Case Law SummarySinkhole Trial Court Orders on Constitutionality
of Neutral Evaluation
Anderson v. American Strategic Insurance Corporation, Case No.:
51-2011-CA-1136-WS/G (6th Cir. Fla. June 17, 2011);Buitrago v.
State Farm Florida Insurance Company, Case. No.: 512011CA1918ES
(6th Cir. Fla. August 11, 2011);Appleby v. Royal Palm Insurance
Company, Case No.: 11-329-CA (12th Cir. Fla. October 6,
2011)Circuit Courts held that Florida Statute 627.7074 (2006), the
Neutral Evaluation statute, unconstitutionally encroaches upon the
powers of the judiciary, the evidence code, and the insureds rights
to due process. Article II, section 3, of the Florida Constitution
prohibits one branch of the government from exercising the powers
of another branch. The statute unconstitutionally gives the
Department of Financial Services, an executive agency, the power to
adopt court rules of practice and procedure a power that belongs to
the judiciary alone. The statute also violates the Evidence Code
and the insureds due process rights by admitting the neutral
evaluators report without subjecting it to the standards of
relevancy, credibility and authentication, which are required of
all other evidence admissible in court. Further, the insured is
deprived of the opportunity for cross examination.Kroener v.
Florida Insurance Guaranty Association, Inc., 63 So.3d 914 (Fla.
4th DCA 2011)Assignees of insureds under a homeowners' insurance
policy brought action against FIGA, seeking benefits under the
policy for hurricane damage to the residence that the assignees
purchased from the insureds. After FIGA made an offer of judgment
to the assignees, the circuit court awarded summary judgment to
FIGA. The assignees then accepted the offer of judgment and moved
to compel enforcement of the settlement. The circuit court denied
the motion to compel enforcement, and the assignees appealed. The
Fourth District Court of Appeal held that the insureds failed to
give insurer prompt notice of their claim, as required by the
policy, and so the assignees were not entitled to recover benefits
from FIGA. Notice was not given until two years and two months
after the loss. Additionally, the trial court's award of summary
judgment terminated FIGA's pending offer of judgment and precluded
the assignees from accepting the offer. Allowing the offer to
remain open after entry of summary judgment would frustrate the
purpose of the offer of judgment rule to encourage settlement and
discourage protracted litigation.Florida Insurance Guaranty
Association, Inc. v. Devon Neighborhood Association, Inc., 67 So.3d
187 (Fla. 2011)The insured made hurricane damage claims under a
commercial residential insurance policy issued by an insurer that
became insolvent. The circuit court denied FIGA's motion to compel
an appraisal of the property damage. FIGA appealed, and the Florida
Supreme Court held that there was no clear evidence of legislative
intent for the amendments to Florida Statute 627.7015, which added
the requirement that if the insurer fails to give notice of
mediation, 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, to apply
retroactively. Accordingly, the amendment could not be applied
retroactively to the insured's policy.Meritplan Insurance Company
v. Perez, 963 So. 2d 771 (Fla. 3d DCA 2007)In this case, the
insureds sustained a theft loss and made a claim under their
homeowners policy, which provided for replacement cost coverage for
their personal property. The insureds took the position that they
were entitled to receive the replacement value of the loss once
they produced receipts for the replacement items. Although the
insureds did replace some of the items, the insurer later suspected
that some of the claimed replacement had not occurred, and that
some of the orders to purchase replacement items were cancelled.The
insurer sought the ability to claim insurance fraud, and although
the trial court had concluded that the receipts were all that was
required to obtain the replacement cost benefit under the policy,
Floridas Third District Court of Appeal reversed and allowed the
insurer to proceed on its defense of insurance fraud.Grife v.
Allstate Floridian Insurance Company, 493 F.Supp. 2d 1249 (S.D.Fla.
June 28, 2007)In Grife, the federal district court addressed an
issue of insurance policy interpretation concerning a condominium
unit owners insurance policys loss assessment provision. The court
concluded that the policy language in question provided loss
assessment coverage for losses in excess of the associations master
policy limit.Thus, if no payment was made, or if a reduction in
payment was made to the condominium association after taking into
account the policy deductible, the amount of the reduction was not
included in the unit owners loss assessment coverage.Ceballo v.
Citizens Property Insurance Corporation, 2007 Fla. 967 So.2d 811
(Fla. 3d DCA 2007)Ceballo dealt with the interpretation of the 2004
version of Floridas Valued Policy Law. Here, the Florida Supreme
Court analyzed whether the payment of additional coverages, such as
Ordinance or Law coverage, is owed without a showing that any such
expense was actually incurred, as the policy language in that case
required. The Court concluded that the purpose of the Valued Policy
Law did not extend to these supplemental coverages.Thus, the
insured must incur such expenses if the policy contains such a
requirement, and to incur means to become liable for the expense,
but not necessarily to have actually expended it.Florida Farm
Bureau Casualty Company v. Cox, 967 So.2d 815 (Fla. 2007)In Cox,
the question was whether Floridas Valued Policy Law, section
627.701(1), Florida Statutes (2004), required an insurance carrier
to pay the face amount of the policy when a building is deemed a
total loss, even if the building is damaged in part by both a
covered peril and by an excluded peril. Although the intermediate
appellate court and the widely-recognized Mierzwa opinion had
previously concluded that the answer would be yes, the Florida
Supreme Court decided the opposite, and disapproved the previous
appellate opinions on the subject.Thus, the law, when considering
pre-2005 Valued Policy Law, is that a property insurer is only
responsible to pay for the amount of damage cause by a peril that
the policy covers.Starling v. Allstate Floridian Insurance Company,
956 So. 2d 511 (Fla. 5th DCA 2007)In Starling, the homeowners
policy required the insured to provide a sworn proof of loss and
also required compliance with all policy terms before suit could be
brought to enforce the insurance policy. After the insured
sustained a fire loss, the carrier reminded the insured of the
policy requirement regarding the sworn proof, but the insured filed
suit without having complied with this policy condition. Three
months after filing suit, the insured submitted a sworn proof, and
she did not submit a contents inventory until six months after
that.The insurer moved for summary judgment in its favor, based on
the insureds failure to comply with policy conditions. Although the
insured argued substantial compliance with the policy condition,
both the trial and appellate courts found that the insured
materially breached a condition precedent to filing suit, so that
her recovery was barred.Pino-Santoro v. Citizens Property Ins.
Corp., 15 Fla. L Weekly Supp. 463b (Circuit Court Order, 17th
Judicial Circuit, Broward County, February 25, 2008In this Circuit
Court matter the trial court granted the insureds motion to confirm
appraisal award. The insured had filed suit for Citizens failure to
fully compensate the insured for property damage from hurricanes
Katrina and Wilma. After suit was filed, Citizens moved to compel
appraisal. Appraisal awards were issued which totaled $412,778 for
both storms. The insured then filed a motion to confirm appraisal
award. The court found that it was compelled to confirm the
appraisal awards because Citizens had requested the appraisal, and
did not wholly deny coverage or claim fraud, lack of notice, or
failure to cooperate.State Farm Automobile Ins. Co. v. O'Hearn,33
Fla. L. Weekly D708a, ___So.2d ___ (Fla. 2d DCA 2008)OHearn filed a
claim for uninsured motorist benefits under her automobile policy.
State Farm offered $5,000 to settle the UM claim, but OHearn
rejected the settlement offer. OHearn then filed a complaint
asserting a claim for bad faith. The complaint alleged State Farm
had determined the value to be $5,000, however, it also alleged the
value of the claim far exceeded $5,000. At the same time OHearn
served a request for production of documents, including the
contents of the insurers claims and underwriting files. State Farm
moved to dismiss the bad faith claim as premature, arguing damages
and liability had not yet been determined. State Farm also objected
to the request for production of documents. The trial court denied
both the motion to dismiss and the objection to produce the claims
and underwriting files. State Farm appealed, and the Second
District Court of Appeals held that the $5,000 settlement offer did
not constitute a final determination of damages where the complaint
alleged damages far exceeding that amount. The Court also reversed
the discovery order to produce the claims and underwriting file,
holding they were not discoverable until liability and the amount
of damages were determined.State Farm v. Ondis, 33 Fla. L. Weekly
S224a; Citizens v. Ueberschaer, 33 Fla. L. Weekly S223a (Fla.
2008)In the lower court ruling, the First District Court of Appeal
held in each case that the pre-2005 Valued Policy Law (F.S.
627.701(1)) required payment of the face amount of the policy when
the building was a total loss, even if the damage was from a
covered peril and an excluded peril. The Florida Supreme Court
accepted jurisdiction in both cases and held them in abeyance
pending their decision in Florida Farm Bureau Casualty Ins. Co. v.
Cox, 967 So.2d 815 (Fla. 2007), where they held an insurer is only
responsible to pay for the amount of damage caused by a covered
peril in the policy. The Florida Supreme Court quashed the opinions
below and remanded them to the First DCA for reconsideration in
light of the ruling in Cox on the pre-2005 Valued Policy Law.Banat
Investment Corp. v. Certain Interested Underwriters at Lloyds, 15
Fla. L. Weekly Supp. 361a (Circuit Court Order, 19th Judicial
Circuit, Martin County, January 11, 2008)The Circuit Court in this
matter granted defendants (Underwriters) motion to compel
appraisal, noting that appraisal is not inconsistent with a
coverage defense; an insurer can challenge the amount of loss and
coverage at the same time. The Court denied Banats arguments that
Underwriters waived the appraisal clause in the insurance contract
by repudiating the contract of insurance and that appraisal is
barred because Underwriters failed to promptly inform Banat of the
option to mediate pursuant to F.S. 627.7015. The Court found that
Underwriters substantial payments in at least partial satisfaction
of the claim proved Underwriters did not repudiate the contract.
