Modifications To "Monster Truck"
A Valid Basis For Rescission 

By Thom Glasson 

 

In Mercury Insurance v. Markum, 1st DCA Case No. 1D09-2054, (April 20, 2010), the Court of Appeals found that the trial court had erred in entering Summary Judgment for the Plaintiff and against the carrier on the basis that the term "modified" was ambiguous as concerning an insurance application.  The Ford F-250 truck was insured under a policy issued by Mercury and in the application for coverage, the vehicle owner was asked the following question: "Is any vehicle rebuilt, salvaged, modified, altered or specially built/customized?"
 
The truck owner answered "no" to that question, even though he had installed larger, wider tires, as well as a lift-kit on the truck, which created a "Monster Truck" type of vehicle which is reflected in photographs made a part of the record. There was extensive argument at the trial court level with regard to the ambiguity alleged to exist in connection with the term "modified."
  
According to the testimony of the vehicle owner, his insurance broker assisted him in completing the application and, in fact, the vehicle owner stated that he did not read the application prior to signing it. The vehicle owner indicated that the insurance broker was aware of the nature and extent of the modifications to the truck.
 
The First DCA found that the true issue was not whether there were two interpretations of "modified" that could render the question ambiguous; rather, the issue was whether an objectively reasonable person in the vehicle owner's situation (i.e., having installed larger, wider tires and a lift-kit on his truck) could truthfully answer the question as either "yes" or "no."
 
The Court found that no objectively reasonable interpretation of "modified" would coincide with the vehicle owner's answer of "no" to the question and, therefore, the policy was legally rescinded. However, the matter was remanded for consideration of whether the broker was acting as an agent of Mercury and whether, if the broker did have knowledge of the alterations to the vehicle, that knowledge should be imputed to the carrier.

A New Twist by Plaintiffs in Exhaustion of Benefits (BENEX) PIP Cases
It appears that Plaintiff PIP attorneys never tire of litigating old matters that have been resolved, yet they keep doing so time and again.  Specifically, issues that were decided years ago in Simon v. Progressive, 904 So. 2d 449 (Fla. 4th DCA 2005) keep rearing their heads.  The benefits exhausted (BENEX) litigation du jour appears to be an attempt to twist or otherwise convince the court that an insurer acted in bad faith when they denied payment for a bill received higher in the line of priority based upon the then-prevailing case law and subsequently exhausted benefits to other providers.  
 
In the case specified below, the Plaintiff attempted  to do just that.  At the time the bills were received by the insurer, the Plaintiff had not submitted a disclosure and acknowledgment form in compliance with Fla. Stat. 627.736.  Benefits were then exhausted through payments to other providers.  At hearing on Plaintiff's Renewed Motion for Summary Judgment and Defendant's Renewed Motion for Summary Judgment, the Plaintiff argued that the insurer improperly manipulated the claims process to ensure that the Plaintiff was not paid; however, the Court disagreed.  
 
The Court found that when an insurer relies upon controlling case law and acts according to the same, they cannot be found to have acted in bad faith.  This is true especially when an insurer continues to process claims any pay legitimate claims until benefits are exhausted.  
 
Furthermore, the Court found that the purely speculative allegations made by the Plaintiff concerning spoliation of evidence were without merit as even if it was discovered that the insurer mistakenly did not pay the claim, the Plaintiff's claim would be barred because it had exhausted benefits in the absence of bad faith.  
 
Above all else, the Court's logic and legal reasoning in the above-described case follows Simon and the principals Simon stands for perfectly; to wit, that in the absence of a showing of bad faith, exhaustion of benefits is exhaustion of benefits.