In Warfel v. Universal Insurance Company of North America, ____ So.3d ____ (Fla. 2nd DCA May 12, 2010), the insured homeowner submitted a sinkhole claim to his homeowners insurer, Universal Insurance.  Universal had its own engineers examine the home and the soil under the home.  Based on a report from its engineers, Universal Insurance denied the claim.  

Florida Statue Section 627.7073(1)(c), states that

The respective findings, opinions, and recommendations of the professional engineer or professional geologist as to the cause of distress to the property and the findings, opinions, and recommendations of the professional engineer as to land and building stabilization and foundation repair shall be presumed correct.

At trial, Universal convinced the trial court to give a jury instruction that Universal’s experts reports were presumed correct, and shifted the burden of proof to the insured to prove that their damage was due to sinkhole.  In a typical sinkhole case (as with any case where an insurer is attemption to limit or exclude coverage on an all-risk policy) the burden of proof is on the insurance company to prove a limitation or exclusion from coverage. 

The insured argued that the 627.7073 presumption was a "vanishing" or "bursting bubble" presumption merely requiring that he produce evidence contrary to the presumption, not shifting the burden of proof. 

The 2nd DCA held:

Absent a clear legislative directive, we must conclude that section 627.7073(1)(c) is a ‘vanishing’ or ‘bursting bubble’ presumption that affected only Mr. Warfel’s burden of producing evidence…. 

[W]hen credible evidence comes into the case contradicting the basic fact or facts giving rise to the presumption, the presumption vanishes and the issue is determined on the evidence just as though no presumption has ever existed.  Conversely, if the basic facts are sufficiently proven so as to give rise to the presumption and not thereafter contradicted by credible evidence, the party in whose favor the presumption exists becomes entitled to a directed verdict.  Thus, in either event, the presumption is productive of these procedural consequences but is not a matter of the jury to consider.

The jury is not told of this presumption.  

The court then noted that because the insured presented credible evidence refuting the presumption that the trial court should have allowed the case to go to the jury with the burden on the insurer to prove no sinkhole damage.  The court reversed in favor of the insured. 

A copy of the 2nd DCA’s Warfel decision can be downloaded by clicking here.

The Court did cerfity the question to the Florida Supreme Court as one of great public importance.