Lumbermens Mut. Cas. Co. v. Percefull
638 So. 2d 1026, 1994 WL 275835 (1994)
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Rule of Law:
An insurer's waiver of a procedural requirement, such as the failure to provide claim forms, does not create insurance coverage for services that are not substantively covered by the terms of the policy. The doctrine of estoppel cannot be used to create coverage where none exists, absent a showing of detrimental reliance by the insured on the insurer's representations.
Facts:
- Rip Von Percefull suffered a severe organic brain injury in a 1984 motorcycle collision and was insured under a policy by Lumbermens Mutual Casualty Company.
- His guardian, Kay Percefull, submitted bills to Lumbermens for his treatment at two rehabilitative therapy centers, New Medico and The Bridge.
- The bills submitted to Lumbermens did not contain an itemized breakdown of services; they only listed dates of service, a lump sum figure, and noted the treatment was for a head injury.
- Lumbermens did not furnish Kay Percefull with its standard claim forms for filing proofs of loss, as required by the policy.
- The policy stipulated that if the insurer failed to provide claim forms, the insured would be deemed to have complied with proof-of-loss requirements by submitting written proof of the loss.
- After initially denying coverage, Lumbermens began paying $70 per day for the care, which was the policy's maximum for a hospital stay, despite daily charges being between $600 and $700.
Procedural Posture:
- Kay C. Percefull, as guardian for Rip Von Percefull, sued Lumbermens Mutual Casualty Company in a Florida trial court seeking damages, a declaratory judgment, and specific performance for unpaid medical bills.
- After a trial, the trial court found that the rehabilitative facilities and certain specific services were not covered under the policy.
- However, the trial court ruled that Lumbermens had waived its right to object to these non-covered charges because it had failed to provide Percefull with the required claim forms.
- The trial court entered a final declaratory judgment in favor of Percefull, finding Lumbermens liable for the charges.
- Lumbermens Mutual Casualty Company (Appellant) appealed the trial court's judgment to the District Court of Appeal of Florida, Fourth District. Percefull (Appellee) filed a cross-appeal on other issues.
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Issue:
Does an insurer's failure to provide the insured with claim forms, thereby waiving its right to object to the form of the proof of loss, create insurance coverage for services not otherwise covered by the policy under the doctrine of waiver or estoppel?
Opinions:
Majority - Warner, J.
No. An insurer's failure to provide claim forms does not create coverage for services the policy does not cover. The court reasoned that while the policy's language deems the proof-of-loss requirement satisfied if the insurer fails to provide forms, this only addresses a procedural condition and does not expand the substantive scope of coverage. Citing Florida Supreme Court precedent from AIU Ins. Co. v. Block Marina Inv., Inc., the court affirmed the principle that waiver and estoppel cannot be used to create or extend insurance coverage where none originally existed. The court also rejected the argument for equitable estoppel, finding no evidence of detrimental reliance. Percefull incurred the medical expenses before Lumbermens made any payments, and the partial payments of $70 per day could not have reasonably induced a belief that the full, much larger daily charges for non-covered services would be paid.
Analysis:
This case reinforces the fundamental distinction in insurance law between procedural requirements and substantive coverage. It establishes that an insurer's procedural default, such as failing to provide claim forms, cannot be leveraged by an insured to create coverage for risks the policy was never intended to cover. The decision narrowly construes the equitable estoppel exception, requiring a clear showing of detrimental reliance where an insured acts based on an insurer's representation before incurring an expense. This precedent protects insurers from being compelled to pay for non-covered claims due to procedural errors, thereby upholding the written contract as the primary source of the parties' obligations.
