Court Opinion

ID: 4645701
Source: CourtListenerOpinion
Date Created: 2020-12-22 21:00:56.943902+00
Date Added: 2024-06-11T08:00:54.249849
License: Public Domain

USCA11 Case: 19-12734     Date Filed: 12/22/2020   Page: 1 of 17

                                                                      [PUBLISH]

               IN THE UNITED STATES COURT OF APPEALS

                       FOR THE ELEVENTH CIRCUIT
                         ________________________

                                No. 19-12734
                          ________________________

                       D.C. Docket No. 0:18-cv-62093-UU

ALFREDO QUINTERO,

                                                              Plaintiff-Appellant,

                                      versus

GEICO MARINE INSURANCE COMPANY,

                                                             Defendant-Appellee.

                          ________________________

                  Appeal from the United States District Court
                      for the Southern District of Florida
                        ________________________

                              (December 22, 2020)

Before WILLIAM PRYOR, Chief Judge, HULL and MARCUS, Circuit Judges.

HULL, Circuit Judge:

      This case involves a marine insurance policy insuring a boat owned by

Alfredo Quintero (“Quintero”) and the federal maritime doctrine of uberrimae
          USCA11 Case: 19-12734     Date Filed: 12/22/2020   Page: 2 of 17

fidei. After the boat was stolen, the insurer, Geico Marine Insurance Company

(“Geico”), denied coverage based on Quintero’s misrepresentation that he was in

possession of the boat. Quintero appeals the district court’s grant of summary

judgment in favor of Geico and denial of his motion for partial summary judgment.

The issue is whether Quintero’s misrepresentation voided his policy ab initio.

After careful review, and with the benefit of oral argument, we conclude it did and

affirm.

                                    I. FACTS

A.    Quintero’s Policy

      Initially, Quintero’s 32-foot powerboat was covered by a Geico marine

insurance policy that ran from May 5, 2017, to May 5, 2018. On March 13, 2018,

Geico sent Quintero a policy renewal package identifying changes to the policy’s

terms and Quintero’s required payment.

      Geico’s renewal package required a down payment of Quintero’s annual

premium, or $776 of the premium total of $2580. The package included this

urgent reminder: “Your coverage expires on 05/05/2018 at 12:01 AM Local Time.

Prevent a lapse in coverage by making your required payment promptly.” The

annual premium for the upcoming policy period had increased by 25 percent, and

Quintero’s next payment of $776 was scheduled to be paid through Geico’s

automatic-payment system. The renewal policy stated that Geico would provide

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coverage “during the policy period” on the condition that Quintero pay the

premium and comply with all policy terms.

       On May 4, 2018, Geico charged Quintero’s credit card, but the charge was

declined. That same day, Quintero called Geico about the attempted charge and

increased premium. Quintero began the call by updating his address information.

A customer service representative then explained that (1) Geico ordinarily debited

renewal payments from the policyholder’s card on file, (2) Quintero’s card was

declined, (3) he was thus automatically disenrolled from the automatic-payment

system, and (4) he could either call in to make payments or put another card back

on file.

       When the Geico representative explained that rates had increased for

everyone and why, Quintero complained that the 25 percent increase was

“ludicrous.” He stated that if Geico was making a change, he was “making a

change too,” and that “it’s not acceptable, that you’re going to increase me 25

percent. It’s just not acceptable.” The representative said she could not reduce his

premium, to which Quintero replied, “So you prefer losing a customer, okay. I

guess -- so you’re going to lose me as a customer, with all my vehicles, because

you want to increase me 25 percent.” Quintero asked to speak to a supervisor and

was transferred, but the call went to voicemail. Because Quintero had updated his

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address information, Geico sent him a new endorsement reflecting the address

change.

B.    Non-Payment and Expiration

      Quintero did not make the required renewal payment prior to the policy

expiring on May 5, 2018. On May 10, 2018, Geico sent Quintero a “Notice of

Policy Expiration.” The Notice stated his policy expired on May 5, 2018, at 12:01

a.m., and that “all liability thereunder terminated on its expiration date.”

C.    Theft and Policy Reinstatement

      On May 25, 2018, at 4:58 a.m.—as detailed in a later police report—a dark

pickup truck pulled up to the driveway of Quintero’s home, where the boat was

stored, and towed the boat away along with its trailer. A neighbor’s surveillance

camera, a block away, recorded the perpetrator’s truck towing the boat away, and

the Broward County Sheriff’s Office later obtained the footage.

