UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

KELLY LYLES,

Plaintiff,

v.

AMERICAN ZURICH INSURANCE 

COMPANY, 

Defendant.

__________________________________/

Case No: 1:22-cv-23184-WPD

MOTION TO DISMISS COMPLAINT AND 

INCORPORATED MEMORANDUM OF LAW

Defendant, American Zurich Insurance Company (“American Zurich”), through its 

undersigned counsel and pursuant to Fed. R. Civ. P. 12(b)(6), hereby files this Motion to Dismiss 

Complaint and Incorporated Memorandum of Law. As explained below, plaintiff, Kelly Lyles 

(“Lyles”), made several, glaring, material misrepresentations in her application for a Builders Risk 

insurance policy with American Zurich. Relying upon the misrepresentations made by Lyles, 

American Zurich issued the insurance policy for a certain premium and pursuant to a certain set of 

available coverages. But, had American Zurich known the truth of the information contained 

within Lyles’ policy application, the insurance policy either would not have been issued at all or, 

at minimum, would have been issued in exchange for a premium amount of three to five times 

higher than the amounts charged to Lyles. In this regard, there can be no reasonable dispute that 

Lyles breached her obligation of truthfulness and candor in completing the policy application. And 

since Lyles’ misrepresentations are material in nature, the policy must be considered void ab initio. 

Accordingly, the Complaint for Breach of Contract [D.E. 1-2, pp. 7-65] (the “Complaint”) fails to 

state a cause of action upon which relief can be granted and must be dismissed with prejudice.

Case 1:22-cv-23184-WPD Document 6 Entered on FLSD Docket 10/26/2022 Page 1 of 12
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FACTUAL BACKGROUND AND PROCEDURAL POSTURE

This is a first-party insurance coverage dispute where plaintiff, Lyles, is seeking to recover 

insurance proceeds for alleged loss and/or damage resulting from Tropical Storm Eta to her

property located at 10395 NE 12th Avenue, Miami Shores, Florida 33138 (the “Insured Premises”) 

under a Builders Risk insurance policy (the “Policy”) issued by American Zurich. A copy of the 

Policy is attached as Exhibit “A” to the Complaint [D.E. 1-2, pp. 11-60].

I. THE APPLICATION FOR THE POLICY

Prior to issuance of the Policy, there was an application and underwriting period. 

Specifically, on August 28, 2020, Lyles executed a Builders Risk New Business Application for 

builders risk insurance coverage for the Insured Premises. See Affidavit of Rachele Holden, 

attached hereto as Exhibit “A,” ¶ 7.1 According to Lyles’ response to the first-question in the 

Policy application, the Insured Premises is identified as “new construction of a single family 

dwelling with a total completed value of $500,000 or less.” See id., ¶ 8. Lyles’ response to the

third question of the application further states that the Insured Premises is not “more than 30% 

complete.” See id. The application was co-signed by Lyles’ insurance broker, Alexander Cull, of 

1 The affidavit of Ms. Holden, as the underwriter of the insurance policy at issue in this action, 

may properly be considered by this Court on a motion to dismiss. In ruling upon a motion to 

dismiss, the district court may consider an extrinsic document if it is (1) central to the plaintiff’s 

claim, and (2) its authenticity is not challenged. Day v. Taylor, 400 F.3d 1272, 1276 (11th 

Cir.2005); see also Maxcess, Inc. v. Lucent Technologies, Inc., 433 F.3d 1337, 1340 (11th 

Cir.2005) (“a document outside the four corners of the complaint may still be considered if it is 

central to the plaintiff's claims and is undisputed in terms of authenticity.”); Mims v. Old Line Life 

Ins. Co. of Am., 46 F. Supp. 2d 1251, 1261 (M.D. Fla. 1999) (a court may consider the affidavit of 

the insurance policy’s underwriter when evaluating whether the policy is void ab initio under Fla. 

Stat. § 627.409). As explained below, the affidavit is unequivocally central to Lyles’ claim. 

Furthermore, Lyles cannot, in good faith, possibly dispute the substance of Ms. Holden’s affidavit 

with competent evidence.

Case 1:22-cv-23184-WPD Document 6 Entered on FLSD Docket 10/26/2022 Page 2 of 12
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Brightway Insurance, Inc. on August 28, 2020. See id., ¶ 9. The completed and signed application 

was subsequently submitted to US Assure Insurance Services of Florida, Inc. (“US Assure”), the 

underwriting agent on behalf of American Zurich with respect to the Policy. See id., ¶¶ 3, 9. 