The Court also held that F.S. 627.021(2)(e) specifically excludes
surplus lines insurers, like Underwriters, from the obligations and
responsibilities imposed by Chapter 627,* and Underwriters had no
obligation to notify Banat of the hurricane mediation program. The
Court stayed the case pending binding appraisal proceedings.
*Note that the Florida Supreme Court has pending before it the
issue of whether Chapter 627 applies to surplus lines insurers.
Essex Ins. Co. v. Zota.Essex Ins. Co. v. Zota, 33 Fla. L Weekly
S425b, ___So.2d ___ (Fla. 2008)The Florida Supreme Court answered
the following question certified by the Eleventh Circuit Court of
Appeals:Whether Florida Statute sections 626.922 or 627.421, or
both, require the delivery of evidence of the insurance directly to
the insured, so that delivery to the insured's agent is
sufficient.Essex provided surplus lines insurance to
development/builder corporations for whom Mercedes Zota was
working. Zota was injured on the job, and brought a negligence
action against the builders/developers. Essex filed an action in
federal court seeking a determination and declaration of its rights
and obligations with respect to Zota in the negligence action. The
surplus lines policy Essex issued was delivered to the builder's
producing agent, but the policy was never delivered to the builder.
The Zotas argued that Essex violated Florida Statute sections
626.922 and 627.421 by not delivering the policy to the builder and
were therefore precluded from denying coverage. The district court
agreed and granted the Zotas' motion for summary judgment. The
Eleventh Circuit got the case and certified 5 questions to the
Florida Supreme Court, which chose to answer only one.Before
turning to the certified question, the Florida Supreme Court
addressed the issue of whether chapter 627 of the Florida Statutes
applies to surplus lines insurers. Essex contended that none of
chapter 627 applies in any way to surplus lines insurance by force
of 627.021(2)(e), which states, "This chapter does not apply
to...[s]urplus lines insurance placed under the provisions of ss.
626.913-626.937." The Court rejected that argument, and found that
the exclusionary provisions of 627.021(2) apply only to part I of
chapter 627, and further that the legislative history demonstrated
that it related only to the ratings laws of part I. The remainder
of chapter 627, therefore applies to surplus lines insurers.On the
certified question, the Court held that neither statute altered the
common-law presumption that an insurance representative, serving as
an independent insurance broker, acts on behalf of the insured for
purposes of procuring insurance coverage. Neither statute precludes
a surplus lines insurer or its direct surplus lines agent from
delivering a copy of the coverage documents to the insured's
independent representative-broker instead of directly to the
insured.Hoey v. State Farm Florida Ins. Co., 33 Fla. L. Weekly
D1789a, ___So.2d ___ (Fla. 2d DCA 2008)The Fourth Circuit Court of
Appeal affirmed the trial court's finding that water damage to a
vacant home fell within the homeowner's policy exclusion for
"continuous or repeated seepage or leakage of water or steam from"
a "plumbing system, including from, within or around any shower
stall, shower bath, tub installation or other plumbing fixture,
including their walls or floors." The trial court's finding was
supported by expert testimony, water bills, and the plaintiff's
testimony.Allstate Floridian Ins. Co. v. Office of Ins. Regulation,
981 So.2d 617 (Fla. 1st DCA 2008)The First Circuit Court of Appeal
affirmed the Immediate Final Order of OIR, suspending Allstate's
certificates of authority to transact new business in Florida until
it complied with subpoenas and subpoenas duces tecum issued in
connection with OIR's investigation into Allstate's claims handling
practices. The OIRis investigating Allstate's relationship with
risk modeling companies, insurance rating organizations, trade
associations and compliance with House Bill 1A. Each subpoena gave
notice of OIR's hearing on the matter, and the subpoena duces tecum
required Allstate's corporate representatives with knowledge of the
identified subject matter to appear and testify at the public
hearing. In response to the subpoena's Allstate produced more than
30,000 documents labled "trade secret," and most of the documents
produced had pages removed. Allstate did not produce most of the
required documents. Notably, Allstate chose to incur more than $2
million in fines rather than produce the requested documents for a
Missouri Court. At the hearing, Allstate's witnesses were not able
to testify regarding its claims handling practices (as contained in
the McKinsey report), despite being requested to do so. The three
witnesses Allstate produced did not bring documents and were unable
to answer questions about the subjects required by the subpoenas.
Allstate argued that OIR's request was "breathtakingly broad" and
they were not given enough time to comply. However, Allstate did
not request an extension of time. Allstate's representative told
OIR that it intended to provide documents it felt were necessary
for OIR's review, subject to Allstate's objections and privileges.
OIR issued the IFO the next day. Finding that Allstate's willful
failure to comply with its statutory disclosure requirements made
it extremely difficult for OIR to provide the degree of specificity
the Court usually requires to uphold an IFO, the Court applied a
relaxed standard and affirmed the IFO. An IFO must contain facts
sufficient to demonstrate: 1) immediate, serious danger to the
public health, safety, or welfare; 2) the order takes only that
action necessary to protect the public; 3) procedural fairness
under the circumstances. Two alagations in the IFO met the first
element: monetary loss to policy holders and beneficiaries, and
ongoing criminal activity-failure to cooperate with an OIR
investigation is a crime. The IFO was limited in scdope to new
businesses, mitigating potential harm from Allstate's insurance
practices while allowing Allstate to service existing policies.
Third, the IFO was tailored to the harm by allowing Allstate to
determine the duration of its suspension; Allstate can lift the
suspension at any time by simply producing the documents it is
required by statute to "freely" produce in order to conduct
insurance business in Florida. The Court noted the record supported
the IFO allegation that Allstate's conduct was likely to continue,
based on its failure to comply with the hearing requirements,
request an extension of time to comply, timely request a protective
order for documents it believed were privileged, and its decision
to incur millions of dollars in fines rather than comply with
court-ordered production in Missouri.Banat Investment Corp. v.
Certain Interested Underwriters at Lloyd's,15 Fla. L. Weekly Supp.
361a (Circuit Court Order, 19th Judicial Circuit, Martin County,
January 11, 2008)UPDATE: The Circuit Court in this matter granted
defendant's (Underwriters) motion to compel appraisal and denied
Banat's arguments that appraisal was barred because Underwriters
failed to promptly inform Banat of the option to mediate pursuant
to F.S. 627.7015. The trial court held that F.S. 627.021(2)(e)
specifically excludes surplus lines insurers, like Underwriters,
from the obligations and responsibilities imposed by Chapter 627,
and Underwriters had no obligation to notify Banat of the hurricane
mediation program.Although it appears the Circuit Court Order was
not appealed by plaintiff, the recent Florida Supreme Court opinion
in Essex Ins. Co. v. Zota, (see summary above), wherein the Florida
Supreme Court ruled Chapter 627 applies to surplus lines insurers,
would appear to overrule this trial court ruling.Holder v. State
Farm Ins. Co., 994 So. 2d 521, 33 Fla. L. Weekly D2694a (3rd DCA
November 19, 2008)Insured gets attorney fees post-suit when
appraisal is demanded. The insured declined State Farm's settlement
offer of $65.00 ($9065 minus the homeowner's $9,000 deductable) and
filed suit. State Farm then invoked the binding arbitration clause
of the policy, resulting in an appraisal award of $50,178.60. The
insured sought both attorney's fees and interest prior to the date
of payment. Citing Ajmechet v. United Automobile Ins. Co., 790 So.
2d 575 (Fla. 3d DCA 2001), the Third District Court of Appeal held
State Farm was required to pay the insured's attorney's fees
because State Farm's payment was obviously affected by filing of
the lawsuit. The Court then held that the insured was not entitled
to interest prior to the date of the appraisal award, as the matter
was in controversy prior to that time.QBE Ins. Corp. v. Dome
Condominium Assn, Inc., 577 F.Supp.2d 1256 (S.D. Fla. 2008)
Southern District caseAfter hurricane Wilma, Dome filed a claim
with its insurer, QBE. The parties disputed what damages were
covered by the policy and twice submitted to the mediation program
offered under Florida Statutes, section 627.7015. Although the
statute requires the insurer to notify the insured of its right to
participate in the mediation program, QBE never did. Dome's
attorneys were aware of the program and sought mediation through
the program after the attorneys were retained. The parties could
not agree on a neutral umpire and QBE petitioned the United States
District Court for the Southern District of Florida to appoint a
neutral umpire, and Dome filed a counterclaim. QBE moved to dismiss
the counterclaim, arguing Dome could not bring suit because it had
not participated in the appraisal process. The Court strictly
construed Florida Statutes, section 627.7015. Noting that Florida
Statutes. Section 627.7015(7) states that if the insurer fails to
notify the insured of its right to participate in the mediation
program, 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, the Court refused to
dismiss Dome's counterclaim. Dome's independent knowledge of the
mediation program did not absolve QBE of its statutory duty to give
notice, and since it failed to do so, Dome could bring the
suit.Goff v. State Farm Florida Ins. Co., ___ So. 2d ___, 33 Fla.
