SUPREME COURT OF FLORIDA Tallahassee, Florida

Transcription

1 SUPREME COURT OF FLORIDA Tallahassee, Florida Appeal No: Fourth District Court Of Appeals No: 4D ZC INSURANCE COMPANY, a foreign corporation, Petitioner/Plaintiff v. ANNIS BROOKS, individually, and as natural guardian of ANSELIQUE ASHLEY BROOKS, and RALPH BROOKS, individually, and as natural guardian of ANSELIQUE ASHLEY BROOKS, Respondents/Defendants. On Appeal from the Fourth District Court of Appeal PETITIONER S JURISDICTIONAL BRIEF BARTLETT, HEEKIN, SMITH, GREENE & MALIN, P.A. T. Geoffrey Heekin Fla. Bar No.: Deborah L. Greene Fla. Bar No.: S. Hunter Malin Fla. Bar No.: P.O. Box 477 Jacksonville, FL Telephone: (904) Facsimile: (904)

2 Attorneys for Petitioner TABLE OF CONTENTS Page TABLE OF CONTENTS... i TABLE OF AUTHORITY...ii STATEMENT OF THE CASE AND OF THE FACTS... 1 SUMMARY OF THE ARGUMENT... 4 ARGUMENT... 5 I. Discretionary Jurisdiction is Appropriate... 5 II. The District Court Created Coverage Where None Exists Without Requiring the Elements of Promissory Estoppel to First be Met... 6 CONCLUSION...10

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4 TABLE OF AUTHORITIES Crown Life Insurance Co. v. McBride, 517 So. 2d 660 (Fla. 1987) Mount Sinai Hospital, Inc. v. Jordan, 290 So. 2d 484 (Fla. 1974) Nielson v. City of Sarasota, 117 So. 2d 731 (Fla. 1960)... 5 Southeastern Sales & Service Co. v. T. T. Watson, Inc., 172 So. 2d 239 (Fla. 2d DCA 1965) Travelers Indemnity Company v. Billue, 763 So. 2d 1204 (Fla. 1 st DCA 2000)... 5, 7, 9 W.R. Grace & Co. v. Geodata Services, 547 So. 2d 919 (Fla. 1989)...5, 7-9 Article V, Section 3(b)(3), Florida Constitution... 5

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6 STATEMENT OF THE CASE AND THE FACTS ZC 1 issued an insurance policy to Dollar, so that Dollar could make certain coverages available to its renters (the Policy ), including supplemental liability insurance ( SLI ). Dollar, which was not ZC s agent, prepared the documents given to its renters explaining the available insurance coverages. Ms. Brooks rented a car from Dollar, signed Dollar s Rental Agreement and purchased SLI from Dollar. That same night, she wrecked the car in a one-car accident and her three passengers made claims against her. There was no contact between ZC and Ms. Brooks. All of her contact was with Dollar. One of those passengers was Ms. Brooks own minor daughter. Ms. Brooks sought SLI coverage for her daughter s claims. The SLI Policy contains the following family member exclusion: There shall be no coverage under this policy for:... 3.) Liability arising out of bodily injury or personal injury or property damage sustained by the rentee or the relatives of the rentee if such relative s reside with the rentee as of the date the rental agreement is entered into. Relative is defined as anyone related to the rentee by blood, marriage or adoption. 1 Plaintiff below, ZC Insurance Company, shall be referred to as ZC. The Defendants below shall be referred to as follows: Annis Brooks ( Ms. Brooks ); Ralph Brooks ( Mr. Brooks ) (collectively as Respondents ). The Fourth District Court shall be referred to as the 4 th DCA.

7 (emphasis added). ZC filed an action seeking a declaration that the Policy did not provide liability coverage for Ms. Brooks daughter s claims. Both Mr. Brooks (the child s father and Ms. Brooks Husband) and Ms. Brooks admitted that her daughter is a relative who was residing with her at the time of the accident. The Brooks admitted that the Policy s family member exclusion excluded coverage for Ms. Brooks minor daughter. Despite these admissions, Respondents asserted that since Ms. Brooks was not informed of the SLI s family member exclusion, coverage somehow existed. 2 The Rental Agreement, which was prepared by Dollar without ZC s input, notified Ms. Brooks that SLI was provided by a separate insurance policy and was subject to other terms and exclusions, which were summarized in the SLI brochure available at the Dollar counter. 3 It is undisputed that the SLI 2 Importantly, however, she admitted that she NEVER bothered to read the Rental Agreement and, instead, she made her own assumptions about its contents and about what coverage would be afforded to her under SLI. Additionally, she admitted she was not prevented or prohibited from reading the Rental Agreement, but that she simply chose not to. Further, the Dollar employee who sold the SLI benefits made no representations regarding the scope of coverage. 3 The Dollar Rental Agreement clearly stated: Brochures are available at the rental location that explain the LDW, PAE, 4