American Zurich relied upon the information contained within Lyles’ application, including her 

misrepresentations, in deciding to issue the Policy as a “new construction” Builders Risk insurance 

policy and in calculating the premium at $2,183.

II. THE CLAIM AND AMERICAN ZURICH’S INVESTIGATION

On or about December 10, 2021, Lyles submitted a claim under the Policy to American 

Zurich for alleged loss and/or damage to the Insured Premises resulting from Tropical Storm Eta. 

American Zurich conducted a detailed investigation of the claim, subject to a full reservation of 

rights. See American Zurich’s position letter attached as Exhibit “B” to the Complaint [D.E. 1-2, 

pp. 61-65]. During the course of American Zurich’s investigation of the claim, it became apparent 

that the Insured Premises was not “new construction” as of the inception date of the Policy. See 

id., p. 62.

On April 14, 2022, Lyles agreed to submit to a recorded statement with respect to her claim 

under the Policy. The statement was taken in the presence of her counsel in this action, Carlos 

Santi., Esq., and was administered by Mark Charriez, an investigator on behalf of American 

Zurich. Attached hereto as Exhibit “B” is a true and correct copy of the transcript of the April 14, 

2022 recorded statement.2 During the interview, Lyles conceded that the Insured Premises was 

not a new construction property, but rather, a pre-existing structure. See Recorded Statement, p. 

11, lns. 2-3 (“In [sic] your house, obviously, is pre-existing. ... Yes. Pre-existing.”).

2 The Court may also consider the recorded statement of Lyles because it is central to her claim 

and undisputed, as it is her own testimony. See Day v. Taylor, 400 F.3d at 1276.

Case 1:22-cv-23184-WPD Document 6 Entered on FLSD Docket 10/26/2022 Page 3 of 12
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At the conclusion of its investigation, American Zurich ultimately denied coverage for the 

claim. In relevant part, American Zurich explained that there was no coverage available under the 

Policy for the claim because the Insured Premises is not a new construction property, as required 

under the Policy’s insuring agreement. See position letter [D.E. 1-2, pp. 62, 65].

III. THE COVERAGE ACTION

On August 8, 2022, Lyles commenced this action by filing her Complaint in the Eleventh 

Judicial Circuit, Miami-Dade County, Florida. American Zurich was served with a summons and 

a copy of the Complaint on September 1, 2022. See Notice of Removal [D.E. 1-2, p. 3]. The 

Complaint consists of a single count for breach of contract. American Zurich timely removed the 

action to this Court by filing its Notice of Removal [D.E. 1] on September 30, 2022. Thereafter, 

on October 4, 2022, the Court entered an Order [D.E. 5] granting American Zurich an extension 

of time, up to and including October 28, 2022, to file its response to the Complaint.

LEGAL STANDARD FOR EVALUATING A MOTION TO DISMISS

A motion to dismiss under Rule 12(b)(6) challenges the legal sufficiency of the allegations 

in a complaint. See Fed. R. Civ. P. 12(b)(6). In assessing legal sufficiency, the Court is bound to 

apply the pleading standard articulated in Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) and 

Ashcroft v. Iqbal, 556 U.S. 662 (2009). That is, the complaint “must ... contain sufficient factual 

matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Am. Dental Ass’n 

v. Cigna Corp., 605 F.3d 1283, 1289 (11th Cir. 2010) (quoting Twombly, 550 U.S. at 570).

“Dismissal is therefore permitted when on the basis of a dispositive issue of law, no construction 

of the factual allegations will support the cause of action.” Glover v. Liggett Grp., Inc., 459 F.3d 

1304, 1308 (11th Cir. 2006) (internal quotations omitted) (citing Marshall Cty. Bd. of Educ. v. 

Marshall Cty. Gas Dist., 992 F.2d 1171, 1174 (11th Cir. 1993)).