L. Weekly D2694a (Fla. 2d DCA November 19, 2008)In Goff v. State
Farm Insurance Co., the Second District Court of Appeal held that
State Farm could withhold a portion of profit and overhead as
depreciation in determining actual cash value of a loss. The
plaintiff argued that State Farm wrongly depreciated and withheld a
portion of contractor overhead and profit. The Court noted that
actual cash value includes overhead and profit when the insured is
reasonably likely to need a general contractor for repairs.
However, the Court also noted that depreciation is the actual cost
of replacement or repair minus actual cash value, and that profit
and overhead of twenty percent is usually incorporated into a
contractors bid. Therefore, the Second District Court of Appeal
held that State Farm could withhold a portion of profit and
overhead as depreciation in determining actual cash value of a
loss.Ramirez v. Mccravy, ___ So. 2d ___, 34 Fla. L. Weekly D395a
(3rd DCA February 18, 2009)In this case, the Third District Court
of Appeal held that the Florida Supreme Courts hurricane related
tolling orders did not toll a statute of limitations where the
weather emergencies did not delay the plaintiff in filing suit.
Ramirez filed suit 3 days after the running of the statute of
limitations, and 6 months after the courts had entered an
administrative order tolling the statute of limitations due to
Tropical Storm Ernesto causing the closure of the courts. The
administrative order stated the storm may have temporarily impeded
the ability of attorneys, litigantsin the performance of their
duties and obligations with respect to many legal processes. The
court found that Ramirez did not show how he was temporarily
impeded in his ability to timely file suit six months after the
court closing. The court held there was nothing in the language
that required tacking extra days at the end of a four year
period.Citizens Property Ins. Corp. v. Cuban-Hebrew Congregation of
Miami, Inc., ___ So.2d ___, 34 Fla. L. Weekly D333a (3rd DCA
February 11, 2009)In 2006, the insured sued Citizens for breach of
contract and declaratory relief, arguing that Citizens failed to
pay the full amount of the insured's loss with respect to one of
the three properties. The trial court compelled appraisal pursuant
to the appraisal clause of the insurance policy. Each party
appointed an appraiser and the court appointed the neutral umpire.
Two of the three members of the appraisal panel agreed that the
amount of the insured's loss was $194,454. The award did not
include any deduction for the policy deductible or prior payments
by Citizens.Citizens took the position that the appraisal award was
subject to reduction for the policy deductible and payments
previously made on the claim. Citizens subtracted those items and
issued a check for $106,646.27.The insured filed a motion to compel
payment of the full amount of the appraisal award, without
reduction. The trial court entered an order compelling payment of
the full amount, and Citizens appealed.The Third District Court of
Appeal reversed the order. The lower court found that Citizens
waived the right to make these deductions, that making these
deductions amounted to a modification of the appraisal award, and
that Citizens unreasonably delayed in bringing the issue to the
court because Citizens did not file anything which amounted to a
request for modification until after the statutory ninety-day time
limit had expired. The Third District disagreed. It noted that the
appraisers made an estimate of the total loss, without regard to
the deductible or any prior payments. Citizens accepted the
appraisers' calculation, and then reduced it by the deductible and
the prior payments. That procedure was correct. There was no
requirement for Citizens to file an application for modification,
and there was no waiver of Citizens' position under the
circumstances.The Court also held that because Citizens underpaid
the claim, the insured was forced file suit, and the appraisal
award resulted in judgment for the insured, the insured was
entitled to attorneys fees.Chalfonte Condominium Apartment Assoc.
v. QBE Ins. Corp., ___ F.Supp.2d ___ (11th Cir. March 9, 2009)In
Chalfonte, the insured brought action against the insurer, arguing
that it breached the implied warranty of good faith and fair
dealing based on the insurers failure to investigate and assess the
insureds claim within a reasonable time period and seeking to
invalidate the hurricane deductable because the policy did not
comply with language and type size requirements established by
Florida law.In addressing the first issue, the Eleventh Circuit
Court of Appeals noted that the Florida Supreme Court has
repeatedly observed that Florida does not recognize a common law
first-party action for bad faith failure to settle a claim under an
insurance contract. However, the Court held that was not
dispositive. Florida has a statutory first-party action for bad
faith failure to settle a claim under an insurance contract under
Fla. Stat. 624.155 (to provide a civil remedy for any person
damaged by an insurer's conduct, including [n]ot attempting in good
faith to settle claims when, under all the circumstances, it could
and should have done so, had it acted fairly and honestly toward
its insured and with due regard for her or his interests.) Florida
contract law recognizes the implied covenant of good faith and fair
dealing in every contract. Several of the federal district courts
in Florida have held that common law good faith and fair dealing
claims are distinct from statutory bad faith claims in the context
of a first-party action on an insurance contract. Additionally, at
least one Florida appellate court has implicitly recognized that a
good faith and fair dealing claim can be distinct from a statutory
bad faith claim in a first-party action on an insurance
contract.The Court then concluded that because Florida courts have
not addressed the issue, the following questions would be submitted
to the Florida Supreme Court:(1) Does Florida law recognize a claim
for breach of the implied warranty of good faith and fair dealing
by an insured against its insurer based on the insurer's failure to
investigate and assess the insured's claim within a reasonable
period of time?(2) If Florida law recognizes a claim for breach of
the implied warranty of good faith and fair dealing based on an
insurer's failure to investigate and assess its insured's claim
within a reasonable period of time, is the good faith and fair
dealing claim subject to the same bifurcation requirement
applicable to a bad faith claim under Fla. Stat. 624.155?Regarding
the second issue, the Eleventh Circuit, noted that to resolve the
issue, it had to determine what penalty an insurer must pay for
noncompliance with language and type size requirements for
hurricane deductibles and coinsurance provisions established by
Florida law as well as the remedy/penalty for noncompliance with
the statute. Fla. Stat. 627.701(4)(a). The statute does not have an
explicit statutory remedy provision, so resolution of the issues
required a determination of how the Florida Legislature intended
courts to address violations of 627.701(4)(a). Because the Florida
Supreme Court has not yet directly addressed the consequences of
noncompliance with 627.701(4)(a), the Eleventh Circuit declined to
resolve the dispute and certified the following questions to the
Florida Supreme Court:(1) May an insured bring a claim against an
insurer for failure to comply with the language and type-size
requirements established by Fla. Stat. 627.701(4)(a)?(2) Does an
insurer's failure to comply with the language and type-size
requirements established by Fla. Stat. 627.701(4)(a) render a
noncompliant hurricane deductible provision in an insurance policy
void and unenforceable?Finally, the Court addressed Chalfontes
argument that the plain language of the policy required QBE to pay
Chalfonte within 30 days of the district court's entry of the
amended final judgment on December 18, 2007, and that the district
court erred when it denied Chalfonte's motion to enforce execution
of the amended final judgment. Once again, because the Florida
Supreme Court has not addressed that specific issue, the Court
certified the following question:(1) Does language in an insurance
policy mandating payment of benefits upon entry of a final judgment
require an insurer to pay its insured upon entry of judgment at the
trial level?Hopefully, the Florida Supreme Court will resolve the
issues soon.Segal v. Hartford Ins. Co., No. 09-10588, 2009 U.S.
Dist. LEXIS 13215 (11th Cir. June 18, 2009)Most insurance policies
contain a liberalization clause. We usually think that a
liberalization clause means that any change in the law broadening
coverage would benefit the policyholder, even if the change
happened in the middle of a policy period. One court, however, took
a narrower view on a liberalization clause's applicability.The
Segals' Boca Raton home was damaged by Hurricane Wilma in 2005. The
Segals duly filed a claim under their homeowner's insurance policy
with Harford. Hartford accepted liability for the claim. However,
Hartford held back the depreciation in value of the damaged
property that was covered. The Segals felt Hartford's depreciation
holdback breached the insurance policy, and sued. Hartford moved to
dismiss the Segals' Complaint with prejudice for failure to state a
claim.The United States District Court for the Southern District of
Florida granted Hartford's motion to dismiss because the Segals'
insurance policy with Hartford included a depreciation holdback
clause. Thus, the district court concluded that Hartford's
depreciation holdback pursuant to that clause was not a breach. The
Segals appealed.The 11th Circuit affirmed the district court's
dismissal and held that the Segals' Complaint failed to state a
claim. On appeal, the Segals had two arguments. First, the Segals
argued that Florida Statute 627.7011(3), which prohibited insurers
from holding back the depreciation in value of damaged property
covered by a policy, was incorporated into the Segals' policy.
Unfortunately for the Segals the statute went into effect after the
Segals' policy was signed. The parties even agreed the statute did
not apply retroactively to the Segals' existing policy. However,
the Segals argued that the statute prohibiting depreciation
holdback was incorporated into their policy through the policy's
liberalization clause. The liberalization clause stated,"If we make
a change which broadens coverage under this edition of our policy
without any additional premium charge, that change will
automatically apply to your insurance as of the date we implement
the change in your state . . . "The court, however, disagreed with
the Segals, and explained that in Florida, contracts for insurance
"are construed in accordance with the plain language of the
policies as bargained for by the parties."Segal, 2009 U.S. Dist.