8 brochure was available at the counter, but Ms. Brooks never asked to see it. The SLI brochure provided notification that the family member exclusion applied to SLI. 4 Thus, Ms. Brooks was notified that a separate policy issued by an independent insurance company (ZC) would govern SLI, and that a family member exclusion applied. 5 Despite the foregoing, the Trial Court denied ZC s Motion for Summary Judgment, and granted the Respondents crossmotions. ZC appealed and the divided Court 6 affirmed the Final UMP, ESP and SLI programs..... You acknowledge and understand SLI is subject to other specific exclusions which are summarized on the separate SLI brochure, which is available at the rental counter. (Emphasis added). 4 The SLI Brochure stated: SLI... [is] provided through independent insurance companies. While the information in this brochure provides a summary of these coverages, it is subject to all provisions, limitations and exclusions contained in the actual policies... SLI does not provide coverage:... For bodily injury or property damage sustained by you and/or your relatives residing with you, or by any authorized renter and/or their relatives residing with them. (Emphasis added). 5 The Rental Agreement and SLI brochure were prepared by Dollar, without ZC s input, approval or request. 6 Judge Warner in a dissenting opinion recognized, inter alia that: The policy in question specifically excluded coverage for family members. The effect of the trial court s ruling, and the majority s affirmance, is to create coverage where none existed. The only circumstance where courts have authorized the creation of coverage has been in promissory estoppel cases to prevent forfeiture of coverage where failure to do so would sanction fraud or injustice. See Crown Life Ins. Co. v. McBride, 517 So. 2d 660, 662 (Fla. 1987). The Crown 5

9 Judgment, stating: Regarding creating coverage where none existed, it is true that the terms of the policy... excluded family members from coverage, but the question under Crown Life Insurance Co. v. McBride, 517 So. 2d 660 (Fla. 1987), is whether failing to provide Annis Brooks with adequate information regarding the scope of the coverage she purchased is tantamount to fraud or other injustice. [citations omitted]. Florida law recognizes that fraud can occur by omission, and places a duty on one who undertakes to disclose material information to disclose that information fully. [citation omitted]. In this case, providing Annis Brooks with documents that define coverage while failing to provide documents that set forth the exclusions to that coverage is tantamount to fraud by omission. (A1.3) (emphasis added). ZC filed a timely Motion for Rehearing, which was denied on July 3, ZC then filed its Notice of Invoking Discretionary Jurisdiction of this Court. SUMMARY OF THE ARGUMENT The Fourth DCA s Majority Opinion (the Opinion ) is in direct conflict with this Court s prior rulings regarding the court further explained that [s]uch injustice may be found where the promisor reasonably should have expected that his affirmative representations would induce the promisee into action or forbearance substantial in nature, and where the promisee shows that such reliance thereon was to his detriment. Id. (emphasis added)... Here, no affirmative representation was made either by Dollar or by the insurance company [ZC] as to the extent of the supplemental insurance and whether it covers family members. (Emphasis added). 6

10 creation of insurance coverage where none exists. If not reversed, the Opinion will create havoc on not only the Florida auto rental industry, but also in any instance in which a certificate of insurance or declarations page had previously been accepted in lieu of the full policy. In the Opinion, without first finding that all of the required elements of promissory estoppel were met, the Majority created coverage where none exists under the Policy; and held that the family member exclusion, which was admittedly clear and unambiguous, 7 does not apply to exclude coverage for Ms. Brooks family members. This ruling was improper because the elements of promissory estoppel did not exist. By failing to require that each element of promissory estoppel be met before creating coverage, the Opinion conflicts with the following decisions: Crown Life Ins. Co. v. McBride, 517 So. 2d 660 (Fla. 1987); W.R. Grace & Co. v. Geodata Services, 547 So. 2d 919 (Fla. 1989); and Travelers Indemnity Company v. Billue, 763 So. 2d 1204 (Fla. 1 st DCA 2000). ARGUMENT I. Discretionary Jurisdiction is Appropriate Under Article V, Section 3(b)(3), Fla. Const., this Court 7 The Appellees counsel admitted that the Policy language was clear and unambiguous and that but for Dollar s Rental Agreement, would have precluded coverage. 7