      That same morning, at 7:28 a.m., Quintero called Geico to “pay [his] boat

policy.” A customer service representative observed that “the policy was due the

5th of May,” and asked Quintero if he was trying to reinstate it. Quintero said yes

and acted as if he was unaware of the lapse:

      [REPRESENTATIVE]: Okay, so it looks like the policy was due the
      5th of May. Are you trying to reinstate it?

      MR. QUINTERO: Yeah. Well, I didn’t know it was -- oh, it says here
      that . . . okay, yeah, I guess I’m -- they told me that I have to pay $700
      or something like that, 700 and something dollars.

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      [REPRESENTATIVE]: The first payment is $776, that’s right.

      MR. QUINTERO: Yeah. What are we . . .

      [REPRESENTATIVE]: What are we, I’m sorry?

      MR. QUINTERO: That I don’t know why you guys -- it’s only eight
      months, instead of like the cars are . . . okay. It is what it is. We have
      to have insurance, so . . . Something -- something happens out there,
      you know, you want to be insured, so . . .

The representative then asked these questions:

      [REPRESENTATIVE]: I have to ask you some questions, then we can
      make a payment and reinstate the policy, okay?

      MR. QUINTERO: Sure.

      [REPRESENTATIVE]: First off, is the boat -- does the boat have any
      damage or is it -- has it been damaged?

      MR. QUINTERO: No. It’s beautiful.

      [REPRESENTATIVE]: Okay. And is it sound and seaworthy?

      MR. QUINTERO: Sound and seaworthy. What it means? It’s in good
      condition?

      [REPRESENTATIVE]: Mm-hmm.

      MR. QUINTERO: Yeah, yeah, yeah.

      [REPRESENTATIVE]: Okay.            And when was the last time you
      physically saw your boat?

      MR. QUINTERO: Every day. It’s in my house.

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The representative then took Quintero’s credit card information and reenrolled him

in the automatic-payment system. At one point, Quintero noted the declarations

page he had received from Geico showed that his policy expired on May 5. At the

end of the call, Quintero asked, “So the policy will be active right away, right? I

just want to make sure that I’m not without insurance.” The representative

confirmed that with the payment, the policy was now reinstated as of May 5, 2018.

      That same afternoon, at 2:43 p.m., Quintero reported his boat and trailer

stolen to local police. At 6:28 p.m., he called Geico again, this time to make a

claim for the stolen boat and trailer. During his call to the claims department,

Quintero stated that he stored the boat at his home, “right in front of [his]

driveway,” and that he had last seen the boat around 11:30 p.m. to 12 a.m. the

night before. He told Geico he discovered the boat was missing when his wife

came home from work just after noon that day and asked him where the boat was.

He had “assumed” the boat was still there when he went to work that morning,

having to run to his truck due to heavy rain.

      Geico investigated and took statements from Quintero and his wife. In July

2018, Geico informed Quintero it needed further information and was awaiting the

final police report. Geico demanded that Quintero submit to an examination under

oath. Quintero refused.

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                          II. PROCEDURAL HISTORY

      On July 31, 2018, Quintero filed this action in Florida state court, seeking a

declaration that Geico breached the policy by failing to cover his boat loss. Geico

removed the case to federal court.

      Geico then obtained a final report from the Broward County Sheriff’s Office

describing the video surveillance obtained from a neighboring residence a block

away. According to the report, the surveillance footage captured the boat being

towed away just before 5 a.m. on May 25, 2018. It showed two vehicles drive into

the community where Quintero resided, and one—a dark pickup truck—tow away

the boat minutes later.

      Then, in a January 30, 2019 letter, Geico informed Quintero that: (1) it had

completed its investigation; (2) it had denied coverage and rescinded the policy ab

initio because Quintero was not in possession of the boat when he called to

reinstate his expired marine insurance policy; and (3) Quintero’s

misrepresentations that the boat was in his possession and in good condition were

material to its agreement to insure the vessel after the policy had previously

expired and been non-renewed at his request.

      Ultimately, the district court granted Geico’s motion for summary judgment

and denied Quintero’s motion for partial summary judgment. The court concluded

that Quintero’s misrepresentations concerning the status of the boat on May 25,

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2018, voided the policy ab initio under the doctrine of uberrimae fidei because they

were material to Geico’s calculation of the risk of insuring the vessel. In

addressing Quintero’s contention that the policy was never cancelled or non-

renewed, the court noted that “the Policy, the Notice of Policy Expiration, and the

recorded telephone transcripts indicate that the previous policy’s term expired on

May 5, 2018.” The court concluded that the policy was void ab initio under the

uberrimae fidei doctrine “regardless of whether [it] was renewed, cancelled, or

expired.”