LEXIS 13215 at *1. So, the court analyzed the liberalization clause
pursuant to its plain language. The liberalization clause stated,
"[I]f we make a change . . . ." Id. Section 627.7011(3)'s change
prohibiting depreciation holdback, however, was made by the Florida
Legislature, not by Hartford. Thus, the court took a narrow view of
the liberalization clause and held that pursuant to the policy's
plain language the liberalization clause did not incorporate the
statute's provision prohibiting depreciation holdback.Second, the
Segals argued that the same liberalization clause also incorporated
Hartford's changed practices to no longer holdback depreciation to
their insureds. The court, however, rejected this claim because the
Segals did not allege Hartford's changed practices in their
Complaint. Accordingly, the court affirmed the district court's
dismissal of the Segals' Complaint with prejudice for failure to
state a claim.Sunshine State Ins. Co. v. Davide, ___ So. 3d ___, 34
Fla. L. Weekly D1422a (Fla. 3d DCA July 15, 2009)In this case,
Floridas Third District Court of Appeal held that when an insurer
erroneously withholds a portion of a payment due, the insured is
entitled to prejudgment interest on the amount not timely paid from
the date the payment became due under the policy, not from the date
the property was damaged. As I will explain at the end of the case
summary, this case applies only to pre-2007 claims. On July 11,
2007, consumer friendly legislation took effect which would have
provided Davide with prejudgment interest from the date Sunshine
received notice of the claim.In the summer and early fall of 2005,
Arthur Davides home was damaged by Hurricanes Katrina and Wilma.
Davide filed a claim with his insurer, Sunshine State Insurance
Company, a dispute arose regarding the amount to be paid for damage
to Davides roof, and the parties went to appraisal. More than one
year after Wilma, the appraisers awarded David $246,491.94, with
the caveat:This appraisal award is in total, and money previously
paid by the carrier to its insured on the subject claim, if any,
should be deducted from this award. This appraisal award is subject
to the terms and conditions of the policy of insurance (e.g.,
deductible) and the laws of the State of Florida.Claiming to be
unsure as to whether this language meant that the appraisal award
had already taken into account a deduction for depreciation or
whether this language authorized Sunshine to take such a deduction,
Sunshine asked the umpire many times for clarification. Twenty six
days later, without an answer from the umpire, Sunshine paid the
award minus an amount it attributed to depreciation. Three months
later, Davide brought suit to confirm the appraisal award. That
same day, Davide's counsel obtained a letter from the umpire which
confirmed Davids position that the award was an actual cash value
award which took depreciation into account. David told Sunshine on
March 8, 2007, and the amount previously withheld by Sunshine was
paid to Davide on April 4, 2007.Davide sought an award of
pre-judgment interest on the amount held back from the date on
which his home was damaged rather than within the time frame
authorized by the policy (within sixty days of the filing of an
appraisal award). The trial court gave it to him; the Third
District Court of Appeal reversed.Basically, the Third District
held the parties to the terms of the policy. The policy stated that
Sunshine was not obligated to pay a covered claim until sixty days
after the filing of an appraisal award. Relying on substantial
precedent the Court noted that prejudgment interest should be
computed from the date payment of a covered claim is due.
Therefore, Davide was entitled to pre-judgment interest on the
portion of the appraisal award not timely paid within sixty days of
the filing of the appraisal award with Sunshine.As noted above,
Davide would have faired better if the hurricanes occurred in 2007
rather than 2005. Florida Statute 627.70131, which was effective on
July 11, 2007, provides: 627.70131. Insurer's duty to acknowledge
communications regarding claims; investigation(5) (a) Within 90
days after an insurer receives notice of a property insurance claim
from a policyholder, the insurer shall pay or deny such claim or a
portion of the claim unless the failure to pay such claim or a
portion of the claim is caused by factors beyond the control of the
insurer which reasonably prevent such payment. Any payment of a
claim or portion of a claim paid 90 days after the insurer receives
notice of the claim, or paid more than 15 days after there are no
longer factors beyond the control of the insurer which reasonably
prevented such payment, whichever is later, shall bear interest at
the rate set forth in s. 55.03.Interest begins to accrue from the
date the insurer receives notice of the claim. The provisions of
this subsection may not be waived, voided, or nullified by the
terms of the insurance policy.If there is a right to prejudgment
interest, the insured shall select whether to receive prejudgment
interest or interest under this subsection. Interest is payable
when the claim or portion of the claim is paid. Failure to comply
with this subsection constitutes a violation of this code. However,
failure to comply with this subsection shall not form the sole
basis for a private cause of action.(b) Notwithstanding subsection
(4), for purposes of this subsection, the term "claim" means any of
the following:1. A claim under an insurance policy providing
residential coverage as defined in s. 627.4025(1);2. A claim for
structural or contents coverage under a commercial property
insurance policy if the insured structure is 10,000 square feet or
less; or3. A claim for contents coverage under a commercial tenants
policy if the insured premises is 10,000 square feet or less.Had
this Statute been in effect at the time Davide suffered his loss,
he would have been entitled to a year and a halfs interest, not
just a few months.Pyramid Diversified Servs., Inc. v. Providence
Prop. & Cas. Ins. Co., No. 08-445, 2009 U.S. Dist. LEXIS 49056
(N.D. Fla. June 10, 2009)We all enter into contracts everyday.
Every time we buy a product, get a gym membership, or even renew a
home insurance policy we sign and enter into contracts. What we
usually don't do, however, is read the fine print. More often than
not, these contracts we enter into everyday are what we like to
call "form contracts." Form contracts contain standard terms of
legal mumbo jumbo that most people think nothing about and proceed
to sign the contract without reading. Often the legal mumbo jumbo
includes forum selection clauses. Forum selection clauses dictate
where any litigation surrounding the contract will take place. Not
only can this clause shlep any old person across the country to
litigate a contract dispute, but this clause can be mandatory and
dictate which jurisdiction's law will be controlling in the suit
and consequently whether or not a court has jurisdiction to hear
the case. Recently, one court stressed a forum selection clause's
importance.The United States District Court for the Northern
District of Florida, Pensacola Division, granted Providence
Property & Casualty Insurance Company's Motion to Transfer
Venue from the Northern District of Florida to the Western District
of Oklahoma pursuant to 28 U.S.C. 1404(a) based on a forum
selection clause in a diversity jurisdiction case. 28 U.S.C.
1404(a) provides, in pertinent part,"(a) For the convenience of
parties and witnesses, in the interest of justice, a district court
may transfer any civil action to any other district or division
where it might have been brought."28 U.S.C. 1404(a) (2009). In
other words, Section 1404(a) allows a party to transfer the venue
of a lawsuit to any venue where jurisdiction was proper. Here, the
court explained that not only does Section 1404(a) allow the
transfer, but a forum selection clause can mandate the transfer so
long as the transfer was not "unreasonable or unjust and the clause
was not the product of fraud or overreaching."Pyramid Diversified
Servs., Inc. v. Providence Prop. & Cas. Ins. Co., 2009 U.S.
Dist. LEXIS 49056 (N.D. Fla. June 10, 2009). Basically, forum
selection clauses are the "get out of jail free" cards for venue
selection and transfer.ThePyramidcourt explained that forum
selection clauses were enforceable by federal courts, and federal
law, rather than state law, governed the determination of whether
to enforce a forum selection clause in a diversity jurisdiction
case. The court further explained that forum selection clauses
are"generally considered either mandatory, in which there is a
clear, unequivocal expression of the parties' intent to exclusively
limit the forum to a particular venue of court, or permissive, in
which there is no clear expression of exclusivity but rather an
understanding that the parties have consented to venue or
jurisdiction in a particular forum."Pyramid Diversified Servs.,
Inc., 2009 U.S. Dist. LEXIS 49056 at *1.After reviewing the forum
selection clause at issue in Pyramid, the court concluded that the
clause was mandatory rather than permissive. The clause read,"The
parties agree that any legal action, suit or proceeding relating to
this Agreement or the transactions contemplated hereby, shall be
instituted in a federal or state court sitting in Oklahoma County,
Oklahoma, which shall be the exclusive jurisdiction and venue of
said legal proceedings."Pyramid Diversified Servs., Inc., 2009 U.S.
Dist. LEXIS 49056 at *1. The court concluded the clause to
unambiguously demand that litigation would take place in Oklahoma
County, Oklahoma. The court further noted that the action might
have been brought in the Western District of Oklahoma and
jurisdiction was proper. Accordingly, the court granted
Providence's Motion for venue transfer from the Northern District
of Florida to the Western District of Oklahoma.The lesson here is
to read those pesky forum selection clauses. If not, you could find
yourself litigating in Western Oklahoma and dealing with an
unfamiliar body of law. So, just remember, forum selection clauses
are kind of a big deal.North Pointe Ins. Co. v. Tomas, No.
3D08-2245, ___ So. 3d ___ (Fla. 3d DCA, August 26, 2009)The recent
case ofNorth Pointe Insurance Company v. Tomasillustrates why many
insurers who wrongfully fail to pay a claim choose to unnecessarily
delay payment rather than submit an outright denial.InTomas, the
insureds made a claim with North Pointe, their homeowners'
insurance carrier, for a complete replacement of a marble kitchen
floor. North Pointe first concluded the loss was excluded under the
policy and denied coverage. The Tomases filed a petition to compel
appraisal pursuant to the terms of their policy, and North Pointe
withdrew its previous denial of the claim, admitted coverage and
stipulated to attorney's fees up to that date. The claim went to
appraisal, and North Pointe paid. A month later, an appraisal award
was entered in the amount of $115,899.52, including pre-judgment
interest from the date of the loss. The lower court confirmed the
appraisal award and entered final judgment.On appeal, North Pointe
argued that the trial court erred in confirming the award before
the contractual sixty-day period to make payment expired and that
prejudgment interest should have been awarded only from the date it
paid the award, not the date of loss. Citing long-standing
authority in the Third District,Independent Fire Insurance Co. v.
