Florida Insurance Law Blog : Florida Insurance Lawyer & Attorney : Mark Nation Law Firm : Orlando, Longwood, Gainesville

Wilson v. Federated Nat'l Ins. Co., 2007 WL 3355118 (Fla. 2nd DCA Nov. 17, 2007)
       
    Like First Floridian v. Myrick, posted on November 9, 2007, this case is another good case for insureds and their lawyers who fight for insurance proceeds which are due under an insurance policy.  Importantly, along with Myrick, Travelers Indem. Ins. Co. v. Meadows MRI, LLP, 900 So. 2d 676 (Fla. 4th DCA 2005), and Three Palms Pointe, Inc. v. State Farm Fire & Cas. Co., 250 F.Supp.2d 1357 (M.D.Fla 2003), affirmed 362 F.3d 1317, this new case re-affirms the law that that courts must continue to confirm appraisal awards as arbitration awards and enter final judgment.  
       
    In  Wilson, a Florida resident insured his home and personal property through a policy of insurance issued by a Florida insurance company.  After his home was damaged by Hurricane Charley, the insured could not get the insurance company to pay the full amount of the claim (calculated by the insurance company's own adjusters).  The insured filed a complaint against the Florida insurance company for breach of contract.  The insurance company asserted its right to invoke the appraisal clause of the insurance policy as an affirmative defense, and one month later actually invoked the appraisal clause.  
       
    After appraisal, the insured filed the appraisal award with the court.  The insured filed a motion to confirm the appraisal award and for entry of final judgment (which would entitle him to attorney's fees and costs).  In the meantime, the Florida insurance company tried to pay the insured the amount it contended was the balance owed on the appraisal award. The insured rejected these attempts, and the insurance company ultimately deposited the amount into the court's registry.
       
    The trial court denied the insured's motion to confirm the appraisal award and for entry of final judgment. The appellate court determined the trial court abused its discretion, stating the appropriate course of action was to confirm the appraisal award and enter final judgment. The appellate court reversed the trial court and remanded the case, and actually directed the trial court to confirm the appraisal award and enter final judgment on the award to the insured.
       
    In support of its decision, the Second DCA relied on the Florida Supreme Court's holding in Allstate Ins. Co. v. Suarez, 833 So. 2d 762 (Fla. 2002), and Travelers Indem. Ins. Co. v. Meadows, 900 So. 2d 676 (Fla. 4th DCA 2005).  Interestingly, in Suarez, the supreme court held that appraisals should proceed in accordance with the appriasal provisions of the contract "rather than by the wholly different proceedings contemplated by an agreement to arbitrate."  Suarez at 766.  Although Suarez did not specifically address confirmation of an appraisal, the supreme court approved the district court's opinion, which affirmed the trial court's Order which granted the plaintiff's "Motion to Confirm Appraisal Award."  Thus, although under Suarez the "fact finding" portion of the appraisal is not held as a formal arbitration procedure, the courts must continue to confirm the appraisal under the arbitration code.  After the confirmation, the courts are to enter final judgment.  Once judgment is entered, the court should award the insured attorney's fees and costs (including appraisers fees) under Florida Statute Section 627.428.  

This is an interesting case where the insured sought attorneys fees and costs after the Florida insurance company filed a notice of voluntary dismissal of petition to appoint a umpire.

In Peraza v. Citizens Property Insurance, the appellate court reviewed the trial court's denial of a motion to tax costs and attorneys fees.

The insured filed a claim with her Florida insurance company for windstorm damages her property sustained during Hurricane Wilma in October, 2005.  As a result of the claim, the Insurer invoked the "appraisal clause" of her insurance policy.  Each party appointed an appraiser, but the parties' appraisers could not agree on an umpire.  The appraisal clause in the insured's policy contained a provision for petitioning the trial court to appoint an umpire.  The Florida insurance company petitioned the trial court for appointment of an umpire, and the insured filed a response indicating her agreement to the court's appointment. After the trial court entered its order  appointing an umpire, the Florida insurance company filed a voluntary dismissal under Fla. R. Civ. P. 1.420.

As a result of the voluntary dismissal, the insured filed her motion to tax costs against the Florida Insurance company, including reasonable attorney's fees.  As grounds for the motion, the insured claimed entitlement to costs under Fla. R. Civ. P. 1.420(d) and attorneys fees under Section 627.428(1), Fla. Stat.  The trial court denied the insured's motion. 

