Court Opinion

ID: 9957267
Source: CourtListenerOpinion
Date Created: 2024-04-03 21:05:11.749794+00
Date Added: 2024-06-11T08:18:11.799112
License: Public Domain

DISTRICT COURT OF APPEAL OF FLORIDA
                        SECOND DISTRICT

 THE HANOVER INSURANCE GROUP, INC; and MICHAEL ARLINE, JR.,

                               Appellants,

                                    v.

                             LUKE FRAZIER,

                                Appellee.

                             No. 2D22-1689

                              April 3, 2024

Appeal from the Circuit Court for Hillsborough County; Emmett L.
Battles, Judge.

Sharon C. Degnan of Kubicki Draper, Orlando, for Appellants.

Brigid F. Cech and Bethany J.M. Pandher of Greenberg Traurig, P.A.,
Miami, for Amicus Curiae, The Coalition Against Insurance Fraud.

Kerry C. McGuinn, Jr., and Carla M. Sabbagh of Rywant, Alvarez, Jones,
Russo & Guyton, PA, Tampa, for Appellee.

KELLY, Judge.

     Appellee Luke Frazier sued The Hanover Insurance Group, Inc.,
and Michael Arline, Jr., an employee in Hanover's Special Investigations
Unit, for malicious prosecution after Frazier was acquitted of charges of
making a false statement in support of an insurance claim and grand
theft arising from statements Frazier made to Hanover in connection with
an insurance claim. Hanover and Arline responded, asserting immunity
from suit under section 626.989(4)(c), Florida Statutes (2011), which
provides immunity from civil liability to persons furnishing information
related to suspected fraudulent insurance acts. Both at the summary
judgment stage and at trial, the trial court rejected the claims of
immunity and ultimately entered judgment in favor of Frazier. In this
appeal, Hanover and Arline argue, among other things, that the trial
court erred when it rejected their claims of immunity. We agree and
reverse.1
     Before reciting the facts surrounding Frazier's claim of malicious
prosecution, we think it is important to understand the statutory scheme
underlying the events leading to the filing of criminal charges against
Frazier. Every insurer admitted to do business in Florida is statutorily
required to establish and maintain an "anti-fraud investigative unit" or
division, commonly called a special investigations unit (SIU), to
investigate and report possible fraudulent insurance acts by insureds or
by persons making claims against policies held by insureds. See
§ 626.9891(1).2 If an insurer has knowledge or believes that a fraudulent
insurance act that would be a felony or misdemeanor has been
committed, it must send a report to the Division of Investigative and

     1 Hanover and Arline also unsuccessfully sought a directed verdict

and judgment notwithstanding the jury verdict, arguing Frazier's
evidence was insufficient to prove malicious prosecution, an issue they
have pursued in this appeal as well. We need not reach the issue
because our determination that Hanover and Arline had immunity from
suit is dispositive.
     2 In the current version of the statute, this provision appears in

subsection (2). See § 626.9891(2), Fla. Stat. (2023).
                                     2
Forensic Services ("DIFS"), a unit of the Department of Financial
Services, detailing the information it has giving rise to its suspicion. See
§ 626.989(6).3 This reporting is mandatory. Individuals can also file
reports with DIFS. Id. Upon receiving a report, DIFS conducts an
independent investigation to determine the extent, if any, to which a
fraudulent insurance act has been committed. Id. Should DIFS's
investigation lead it to conclude that there has been a violation of law, it
is required by statute to report it to the state attorney or other
prosecuting agency having jurisdiction over the violation. Id. If the state
attorney does not begin a prosecution within sixty days after receiving
the report, or if it declines to prosecute, it must inform DIFS of the
reasons. Id.
      As part of this legislatively mandated anti-fraud program, section
626.989(4)(c) provides insurers and their employees immunity from civil
actions, absent fraud or bad faith, arising out of the furnishing of the
information required by the statute:
      (c) In the absence of fraud or bad faith, a person is not
      subject to civil liability for libel, slander, or any other relevant
      tort by virtue of filing reports, without malice, or furnishing
      other information, without malice, required by this section or
      required by the department or division under the authority
      granted in this section, and no civil cause of action of any
      nature shall arise against such person:
      1. For any information relating to suspected fraudulent
      insurance acts or persons suspected of engaging in such acts
      furnished to or received from law enforcement officials, their
      agents, or employees;
      2. For any information relating to suspected fraudulent
      insurance acts or persons suspected of engaging in such acts

