Alvarez v. State Farm Florida Ins. Co., 305 So.3d 5

Background

In 2009–2010 the Alvarezes experienced repeated drain/back-up issues; repairs were made to a kitchen drain but State Farm’s initial inspections found no interior water damage.
In 2010 State Farm denied coverage after concluding there was no accidental direct physical loss; denial letters noted no claim of interior water damage.
In 2012 the Alvarezes submitted a sworn proof of loss claiming $82,967.92 for water damage allegedly occurring in 2009; State Farm re-inspected in 2013 and found no water damage.
The Alvarezes sued State Farm for breach of contract; the trial court granted partial summary judgment for the Alvarezes on “liability” but left damages for the jury; the successor judge allowed State Farm’s misrepresentation defense to proceed.
At trial the jury was asked whether the Alvarezes made a material misrepresentation and, if not, what damages they should receive; the jury found material misrepresentation and nevertheless awarded $6,000.
The trial court entered final judgment for State Farm with no entitlement to damages, concluding the jury’s finding of material misrepresentation voided coverage; the Alvarezes appealed.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether an insured’s material misrepresentation in pursuing a claim voids coverage	Alvarezes argued they were entitled to damages and that the jury’s damages answer created a compromised/inconsistent verdict	State Farm argued the policy’s concealment/fraud clause voids coverage where insureds intentionally misrepresented material facts	Court held material misrepresentation voids the policy as a matter of law, so no recovery is permitted
Whether the jury’s award of damages despite finding misrepresentation required reversal	Alvarezes contended the verdict was compromised/inconsistent and thus should be set aside	State Farm argued plaintiffs agreed to the verdict form and waived any inconsistency objection; verdict form properly submitted both issues	Court held plaintiffs waived objection and the damages award did not change that misrepresentation voids coverage
Whether the trial court erred by allowing State Farm’s misrepresentation defense after earlier partial summary judgment	Alvarezes argued liability had been decided; they sought to limit issues to damages only	State Farm maintained its misrepresentation defense survived and was supported by discovery (inspector reports, conflicting insurance applications)	Court affirmed the trial court’s handling—misrepresentation was a triable issue for the jury
Whether the trial court needed to instruct jury to skip damages if it found misrepresentation	Alvarezes implied the absence of such an instruction led to a compromised verdict	State Farm requested an instruction to skip damages; trial court did not include it but used a verdict form the parties agreed on	Court found no reversible error; parties had agreed to the verdict form and did not object

Key Cases Cited

Schneer v. Allstate Indem. Co., 767 So. 2d 485 (Fla. 3d DCA 2000) (insureds’ fraudulent misrepresentations voided homeowner’s policy and dwelling coverage)
Valdez v. Consolidated Prop. & Cas., 762 So. 2d 1034 (Fla. 3d DCA 2000) (policy void where insured intentionally concealed or misrepresented material facts)
Am. Reliance Ins. Co. v. Kiet Invs., Inc., 703 So. 2d 1190 (Fla. 3d DCA 1997) (clauses voiding coverage for intentional misrepresentations and fraud in claims are enforceable)
Wong Ken v. State Farm Fire & Cas. Co., 685 So. 2d 1002 (Fla. 3d DCA 1997) (clause voiding coverage for intentional misrepresentation after a loss is valid and enforceable)
Baker v. R.J. Reynolds Tobacco Co., 158 So. 3d 732 (Fla. 4th DCA 2015) (failure to object to verdict form precludes revisiting the jury’s verdict)
Plana v. Sainz, 990 So. 2d 554 (Fla. 3d DCA 2008) (party waives verdict-form error by not objecting)
Beverly Health & Rehab. Servs., Inc. v. Freeman, 709 So. 2d 549 (Fla. 2d DCA 1998) (plaintiff waived error by agreeing to verdict form)