11 is vested with discretionary jurisdiction to review an appellate decision which expressly and directly conflicts with a decision of this Court or another appellate court. See Nielson v. City of Sarasota, 117 So. 2d 731, 734 (Fla. 1960). Such a conflict is present here because the Opinion improperly broadens a very narrow exception to creating coverage where none exists. By doing so, the Opinion directly and expressly conflicts with the law set forth in prior cases of this Court, and another District Court: Crown Ins. Co., 517 So. 2d 660; W.R. Grace & Co., 547 So. 2d 919; and Billue, 763 So. 2d II. The District Court Created Coverage Where None Exists Without Requiring the Elements of Promissory Estoppel to First be Met Insurance coverage may be created only where all elements of promissory estoppel are established. These elements are: (1) an affirmative representation; (2) actual reliance; and (3) that failure to enforce the promise will sanction fraud or other injustice. Crown Life Ins. Co., 517 So. 2d at The record is devoid of any evidence of reliance or of an affirmative misrepresentation. The Opinion changes existing law by doing away with the first and second elements of insurance by estoppel in favor of a tantamount to fraud by omission 8

12 standard. This Court in Crown Life Ins. Co. re-stated the rule that equitable estoppel cannot be used to create or extend coverage where none exists, and carved out a very narrow exception to the general rule for circumstances in which all elements of promissory estoppel have been met: The general rule in applying equitable estoppel to insurance contracts provides that estoppel may be used defensively to prevent a forfeiture of insurance coverage, but not affirmatively to create or extend coverage. Six L s Packing Co. v. Florida Farm Bureau Mutual Insurance Co., 268 So. 2d 560 (Fla. 4 th DCA 1972), cert. discharged, 276 So. 2d 37 (Fla. 1973) An exception to the general rule is the doctrine of promissory estoppel... The [promissory estoppel] doctrine, however, only applies where to refuse to enforce a promise... would be virtually to sanction the perpetration of fraud or would result in other injustice. Southeastern Sales, 172 So. 2d at 241 (quoting 19 Am.Jur.Estoppel 53 (1939)). Such injustice may be found where the promisor reasonably should have expected that his affirmative representations would induce the promisee into action or forbearance substantial in nature, and where the promisee shows that such reliance thereon was to his detriment. See Mount Sinai Hospital. Crown Life Ins. Co., 517 So. 2d at (emphasis added). In setting forth this limited exception, this Court cited favorably 9

13 to Southeastern Sales & Service Co. v. T.T. Watson, Inc., 172 So. 2d 239 (Fla. 2d DCA 1965), in which that Court stated: Promissory estoppel differs from ordinary equitable estoppel in that the representation is promisory rather than as to an existing fact. [citations omitted].... Southeastern Sales, 172 So. 2d at 241 (emphasis added). 8 This Court, in W.R. Grace & Co., explained that promissory estoppel requires a promise which induces action or forbearance. 547 So. 2d at 924. Likewise, the First DCA, following Crown Life Ins. Co., held that promissory estoppel requires an affirmative representation. Billue, 763 So. 2d 1204 (holding that promissory estoppel requires proof that one party relied to his detriment on an affirmative representation made by another). Thus, it is clear that the intention of this Court in Crown Life Ins. Co. was to allow promissory estoppel to apply as a very narrow and limited exception to the general rule against extending or creating coverage, and then only where all of the elements of the theory have been properly and fully met. In order for the exception to apply, the promisee must show an 8 The promisee must show that he or she was induced in reliance upon the promise to take some substantial action, or to forego a material right. Mount Sinai Hospital, Inc. v. Jordan, 290 So. 2d 484 (Fla. 1974). 10

14 affirmative promise or representation and reliance thereon. Crown Life Ins. Co., 517 So. 2d at 662; W.R. Grace & Co., 547 So. 2d at 924; Southeastern Sales, 172 So. 2d at 241; Mount Sinai, 290 So. 2d at 487. It is only after an affirmative representation or promise and reliance are demonstrated, that the query of whether failing to enforce the affirmative promise will sanction a fraud or other injustice should be addressed. Id. In sum, coverage cannot be created or extended unless promissory estoppel is first established, and promissory estoppel cannot be established where there is no proof of an affirmative representation and reliance thereon. Despite the foregoing, the Opinion did not discuss the elements of promissory estoppel, and completely overlooked the pivotal elements of: (1) an affirmative representation; and (2) reliance, both of which must exist for promissory estoppel to apply at all. Without promissory estoppel, there can be no coverage under the Policy because of the unambiguous family member exclusion. Moreover, if there is no affirmative representation, then the question of whether failure to enforce the promise would result in fraud or other injustice is wholly irrelevant. By making this inquiry without the existence of an affirmative representation and reliance, the Opinion conflicts with: Crown Life Ins. Co., 517 So. 2d at 662; W.R. Grace & Co., 11