      Later on, the district court denied Quintero’s motion for relief under Federal

Rules of Civil Procedure 59(e) and 60(b). This appeal followed.

                         III. STANDARD OF REVIEW

      “We review de novo a district court’s grant of summary judgment, viewing

all facts and reasonable inferences in the light most favorable to the nonmoving

party.” Jurich v. Compass Marine, Inc., 764 F.3d 1302, 1304 (11th Cir. 2014).

Summary judgment is appropriate where “there is no genuine dispute as to any

material fact and the movant is entitled to judgment as a matter of law.” Fed. R.

Civ. P. 56(a). “A genuine issue of material fact does not exist unless there is

sufficient evidence favoring the nonmoving party for a reasonable jury to return a

verdict in its favor.” Haves v. City of Miami, 52 F.3d 918, 921 (11th Cir. 1995).

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                                 IV. DISCUSSION

      Quintero argues the district court erred in applying the doctrine of uberrimae

fidei because (1) his policy was not cancelled, non-renewed, or expired when he

spoke to Geico the morning of May 25, 2018, (2) his coverage continued in full

force without a lapse, and (3) his May 25 statements were not material to Geico’s

decision to insure his boat because Geico reinstated and backdated his policy and

did not require a new underwriting process.

A.    Expiration of the Policy

      First, based on the record, we conclude that Quintero’s initial policy, by its

terms, expired on May 5, 2018, because Quintero did not pay the required

premium for the new policy period. In fact, Quintero’s phone call on May 4 with

Geico makes clear that Quintero understood that if he did not pay his new

premium, Geico would not renew his policy for the May 5, 2018, to May 5, 2019

period.

      Notably too, during the May 4 call, Quintero complained that the 25 percent

premium increase was “ludicrous” and “not acceptable.” After this exchange,

Quintero did not pay the installment amount due on May 5, 2018. Accordingly, on

May 10, 2018, Geico sent Quintero a Notice of Policy Expiration informing him

that the policy had expired as of May 5, 2018, and “all liability thereunder

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terminated on its expiration date.” Therefore, Quintero’s initial policy did not

cover his boat loss that occurred on May 25, 2018.

      Quintero argues that the initial policy was not cancelled or non-renewed, but

that is irrelevant. His coverage already expired on May 5, 2018, so he did not have

coverage when he called Geico on the morning of May 25, 2018.

      Quintero also argues Geico’s Jeffrey O’Keefe, an adjuster, inconsistently

testified as to whether the policy was ever cancelled or expired. But the district

court did not rely on O’Keefe’s statements for the proposition that the policy

expired. Rather, the district court noted that “the Policy, the Notice of Policy

Expiration, and the recorded telephone transcripts indicate that the previous

policy’s term expired on May 5, 2018 and that Quintero called to reinstate his

Policy on May 25, 2018 after the Vessel had been stolen.”

      Furthermore, O’Keefe clarified any confusion about cancellation and

expiration. In his deposition, he repeatedly stated that the policy was not cancelled

in May 2018; it expired. And in his supplemental affidavit, he stated that on May

5, 2018, “the subject policy expired and a Notice of Policy Expiration was mailed

to Alfredo Quintero on May 10, 2018.”

      In any event, any initial imprecise statements by O’Keefe do not change the

fact that the terms of Geico’s policy conditioned renewal of coverage on payment

of the premium, Quintero did not pay the premium, and the policy period expired

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on May 5, 2018. Indeed, the renewal package informed Quintero that coverage

would expire on this date at 12:01 a.m. and included an urgent reminder to

“[p]revent a lapse in coverage by making [the] required payment promptly.” As a

result, when Quintero failed to pay his renewal premium, he received a Notice of

Policy Expiration stating his policy had expired on May 5, 2018, at 12:01 a.m., and

that “all liability thereunder terminated on its expiration date,” making clear that

coverage expired along with the policy. Quintero’s boat was thus uninsured

between May 5, 2018, and when he first called Geico on May 25, 2018. In other

words, there was a lapse in coverage, and no policy was in force when Quintero

called Geico on May 25.

