Citizens Property Insurance Corporation v. European Woodcraft & Mica Design, Inc.
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DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
July Term 2010
CITIZENS PROPERTY INSURANCE CORPORATION, a Florida
corporation,
Appellant,
v.
EUROPEAN WOODCRAFT & MICA DESIGN, INC., a Florida
corporation, and GLOBAL INSURANCE SERVICES, INC., a Florida
corporation,
Appellees.
No. 4D08-4932
[ September 29, 2010 ]
GATES, MICHAEL L., Associate Judge.
This litigation arose from a coverage dispute between Plaintiff
European Woodcraft & Mica Design, Inc. (“Plaintiff” or “European
Woodcraft”) and Citizens Property Insurance Company (“Defendant” or
“Citizens”).
Citizens does not have direct contact with prospective insureds.
Rather, it only accepts applications for windstorm coverage from
appointed Florida licensed agents. Citizens appointed Global Insurance
Services, Inc. (“Global”) as its licensed Florida agent, giving Global the
authority to submit insurance applications. As such, Citizens supplied
Global with the application forms as well as an agency number.
As European Woodcraft regularly used Global to obtain its insurance,
it requested that Global provide windstorm insurance for its new
property. Pursuant to Plaintiff’s request, Global secured a quote from
Citizens and thereafter faxed a letter along with an insurance application
to Plaintiff.
However, Global only included the first page of the
application while the letter stated:
In order for our office to b i n d coverage with Citizens
Insurance Corporation a full annual premium check in the
amount of $563.00 is required along with a signed
application (see attached). This check should b e made
payable to Citizens Property Insurance Company.
The informational section of the application, some of which was
incorrect, was completed by a Global representative. Directly above the
applicant/signature line on the application was the following printed
language:
I hereby certify that the information on this application is
true and correct to the best of my knowledge. I further
understand and agree to the terms as set forth on page 2.
The Plaintiff’s principal, Mr. Volpe, signed the application
notwithstanding the incorrect information.
Additionally, Mr. Volpe
admitted that when he signed the application he understood page 2 was
part of the application. Yet he never requested to review page 2 of the
application before signing.
Upon receipt of the application and premium check, Citizens faxed
Global a confirmation which stated the following:
This is not a binder of coverage. Coverage is contingent
upon compliance with applicable requirements as set forth
in the Citizens Manual of Rates, Rules, and Procedures.
On July 18, 2005, Citizens notified Global that Plaintiff’s premium
check was void for insufficient funds. A Global representative advised
European Woodcraft of the problem. Mr. Volpe of European Woodcraft
delivered a new check to Global o n th e premise that once Citizens
received the check, the process for securing the insurance would be
completed.
On July 28, 2005, after receiving the application and replacement
check for the premium, Citizens determined a mistake was made in the
property designation section of the application. The correct property
designation increased the amount of the premium. Citizens sent a Notice
of Deficiency to Global and to Plaintiff’s address listed on its application.
The Notice indicated a policy would not be issued until the full premium
was paid. European Woodcraft’s notice was returned as undeliverable.
Global received its notice but never communicated with the Plaintiff.
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On October 5, 2005, Citizens informed Global b y letter that no
additional premium payment had been received. Therefore, it was
closing its file, returning the premium paid and further advised no
coverage exists. Shortly thereafter, Hurricane Wilma struck South
Florida damaging European Woodcraft’s property.
European Woodcraft reported its loss to Citizens and was advised
there was no coverage. This lawsuit ensued.
ANALYSIS
In the Final Judgment the trial court found as follows:
(a) “The Court finds that Global at all times material, was a ‘general
lines agent’ which h a d apparent authority to bind insurance
coverage for Citizens.”
(b) “The Court also finds that Global was given the ‘indicia of
agency’ to bind coverage by Citizens.”
(c) “The Court also finds that there is no evidence that European
Woodcraft was ever put on notice of any limitations on Global
authority to bind coverage.”
A s a general lines agent, Global would b e licensed to represent
insurance companies in the solicitation and sale of insurance policies.
Hughes v. Pierce, 141 So. 2d 280, 282 (Fla. 1st DCA 1961).
Section 626.015(5), Florida Statutes (2005), defines a “General Lines
Agent” as an agent who transacts with one or more of the following kinds
of insurance:
(a) Property insurance.
(b) Casualty insurance, including commercial liability
insurance underwritten b y a risk retention group, a
commercial self-insurance fund as defined in s. 624.462, or
a workers’ compensation self-insurance fund established
pursuant to s. 624.4621.
(c) Surety insurance.
(d) Health insurance, when transacted by an insurer also
represented by the same agent as to property or casualty or
surety insurance.
(e) Marine insurance.
§ 626.015(5), Fla. Stat. (2005).
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Under Section 626.015(5)(a), Global would be considered a “general
lines agent” for transacting windstorm property insurance. The issue is
whether Global was specifically Citizens’ general lines agent, having the
apparent authority to bind Citizens into providing coverage for European
Woodcraft. Russell v. Eckert, 195 So. 2d 617, 620 (Fla. 2d DCA 1967).