The Third District determined the insured's motion should be granted regarding costs, but was rightly denied on the issue of attorney's fees.  The court held that once the Florida insurance company filed its voluntary dismissal, the
insured was entitled to recover her costs.  The court cited the Florida Supreme Court's language in Wilson v. Rose Printing Co. Inc., 624 So. 2d 257, 258 (Fla. 1993): "Rule 1.420(d) is unambiguous - costs are to be assessed in the action that is the subject of the voluntary dismissal...." 

The trial court had agreed with the Florida insurance company that certain language in the insured's policy precluded the recovery of costs under Rule 1.420: "[e]ach party will (a) pay its chosen appraiser; and (b) bear the other expenses of appraisal and umpire equally." The appellate court, however, felt this language allocated the expenses for the appraisal process, but did not constituted a waiver of entitlement to court costs under Rule 1.420(d).

The Third District sustained the trial court's ruling on attorney's fees, however.  Section 627.428(1), Fla. Stat. authorizes an award of attorney's fees when an insured recovers "judgment" or a "decree" against an insurer.
The appellate court determined that the Florida insurance company Citizens filed a petition to appoint an umpire, and the insured requested the exact same relief.  The trial court's order granted the relief requested by both sides. Under these facts, the appellate court held the order was not a "judgment or decree" against the Florida insurance
company and for insured for purposes of the statute, and the insured did not meet the strict requirements of Section 627.428(1), Fla. Stat., to qualify for attorney's fees.

The issue in this case should not be confused with the situation where an insurance company files a dec action on coverage or to void a policy, and then later dismisses.  In those situations, the insured should be entitled to fees under 627.428.  One thing to always consider whenever an insurer files a dec action on coverage is to file a counter-claim for coverage.  This prevent the insurer from trying to divest the court of jurisdiction by simply dismissing the case. 

A Florida insurance company may not invoke the appraisal clause of its insurance policy if it has not timely advised its insured of the right to mediate the dispute.  

In Sierra v. Citizen's Property Insurance Company, a case decided by the district Court in Miami-Dade County (Case No. 06-22196CA-20), the insured sent correspondence to its Florida insurance company alleging insufficient monies were paid to the insured and/or the estimates generated by the insurance company did not adequately compensate the insured for damages sustained in Hurricane Wilma. 

The insurance company failed to appropriately respond to the correspondence, and the insured filed suit.  The Florida insurance company filed a motion to dismiss the lawsuit or, in the alternative, a motion to abate the lawsuit on the grounds it wanted to engage in the appraisal process pursuant to the homeowner's insurance policy.

The trial court denied the insurance company's motion to dismiss or abate, stating that as a result of the insurance company's failure to advise its insured of the right to mediate the dispute under Section 627.7015, Fla. Stat., the insurance company waived its right to appraisal.

The court determined the insured's correspondence to the insurance company put the insurer on notice that there was a dispute as to the money paid for the hurricane damage.  Section 627.7015, Fla. Stat., entitled Alternative Procedure for Resolution of Disputed Property Insurance Claims, establishes a mediation program to help insureds resolve their claims disputes with insurers. Section 627.7015(2) Fla. Stat. provides: "At the time a first-party claim within the scope of this section is filed, the insurer shall notify all first-party claimants of their right to participate in the mediation program under this section."

The trial court noted that Florida Administrative Code Section 69J-2.003(3)(a) actually implements the statute by setting forth a mediation procedure which requires the insurance company to provide the insured: "notice of the right to mediate disputed claims to the insured within 5 days of the time the insured or the Department notifies an insurer of a dispute regarding the insured's claim."

The trial court found that the insurance company did not notify the insured of her right to participate in the mediation program under 627.7015, and therefor waived its right to appraisal under subsection (7), which provides:

"If the insurer fails to comply with subsection (2) by failing to notify a first-party claimant of its right to participate in the mediation program under this section or if the insurer requests the mediation, and the mediation results are rejected by either party, the insured shall not be required to submit to or participate in any contractual loss appraisal process of the property loss damage as a precondition to legal action for breach of contract against the insurer for its failure to pay the policyholder's claims covered by the policy."
 

