An interesting case was decided recently by the Court of Appeals of the State of Florida regarding the refusal by an insurer to provide coverage for a theft because of an alleged misrepresentation by the business in its application for insurance.

The business filed an action against the insurer, and the trial court granted a summary judgment in favor of the insurance company. This judgment was based on the alleged misrepresentation by the business in its application for insurance that its business premises were equipped with burglar alarms, when no such alarms were present. The business owner appealed the trial court’s order granting the motion for summary judgment.

The business denied that it ever represented that such an alarm was in place. The business relied on an affidavit of its insurance agent to the effect that the application was prepared using information, including the burglar alarm representation, provided over the phone to the insurance agent’s personnel.

Included within the affidavit was an endorsement that was presumably appended to the policy which stated, among other things, that the insurance coverage will be “immediately suspended� if the insured fails to notify the insurance company of any known suspension or impairment of the protected safeguards.

In his statement, the owner of the business denied representing to the agent that he had a central station burglar alarm. Instead, he contended that he truthfully stated that the company’s business premises were protected by two security cameras with a continuous, 40-hour tape.

He indicated that he received a copy of the policy afterward, but did not read it. He further testified that the party who spoke to the insurance agent over the phone was not an employee of the plaintiff and had no authority to speak for the plaintiff.

The court pointed out that a motion for summary judgment should only be granted “if the pleadings, depositions, answers to interrogatories and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.�

The court concluded that a disputed issue of material fact arises from the conflict between the affidavits and other documents relied upon by the insurance company and the deposition testimony of the owner. Therefore, the appellate court determined because of the material conflict of the evidence that the trial court erred in granting summary judgment. The matter was sent back to the trial court for further proceedings.

There obviously was a disparity among the affidavits of all the parties that ultimately will be sorted out by the trial court. What is important is the insurer’s requirement of an alarm system as a condition precedent to coverage.