Gilbert v. Liberty Bankers Life Insurance Company, 1:15-cv-21425

Background

Plaintiff Clara Gilbert applied for life insurance for her son, John Geter III, on Sept. 17, 2011; the application asked whether the proposed insured had tested positive for HIV (Question 28).
The application initially showed Question 28 answered “yes,” but the salesman (Sanphasiri) changed it to “no” and initialed the change; facts about who directed or authorized that change are disputed.
Liberty required and obtained an executed Amendment on Sept. 26, 2011 confirming the “no” answer; Gilbert later disputes whether she knowingly signed or authorized the change, but does not now contest the Amendment’s validity.
Geter died on Nov. 28, 2012; Liberty denied the death-benefit claim citing material misrepresentation on Question 28 and refusing coverage under Fla. Stat. § 627.409.
Liberty moved for summary judgment arguing (1) the contract never formed if the Amendment was forged, (2) § 627.409 bars recovery because of misrepresentation, (3) agents’ knowledge is not imputable to Liberty, and (4) agents lacked authority to alter the application; the court denied summary judgment.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Was there an inaccurate statement by insured such that Fla. Stat. § 627.409 bars recovery?	Gilbert says she honestly answered “yes” and agents changed it to “no,” so no admissible misstatement by insured.	Liberty says the application and Amendment show an unambiguous “no” and thus a misrepresentation that voids recovery.	Genuine dispute exists over who made/authorized the inaccurate statement; summary judgment denied.
Is agents’ knowledge and conduct imputable to Liberty?	Gilbert argues agents acted as Liberty’s agents (or as dual-capacity actors) and Liberty cloaked them with indicia of agency, so Liberty is bound.	Liberty contends agents’ knowledge (and any unauthorized changes) are not imputable; they were independent and lacked authority to alter the application.	Court finds a factual dispute about agency indicia and authority; imputation is a triable issue.
Did the Amendment/affirmation conclusively establish a misstatement by insured?	Gilbert contends the Amendment resulted from agent conduct and does not resolve whether insured originally answered truthfully.	Liberty treats the Amendment as confirmation of the “no” answer and as binding.	The Amendment does not indisputably establish a misstatement because surrounding facts (agent conduct, who completed answers) are disputed.
Are prior cases (e.g., Joseph) controlling to deny relief when agents disclose post-application info?	Gilbert distinguishes Joseph and relies on cases where agents ignored disclosed information, arguing Liberty’s agents actively changed answers.	Liberty relies on Joseph to argue extraneous agent communications aren’t imputable when application terms preclude changes.	Court distinguishes Joseph on the facts and declines to apply it as a basis for summary judgment.

Key Cases Cited

Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment burden-shifting principle)
Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (definition of genuine issue and sufficiency of evidence at summary judgment)
William Penn Life Ins. Co. of New York v. Sands, 912 F.2d 1359 (Eleventh Circuit: prerequisite that insured made an inaccurate application statement for § 627.409 to apply)
Joseph v. Zurich Life Ins. Co. of America, [citation="159 F. App'x 114"] (agent disclosures not imputable where application precluded changes)
Continental Assurance Co. v. Carroll, 485 So. 2d 406 (Florida Supreme Court on materiality and insurer’s decision to issue under § 627.409)
Almerico v. RLI Ins. Co., 716 So. 2d 774 (distinction between broker and agent; indicia-of-agency and imputation under Florida law)