Case 1:22-cv-23184-WPD Document 6 Entered on FLSD Docket 10/26/2022 Page 4 of 12
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ARGUMENT

I. MATERIAL MISREPRESENTATIONS IN POLICY APPLICATIONS VOID THE CONTRACT AB 

INITIO

The voiding of an insurance policy is governed by Fla. Stat. § 627.409, which provides, in 

relevant part:

(1) [A] misrepresentation, omission, concealment of fact, or incorrect statement 

may prevent recovery under the [insurance] contract or policy only if any of the

following apply:

(a) The misrepresentation, omission, concealment, or statement is fraudulent or 

is material 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 

loss.

Fla. Stat. § 627.409(1); see also Nat’l Union Fire Ins. Co. of Pittsburgh, Pa. v. Sahlen, 999 F.3d 

1532, 1536 (11th Cir. 1993) (“Misrepresentations and incorrect statements in a policy application 

bar recovery under the policy where, inter alia, they are material to the risk assumed by the insurer 

or the insurer would not have offered the same terms had it known the truth.”) (citing substantively 

similar prior version of Fla. Stat. § 627.409). Thus, to void an insurance policy under § 

627.409(1)(a) or (b), the applicant must have made a misrepresentation or incorrect statement of 

fact in the application, and the misrepresentation must have been material to the acceptance of the 

risk assumed by the insurer. See Mt. Hawley Ins. Co. v. Deakin, No. 18-21013-CIV, 2019 WL 

4731941, at *3 (S.D. Fla. Aug. 21, 2019). As long as the misstatement satisfies subsections (a) or 

(b) of the statute, it is sufficient to void the policy. See, e.g., Darwin Nat’l Assur. Co. v. Brinson 

Case 1:22-cv-23184-WPD Document 6 Entered on FLSD Docket 10/26/2022 Page 5 of 12
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& Brinson, No. 6:11-cv-1388-Orl-36-DAB, 2013 WL 2406154, at *6 (M.D. Fla. June 3, 2013) 

(“[T]he statute makes plain that subsections (a) and (b) are written in the disjunctive.”).

There are two different definitions of materiality under § 627.409. Under subsection 1(a), 

materially refers to “any fact of such moment that it would put a careful insurer on inquiry, which 

in turn might uncover facts that would lead to a rejection of the application.” Zurich Am. Ins. Co. 

v. Ednic Trading Corp., No. 13-62229-CIV, 2014 WL 11706423, at *3 (S.D. Fla. Sept. 8, 2014) 

(quoting Singer v. Nationwide Mut. Fire Ins. Co. v. Denton, 512 So.2d 1125, 1129 (Fla. 4th DCA 

1987)). In other words, a misrepresentation is material under subsection (1)(a) if it does not allow 

the insurer to adequately gauge the risk before deciding to assume it. Id. Accordingly, the 

objectively material standard presents a question of law for the court to decide. Singer, 512 So.

2d at 1128.

Section 627.409(1)(b) applies a subjective standard, which focuses on whether the 

particular insurer would have issued the policy, or whether it would have issued it on different 

terms, had it known the true facts. Id. at 1128. The “subjectively material” standard can be 

satisfied by the affidavit of the insurer’s underwriter. See Mims v. Old Line Life Ins. Co. of Am., 

46 F. Supp. 2d 1251, 1261 (M.D. Fla. 1999).

II. THE POLICY APPLICATION CONTAINS MULTIPLE MISREPRESENTATIONS

As noted above, there can be no reasonable dispute that the application for the Policy 

completed by Lyles is plagued by, at least, two misrepresentations. Specifically, according to 

Lyles’ response to the first-question in the Policy application, the Insured Premises is identified as 

“new construction of a single family dwelling with a total completed value of $500,000 or less.” 

See Holden Affidavit, ¶ 7. Lyles’s response to the third question of the application states that the 

Insured Premises is not “more than 30% complete.” See id. Both of these responses are false.

Case 1:22-cv-23184-WPD Document 6 Entered on FLSD Docket 10/26/2022 Page 6 of 12
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American Zurich’s investigation of the claim confirmed that the Insured Premises was not 

“new construction” as of the inception date of the Policy, but rather, was a pre-existing structure. 

