Universal Property and Casualty Insurance Company seeks reversal of a final judgment entered in favor of Jamón A. and Chaka Johnson who prevailed in a breach of contract suit after Universal denied their insurance claim following the discovery of a false statement on the application for insurance. Because, under the policy language at issue here, the policy is deemed void if an insured made false statements, without regard to intent, we reverse.
On March 13, 2008, an accidental fire destroyed the Johnsons’ home. They were insured by Universal Property and Casualty Insurance Company (Universal) and, after the fire, the Johnsons filed a claim with Universal. An investigation ensued and the claim was denied following Universal’s determination that the Johnsons had falsely answered one of the questions on their insurance application. Specifically, the Johnsons had answered “no” to the question: “Have you been convicted of a felony in the last ten years.” In fact, Mrs. Johnson had been convicted of five felonies in July 1998. These felony convictions stemmed from arrests that occurred in October 1995 and September 1997. The initial arrest led to the sentence and a withholding of adjudication. During her probationary period, however, Mrs. Johnson was arrested again; her probation was revoked, she was resenteneed, and an adjudication of guilt entered as to all offenses in 1998. This adjudication occurred eight and a half years prior to the application for insurance.
Following denial of their claim, the Johnsons brought suit seeking damages for breach of contract. Universal filed a counterclaim seeking a declaratory judgment that it was permitted to rescind the insurance contract on the authority of section 627.409(1), Florida Statutes (2007). This statute provides:
(1) Any statement or description made by or on behalf of an insured or annuitant in an application for an insurance policy or annuity contract, or in negotiations for a policy or contract, is a representation and is not a warranty. A misrepresentation, omission, concealment of fact, or incorrect statement may prevent recovery under the contract or policy only if any of the following apply:
(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.
Prior to trial, the Johnsons moved for summary judgment arguing that Universal could not rely on section 627.409(1) because it had adopted, by virtue of the language in the insurance contract, a more stringent standard for rescission on the ground of misrepresentation than the statute provides. According to the Johnsons, on the authority of Green v. Life & Health of America,
The trial court entered a partial summary judgment ruling that, under Universal’s policy language, Universal would be
At trial, the Johnsons testified that the misrepresentation was unintentional, as they were confused as to when the convictions were actually entered. After the trial court denied Universal’s motion for a directed verdict made at the conclusion of the Johnson’s case in chief, the jury returned a verdict on which it found that the Johnsons did not
knowingly and intentionally [make] a misrepresentation, omission, concealment of fact or an intentionally incorrect statement in their application for insurance which was material to the acceptance of the risk or to the hazard assumed by Universal Property & Casualty Insurance Company[.]
The jury further found
that, if the true facts had been known to Universal Property & Casualty Insurance Company, [it] in good faith pursuant to a policy requirement or other requirement, 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 amount, or would not have provided coverage with respect to the hazard resulting in the loss.
This second finding mirrors the language of section 627.409(l)(b), quoted above.
Universal’s subsequent motions for a judgment notwithstanding the verdict and for a new trial were denied. Thereafter, a final judgment entered in favor of the Johnsons. They were awarded $463,158.89 in total damages, including attorney’s fees, costs and interest.
On appeal, Universal argues that the trial court erred in granting the John-sons’ motion for a summary judgment thereby requiring Universal to prove that the Johnsons’ misrepresentation as to Mrs. Johnson’s criminal history was an intentional misrepresentation before the claim could be denied and the insurance contract voided. In addition, Universal argues that the trial court ultimately should have entered judgment in its favor given the jury’s finding that Universal would not have issued the policy if the truth regarding Mrs. Johnson’s criminal history had been known to it. Universal further argues reversal is required because the jury’s finding of fact that the misrepresentation was unintentional is contrary to the manifest weight of the evidence. We hold this last argument to be without merit. Nevertheless, we agree with Universal that judgment ultimately should have entered in its favor.
The insurance policy provision at issue here provides in pertinent part:
SECTIONS I AND II — CONDITIONS
1. Policy Period. This policy applies only to loss in Section I or “bodily injury” or “property damage” in Section II, which occurs during the policy period.
