(Article from Insurance Law Alert, October 2019)
For more information, please visit the Insurance Law Alert Resource Center.
A Florida appellate court ruled that an insured’s affirmative defense of estoppel could give rise to coverage notwithstanding that the underlying claims alleged non-covered intentional acts. Hurchalla v. Homeowners Choice Prop. & Cas. Ins. Co., Inc., 2019 WL 5198731 (Dist. Ct. App. Fla. Oct. 16, 2019).
An underlying suit against the insured alleged tortious interference with contract. The insurer initially defended under a reservation of rights, but subsequently sought a declaration that the policy did not cover the underlying “intentional acts.” In her answer, the insured raised affirmative defenses of estoppel, waiver and laches, among other things. The underlying suit ultimately resulted in a substantial verdict against the insured. Thereafter, the insurer moved for summary judgment, arguing that the underlying verdict established intentional conduct, which was excluded by the policy. The insurer’s summary judgment motion did not address the insured’s affirmative defenses. A Florida trial court granted the insurer’s summary judgment motion.
The appellate court reversed, finding that the trial court erred in dismissing the case without addressing the insured’s affirmative defenses. The appellate court explained that under Florida precedent, an insurer may be estopped from denying coverage, even where the policy does not cover the underlying claim, if the insured has been prejudiced by the insurer’s assumption of the defense. Therefore, the court explained, the insured’s affirmative defense of estoppel, which was legally sufficient and had not been negated, should not have been dismissed. The court remanded the matter for a determination as to the sufficiency of the insured’s affirmative defenses.