Honesty is Always the Best Policy
Quinterov. Geico Marine Ins. Co., No.0:18-cv-62093-UU, 2019 U.S. Dist. LEXIS 74422 (S.D. Fla. Apr. 29, 2019).
By: SpringGaines
This case out of Florida concerns aclash of summary judgments and the application of the doctrine of uberrimae fidei (utmost good faith) for marine insurance. In May of 2018,Geico received a phone call from the plaintiff, Alfredo Quintero (Quintero)about renewing his lapsed policy on his 2008 RenegadeBoats Runabout (vessel). Before Geico took payment to renew his policy, itasked Quintero a few questions concerning the condition of the vessel, the lasttime he saw the vessel, and the location of the Vessel. Quintero assured Geicothat the vessel was in sound condition, he saw it every day and that it was athome with him. Based on these answers,Geico agreed to renew his policy.
Laterin the day, Geico received another call from Quintero saying that the vessel wasstolen and made a claim under his now reinstated policy. Subsequentinvestigation by Geico showed that the vessel was stolen three hours beforeQuintero called to reinstate his policy. Geico proceeded to send a recessionletter and denial of coverage in January 2019. Geico explained that it wasdenying coverage and rescinding the policy ab initio (fromthe beginning) because 1) Quintero misrepresentedthe condition of the vessel and 2) Quintero misrepresented his possession ofthe vessel when he called to reinstate his policy.
Quintero argued that heis entitled to partial summary judgement because there is no dispute that Geicofailed to comply with the nonrenewal of his policy, that his coverage neverlapsed, and because of this, the vessel was a covered loss. Geico countered thiswith a Motion for Summary Judgment because the misrepresentations made byQuintero preclude any form of recovery. While Geico argued on three grounds,the court focused on the first, which is that under the doctrine of uberrimae fidei,the policy was void abinitio when Quintero misrepresented the location of his vessel duringhis phone call with Geico to reinstate the aforementioned policy.
The doctrine of uberrimae fidei does apply to marine insurance and"requires that an insured fully and voluntarily disclose to the insurerall facts material to a calculation of the insurance risk.”[1] The dispute here is whether this doctrineapplies in this case. Geico argues that it does because it is the controllinglaw for the Eleventh Circuit[2]. However, Quintero denied this and statedthat the language of his policy imposes different obligations so uberrimae fidei does not apply. On Geico’s side, the insurer argued thatwhen Quintero called to renew his policy, he failed to disclose the actualstatus of his vessel and said it was at his location. Quintero did not providecontradictory evidence of this. However, he didcounter that there is a genuine dispute as to whether his misrepresentation ismaterial to this claim because he called to inform Geico that his vessel wasstolen on the same day he renewed his policy; thus, Geico "had knowledge of thepurported material misrepresentation."[3] When Quintero called to reinstate his policy, he didnot tell Geico that his vessel was stolen. Therefore, Geico could not have hasknowledge of this action. The fact that Quintero later told Geico of this theftdoes not erase his earlier omission.
Ultimately,the court concluded that when Quintero failed to disclose the actual status ofthe vessel, the policy was void ab initio under uberrimae fidei. The court did not discuss Quintero’s other claims.Quintero’s partial summary judgement was denied, and the Court granted summaryjudgment in Geico’s favor dismissing the Complaint.
[1] HIHMarine Servs., Inc. v. Fraser, 211F.3d 1359, 1362 (11th Cir. 2000).
[2] The Eleventh Circuithas a strict analysis for uberrimae fidei. Other circuits, such as the Fifth, do not view this doctrine asentrenched federal maritime law and apply a different analysis. Albany Ins. Co. v. Anh Thi Kieu, 927F.2d 882 (5th Cir. 1991).
[3] Quintero v. Geico Marine Ins. Co., No. 0:18-cv-62093-UU, 2019 U.S. Dist. LEXIS 74422, at *17-18.(S.D. Fla. Apr. 29, 2019).