Lugassy, 593 So. 2d 570 (Fla. 3d DCA 1992), the Court
disagreed.Generally, interest on a loss payable under an insurance
policy is recoverable from the date the policy provides that
payment is due.Lugassycarved out an exception to that rule: when
the insurer denies coverage but later admits coverage or coverage
is later awarded through litigation, the insurer is liable for
prejudgment interest from the date of the loss. Once the insurer
denies coverage, it is deemed to have waived the policy provision
for deferred payment and, should it pay, becomes responsible for
prejudgment interest from the date of loss.Tomas, at * 2.Because
North Point first denied coverage for the claim, it was deemed to
have waived the policy provision allowing deferred payment and was
responsible for prejudgment interest from the date of the loss,
even though it later agreed to pay the claim within the time period
provided in the policy.Had North Pointe not denied the claim at
first but instead engaged in tactics to delay or reduce that
payment owed for the loss, the issue of prejudgment interest would
not have been so clear. Without the denial, the payment may have
been deemed due60 days after the appraisal award or the date of
final judgment, and the Tomases may not have been entitled to the
nearly two and a half years of prejudgment interest they ultimately
received.See Liberty Mut. Ins. Co. v. Alvarez, 785 So. 2d 700 (Fla.
3d DCA 2001) (making distinction that, where there is no denial of
coverage, prejudgment interest is payable from date of appraisal as
opposed to date of the loss);Aries Insurance Co. v. Hercas Corp.,
781 So. 2d 429 (Fla. 3d DCA 2001).Corban v. USAA, No.
2008-IA-00645-SCT, ___ So. 3d ___, (Miss., October 8,
2009)InCorban, the Supreme Court of Mississippi addressed three
issues that were the focal point of much of the Katrina
litigation.(1) Whether storm surge is included in a water damage
exclusion.(2) The interpretation and application of an
Anticoncurrent Causation Clause .(3) Which party bears the burden
of proof.The case came to the Court as an interlocutory appeal from
the circuit court, where the Corbans filed suit claiming, among
other things, breach of their insurance contract. The Corbans home
was damaged during Katrina, and they sought compensation under
their standard all-risk homeowners policy with USAA. Citing the
policys Anticoncurrent Causation Clause (ACC), USAA denied coverage
for damage to the structures caused by wind because they were also
damaged by water. The ACC read:SECTION I-EXCLUSIONS1. We do not
insure for loss caused directly or indirectly by any of the
following. Such loss is excluded regardless of any other cause or
event contributing concurrently or in any sequence to the loss.To
resolve the three issues, the Court declared, Our role is to render
a fair reading and interpretation of the policy by examining its
express language and applying the ordinary and popular meaning to
any undefined terms. In doing so, the Court used the following
rules of contract interpretation: clear and unambiguous contracts
are interpreted as written; if a contract contains ambiguous or
unclear language, the ambiguities are resolved in favor of the
non-drafting party; ambiguities exist when a policy can be
logically interpreted in two or more ways, and one logical
interpretation provides coverage; a term that is not defined within
the policy is not necessarily ambiguous; the common meaning of the
term will prevail; exclusions and limitations on coverage are also
construed in favor of the insured; and language in exclusionary
clauses must be clear and unmistakable, as those clauses are
strictly interpreted.1) Whether the circuit court erred in finding
that storm surge is included in the water damage exclusion.The
Corbans argued that storm surge was a covered peril because [t]he
policy itself defines water damage and purposely does not include
storm surge within that definition. USAA argued that storm surge is
obviously an excluded peril under the water damage exclusion.
Citing Mississippi and Fifth Circuit caselaw, the Court sided with
USAA, holding that storm surge is contained unambiguously within
the water damage exclusion. Storm surge was plainly encompassed
within the flood or overflow of a body of water portions of the
water damage definition, and no other logical interpretation
existed.(2) Whether the circuit court erred in finding that the ACC
clause is applicable in the case sub judice.To resolve this issue,
the Court parsed the language of the ACC clause. First, the Court
considered the term loss. The court noted a loss is incurred by an
insured and typically, but not always, follows damage to his or her
property. Loss occurs at that point in time when the insured
suffers deprivation of, physical damage to, or destruction of the
property insured. The Court further noted that once a loss occurs,
caused by either a covered peril (wind) or an excluded peril
(water), that loss is not changed by any subsequent cause or event.
The insured's right to be indemnified for a covered loss vests at
time of loss. Once the duty to indemnify arises, it cannot be
extinguished by a successive cause or event.Next, the Court looked
at the term concurrently. Based on the plain meaning of the term,
the Court concluded: the exclusion applies only in the event that
the perils act in conjunction, as an indivisible force, occurring
at the same time, to cause direct physical damage resulting in
loss. In this case, though, the perils acted in sequence, not
concurrently, to cause different damage, resulting in separate
losses.The Court then considered the phrase, in any sequence. The
term was contained within an exclusionary clause for water damage
losses, but not defined in the policy. Given the Courts
determination that loss occurs at the point in time when the
insured property is damaged, the phrase in any sequence conflicted
with other provisions of the USAA policy, creating ambiguity. The
provisions, which allowed USAA to determine the value of covered
property at the time of a loss or the instant immediately preceding
it, irreconcilably conflicted with the in any sequence language.
Because the phrase had two interpretations, equally reasonable, the
rules of contract interpretation mandated the interpretation that
gave the Corbans greater indemnity. Thus, the Court concluded that
the in any sequence language in the policy could not be used to
divest the Corbans of their right to be indemnified for covered
losses.In sum, the Court explained that different perils from a
hurricane generally, but not without exception, result in separate
damage and loss. The ACC clause applies only if and when covered
and excluded perils contemporaneously converge, operating in
conjunction, to cause damage resulting in loss to the insured
property. If the insured property is separately damaged by a
covered or excluded peril, the ACC clause does not apply. If the
Corbans property first suffered damage from wind, resulting in a
loss, whether additional [flood] damage occurs was of no
consequence, as they would have suffered a compensable wind-damage
loss. Conversely, if the property was first damaged by flood,
resulting in a loss, and then wind damage occurred, they could only
recover for losses attributable to wind. Those issues were for a
jury to decide.(3) Which party bears the burden of proof.Generally,
under all-risk policies, the insured has the initial burden to
prove that the loss occurred. The burden then shifts to the
insurer, to prove any affirmative defense. Accordingly, the Corbans
are required to prove a direct, physical loss to property
described. Thereafter, USAA has the burden to prove, by a
preponderance of the evidence, that the losses are excluded by the
policy as flood damage.Coconut Key Homeowners Assn, Inc. v.
Lexington Ins. Co., No. 08-60640, ___ F. Supp. 2d ___ (S.D. Fla.,
August 28, 2009)Coconut Key Homeowners Association, Inc., brought
suit after its insurer, Lexington Insurance Company, allegedly
failed to pay for covered losses incurred as a result of Hurricane
Wilma.Lexington filed a Motion for Partial Summary Judgment,
arguing that Coconut Key did not comply with an inspection
provision in the policy which was a condition precedent to
recovery. The provision at issue stated:3. Duties In The Event of
Loss Or DamageYou must see that the following are done in the event
of loss or damage to Covered Property:f. Permit us to inspect the
property and records proving the loss or damage. Also, permit us to
take samples of damaged property for inspection, testing or
analysis.Coconut Key provided Lexington access to the majority of
the property, but a few unit owners refused to make their units
available for inspection. Lexington argued it needed access to the
entirety of damaged property in order for Coconut Key to present a
claim regarding that property, and, as a result, it was entitled to
partial summary judgment for damage to the units it had not been
able to inspect.Coconut Key argued the inspection provision was a
cooperation clause, not a condition precedent, and Lexington's
motion should be denied because the record evidence showed Coconut
Key cooperated with Lexington's request for inspections.The issue
before the United States District Court for the Southern District
of Florida was whether the inspection provision was a condition
precedent or a cooperation clause. The difference between the two
is that a condition precedentmustbe performed before the contract
becomes effective; there is no recovery if the insured materially
breaches or does not fulfill condition precedent at issue. The
insurer does not have to show prejudice. Cooperation clauses
however, are less burdensome on insured parties. To establish a
defense based on breach of a cooperation clause, the insurer must
show both a material breach and substantial prejudice.The Court
looked to case law regarding insurance policies to determine that
the inspection provision at issue was a cooperation clause. The
Court relied on a few factors in reaching this conclusion. First,
the inspection provision helped Lexington obtain evidence, a key
purpose of cooperation clauses. Second, the Court found no Florida
law to support Lexingtons contention that inspection provisions are
typically considered to be a condition precedent. Finally, the rule
of interpretation that policy provisions limiting liability are
construed in favor of the insured weighed in favor of holding the
provision was a cooperation clause. If the provision were a
condition precedent, it would be more difficult for Coconut Key to
recover.As the inspection provision was a cooperation clause,
Lexington needed to show as a matter of law that Coconut Key
materially breached the inspection provision and that it was
prejudiced by the breach to prevail on the motion for summary
judgment. The Court concluded that Lexington did not meet this
burden. It was undisputed that Coconut Key extended four
invitations for reinspection by Lexington. Further, the Court noted
that the record indicated the cause of Lexington's inability to
access the property was the individual unit owners and there was no
evidence that Coconut Key could compel the unit owners to assist
Lexington. As a result, Lexington did not show, as a matter of law,
that Coconut Key materially breached the inspection
provision.Moreover, Lexington offered no evidence that a meaningful
amount of Coconut Key's damages were located in the inaccessible
units nor did it explain why it must access each and every unit to
respond effectively to Coconut Key's claims. Additionally,
Lexington's assertion that it found no additional damage to unit
interiors during re-inspection tended to show that lack of access
to the remaining units has had little impact on its assessment of
Coconut Key's claimed damages. Accordingly, Lexington's motion also
failed because it did not demonstrate substantial prejudice.Liebel
v. Nationwide Ins. Co. of Florida, No. 4D08-3356, ___ So. 3d ___,
(Fla. 4th DCA, October 7, 2009)On February 14, 2003, Liebel noticed
a wide gap between the floor and the wall in her living room. Over
the following two and a half weeks, Liebel's living room floor
began to sag and bend, and then every room of the home detached
from the walls, and a wide crack formed in the middle of the living
room. It turned out that the crack caused a ruptured water line
under Liebel's home, and the escaping water caused the soil beneath
the home to erode, causing the foundation to settle, and the damage
to Liebel's home. Liebel sought coverage for the damage under her
all-risk homeowner's insurance policy with Nationwide.Nationwide
denied coverage for the damage, alleging that the loss was
specifically excluded by the following exclusions in the policy:1.