      3 In the current version of the statute, subsection (6) is divided into

parts (a)–(c). See § 626.989(6)(a)–(c), Fla. Stat. (2023).
                                       3
     furnished to or received from other persons subject to the
     provisions of this chapter;
     3. For any such information furnished in reports to the
     department, the division, the National Insurance Crime
     Bureau, the National Association of Insurance
     Commissioners, or any local, state, or federal enforcement
     officials or their agents or employees; or
     4. For other actions taken in cooperation with any of the
     agencies or individuals specified in this paragraph in the
     lawful investigation of suspected fraudulent insurance acts.
Hanover and Arline claim immunity under this provision.
     Arline, as an SIU investigator, was tasked with investigating a
dispute that arose after Frazier was involved in a minor collision while
driving a car owned by a Hanover insured, Marvic Grant. The driver of
the other car involved in the collision, Wendy Williams, filed a claim with
Hanover. In her sworn statement to Hanover, she said that the collision
happened when Frazier swerved into her lane as the cars approached a
toll plaza and the front driver's side of his car struck the rear passenger
side of her car. She told Hanover there was only minor damage to both
cars. Williams wanted to report the collision to the police, however
Frazier convinced her not to call the police and, in exchange, Frazier
agreed to let Williams make a cell phone video recording in which he
admitted he hit the rear passenger side of Williams' car with the front
driver's side of his car when he swerved into her lane as the cars
approached a toll plaza.4 Williams also took photos of the damage to
both cars.

     4 In the video Frazier states he had gotten into an accident with

Williams, had pulled over and hit the rear of her car with the front of
Grant's car, and that he was "perfectly fine, not hurt, absolutely no
injuries, it was a little scuff down the side like that, no G-force or
anything, no airbags went off, no nothing . . . ."
                                     4
      Williams' claim went unresolved for almost a month while Hanover
tried unsuccessfully to get a statement from Grant and Frazier. When
the adjuster did finally speak to Frazier, his description of the collision
and the resulting damage was different than the account Williams had
provided.5 Frazier told Hanover that as the cars approached the toll
plaza, Williams accelerated to get in front of him and the rear passenger
side of her car hit the front driver's side of his car which then pushed his
car into yellow posts near the toll booth causing damage to the passenger
side of his car, not just the driver's side. Relying on Frazier's statement,
Hanover's adjuster told Williams that he was holding her fifty percent
responsible for the accident and that Hanover would compensate her
accordingly. Williams told the adjuster this was unacceptable and that
she intended to contact her carrier and retain an attorney.
      Unbeknownst to Williams, at the time this took place Grant had
filed a claim with Hanover for damage to her car, which included damage
to the passenger side of the car. Williams first learned of Grant's claim
when she got a subrogation letter from Hanover stating it was holding
her responsible for nearly $5,000 in damages to Grant's car. Williams
was stunned at the amount because the damage to Grant's car, as well
as hers, had been minor.
      Angry about the liability determination as well as the amount of
damages, Williams contacted a supervisor at Hanover. Subsequently,
she learned that Grant, through Frazier, was claiming damages to both
sides of her car. Williams disputed Frazier's account and provided
Hanover with Frazier's video statement and the photos she had taken of
the damage to both cars. She continued her contacts with Hanover
asserting her belief that Frazier and Grant were acting fraudulently