B.    Doctrine of Uberrimae Fidei

      Even so, Quintero claims that he still had coverage on May 25 because

Geico renewed and backdated the policy to run from May 5, 2018, Geico did not

treat it as if it was issuing new coverage, and his statements were not material to

the issuance of coverage. In response, Geico contends that the renewal policy was

void ab initio because Quintero made material misrepresentations in his May 25

call before Geico reinstated the policy. Geico relies on the doctrine of uberrimae

fidei, to which we turn.

      Marine insurance contracts are governed by federal maritime law. Geico

Marine Ins. Co. v. Shackleford, 945 F.3d 1135, 1139 (11th Cir. 2019). In the

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absence of an established federal admiralty rule, we rely on state law. Id. 1 Here,

there is controlling federal maritime law. Specifically, “[i]t is well-settled that the

marine insurance doctrine of uberrimae fidei is the controlling law of this circuit,”

HIH Marine Servs., Inc. v. Fraser, 211 F.3d 1359, 1362 (11th Cir. 2000), and is

“the controlling federal rule even in the face of contrary state authority,” Steelmet,

Inc. v. Caribe Towing Corp., 747 F.2d 689, 695 (11th Cir. 1984), vacated in part

on other grounds, 779 F.2d 1485 (11th Cir. 1986). We first review the scope of the

doctrine and then why it applies here.

       As to scope, the uberrimae fidei doctrine requires an insured to “fully and

voluntarily disclose to the insurer all facts material to a calculation of the insurance

risk,” and “[t]he duty to disclose extends to those material facts not directly

inquired into by the insurer.” HIH Marine, 211 F.3d at 1362. This disclosure

includes all material facts that are “within or ought to be within, the knowledge of

one party, and of which the other party has no actual or presumptive knowledge.”

Steelmet, 747 F.2d at 695 (quoting Gulfstream Cargo, Ltd. v. Reliance Ins. Co.,

409 F.2d 974, 980 (5th Cir. 1969)); see also HIH Marine, 211 F.3d at 1363 (“[T]he

       1
         Consistent with this rule, the choice-of-law provision in both Quintero’s initial policy
and renewal policy states that (1) the “policy is to be construed under United States federal
admiralty law,” and (2) “[i]n the absence of controlling United States federal admiralty law,” the
policy is to be “construed under the laws of the state” of the insured person, here Florida.

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law has placed the burden of good faith disclosure with the person in the best

position to know all the facts: the insured.”).

      This doctrine, which embodies the “highest degree of good faith,” applies to

marine insurance contracts because the insurance underwriter often cannot ensure

the accuracy or sufficiency of the facts supplied by an insured “before the risk is

accepted and the premium and conditions set.” Steelmet, 747 F.2d at 695

(quotation marks omitted). Thus, the doctrine’s central principle “is that the

insured bears the burden of full and voluntary disclosure of facts material to the

decision to insure.” HIH Marine, 211 F.3d at 1263.

      Further, under uberrimae fidei, an insured’s material misrepresentation to an

insurer renders a marine insurance policy void ab initio. See AIG Centennial Ins.

Co. v. O’Neill, 782 F.3d 1296, 1303 (11th Cir. 2015). The policy is void even if

the insured’s misrepresentation was the result of “mistake, accident, or

forgetfulness,” or the insurer did not inquire about the particular material fact the

insured failed to disclose. HIH Marine, 211 F.3d at 1362-63 (quotation marks

omitted). We examine materiality from a reasonable insurer’s perspective, asking

whether a particular fact “could possibly influence the mind of a prudent and

intelligent insurer in determining whether he would accept the risk.” Kilpatrick

Marine Piling v. Fireman’s Fund Ins. Co., 795 F.2d 940, 942-43 (11th Cir. 1986);

see also AIG Centennial, 782 F.3d at 1304 (employing definition from Kilpatrick).

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      Here, Quintero is correct that the doctrine of uberrimae fidei applies only

when an insurer issues a policy, not when a policy is already in full force. See HIH

Marine, 211 F.3d at 1362-63 (requiring the disclosure of “all facts material to a

calculation of the insurance risk” and stating that doctrine’s central principle is

“disclosure of facts material to the decision to insure”); Kilpatrick, 795 F.2d at

942-43 (describing material fact as one that could influence insurer “in determining

whether he would accept the risk”); Steelmet, 747 F.2d at 695 (noting “highest

degree of good faith” is required because insurer cannot otherwise ensure the

accuracy of facts “before the risk is accepted” (quotation marks omitted)).

