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.”