We do not cover loss to any property resulting directly or
indirectly from any of the following. Such a loss is excluded even
if another cause or event contributed concurrently or in any
sequence to cause the loss.a) Earth Movement and Volcanic Eruption.
Earth movement means: earth movement due to natural or unnatural
causes, including mine subsidence; earthquake; landslide; mudslide;
earth shifting, rising or sinking (other than sinkhole collapse).
Volcanic eruption means: eruption; or discharge from a volcano.3.
We do not cover loss to property described in Coverages A and B
resulting directly from any of the following:e) Continuous or
repeated seepage or leakage of water or steam over a period of time
from a heating, air conditioning or automatic fire protective
sprinkler system; household appliance; or plumbing system that
results in deterioration, rust, mold, or wet or dry rote [sic].
Seepage or leakage from, within, or around any shower stall, shower
tub, tub installation or other plumbing fixture, including their
walls, ceilings or floors, is also excluded.Liebel argued that the
loss was covered based upon the following provision of the
policy:If loss caused by water or steam is not otherwise excluded,
we will cover the cost of tearing out and replacing any part of the
building necessary to repair or replace the system or appliance. We
do not cover loss to the system or appliance from which the water
or steam escaped.f) (1) wear and tear, marring, deterioration;If
any items f)(1) through (7) cause water to escape from a plumbing,
heating, air conditioning or automatic fire protective sprinkler
system or household appliance, we cover loss caused by the water
not otherwise excluded. We also cover the cost of tearing out and
replacing any part of a building necessary to repair the system or
appliance. We do not cover loss to the system or appliance from
which the water escaped.Under exclusions 3.a) through 3.f), any
loss that follows is covered unless it is specifically excluded.In
deciding the case, Floridas Fourth District Court of Appeal
explained the classic rules of insurance policy interpretation. In
Florida, insurance contracts are interpreted according to the plain
language of the policy. However, if the terms of a policy are
amenable to two or more reasonable interpretations, one that
provides coverage and one that does not, the policy is considered
ambiguous. Ambiguous coverage provisions are interpreted against
the insurer that drafted the policy and in favor of the insured.
Further, the Court noted ambiguous exclusionary clauses are
construed even more strictly against the insurer than coverage
clauses. The Court also noted the failure of a policy to define a
certain term does not make the policy ambiguous; when the insurer
has not defined a term, the common definition prevails.Applying
these rules to the policy, the Fourth District held that the plain
and unambiguous language of the policys earth movement exclusion
excluded from coverage the damage to Liebels home. The policy
specifically excluded loss to any property resulting directly or
indirectly from earth movement due to natural or unnatural causes.
Earth movement included earth shifting, rising, or sinking.Liebel,
2009 WL 3189332 at *4. As the loss to Liebel's home was caused by
the shifting of earth under the home, which was caused by earth
shifting from unnatural causes, the water line rupturing, the loss
was specifically excluded from coverage.However, the Court agreed
with Liebel's contention that the cost of repairing the water line
was covered by the policy. Because the policy stated that it did
not cover damage caused by water from a plumbing system that was
otherwise excluded, but then stated that it covered the cost of
repairing a system that caused water damage, the policy was
ambiguous because there were two reasonable interpretations of the
provisions.Specifically, one may interpret the otherwise excluded
language to preclude coverage for all damages caused by a matter
otherwise excluded, including the cost of tearing out and replacing
any part of Liebel's home necessary to repair the ruptured water
line. In contrast, a reasonable person could interpret the Policy
to exclude from coverage the damage caused by earth movement, but
include the cost of repairing the water line that caused the loss,
as it is a plumbing system that caused water damage due to its
deterioration from wear and tear.Liebel, 2009 WL 3189332 at *6.
Following the principle that ambiguities in insurance contracts are
construed in favor of the insured, the Court held that the cost of
tearing out the floor and repairing the water line was covered by
the policy. The Court noted that this finding was supported by the
principle that an all-risk policy covers a loss unless that loss is
specifically excluded; the policy did not specifically exclude the
cost of repairing a plumbing system from coverage, it only
specifically excluded damage caused by earth movement.Florida
Insurance Guaranty Association, Inc. v. Castilla, No. 4D09-103, ___
So. 3d ___ (Fla. 4th DCA, September 30, 2009)The Castillas filed an
insurance claim with Florida Preferred Property Insurance Company
(PPI), alleging their home was damaged by Hurricane Wilma in
October, 2005. PPI issued a check for the claim, but the Castillas
found it insufficient and objected. PPI was liquidated and taken
over by FIGA, and the Castillas raised their claim with FIGA. FIGA
inspected the property and denied their claim, finding that the
damages were not caused by Wilma.The Castillas filed suit against
FIGA for breach of the insurance contract, claiming they furnished
FIGA with timely notice of loss and performed all conditions
precedent to recover under the policy and Florida law. FIGA filed a
motion to dismiss, arguing the Castillas failed to fulfill their
contractual obligations, citing to the provisions of the policy
that permitted appraisal.Two months after the Castillas filed suit,
FIGA determined that the patio damage was covered and informed them
that it would formally withdraw its previous denial of the claim.
FIGA then filed an amended motion to dismiss or abate the action,
arguing that the Castillas failed to satisfy all conditions
precedent, including appraisal, documentation to substantiate their
claim, and examination under oath. The trial court denied FIGAs the
motion, ordering it to answer the complaint.Moffett v. Computer
Sciences Corp., No. 05-1547, ___ F. Supp. 2d ___ (D. Md., July 6,
2009)The plaintiffs in this case were Maryland residents seeking to
recover damages for flood losses caused by Hurricane Isabel on
September 18, 2003. They were insured under the National Flood
Insurance Program (NFIP). Under the terms of the Standard Flood
Insurance Policy, proofs of loss had to be filed within 60 days of
the date of loss, by November 17, 2003. On October 28, 2003, FEMA
notified all potentially affected insureds that the deadline for
filing proofs of loss was extended until January 17, 2004. The
plaintiffs missed the deadline and then requested waivers of the
deadline, which FEMA denied. The issue before the Court was whether
it had authority to review FEMA's decisions regarding the
plaintiffs' individual requests for waiver of the deadline to file
proofs of loss.The plaintiffs argued the Court has authority to
review FEMA's waiver decisions under two theories. Citing 42 U.S.C.
4072, [fn1] the plaintiffs argued that a waiver request constitutes
a claim for purposes of section 4072, so the Court has the
authority to review FEMA's denials of waivers as well as denials of
claims of loss on the merits. Alternatively, the plaintiffs argued
that the Court had authority to review FEMAs waiver decisions under
the Administrative Procedure Act, 5 U.S.C. 702, which provides that
[a] person suffering legal wrong because of agency action, or
adversely affected or aggrieved by agency action within the meaning
of a relevant statute, is entitled to judicial review thereof. 5
U.S.C. 702 (2006).The defendants argued a claim under section 4072
can only mean a timely filed proof of loss for covered losses, not
a request for waiver of the time to file the claim. The statute
does not define the term claim, so the ordinary term prevails. The
ordinary meaning of claim is to assert a right, and a request for
waiver does not assert a right. To the contrary, it acknowledges
that no right exists and seeks leave to assert a right. The
defendants also argued the Administrative Procedure Act is
inapplicable because the plaintiffs have an adequate remedy in
section 4072. They further contended the APA does not apply because
FEMA's decision to deny the waiver requests is discretionary and
the Court lacked a meaningful standard against which to judge the
decision.Based on its interpretation of the word claim, the Court
determined that it had authority to review the waiver decisions
under 42 U.S.C. 4072. The Court held that the term claim was
ambiguous, and the ambiguity must be construed favorably to the
insured. Accordingly, the Court held that a claim included a
request for waiver of a proof of loss deadline.The Court then
concluded that FEMA abused its discretion in denying the plaintiffs
requests for waivers of the proof of loss deadline. FEMA did not
publicly disclose that it would grant waivers, nor did it announce
the criteria for obtaining waivers. That, concluded the Court, was
a problem:Its failure to disclose that waivers were even available
or on what grounds was arbitrary and capricious and, in any case,
constituted an abuse of discretion.The Court therefore finds as a
matter of law that all proofs of loss filed by Plaintiffs in this
case must be deemed timely [filed]._______________[fn1] 42 U.S.C.