      But as set forth above, Quintero’s policy was not in full force on May 25

because it had expired on May 5, 2018. Although Quintero was not required to go

through a new underwriting process, he was required to answer questions about the

condition and possession of the boat in order for Geico to issue coverage by

renewing the expired policy. Further, Quintero’s misrepresentations concerning

his possession of the boat during the May 25 phone call were material to Geico’s

calculation of the insurance risk in reinstating his policy, rendering the renewed

policy void ab initio.

      Moreover, when Geico renewed the policy, it issued an amended, new

policy, even if it backdated coverage to the original policy’s expiration date.

Specifically, the cover page of the renewal package sent on March 13, 2018, states,

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“GEICO Marine Insurance Company is pleased to announce a new Marine

Insurance Policy which will replace your previous policy with this renewal. A

copy of the new policy in its entirety is enclosed, along with a Notice of Change in

Policy Terms, which details the differences between the new and previous policy.”

The renewal policy included endorsements that amended the terms of the original

policy. To be sure, O’Keefe stated that Geico did not require Quintero to go

through the entire underwriting process again when renewing his policy, because

“that would be a disservice to Mr. Quintero.” However, the facts remain that on

May 25, Quintero’s policy had expired, his policy was not in full force, and Geico

had to decide whether to issue and renew coverage for Quintero’s boat. Thus, the

doctrine of uberrimae fidei applies here.

      To avoid the doctrine, Quintero reprises his argument that because his initial

policy never expired and Geico renewed and backdated it, his statements on May

25 were thus not material to Geico’s decision to issue coverage for his boat. This

argument fails for two reasons. First, Quintero’s policy did expire on May 5, as

explained above.

      Second, Quintero’s statements were material to Geico’s issuance of

coverage on May 25, even if by renewal and backdating. Viewed from the

perspective of a reasonable insurer, Quintero’s misrepresentation that the boat was

in his home and possession was material, as no “prudent and intelligent insurer”

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would accept the risk of insuring stolen property that is no longer in the insured’s

possession. See Kilpatrick, 795 F.2d at 942-43. When Quintero made the call at

7:28 a.m. on May 25, the boat had already been missing for two and a half hours,

and Quintero had a duty to disclose that fact even if Geico did not directly ask him.

The call was made several hours after the theft of the boat and after weeks of

Quintero not paying his renewal premium.

      Even if we assume, dubiously, that Quintero did not know for sure the boat

was already gone at the time of his misrepresentation, that has no impact on our

analysis. See HIH Marine, 211 F.3d at 1363. That the boat was missing from his

own home at the time of the 7:28 a.m. reinstatement call is a fact that ought to have

been within his knowledge, and one he was obligated to disclose even if Geico had

not asked. See id. at 1362-63; Steelmet, 747 F.2d at 695 (stating that uberrimae

fidei imposes the burden to disclose material facts that are “within or ought to be

within, the knowledge of one party, and of which the other party has no actual or

presumptive knowledge” (quotation marks omitted)).

      Quintero also argues that O’Keefe’s first affidavit should be disregarded as

to materiality, but we need not rely on O’Keefe’s affidavit to assess materiality.

See Woods v. Indep. Fire Ins. Co., 749 F.2d 1493, 1496 (11th Cir. 1985) (noting

that materiality “can be decided as a matter of law if reasonable minds could not

differ on the question.”). An insured’s possession of the subject property is clearly

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material to the insurer’s risk in insuring it, and we agree with the district court’s

commonsense observation that “insuring a stolen Vessel is akin to insuring a loss.”

Accordingly, the district court properly applied the doctrine of uberrimae fidei and

correctly held Quintero’s renewal policy was void ab initio.2

                                     V. CONCLUSION

       For the reasons above, the district court did not err in granting Geico’s

motion for summary judgment and denying Quintero’s motion for partial summary

judgment.3 Accordingly, we affirm.

       AFFIRMED.

       2
         The renewal policy also included a fraud and concealment provision, which stated:
“There is no coverage from the beginning of this policy if an ‘insured’ has omitted, concealed,
misrepresented, sworn falsely, or committed fraud in reference to any material matter relating to
this insurance before or after any loss.” Because Quintero’s renewal policy was void ab initio
under the doctrine of uberrimae fidei, we need not address this provision.
       3
       Quintero’s notice of appeal also refers to the district court’s denial of his Rule 59(e) and
60(b) motion. To the extent Quintero challenges any aspect of that ruling on appeal, his
arguments lack merit.

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