An insurer may be held accountable for the action of those whom it
cloaks with apparent agency. Almerico v. RLI Ins. Co., 716 So. 2d 774,
777 (Fla. 1998). Here, the trial court found Citizens provided application
forms as well as a Citizens underwriting manual to Global. The Florida
Supreme Court has held that “the furnishing of company materials by
the insurance company to the individual agent or broker a n d the
subsequent acceptance of business from that agent establish[ed] civil
liability by an insurer to an insured in the same manner as if the insurer
had specifically designated the broker as its agent.” Id. at 781. However,
the principal (insurer) will not be bound by the agent’s action if the
insured knew or was put on notice of inquiry as to the limitation on the
agent’s actual authority. Amstar Ins. Co. v. Cadet, 862 So. 2d 736, 741
(Fla. 5th DCA 2003) (emphasis added).
The trial court found there was no evidence that European Woodcraft
was ever put on notice of any limitations on Global’s authority to bind
coverage. However, the application states the following in the first
paragraph on the second page of the application:
Effective Date of Coverage is upon approval of Citizens. No
insurance agent has the power to bind coverage or make the
policy effective. Receipt by agents of premiums is not receipt
by Citizens a n d does not make the policy effective.
Applicants must not rely on representations of any party
other than Citizens in its Tallahassee or Jacksonville Offices.
This provision clearly provides actual notice o n th e limitations of
Global to bind the insurer. Since European Woodcraft never received the
second page of the application, the issue is whether European Woodcraft
was placed on notice of inquiry regarding limitations of the brokers’
actual authority. The printed line directly above the signature line on
page 1 of the application reads:
I further understand and agree to the terms as set forth on
page 2.
Mr. Volpe, European Woodcraft’s principal, admitted that when he
signed the application, h e understood page 2 was part of the entire
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application but never asked to review the page. “In order to charge a
person with notice of a fact of which he might have learned by inquiry,
the circumstances known to him must be such as should reasonably
suggest inquiry and lead him to inquiry.” Sheres v. Genender, 965 So. 2d
1268, 1271 (Fla. 4th DCA 2007) (quoting Chatlos v. McPherson, 95 So. 2d
506, 509 (Fla. 1957)). Was Volpe on inquiry notice of the agency
disclaimer? Stated another way, “would a reasonable person inquire and
therefore discover the agency limitation provision?” A reasonable person
under these circumstances would have actually read page 2 and
discovered the agency disclaimer. “[A] person has no right to shut his
eyes or ears to avoid information, and then say that he has no notice;
that it will not suffice the law to remain willfully ignorant of a thing
readily ascertainable by whatever party puts him on inquiry, when the
means of knowledge is at hand.” Sapp v. Warner, 141 So. 124, 127 (Fla.
1932). Similarly, an insured cannot avoid liability for a provision in an
insurance application he claims he did not read. Nationwide Mut. Fire
Ins. v. Kramer, 725 So. 2d 1141, 1143 (Fla. 2d DCA 1998).
The Plaintiff under these given circumstances was placed on inquiry
notice and therefore subject to the limitations imposed on Global by
Citizens. Lastly, Citizens contends the trial court erred in failing to rule,
as a matter of law, that European Woodwork was o n notice of the
contents of p a g e 2 of the insurance application b a s e d on the
incorporation by reference doctrine. The trial court ruled that since Mr.
Volpe was never provided page 2 of the application, Citizens cannot rely
on the incorporation by reference doctrine to bind him to its terms. citing
Affinity Internet, Inc. v. Consol. Credit Counseling Servs., Inc., 920 So. 2d
1286, 1288 (Fla. 4th DCA 2006). We agree.
There are two different rules for deciding whether a document has
been incorporated by reference. First, “[a] document must be considered
incorporated by reference where the incorporating document specifically
provides that it is subject to the incorporated document.” Hurwitz v.
C.G.J. Corp., 168 So. 2d 84, 86 (Fla. 3d DCA 1964) (emphasis added).
This was not th e case with Citizens application. Nowhere in the
application did it make it subject to the terms and conditions on page 2.
Second, if the collateral document is sufficiently described or referenced
in the incorporating agreement it may be considered, but only for the
purpose of determining the intention of the contracting parties. Id. at 87.
Here, the language on page 1 of the application did not expressly refer to
or describe the agency disclaimer on page 2 and therefore cannot be
incorporated by reference. As discussed in Affinity, merely suggesting
the additional terms of the contract, without sufficiently describing the
other document or offering the collateral document to the party intending
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to be bound, precludes application of incorporation by reference doctrine.
920 So. 2d at 1288. Accordingly, the trial court did not err by failing to
apply the incorporation b y reference doctrine as to page 2 of the
insurance application as a matter of law.
Reversed and Remanded.
POLEN and MAY, JJ., concur.
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Appeal from the Circuit Court for the Fifteenth Judicial Circuit, Palm
Beach County; R o b i n L. Rosenberg, Judge; L.T. Case No.
2006CA004103AJ.
Christopher W. Wadsworth and Guy F. Giberson of Wadsworth Huott,
L.L.P., Miami, for appellant.
Philip M. Burlington of Burlington & Rockenbach, P.A., West Palm
Beach, and Edward Zebersky and Michael Kaplan of Zebersky & Payne,
LLP, Hollywood, for Appellee-European Woodcraft & Mica Design, Inc.
Not final until disposition of timely filed motion for rehearing.
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