4072 provides:[T]he Director [Administrator of FEMA] shall be
authorized to adjust and make payment of any claims for proved and
approved losses covered by flood insurance, and upon the
disallowance by the Director of any such claim ... the claimant ...
may institute an action against the Director on such claim in the
United States district court for the district in which the insured
property or the major part thereof shall have been situated, and
original exclusive jurisdiction is hereby conferred upon such court
to hear and determine such action without regard to the amount in
controversy.Citizens Prop. Ins. Corp. v. Garfinkel, No. 5D09-1641,
___ So. 3d ___ (Fla. 5th DCA, December 18, 2009)Citizens sought a
writ of prohibition directed to prevent the trial court from taking
any further action regarding a first-party bad faith claim brought
by Alan Garfinkel.Citizens sought a writ of prohibition directed to
prevent the trial court from taking any further action regarding a
first-party bad faith claim brought by Alan Garfinkel. Garfinkel
purchased a windstorm insurance policy from Citizens which was in
effect when his home was damaged by the multiple 2004 hurricanes.
After some litigation, the parties agreed to appraisal, and an
appraisal award was eventually entered in Garfinkels favor. When
Garfinkel moved to confirm the award, he sought an amount in excess
of the policy limits, arguing three distinct claims resulting from
three separate occurrences. The trial court confirmed the award,
but limited the amount awarded to the policy limits for a single
occurrence. Garfinkel then amended his complaint, arguing the right
to a final judgment on the breach of contract claim, and adding a
bad faith claim against Citizens under sections 624.155(1)(b)(1)
and 626.954(1)(i)(3), Florida Statutes (2008). Citizens moved to
dismiss the bad faith claim on the basis of sovereign immunity, but
the trial court denied the motion, and Citizens sought the writ
from the Fifth District Court of Appeal.The issue specifically
before the Court was whether Citizens is shielded by sovereign
immunity from bad faith claims.The enabling statute that created
Citizens made it clear that Citizens is a government entity and not
a private insurer. The Legislature made Citizens immune from all
liability and suit with five exceptions; bad faith was not an
exception. However, paragraph following the exceptions from
immunity, section 627.351(6)(r)(2), provides:2. The corporation
shall manage its claim employees, independent adjusters, and others
who handle claimsto ensure they carry out the corporation's duty to
its policyholders to handle claims carefully, timely,
diligently,and in good faith, balanced against the corporation's
duty to the state to man-age its assets responsibly to minimize its
assessment potential.Citizens argued that the plain meaning of the
statute is that there are only five exceptions to its immunity and
bad faith was not one of them. Garfinkel argued the requirement to
act in good faith immediately following the exceptions from
immunity suggests the Legislature intended a bad faith exception as
well.To resolve the issue, the Court applied standard principles of
statutory construction. First, when a statute articulates
exceptions, no other exceptions may be implied. As the Legislature
specified only five exceptions to its grant of immunity, it would
not be reasonable to think another grant would show up,
unidentified as such, in a nearby but separate paragraph. Second,
in construing statutes involving sovereign immunity, any waiver of
that immunity must be clear and unequivocal. The paragraph
explaining Citizens duty of good faith does not contain a clear
waiver.Garfinkel argued his claim existed under section 624.155,
Florida Statutes, which provides that any person may bring a civil
action against an insurer when damaged by the insurers failure to
act in good faith to settle claims. Recognizing that section
624.155 applies to private insurers, Garfinkel argued Citizens bad
faith liability comes from the above mentioned paragraph in the
enabling statute. The Court explained the problem with this
argument: Garfinkel's complaint specifically pleads that bad faith
liability is founded on section 624.155(1)(b). If Citizens is not
an authorized insurer under section 624.155(1)(b), then it cannot
be subject to bad faith claims pursuant to it.Additionally, the
Court noted that the Legislature specifically declined to subject
Citizens to bad faith claims during the 2007 legislative session. A
bill before the Senate attempted to add language that would have
made a claim arising under Citizens' duty to act in good faith one
of the immunity exceptions by adding the word or after the five
exceptions and before the subparagraph requiring Citizens to act in
good faith. That bill was redrafted to exclude the word or.
Additionally, a House bill that would have subjected Citizens to
all remedies was not enacted. Accordingly, the Court concluded that
recent legislative history suggested the Legislature did not intend
for section 627.351(6)(r)2 to create a private right of action by
policy holders against Citizens.The Court further noted that
Floridas other insurance risk appointment plans, the Florida
Insurance Guarantee Association (FIGA), and the Florida Medical
Malpractice Joint Under Writing Association (FMMJUA), were endowed
with similar immunity from bad faith causes of action. Finally, the
Court explained that a cause of action for bad faith is not
considered to be a willful tort that would give rise to a claim
under the specific exceptions from liability.In sum, the Court
granted the writ of prohibition, holding that Citizens is immune
from first-party bad faith claims pursuant to section
627.351(6)(r)1 and is not subject to bad faith liability under
section 624.155(1)(b)(1).State Farm Florida Ins. Co. v. Seville
Place Condominium Assn, Inc., No. 3D08-2538, ___ So. 3d ___, (Fla.
3rd DCA, October 14, 2009)InState Farm Florida v. Seville Place,
Floridas Third District Court of Appeal held that an insured could
amend their complaint to add a bad faith claim after coverage was
admitted by the insurer and an appraisal award had been entered,
but before final judgment.The issue on certiorari was whether a bad
faith claim was ripe, not whether bad faith existed, therefore, the
facts giving rise to the bad faith claim were not necessary to the
opinion. In this case though, the majority opinion detailed the
facts, noting the extraordinary length of time it has taken to
resolve the Association's claim, and describing State Farm's
actions as aggressive legal tactics and unfounded imposition of
conditions. As the facts giving rise to the potential bad faith
claim may well have been crucial to the two justice majoritys
decision, they are detailed below.The FactsOn October 24, 2005,
Hurricane Wilma caused substantial damage to the forty five roofs
covering the Seville Place residential condominiums. Seville Place
filed a claim with State Farm under its condominium association
insurance policy, which specifically covered direct physical loss
or damage to property caused by a hurricane. The policy specified
that any dispute between the insurer and insured regarding the loss
amount would be resolved by appraisal:If we [State Farm] and you
[the Association] disagree on the value of the property or the
amount of loss, either may make written demand for an appraisal of
the loss. In this event, each party will select a competent and
impartial appraiser. Each party will notify the other of the
selected appraiser's identity within 20 days after receipt of the
written demand for an appraisal. The two appraisers will select an
umpire. If the appraisers cannot agree upon an umpire within 15
days, either may request that selection be made by a judge of a
court having jurisdiction. The appraisers will state separately the
value of the property and amount of loss. If they fail to agree,
they will submit their differences to the umpire. A decision agreed
to by any two will be binding. . . . If we submit to an appraisal,
we will still retain our right to deny the claim.In January 2006,
State Farm made two payments on the claim which totaled $90,564.62.
Seville Places estimate of the damage exceeded $4.6 million. By
October 2006 (a year after the loss), Seville Place concluded that
further negotiation would be fruitless and made a written demand
for appraisal.State Farm claimed there was no clear disagreement
between the parties because it had not yet been allowed access to
all the damaged condominium units and declared it would agree to
appraisal only if Seville Place agreed to two conditions: 1) any
appraisal award must be a line item document, broken down by
building and unit number, including the pricing that establishes
the award of that item; and 2) State Farm required a sworn proof of
loss form.In February 2007, Seville Place filed suit against State
Farm for breach of the insurance contract and sought declaratory
relief regarding coverage and State Farm's waiver of policy
defenses. Seville Place also asked the court to enforce the
appraisal provision without State Farm's required conditions. State
Farm claimed that it agreed to appraisal, but renewed its request
for the special conditions.The trial court granted Seville Places
motion for partial summary judgment on the policy condition
defenses, based on the facts that State Farm acknowledged the loss
was covered by making the January 2006 payments and then denied the
balance of Seville Places claim. The circuit court also ordered
appraisal, without the conditions sought by State Farm, and allowed
sixty days for the completion of the process. State Farm moved for
an additional sixty days in order to inspect the interior of
several of the condominium units. The trial court granted the
extension, directed Seville Place to assist State Farm in accessing
the units, and set a final appraisal hearing for June 28,
2008.Seville Places appraiser and the umpire signed a final
appraisal award, fixing the insured loss at $2,960,405. The award
excluded any interest, costs, and attorney's fees that might be
determined by the court, and noted it should be reduced by amounts
State Farm previously paid and any applicable deductible.The day
before that hearing, State Farm filed an emergency motion and
affidavit seeking removal of the neutral umpire appointed by the
court. State Farm later supplemented this motion with a request for
an entirely new panel to conduct a new appraisal, asserting that
otherwise it would require many weeks, months, and possibly even
years to sort through the multiple issues related only to this
highly problematic and invalid appraisal gone wrong.The trial court
confirmed the award, denied State Farm's emergency motion for
removal of the neutral umpire, and granted the Seville Place's
motions to amend the complaint to add a statutory bad faith claim
and a demand for punitive damages. The court also reaffirmed that
State Farm's affirmative defenses had been subsumed in the
confirmation order and/or such defenses were waived by State Farm.