See position letter [D.E. 1-2, pp. 62]. Lyles, herself, further confirmed this point through her 

recorded statement during American Zurich’s claim investigation. See Recorded Statement, p. 11, 

lns. 2-3 (“In [sic] your house, obviously, is pre-existing. ... Yes. Pre-existing.”). Indeed, Lyles 

went a step further by testifying that “never in my wildest dreams, that was never, ever my 

intention on tearing down my existing home and building a new home.” See id., p. 15, lns. 4-5 

(emphasis added). Moreover, aerial imagery from the Miami-Dade Property Appraiser’s website 

further confirms that the Insured Premises was an existing structure as of the date of the Policy 

application. Attached hereto as Exhibit “C” is a photograph dated January 7, 2020 from the MiamiDade Property Appraiser’s website confirming that the Insured Premises was fully erected and in 

existence within 8 months prior to the date of Lyles’ application.

In short, there can be no reasonable dispute that the information contained within Lyles’ 

application is inaccurate, at best, or plagued by misrepresentations, at worst.

III. THE MISREPRESENTATIONS IN THE POLICY APPLICATION ARE MATERIAL

Having established that Lyles submitted an application for the Policy that contained 

inaccurate statements or misrepresentations, the only remaining question for the Court is whether 

those inaccuracies or misrepresentations are material. As explained below, the answer to that 

question is yes, they are material.

Misrepresentations and incorrect statements in a policy application bar recovery under the 

policy where, inter alia, they are material to the risk assumed by the insurer or the insurer would 

not have offered the same terms had it known the truth. Sahlen, 999 F.3d at 1536. As long as the

misstatement in the policy application satisfies subsections (a) or (b) of Fla. Stat. § 627.409, it is 

Case 1:22-cv-23184-WPD Document 6 Entered on FLSD Docket 10/26/2022 Page 7 of 12
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sufficient to void the policy. See Deakin, 2019 WL 4731941, at *3; Darwin Nat’l, 2013 WL 

2406154, at *6. 

Significantly, Fla. Stat. § 627.409 “does not require the insurer to prove that the 

misrepresentation was made knowingly or with intent to defraud; even an innocent 

misrepresentation by the insured can bar recovery.” Bays v. Globe Life & Accident Ins. Co., No. 

14-CV-62908-WPD, 2016 WL 2727129, at *4 (S.D. Fla. Apr. 8, 2016); see also Sahlen, 999 F.2d 

at 1536 (“The statute contains no knowledge or intent element; unintentional or unknowing 

misstatements bar recovery under a policy if they alter the risk or the likelihood of coverage.”); 

Life Ins. Co. of Virginia v. Shifflet, 201 So. 2d 715, 719 (Fla.1967) (“We hold misrepresentations 

in an application for insurance, material to the acceptance of the risk, do not have to be made with 

knowledge of the incorrectness and untruth to vitiate the policy.”); Mims, 46 F. Supp. 2d at 1255 

(“Under the statute, an insurer is not required to prove that any misrepresentation was made 

intentionally or knowingly.”).

Turning again to the undisputed facts at bar, it is patently obvious that Lyles’ 

misrepresentations in the Policy application are material. This is unequivocally confirmed by the 

affirmations of the Rachele Holden, Senior Vice President of American Zurich’s underwriting 

agency, US Assure. As clearly articulated in Ms. Holden’s affidavit, if Lyles disclosed the fact 

that the Insured Premises was not a new construction property, then she would have been required 

to provide several more pages of information in connection with the application for the Policy. 

See Holden Affidavit, ¶ 13. And, depending on Lyles’ responses to those additional questions, it 

is possible that the Policy may not have been issued at all. See id. At minimum, even if the Policy 

was still issued, the premium charged for the Policy would have necessarily been three to five 

Case 1:22-cv-23184-WPD Document 6 Entered on FLSD Docket 10/26/2022 Page 8 of 12
9

times higher than what was charged to Lyles in connection with the application containing the two 

misrepresentations discussed above. See id.

The testimony of Ms. Holden is undisputed and, similarly, cannot be contested by Lyles. 

That is because neither Lyles nor any of her representatives have any decision-making power with 

respect to whether American Zurich’s insurance policies are issued based upon information 

contained within policy applications or the terms and premium for those policies. Those decisions 

rest squarely within the purview of US Assure. And pursuant to Ms. Holden’s unequivocal 

affirmation, had Lyles not misrepresented facts concerning the description of the Insured Premises 

in her Policy application, the Policy either would not have been issued at all or, alternatively, 

would have been issued under different terms. In either scenario, Subsections (a) and (b) of Fla. 

