My client, a water extraction and mold remediation company, performed services for a homeowner insured under a State Farm Florida insurance policy. State Farm refused to pay the entire bill, and in accordance with Florida Statute Section 627.7015, Fla. Stat., offered our client the opportunity to participate in the state sponsored mediation program. My client accepted that offer and attended the mediation. The mediation was unsuccessful and our client asked us to file suit on her behalf as assignee of State Farm’s insured.

Both before filing suit and after, State Farm requested appraisal under the homeowner’s policy. However, pursuant to Section 627.7015, Fla. Stat., I asserted that appraisal is not available to an insurer if: 1) the insurer does not notify the insured of their rights to state sponsored mediation at the time a dispute arises; or 2) when the parties participate in an unsuccessful state sponsored mediation. Because my client had participated in an unsuccessful state sponsored mediation, it was my position that State Farm was no longer entitled to ask for appraisal.

The issue was presented to the court on State Farm’s Motion to Dismiss/Abate, and the court denied State Farm’s motion, holding that State Farm was no longer entitled to ask for appraisal under the policy because it participated in the state sponsored mediation program.

State Farm attempted to avoid the clear application of the statute by arguing that the right to appraisal is only lost when the insurer requests the mediation, but that appraisal remains available when the insured asks for the mediation. I do not believe that the statute makes such a distinction, especially given the fact that the insurer is never allowed to request the mediation. The insurer is required to notify the insured of the insured’s right to state sponsored mediation. It is then up to the insured agree to participate. State Farm’s reading of the statute would result in an absurdity, where the parties would always be required to participate in appraisal after every unsuccessful mediation; something clearly not contemplated by the statute.