2. Concealment or Fraud. The entire policy will be void if, whether before or after a loss, an “insured” has:
a. Intentionally concealed or misrepresented any material fact or circumstance;
b. Engaged in fraudulent conduct; or
c. Made false statements;
relating to this insurance.
Universal argues that subsection 2c of the policy provision at issue does not require that the insured’s false statements
The applicable standard of review is de novo. See Chandler v. Geico Indem. Co.,
Insurance contracts are construed according to their plain meaning and, if a policy provision is clear and unambiguous, it should be enforced according to its terms. Taurus Holdings, Inc. v. United States Fid. & Guaranty Co.,
The general rule in Florida is that “a misstatement in, or omission from, an application for insurance need not be intentional before recovery may be denied pursuant to 627.409.” Kieser v. Old Line Life Ins. Co. of Am.,
the party making the misrepresentation should have known that it was false. Innocent misrepresentation is sufficient, for though the misrepresentation may have been made innocently, it would be unjust and inequitable to permit a person who has made false representations, even innocently, to retain the fruits of a bargain induced by such misrepresentation.
27 Williston on Contracts § 69:49 (4th ed.).
We agree with the Johnsons that under Green v. Life & Health of America,
We do not read the insurance policy at issue, however, to impose a more stringent standard for voiding a policy than is provided in the statute. Under section 627.409(1) an insured’s misrepresentation, omission, concealment of fact, or incorrect statement may prevent recovery under the policy if “the misrepresentation,
2. Concealment or Fraud. The entire policy will be void if, whether before or after a loss, an “insured” has:
a. Intentionally concealed or misrepresented any material fact or circumstance;
b. Engaged in fraudulent conduct; or
c. Made false statements;
relating to this insurance.
We agree with Universal that, given the language of subsection 2a, subsection 2c would be superfluous if a “false statement” under 2c included only intentionally false statements. A contract is not to be read so as to make one section superfluous, and so “[a]ll the various provisions of a contract must be so construed ... as to give effect to each.” University of Miami v. Frank,
“Insurance contracts, like other contracts, ‘should receive a construction that is reasonable, practical, sensible, and just.’ ” State Farm Mut. Auto. Ins. Co. v. Fischer,
Thus, under the policy here and under section 627.409(1), a misrepresentation “need not be fraudulently or knowingly made but need only affect the insurer’s risk or be a fact which, if known, would have caused the insurer not to issue the policy or not to issue it in so large an amount.” Fabric v. Provident Life & Acc. Ins. Co.,
We are not persuaded by the Johnsons’ argument that subsection 2c should be read as referring only to an intentional misstatement on the basis that the broader section in which this subsection is located, section 2, is entitled “Concealment or Fraud,” conduct which the Johnsons assert is always intentional. This court has held that “the headings or subheadings of a document do not dictate the meaning of the entire agreement, especially where the literal language of the heading is contrary to the agreement’s overall scheme.”
We acknowledge that other jurisdictions have interpreted differently contract provisions similar to the one at issue in the case before us. For example, in the unreported decision of In re Head,
Florida law differs. As noted, pursuant to section 627.409, the legislature has mandated that “any misrepresentation, innocent or intentional, will void an insurance contract if the misrepresentation ‘is material either to the acceptance of the risk or to the hazard assumed by the insurer’ or ‘[i]f the true facts had been known to the insurer ..., the insurer in good faith would not have issued the policy....’” GRG Transport, Inc. v. Certain Underwriters at Lloyd’s, London,
In sum, the insurance contract here does not adopt a more stringent standard than what is provided in section 627.409. Thus, because neither the contract nor Florida statutory law requires that a misrepresentation be intentionally made for the contract to be voided, the trial court erred in granting summary judgment requiring that Universal was required to prove an intent to deceive. Further, given the jury’s finding as to the materiality of this misrepresentation, the contract of insurance is void. The judgment is therefore REVERSED.