Stat. § 627.409 are implicated and confirm the materiality of the misrepresentations. See Benitez 

v. Universal Prop. & Cas. Ins. Co., No. 4D21-3281, 2022 WL 6827428 (Fla. 4th DCA Oct. 12, 

2022) (insured’s failure to disclose prior losses at the insured premises in policy application was 

sufficient basis for policy to be rendered void ab initio).

CONCLUSION

For the reasons discussed above, there can be no reasonable dispute that Lyles has failed 

to present this Court with a viable cause of action upon which relief can be granted. Specifically, 

Lyles submitted an application for the Policy that was based, at least in part, on two, patent 

misrepresentations concerning the physical status of the Insured Premises. American Zurich 

detrimentally relied upon those misrepresentations by issuing the Policy. Upon discovery of the 

misrepresentations, American Zurich promptly brought them to Lyles’ attention and ultimately 

relied upon the misrepresentations as one of several reasons for denying the claim. As confirmed 

by the affirmations of Ms. Holden, had American Zurich been provided with the correct and 

Case 1:22-cv-23184-WPD Document 6 Entered on FLSD Docket 10/26/2022 Page 9 of 12
10

truthful information about the Insured Premises, it either may not have issued the Policy in the first 

instance or, alternatively, would have issued it for substantially higher premium amounts. These 

are telltale signs of materiality. On this basis, pursuant to Fla. Stat. § 627.409 and the additional 

authorities referenced above, there can be no reasonable dispute that the Policy must be deemed 

void ab initio. And, in the absence of a valid Policy, American Zurich could not possibly have 

breached the Policy, thus rendering the entirety of the Complaint invalid. There is also no 

corrective action that Lyles could take at this point to remedy her misrepresentations.

WHEREFORE, defendant, American Zurich Insurance Company, respectfully requests 

that the Court grant this Motion to Dismiss Complaint and Incorporated Memorandum of Law in 

all respects, dismiss the Complaint with prejudice, and award all costs and disbursements incurred 

by American Zurich in this action. 

Dated: October 26, 2022

Respectfully submitted,

ZELLE LLP

By: s/ Jason M. Chodos

Jason M. Chodos, Esq. (FL Bar No. 025823)

jchodos@zellelaw.com 

Christian A. Triay, Esq. (FL Bar No. 1018235)

ctriay@zellelaw.com

SunTrust International Center

One Southeast Third Avenue, Suite 1600

Miami, Florida 33131

Tel.: (786) 693-2351

Fax: (612) 336-9100

Attorneys for Defendant, 

American Zurich Insurance Company

Case 1:22-cv-23184-WPD Document 6 Entered on FLSD Docket 10/26/2022 Page 10 of 12
11

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

KELLY LYLES,

Plaintiff,

v.

AMERICAN ZURICH INSURANCE 

COMPANY, 

Defendant.

__________________________________/

Case No: 1:22-cv-23184-WPD

CERTIFICATE OF SERVICE

I hereby certify that on October 26, 2022 I electronically filed the foregoing document with 

the Clerk of the Court using CM/ECF. I also certify that the foregoing document is being served 

this day on all counsel of record or pro se parties identified on the attached Service List in the 

manner specified, either via transmission of Notices of Electronic Filing generated by CM/ECF or 

in some other authorized manner for those counsel or parties who are not authorized to receive 

electronically Notices of Electronic Filing.

s/ Jason M. Chodos

Jason M. Chodos, Esq. (FL Bar No. 025823)

jchodos@zellelaw.com 

ZELLE LLP

SunTrust International Center

One Southeast Third Avenue, Suite 1600

Miami, Florida 33131

Tel.: (786) 693-2351

Fax: (612) 336-9100

Counsel for Defendant, 

American Zurich Insurance Company

Case 1:22-cv-23184-WPD Document 6 Entered on FLSD Docket 10/26/2022 Page 11 of 12
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SERVICE LIST

Kelly Lyles v. American Zurich Ins. Co.

Case No. 1:22-cv-23184-WPD

United States District Court, Southern District of Florida

Carlos L. Santi, Esq. 

Property & Casualty Law Group

2307 Douglas Road, Suite 302

Miami, Fl 33145

Tel.: (305) 961-1038

Attorneys for Plaintiff,

Kelly Lyles.

Served via transmission of Notice of 

Electronic Filing generated by CM/ECF

Case 1:22-cv-23184-WPD Document 6 Entered on FLSD Docket 10/26/2022 Page 12 of 12