First Floridian Auto & Home Insurance Company v. Myrick, 32 FLW D2672a (Fla. 2nd DCA Nov. 9, 2007)

This is a good case for insureds and their lawyers who are forced to file a lawsuit in order to get the insurance company to do the right thing.

In this case, the insured presented a sinkhole claim to her homeowner's insurance company.  The insured submitted a proof of loss fo $104,000.  The insured, through her public adjuster, also questioned the insurance companies proposed remediation plan.  In response, her insurance company sent a check for $48,706.  The homeowners insurance company did not even respond to the adjusters inquiries about the remediation plan. 

In a letter from the insurance company accompanying the check, the homeowner's insurance company reminded the insured of the appraisal clause in the insurance contract.  The insurer did not invoke the appraisal clause.  

 Two months later, the insured filed a lawsuit against the homeowners insurer for breach of contract because of the insurance companies failure to pay the amounts she believed were due and owing.  

In its answer, the insurer claimed that the losses were not covered.  After almost 4 months of litigation, the insurance company invoked the appraisal provision.  The insured did not object to the appraisal.  The parties entered into a Joint Stipulation to Stay Action Pending Appraisal providing that "[t]he parties...agree that the Court shall retain jurisdiction over any matters within its jurisdiction under Florida law, including, but not limited to, issues of policy interpretation, coverage, entitlement to and amount of attorneys's fees and costs, if applicable."  

The appraisal was completed, and the award was $102,500, minus the $500 deductible.  The homeowner's insurance company paid this amount about 1 month later.    The insured's attorney then filed a motion to confirm the appraisal award and to determine entitlement attorneys fees and costs.  Over the objection of the insurance company, the trial court confirmed the award and later entered its final judgment awarding attorneys fees and costs to the insured under Section 627.428. 

The insurance company appealed the award of the attorneys fees and costs.  The 2nd DCA affirmed the trial court.  In so doing, the District Court of Appeal stated that the insured was entitled to have the insurance company pay her attorneys fees in costs becasue the suit was instituted after the insurance company wrongfully refused to pay the true amount of the loss, failed to invoke the appraisal process prior to the insured filing suit.  Specifically, the court stated: "The insured needed the involvement of the judicial system to address coverage issues and to ensure that its rights were fully protected through the appraisal process." 

Citizens Property Insurance Corporation v. Manning, 32 FLW D2458c (Fla. 1st DCA October 15, 2007)

In this newly decided case, the insured homeowners sought to recover from their homeowner's insurer for the total loss of their home as a result of Hurricane Ivan which devestated the north-west coast of Florida on September 16, 2004. 

The trial court granted summary judgment in favor of the homeowner, and against Citizens Insurance Company.  The homeowner presented evidence at the summary judgment hearing that the total loss of their home was due, at least in part, by wind - a covered cause of loss.  The trial court held that under Florida Statute Section 627.702 the Valued Policy Law, the insured was owed the total policy limits under their homeowners insurance because the total loss was due "in part" to the wind damage. 

However, the trial court made this ruling before the Florida Supreme Court had ruled on the VPL in Florida Farm Bureau Casualty Insurance Co., v. Cox,  32 FLW S564 (Fla. Sept. 20 2007).  In Cox, the Supreme Court ruled that the VPL "does not establish any requirement for an insurer to pay for excluded or noncovered perils" identified by a windstorm policy as such.  Thus, the policy controls, not the VPL.  In this case, the Citizens' policy excludes coverage for loss caused directly or indireectly by "water damage," which includes "flood, surface water, waves, tidal water, storm surge, wave wash, or total wave overflow of a body of water, or spray from any of these, whether or not driven by wind," and, except in certain circumstances, even wind-driven rain.  The policy also contains an anti-concurrent cause clause, providing that losses to which excluded perils contribute are "excluded regardless of any other cause or event contributing concurrently or in any sequence."  The First DCA then noted that the record before it did not identify which damage to the house was done by wind alone, or the amount of any such damage. 

Thus, the parties were sent back down to the trial court level to determine which portion of the loss was due to wind - a covered cause of loss, and which portion was due to items that were not covered.  Obviously, the insured will argue that the burden of proof is on the insurance company to prove what portion is of the loss is excluded.  Given the "anti-concurring cause clause," the insurance company will probably argue that they do not owe any of the loss as long as the loss is caused in part by a covered cause of loss, and in part by an excluded cause of loss.  I expect to see this case back up on appeal regardless of what happens. 

