While Blanchard’s misrepresentations in his deposition constituted
sanctionable conduct, they are not the type of material misrepresentations “relating
to insurance” that would implicate the “Fraud and Misrepresentation” provision of
the Geico policy. Hence, Geico’s attempt to void the policy based on those
misrepresentations was ineffectual. Geico’s April 2008 ROR issued to
Blanchard’s estate, purporting to disclaim coverage to the estate based on
Blanchard’s misrepresentations, was ineffectual and allowed Blanchard’s estate to
take control over the litigation, despite Geico’s willingness to continue to provide a
defense, albeit subject to their reservation of rights.
Since the sanctions judgment was a court cost charged to Blanchard as part
of a lawsuit covered by Geico’s policy, the Geico policy provided coverage to
Blanchard’s estate for the sanctions judgment. We therefore affirm the trial court’s
summary judgment determining that Geico is responsible for payment of the
sanctions judgment. We reiterate, however, that we do not reach the issue of
whether Geico is exposed to liability for the consent judgments in excess of its
policy limits.
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Affirmed.
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