Sunshine State Insurance Company v. Frances Corridori

The issue presented is whether the trial court erred in finding that appellees were entitled to a n appraisal pursuant to a homeowners' insurance policy where coverage issues remained in dispute. We conclude that the appraisal was premature, and we reverse.



Appellees purchased homeowners' insurance from appellant in 2005. After sustaining damage during Hurricane Wilma, appellees filed a claim for reimbursement. Appellant paid that claim and closed the case. Two years later, appellees submitted a "supplemental claim” for damages discovered by a public adjuster. In response, appellant requested a sworn proof of loss, to be filed within ninety days, and examinations under oath. Appellees did not comply with the deadlines, and the late submission was, according to appellant, incomplete and inaccurate.



Appellant denied the claim, concluding that the damages claimed were not in fact "supplemental” to the original damages. Appellants further claimed that appellees breached the contract by failing to comply with the proof of loss requirement, and appellees materially breached the policy.



Appellees responded by filing a petition to compel an appraisal in the trial court. Without taking any evidence, the trial court concluded that the new claim was supplemental and that appellees had not materially breached the policy. The trial court ordered the parties to appraise the loss. Appellant claims that the trial court erred by holding, as a matter of law, that the new claims are covered by the policy.



We review de novo a trial court's order compelling an appraisal under an insurance policy. Fla. Ins. Guar. Ass'n v. Castilla, 18 So. 3d 703, 704 (Fla. 4th DCA 2009).



In Johnson v. Nationwide Mutual Insurance Co., 828 So. 2d 1021, 1025-26 (Fla. 2002), the Florida Supreme Court recognized that coverage issues must be resolved before an appraisal of the amount of a loss is ordered. Issues of coverage are "for judicial determination by a court,” not the appraisal panel. Id. at 1026. Once the court establishes that the losses are covered by a policy, then those losses may be appraised.



The parties dispute whether the claimed losses are covered by the policy and whether appellees complied with the policy requirements.



Specifically, appellees claim that their compliance with the policy requirements was not necessary because appellant previously admitted coverage. Even if appellant did not admit coverage, appellees argue that they substantially complied with the requirements and should not be found in breach of the policy. By contrast, appellant claims it never admitted coverage and maintains that appellees' compliance with the policy demands was insufficient.



As this court has previously noted, where the "insured cooperates to some degree or provides an explanation for its noncompliance, a fact question is presented” regarding the necessity or sufficiency of compliance. Haiman v. Fed. Ins. Co., 798 So. 2d 811, 812 (Fla. 4th DCA 2001) (citation omitted). Whether appellees' compliance with the policy terms was necessary or sufficient is a dispute of fact. The trial court, without taking any evidence, did not resolve this dispute of fact with competent evidence to support its determination of coverage.



Because the trial court must resolve all underlying coverage disputes prior to ordering a n appraisal, we reverse and remand for further proceedings consistent with this opinion.



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See: http://www.4dca.org/opinions/Feb%202010/02-03-2010/4D09-2502.op.pdf

Reversed and remanded.

Editor's Note: Mr. Schwartz commented as follows:

"Your summary is well written but I would clarify that the insurer appealed the lower court rulings not simply on the grounds the court erred in determining coverage without any evidentiary hearing but that any demand for appraisal is improper and premature where the insurer has denied the claim. We also argued and won the issue that the insured’s distinction between some original claim denial and supplemental claim denial was baseless. In essence the insured argued that once the insurer pays a claim it loses the right to raise coverage defenses upon presentation years later of a supplemental claim. The appellate court rejected this distinction.



The significance of the decision here in Florida lies in the fact that there are hundreds if not thousands of such “supplemental” hurricane claims being presented by Public Adjusters years after the ’04 Hurricanes Frances and Jeanne, and ’05 Wilma storm (among other storms). Public Adjusters have been presenting these “supplemental” claims often resisting insurer requests for information during its re-opened investigation of these supplemental claims, instead demanding appraisal. The insurer takes the position, now upheld by the court, that an insured must first cooperate with such investigation as a condition precedent to any right to compel appraisal and further, where the insurer determines for whatever reasons that there is no coverage for the supplemental claim, there is no right at all to compel such an appraisal-the only proper remedy being a lawsuit for coverage and a trial on the merits whether the claim is covered and whether the insured has complied with post-loss duties of cooperation. "