KARLA R. SPAULDING, Magistrate Judge.
This cause came on for consideration without oral argument on the following motion filed herein:
On December 28, 2018, Plaintiff Life Insurance Company of the Southwest filed a complaint against Defendant Jose Fran Barragan, seeking a declaratory judgment determining its obligations under a life insurance policy it issued to Defendant. Doc. No. 7. Specifically, Plaintiff asks the Court to issue an order declaring that Plaintiff effectively rescinded the life insurance policy and/or rescission of the policy by operation of the Court's judgment. Id. ¶ 1.
Defendant was properly served with the complaint by personal service. Doc. No. 11.
"[A] defendant's default does not in itself warrant the court in entering a default judgment." Nishimatsu Constr. Co. v. Houston Nat'l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975). A court may enter a default judgment only if the factual allegations of the complaint, which are assumed to be true, provide a sufficient legal basis for such entry. See id. ("The defendant is not held to admit facts that are not well-pleaded or to admit conclusions of law."). Therefore, in considering a motion for default judgment, a court must "examine the sufficiency of plaintiff's allegations to determine whether plaintiff is entitled to" a default judgment. Fid. & Deposit Co. of Md. v. Williams, 699 F.Supp. 897, 899 (N.D. Ga. 1988).
The Supreme Court has explained that a complaint need not contain detailed factual allegations, "but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation. A pleading that offers `labels and conclusions' or `a formulaic recitation of the elements of a cause of action will not do.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). This analysis applies equally to motions for default judgment. De Lotta v. Dezenzo's Italian Rest., Inc., No. 6:08-cv-2033-Orl-22KRS, 2009 WL 4349806, at *5 (M.D. Fla. Nov. 24, 2009) (citations omitted).
A party seeking relief under the Declaratory Judgment Act, 28 U.S.C.§ 2201, must demonstrate "at an `irreducible minimum,' that at the time the complaint was filed, he has suffered some actual or threatened injury resulting from the defendant's conduct, that the injury fairly can be traced to the challenged action, and that the injury is likely to be redressed by favorable court disposition." Atlanta Gas Light Co. v. Aetna Cas. & Sur. Co., 68 F.3d 409, 414 (11th Cir. 1995) (quoting U.S. Fire Ins. Co. v. Caulkins Indiantown Citrus Co., 931 F.2d 744, 747 (11th Cir. 1991)).
Defendant is a Florida resident who applied for a life insurance policy from Plaintiff. Doc. No. 7 ¶¶ 3, 7. The policy had a face value of $125,000.00. Id. ¶ 4; see Doc. No. 7-3. On the application, Defendant agreed that "all answers given above and in any medical exam are to the best of my knowledge and belief complete and true. All such answers and this application shall be part of any contract issued." Doc. No. 7 ¶ 8; Doc. No. 7-1, at 6. In connection with his application, Plaintiff was interviewed by a paramedic, who recorded his answers to certain questions on a medical questionnaire. Doc. No. 7 ¶ 9; see Doc. No. 7-2. By signing the questionnaire, Defendant confirmed:
Doc. No. 7 ¶ 10; see Doc. No. 7-2, at 2.
On January 30, 2018, Defendant confirmed receipt of the policy, a life insurance guide and a buyer's guide. Doc. No. 7 ¶ 11. In the document, he confirmed that he "has had no change in health, occupation, or other circumstance that would require a change to any answer or statement made in writing or orally in the process of applying for insurance identified by the policy number shown above." Id.
In reliance on Defendant's representations on the application and questionnaire, Plaintiff issued the life insurance policy to Defendant. Id. ¶ 12. The policy included an Accelerated Benefits Rider for Critical Illness, under which Defendant was afforded benefits during his lifetime under certain circumstances. Id. ¶ 14.; see Doc. No. 7-3, at 37. Defendant made a claim for benefits under the rider. Doc. No. 7 ¶ 14.