15 547 So. 2d at 924; Southeastern, 172 So. 2d at 241; Mount Sinai, 290 So. 2d at 487. As there was no evidence of an affirmative representation or of reliance, and as recognized by Judge Warner s Dissent, the Opinion mis-applied these case authorities and improperly created coverage when all parties agree that none existed under the Policy. More specifically, the Opinion improperly stated that the question to ask under Crown Life Ins. Co., to determine if the promissory estoppel exception applies, is whether failing to provide the Policy, or a summary thereof, to Ms. Brooks was tantamount to fraud or other injustice. This query should not be made unless the elements of: (1) an affirmative promise or representation; and (2) reliance thereon are first found. 9 The District Court s decision in this regard completely vitiates the general rule that insurance coverage may not be created or extended by estoppel. Thus, the District Court s Majority Opinion conflicts with: Crown Life Ins. Co., 517 So. 2d 660; W.R. Grace & Co., 547 So. 2d 919; and Billue, 763 So. 2d Finally, the Opinion erroneously allowed Dollar (which was not ZC s agent) to somehow create coverage under ZC s 9 The District Court even recognized that there was no affirmative representation when it explained that the prevention of fraud element was met by an omission, rather than an affirmative representation. 12

16 unambiguous Policy which contained the family member exclusion. As such, it was not even ZC s actions that were held to create coverage under ZC s Policy. Conclusion Based on the foregoing, it would be appropriate for this Court to exercise its discretionary jurisdiction. BARTLETT, HEEKIN, SMITH, GREENE & MALIN, P.A. By: T. Geoffrey Heekin Florida Bar No Deborah L. Greene Florida Bar No S. Hunter Malin Florida Bar No P.O. Box 477 Jacksonville, FL Telephone: Attorneys for Petitioner CERTIFICATE OF SERVICE I CERTIFY that a true and correct copy of the foregoing has been furnished VIA UNITED STATES MAIL to: Peter Diamond, 150 W. Flagler St., Ste. 1450, Miami, FL 33130; James O. Williams, One Clearlake Centre #1102, 250 Australian Ave. South, West Palm Beach, FL 33401; Keith A. Gasman, Republic Security Bank Tower, Ste. 702, 2929 E. Commercial Blvd., Ft. Lauderdale, FL 33308; Louis M. Silber, 1800 Australian Ave. South, Ste. 200, West Palm Beach, FL 33409; David L. Kahn, 633 S. E. 3 rd Ave., Ste. 202, Ft. Lauderdale, FL 33301; and Jane Kreusler-Walsh, Ste. 503-Flagler Center, 501 S. Flagler Dr., West Palm Beach, FL on August 11, CERTIFICATE OF COMPLIANCE WITH FONT REQUIREMENTS The type in this brief is Courier New 12-point, and complies 13

17 with the font requirements of Rule 9.210(a)(2), Fla. R. App. Proc. Attorney SUPREME COURT OF FLORIDA Tallahassee, Florida Appeal No. Fourth District Court Of Appeals No: 4D ZC INSURANCE COMPANY, a foreign corporation, Petitioner/Plaintiff v. ANNIS BROOKS, individually, and as natural guardian of ANSELIQUE ASHLEY BROOKS, and RALPH BROOKS, individually, and as natural guardian of ANSELIQUE ASHLEY BROOKS, Respondents/Defendants. On Appeal from the Fourth District Court of Appeal APPENDIX TO PETITIONER S JURISDICTIONAL BRIEF BARTLETT, HEEKIN, SMITH, GREENE & MALIN, P.A. T. Geoffrey Heekin Florida Bar No Deborah L. Greene

18 10 Florida Bar No S. Hunter Malin Florida Bar No P.O. Box 477 Jacksonville, FL Telephone: Attorneys for Petitioner

19 TABLE OF CONTENTS APPENDIX TO PETITIONER S JURISDICTIONAL BRIEF Item Tab Opinion filed May 14, July 3, 2003, Order Of The Court Denying Motion For Rehearing 2