Castillo v. State Farm Fire & Casualty Company, 32 FLW D2474a (Fla. 3rd DCA October 17, 2007)

In this case, the insured homeowner alleged that "nearby blasting created shockwaves and vibrations which damaged the insured dwelling without displacement or permanent displacement of the earth" and that the amount for the repair "of the blasting damages" was $74,761.83.  State Farm sought to exclude the damages based upon the following exclusion:

"We do no insure under any coverage for an y loss which would not have occurred in the absence of one or more of the following excluded events.  We do not insure for such loss regardless of: (a) the cause of the excluded event; or (b) other causes of loss; or (c) whether other causes acted concurrently or in any sequence with the excluded event to produce the loss; or (d) whether the event occurs suddenly or gradually, involves isolated or widespread damage, arises from natural or exteneral forces, or occurs as a result of any combination of...

b.    Earth Movment, meaning the sinking, rising, shifting, expanding or contracting of earth, all whether combined with water or not.  Earth movement includes but is not limited to earthquake, landslide, mudflow, sinkhole, subsidence and erision...."

The Third DCA distinguished this case from two prior cases State Farm Fire & Casualty Co. v. Castillo, 829 So.2d 242 (Fla. 3rd DCA 2002) ("Castillo I (no relation to the current case), and Fayadv. Clarendon National Insurance Company, 899 So.2d 1082 (Fla. 2005).  In the current case, the Court recognized that the allegations in the complaint were that vibrations and shockwaves caused by blasting "without displacement of the earth resulted in damage to an insured dwelling."  The court then noted that "[t]he policy does not specifically address whether or not damages caused by blasting, shockwaves, or vibrations categorically fall under "earth movement" and would, therefore, be excluded from coverage." 

Importantly, court then went on to state that "'when the terms of the contract are ambiguous [and] susceptible to different interpretations, parol evidence is admissible to 'explain, clarify or elucidate' the ambiguous term.'  Strama v. Union Fidelity Life Insurance Company, 793 So.2d 1129, 1132 (Fla. 1st DCA 2001)( citing Friedman v. Va. Metals Prods. Corp., 56 So.2d 515, 517 (Fla. 1952))."  The court then held looked at State Farm's internal operating guidelines to determine whether the exclusion was applicable in this case.  Indeed, the court held that "State Farm's internal operating guideline OG 75-105 is both instructive and admissible as parol evidence.  The allegatiosn by the Castillos that vibrations and shockwaves actually occurred and damaged the insurad dwelling without accompanying displacement of the earth appear to be contemplated as a potentially covered loss by State Farm."  For example, the operating guideline states at OG 75-105 V. A. "Damage from blasting, headache balls, etc. cannot occur unless the earth moves.  Therefore, the 'in the absence of' language found in the earth movement exclusion would apply to eliminate coverage.  By interpretation, coverage will be provided for damage as a result of shockwaves being transmitted through the earth so long as there is no permanent displacement of the earth itself.... B. 2. Blasting that causes shockwaves/vibration to be transmitted through the earth to the insured dwelling and which shockwaves damage the dwelling without displacement of the earth would be considered a covered loss." 

Based on this language and the language of the policy, the court determined that the insured could proceed to a jury.  The court noted that whether or not the shockwaves and vibrtations alleged by the Castillos damaged their dwelling without displacement of the earth is an issue of material fact.  The court also noted the longstanding Florida law that "[w]hen an insurer relies on an exclusion to deny coverage, it has the burden of demonstrating that the allegations of the complat are cast solely and entirely within the policy exclusion and are subject to no other reasonable interpretation."  Northland Casualty Company v. HBE Corp., 160 F. Supp. 2d 1348, 1359 (M.D. Fla. 2001).  Moreover, "[o]nce the insured establishes a loss apparently within th terms of an all-risk policy, th eburden shifts to the insurer to prove that the loss arose from a cause which is excepted."  B&S Assocs., Inc. v. Indemnity Casualty & Property, Ltd., 641 So.2d 436, 437 (Fla. 4th DCA 1994)(citing Hudson v. Prudential Property & Casualty Insurance Company, 450 So.2d 565 (Fla. 2nd DCA 1984).