An insurer moved for Summary Judgment arguing that material misrepresentation(s) constituted unclean hands, and thus, precluded the insured-appellant from asserting the affirmative defenses of waiver or estoppel in answer to an insurer-appellee’s claim for rescission.

The First District noted that a pleading requires a party to set forth affirmatively the matter constituting an avoidance or affirmative defense. Where a party files no reply to an affirmative defense, this merely denies (as opposed to avoids) the affirmative defense. Thus, the insurer-appellee should have pleaded the issue, unclean hands, in a reply to Appellants’ answer, not in the second motion for summary judgment. The Court also adopted the Fourth District’s opinion that summary judgment based on unclean hands “is not an appropriate vehicle to resolve disputed issues of fact.”

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