Plaintiff investigated Defendant's claim under the rider, during which it learned that Defendant had made material misrepresentations and omissions in the application and questionnaire. Id. ¶ 15. Defendant knew that the representations were false when he signed the application and questionnaire. Id. Plaintiff documents the misrepresentations and omissions on the application as follows:
Id. ¶ 17. The misrepresentations and omissions on the questionnaire included:
Id. ¶ 18.
The misrepresentations and omissions were material to Plaintiff's issuance of the policy. Id. ¶ 20. Plaintiff alleges that it would not have issued the insurance policy with the rider if it had known that Defendant suffered from joint pain and numbness in his extremities and was referred to a rheumatologist; nor would Plaintiff have issued the policy had it had known that Defendant was referred to a gastroenterologist for evaluation of blood in his stool. Id. After Plaintiff discovered the misrepresentations and omissions, Plaintiff sent Defendant a letter rescinding the policy and tendering him a check for the amount of premiums Defendant paid under the policy plus interest. Doc. No. 7 ¶ 16; see Doc. No. 7-4.
Plaintiff seeks a declaration that the policy and the rider are void from inception and that Plaintiff effectively rescinded the policy. Doc. No. 7, at 8-9.
In this diversity action, the Court must apply "the substantive law of the forum state." S.-Owners Ins. Co. v. Easdon Rhodes & Assocs. LLC, 872 F.3d 1161, 1164 (11th Cir. 2017) (quoting Tech. Coating Applicators, Inc. v. U.S. Fid. & Guar. Co., 157 F.3d 843, 844 (11th Cir. 1998)).
Fla. Stat. § 627.409.
Thus, in Florida, "if an insured has made a misrepresentation in an application for insurance, and the insurer with full disclosure would not have issued a policy or would not have issued one under the same terms, then rescission of the policy by the insurer is proper." USAA Life Ins. Co. v. Magana, No. 5:17-cv-15-JSM-PRL, 2017 WL 1289846, at *2 (M.D. Fla. Apr. 4, 2017) (citation and quotation marks omitted). "Misrepresentations related to an insured's medical history or condition obviously affect an insurer's risk in issuing a life insurance policy and may be found to be material as a matter of law." Mims v. Old Line Life Ins. Co. of Am., 46 F.Supp.2d 1251, 1256 (M.D. Fla. 1999).
Here, the well pleaded allegations of the complaint demonstrate that Defendant made material misrepresentations and omissions in procuring the insurance policy and that Plaintiff relied on Defendant's misrepresentations in issuing the policy. Plaintiff has alleged that Defendant made material misrepresentations and omissions in the application and questionnaire and that Defendant knew that the representations were false when he signed these documents. Doc. No. 7 ¶¶ 15, 17, 18. These misrepresentations and omissions were related to Defendant's medical history or conditions. Id. ¶¶ 17, 18. Plaintiff alleges that had it known the true facts, it would not have issued the policy with the accelerated benefits rider, or it would not have issued the policy at all. Id. ¶ 20. Plaintiff also alleges that after it discovered the misrepresentations and omissions, it sent Defendant a letter rescinding the policy and tendering Defendant the amount of premiums paid. Id. ¶ 16.
By his default, Defendant has admitted the well-pleaded allegations of the complaint. See Nishimatsu Constr. Co., 515 F.2d at 1206. Thus, I recommend that the Court grant Plaintiff's request for a declaration that the insurance policy, including the rider, was properly rescinded by Plaintiff. See, e.g., Magana, 2017 WL 1289846, at *2-3; Infinity Auto Ins. Co. v. Ortiz-Garcia, No. 8:10-CV-1883, 2011 WL 69082, at *2 (M.D. Fla. Jan. 10, 2011). Accordingly, I recommend that the Court enter a default declaratory judgment in favor of Plaintiff and against Defendant.
For the reasons stated above, I
A party has fourteen days from this date to file written objections to the Report and Recommendation's factual findings and legal conclusions. A party's failure to file written objections waives that party's right to challenge on appeal any unobjected-to factual finding or legal conclusion the District Judge adopts from the Report and Recommendation. See 11th Cir. R. 3-1.