State Farm then filed the petition for certiorari at issue, arguing
that the trial court erred in allowing the complaint to be amended
with the bad faith claim.Whether the bad faith claim was ripeThe
Third District explained that two conditions must be met before a
statutory first-party bad faith action is ripe. First, the insurer
raises no defense which would defeat coverage, or any such defense
has been adjudicated adversely to the insurer. Second, the actual
extent of the insured's loss must have been determined.The Court
rejected State Farms argument that a trial was required on certain
affirmative defenses it believed were still pending and all
appellate remedies regarding that judgment must be exhausted before
a bad faith claim may proceed. No affirmative defenses remained
pending; State Farm waived most or all defenses to coverage by
acknowledging and paying Seville Place for the loss after the claim
was made. In dismissing State Farms argument, the Court
explained:[T]he procedural trenches and hurdles proposed by State
Farm would contravene the express objectives of the bad faith
statute and the Florida Insurance Code: the fair and prompt
investigation and adjustment of claims by insurers.The Court found
no authority to support State Farms contention that Seville Place
must obtain a final judgment from a jury before it may proceed with
its bad faith and punitive damages claim. To the contrary, the
Florida Supreme Court has held that an arbitration award
determining liability and extent of loss is a sufficient basis for
the commencement of a bad faith claim. The Court further noted that
State Farm bargained for the binding nature of the appraisal award
in the policy it drafted. The Third District held the remaining
calculations to the award, including subtraction of the three
percent hurricane deductible and prior payments and the computation
of prejudgment interest, were ministerial acts which did not affect
the final nature of the award. The Court further held that Seville
Places reserved motion for attorney's fees and costs allowed that
issue to be determined at the conclusion of the entire case.The
Court also rejected State Farms argument that a bad faith claim is
premature until the insurer exhausts all appellate remedies
regarding liability and loss amount, noting no decision by this
Court or the Florida Supreme Court has held that liability and the
extent of damages must also be finally final, surviving any
appellate remedies sought by an insurer, before the insured's bad
faith claim is ripe.The Court concluded with the following
observation regarding State Farms conduct:State Farm originally
estimated the Association's covered loss at $324,017. This is less
than eleven percent of the amount determined by the appraisal
process. State Farm will have an opportunity to explain this fact,
to explain the extraordinary length of time it has taken to resolve
the Association's claim, and to defend State Farm's aggressive
legal tactics (including the unfounded imposition of conditions on
the contractually-stipulated appraisal provision and the
last-minute attempt to remove the neutral umpire). For now,
however, we find no basis in this record to quash the orders below
as requested by State Farm.Justice Shepherd dissented, writing that
the majoritys decision to deny State Farms petition for certiorari
conflicted withNorth Pointe Ins. Co. v. Tomas, 999 So. 2d 728 (Fla.
3d DCA 2008), andXL Specialty Ins. Co. v. Skystream, Inc., 988 So.
2d 96 (Fla. 3d DCA 2008). Shepherd took issue with the fact that no
judgment had been entered in the case. According to Shepherd, it is
prejudicial to allow issues of bad faith into a coverage case, with
expanded bad faith discovery, before the underlying claim for
damages has been determined.As noted above, State Farms seemingly
bad faith conduct in handling the claim was not relevant to the
sole issue before the court-whether, by law, the bad faith action
was ripe. Yet Justice Salter took care to detail the abusive
tactics and even commented upon them in concluding his opinion. In
this case, bad facts made good law.Warfel v. Universal Ins. Co. of
North America, No. 2D08-3134, ___ So. 3d ___ (Fla. 2nd DCA,
December 9, 2009)The issue in this case was whether the amended
sections of Florida Statute sections 627.7065, 627 .7072, and
627.7073 (2005), which affected database information, testing
standards, and reporting requirements for sinkhole claims, created
a presumption that shifted the burden of proof to the homeowner to
disprove an insurers experts opinion that damage was not caused by
a sinkhole or whether it created a presumption that vanished once a
homeowner produced evidence that a sinkhole damaged his or her
property.In August 2005, Mr. Warfel noticed damaged walls and
floors in his home. He filed a sinkhole claim under his all-risk
policy with Universal, and Universal retained experts to conduct
the investigation required by Florida Statute section 627.707.
Universal denied the claim after the experts it retained concluded
that damage was caused by shrinkage, thermal stress, and
differential settlement, all of which were excluded from coverage
under the policy. Mr. Warfel then filed suit.Universal asked the
trial court to determine that Florida Statute section 90.304
allowed a jury instruction based on section 627.7073(1)(c) as a
rebuttable presumption affecting the burden of proof. Florida
Statute section 90.304 provided:In civil actions, all rebuttable
presumptions which are not defined in s. 90.303 are presumptions
affecting the burden of proof.Section 627.7073(1)(c) provided: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.Universal argued that its expert report findings were
presumptively correct, and the presumption shifted the burden of
proof to Mr. Warfel to prove that the damage was caused by a
sinkhole. Mr. Warfel argued that the section 627.7073(1)(c)
presumption was a vanishing presumption, which affected the burden
of producing evidence but did not shift the burden of proof to him.
The trial court agreed with Universal and instructed the jury:You
must presume that the opinions, findings, and conclusion in the SD
II report as to the cause of damage and whether or not a sinkhole
loss has occurred are correct. This presumption is rebuttable. The
Plaintiff has the burden of proving by a preponderance of the
evidence that the findings, opinions, and conclusions of the report
are not correct.Floridas Second District Court of Appeal, however,
sided with Warfel. The Court explained that in enacting the
statutes relating to the expert reports, the Legislature did not
clearly state that public policy requires a homeowner to bear the
burden to disprove the findings and recommendations of the
insurer's engineers and geologists. The Court also noted that
all-risk policies traditionally give the insurer the burden to
prove that a claimed loss is not covered. The Court then noted, it
must assume that the legislature was aware of this fact when it
enacted section 627.7073(1)(c), and that the Legislature knows how
to create burden-shifting presumptions under section 90.304.Warfel
v. Universal, 2009 WL 4640882 at *2 (Fla. 2d DCA 2009). In the
absence of clear Legislative intent otherwise, the Court concluded
the presumption under section 627.7073(1)(c) was a vanishing or
bursting bubble presumption that affected only Mr. Warfel's burden
of producing evidence. As Mr. Warfel produced credible evidence
contradicting the presumption, the presumption vanished and the
issue should have been determined on the evidence as though no
presumption ever existed.Because the trial court misapplied the
presumption and gave the jury an instruction that improperly
shifted the burden of proof, the Court awarded Mr. Warfel a new
trial.Justice Villanti dissented, writing that Florida Statute
section 90.303 and the public policy behind Florida Statute
sections 627.7065, 627 .7072, and 627.7073 support a burden
shifting instruction.State Farm Ins. Co. v. Nichols, 21 So. 3d 904
(Fla. 5th DCA, November 6, 2009)In this case, several policyholders
brought suit after State Farm refused to pay damages awarded for
subsurface sinkhole repairs. The policyholders each received
appraisal awards that separately listed the amount of above ground
and subsurface damages caused by sinkholes. State Farm promptly
paid the amounts designated for above ground damage but withheld
the amounts designated for subsurface damage, arguing that Florida
Statute 627.707(5)(b) (2007) authorized it to withhold the funds
until the homeowners had contracted for the repairs.The portion of
the statute upon which State Farm relied stated:The insurer may
limit its payment to the actual cash value of the sinkhole loss,
not including underpinning or grouting or any other repair
technique performed below the existing foundation of the building,
until the policyholder enters into a contract for the performance
of building stabilization or foundation repairs. After the
policyholder enters into the contract, the insurer shall pay the
amounts necessary to begin and perform such repairs as the work is
performed and the expenses are incurred. The insurer may not
require the policyholder to advance payment for such repairs.The
insureds argued that that the language in their homeowners
policies, which required payment within sixty days after the amount
of the loss is settled by appraisal, controlled.Finding that the
language of Florida Statute 627.707(5)(b) was permissive and not
mandatory, Floridas Fifth District Court of Appeal agreed with the
insureds and held State Farm to the terms of the policy it wrote.We
construe this language as permissive, not mandatory. Because it is
permissive, the policy language that requires payment of subsurface
repairs within sixty days after the appraisal award is not in
conflict with the statute and is binding on the parties to the
insurance contract.American Capital Assurance Corp. v. Courtney
Meadows Apts., No. 1D09-2940, ___ So. 3d ___ (Fla. 1st DCA, April
7, 2010)A hailstorm damaged the roof of the insured apartment
complex. On October 3, 2008, the insurer sent a final estimate,
which indicated that only the office roof needed to be replaced and
that the remaining roofs in the complex could be repaired. The
final estimate also included other items of loss and estimated the
total amount of damage at $168,285.98.A hailstorm damaged the roof
of the insured apartment complex. On October 3, 2008, the insurer
sent a final estimate, which indicated that only the office roof
needed to be replaced and that the remaining roofs in the complex
could be repaired. The final estimate also included other items of
loss and estimated the total amount of damage at $168,285.98.On
October 22, 2008, the insurer gave the insured a check for
$168,285.98, asked the insured to file a sworn proof of loss, and
stated that if the parties were unable to resolve the dispute the
insurer may wish to proceed with appraisal.November 11, 2008, the
insured rejected the insurer's check and refused to provide the
sworn proof of loss. The insured agreed with the portion of the
final estimate regarding the heat, vent, and air conditioning;
window reglazing; and painting the gazebo. The insured also claimed
additional items that were not included in the final estimate. On
November 18, 2008, the insurer demanded appraisal. On December 23,
2008, the insured filed a complaint, seeking declaratory relief and
alleging numerous breaches of contract. The insurer in turn moved
to dismiss and/or abate the action and to compel appraisal, arguing
that it