      5 Hanover was never able to get a statement from Grant.

                                      5
because they were claiming that both sides of Grant's car were damaged
in the collision with her car. After approximately three months, Hanover
assigned Arline to investigate the conflicting accounts given by Frazier
and Williams.
     In the meantime, Williams had already filed a fraud report with
DIFS alleging that Frazier and Grant were claiming damage to Grant's
car that was not related to the accident in which she was involved.
Williams was adamant that there was only minor damage to the driver's
side bumper and fender of Grant's car and that there was no impact or
damage to the passenger side. Based on Williams' allegations, DIFS
opened an investigation.
     While DIFS's investigation was ongoing, Arline concluded his
investigation and based on Williams' sworn statements, Frazier's video
statement obtained by Williams, Williams' photos, Hanover's photos of
the damage to the passenger side of Grant's car, and an inspection of the
toll plaza, he concluded that the damage to the passenger side of Grant's
car was not caused by the collision with Williams.6 Thus, he concluded
Grant should have filed two claims with Hanover, not one, and been
subject to two deductibles. As required by section 626.989(6), Arline
filed a report with DIFS, noting in the report that it was a supplement or
duplicate of the report Williams had filed several months earlier.
     As part its investigation, DIFS's investigator, Tom Eberhart,
interviewed Williams, reviewed her video of Frazier and the photos she
took after the accident, interviewed Grant's neighbor and stepdaughter,
and visited the toll plaza. Eberhart also obtained a copy of Arline's file
along with Hanover's claims file. He was unable to obtain statements

     6 Despite repeated attempts, he was not able to obtain statements

from Grant or Frazier.
                                     6
from either Grant or Frazier. Ultimately, Eberhart determined that there
was probable cause to believe that Grant and Frazier "made material
misrepresentations of fact in their claim" with Hanover in that they
claimed Grant's car was damaged on the passenger side during the
accident when it was not. He concluded that the damage on the
passenger side was caused by a second accident that "was not disclosed."
He then referred the matter to the state attorney's office. Frazier and
Grant were charged with making a false statement to an insurance
company and grand theft. After a jury found Frazier not guilty, he filed
this action for malicious prosecution against Hanover and Arline.7
     On appeal, Hanover and Arline argue the trial court erred in
denying their claims of immunity because all Arline did was investigate
and report the suspected fraud as he was statutorily required to do. See
§§ 626.989, 626.9891. The undisputed record evidence shows that
Arline was tasked with investigating after Frazier gave conflicting
accounts of the accident—one on the post-accident video and one to the
adjuster. Further, Frazier's statement to the adjuster not only conflicted
with his video statement, but it was also at odds with Williams' sworn
statements. Arline also visited the accident scene, reviewed photos
supplied by Williams, photos taken by Hanover's adjuster, and he
concluded that the damage to the passenger side of Grant's car was not
caused by the collision with Williams. Because this information gave
Arline a basis to believe that Frazier had made a false statement in
connection with Grant's claim, pursuant to the anti-fraud statute he was
required to supply the information he had gathered to DIFS. See
§ 626.989(6).

     7 The charges against Grant were dropped before trial.

                                     7
     Absent fraud or bad faith, section 626.989(4)(c) immunizes insurers
and their employees if they have done what is required by the anti-fraud
statute. See Saenz v. State Farm Fire & Cas. Co., 861 So. 2d 64, 67 (Fla.
3d DCA 2003) (affirming the trial court's grant of summary judgment for
the defense based on immunity in an action for malicious prosecution,
where the undisputed record evidence showed that neither State Farm
nor its investigator acted fraudulently or in bad faith in reporting the
matter to DIFS). Frazier's evidence entirely failed to show fraud or bad
faith in connection with Arline's investigation or report to DIFS.8
Accordingly, we conclude that Arline and Hanover were statutorily
immune from suit, and we reverse the judgment in favor of Frazier and
remand for entry of judgment in favor of Hanover and Arline.
     Reversed and remanded.

SILBERMAN and SMITH, JJ., Concur.

Opinion subject to revision prior to official publication.

     8 We have not overlooked Frazier's argument that Arline's report in

places confuses left and right when referring to the location of the
damage Hanover alleges was sustained in a second collision. In other
words, in places the report says "left" instead of "right." We reject the
argument that this error, which is obvious when viewed in context, could
have even been misleading, much less amount to fraud or bad faith. The
gist of the suspected fraud was that Grant, through Frazier, was claiming
damages to both sides of her car—not just one side—from the collision
with Williams.
                                      8