Robert Curtis and Darlene Curtis v. Tower Hill Prime Insurance Co.

Robert and Darlene Curtis sued Tower Hill Prime Insurance Co. in a

dispute over a sinkhole insurance claim. They appeal a final summary judgment in

favor of Tower Hill. We reverse and remand for further proceedings.

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The Curtises owned a home that was insured under a policy issued by

Tower Hill.1 During the policy term, the Curtises made a claim for damage under the

policy's sinkhole coverage. Tower Hill retained an engineering company to investigate,

and the engineering company concluded that the cause was sinkhole activity, which

was covered by virtue of a Sinkhole Loss Coverage endorsement.2 The insurance

company obtained estimates to stabilize the land and building at a cost of $93,000 to

$95,000. In contrast, estimates secured by the Curtises ranged from $193,090 to

$342,210. These costs were in addition to that of making cosmetic repairs to the home,

which was estimated by Tower Hill at $24,218 and by the Curtises at $36,818.

After receiving the repair estimates obtained by the Curtises, Tower Hill

initiated a neutral evaluation, a statutory procedure applicable to sinkhole claims and

referenced in the policy's sinkhole endorsement. The property owners then filed suit in

circuit court. Their complaint alleged, in part, that the insurance company "denied the

claim as a sinkhole loss and/or refused to honor the claim or pay benefits to the

Plaintiffs or loss payees/third-party beneficiaries as provided for in the insurance policy."

In response to the complaint, Tower Hill filed three separate motions for summary

judgment. The circuit court granted two of the motions and denied the third. Final

judgment was thereafter entered in favor of Tower Hill.

We review summary judgments de novo, see Trinidad v. Fla. Peninsula

Ins. Co., 121 So. 3d 433, 437 (Fla. 2013), applying the well-established standard that

"[s]ummary judgment is proper if there is no genuine issue of material fact and if the

1The form of insurance is DP 00 03 07 88, copyright Insurance Services

Office, Inc., 1988, 1992, with a Florida endorsement, form DW-0023-09 (04-09).

2Form IL-0502-00 (06/07).

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moving party is entitled to a judgment as a matter of law," Volusia Cnty. v. Aberdeen at

Ormond Beach, L.P., 760 So. 2d 126, 130 (Fla. 2000). For the following reasons, we

conclude that Tower Hill's summary judgment motions were not well taken.

The two motions granted by the circuit court were captioned "No Payment

Owed" and "Violation of Section 627.7074(10), Florida Statutes, and 'Suit Against Us'

Provision," respectively. In the former motion, Tower Hill maintained that the claim was

not ripe because no payment was due under the policy and, therefore, it had not

breached the contract of insurance. This motion was based on the "Loss Payment"

provision in the Florida endorsement, which provided as follows:

Loss Payment. We will adjust all losses with you. We will

pay you unless some other person is named in the policy or

is legally entitled to receive payment. Loss will be payable:

a. Twenty (20) days after we receive your proof of loss and

reach written agreement with you; or

b. Sixty (60) days after we receive your proof of loss; and:

(1) There is an entry of a final judgment; or

(2) There is a filing of an appraisal award or mediation

settlement with us.

c. Within 90 days of receiving notice of a property insurance

claim. We will pay or deny such claims, or portions

thereof, unless there are factors beyond our control that

would reasonably prevent payments.

Tower Hill relies on Geico General Insurance Co. v. Graci, 849 So. 2d 1196, 1199 (Fla.

4th DCA 2003), for the proposition that "[a]n insurer's refusal to meet an insured's

demand for payment under a policy is not a breach if no payment is then due." Thus, it

contends, the Curtises cannot maintain a breach-of-contract suit until the time for

payment under the loss-payment provision has come and gone without payment. But

Tower Hill reads the complaint too narrowly and Graci too broadly.

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Graci was a venue case, and it analyzed the plaintiff's cause of action to

determine where it accrued for venue purposes. Id. at 1197. The Fourth District held

that the claim was not for breach of contract; rather, it noted that the insured alleged an

action "for a determination of her entitlement to, and amount of, damages." Id. at 1197.

"Although Graci's action against Geico is, indeed, an action on the contract of

insurance, it is not an action for a breach of that contract; rather, it is an action filed

pursuant to the contract." Id. at 1199. Thus, the cause of action accrued in the county

where the accident occurred.

Here, the Curtises filed an action on the insurance contract to determine

their entitlement to and amount of damages. The loss-payment provision of the policy

did not render the suit premature; indeed, that provision expressly contemplated that

there might be a final judgment—presumably stemming from a lawsuit—before payment

was due. But certainly, even when an insurance suit is filed prematurely, final summary

judgment would not be the appropriate remedy where, as here, the insurance company

has admitted coverage. See Shuck v. Bank of Am., N.A., 862 So. 2d 20, 24-25 (Fla. 2d

DCA 2003) (discussing circumstances when premature suits should be either abated or

dismissed without prejudice). The circuit court erred in granting this motion for

summary judgment. See Panjikaran v. State Farm Fla. Ins. Co., 77 So. 3d 1278, 1280

(Fla. 2d DCA 2012) (reversing summary judgment when it was "unclear whether the

parties dispute the amount of loss or a denial of coverage").

Tower Hill's other successful summary judgment motion contended that,

by filing suit just after the insurer initiated a neutral evaluation, the Curtises violated the

stay imposed by the neutral evaluation statute and breached the "Suit Against Us"

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provision in the insurance contract.3 Tower Hill asserted that neutral evaluation was a

condition precedent under the policy because it was referenced in the Sinkhole Loss

Coverage endorsement. It further argued that the Curtises' filing of suit violated the

neutral evaluation stay and thereby violated the Suit Against Us provision in the Florida

endorsement, which stated that "[n]o action can be brought unless the policy provisions

have been complied with and the action is started within five (5) years after the date of

loss."

The legislature has established a statutory neutral evaluation process

applicable to sinkhole insurance claims. The statute includes a stay provision that

provides as follows: "Regardless of when noticed, any court proceeding related to the

subject matter of the neutral evaluation shall be stayed pending completion of the

neutral evaluation and for 5 days after the filing of the neutral evaluator's report with the

court." § 627.7074(10), Fla. Stat. (2011).4 Notably, the statute does not by its terms

preclude the filing of a lawsuit. In contrast, the automatic stay provision in bankruptcy

expressly prohibits the "commencement or continuation" of a judicial action against the

debtor. 11 U.S.C. § 362(a)(1); see Barton-Malow Co. v. Gorman Co. of Ocala, Inc., 558

3Conversely, however, Tower Hill argued that its own filing of summary

judgment motions did not violate the statutory stay because the motions were not heard

until after the stay was lifted. Of course, the Curtises' lawsuit has never been heard.

4We cite the 2011 version of the stay provision because this court has

found it procedural and thus appropriate for retroactive application. See Citizens Prop.

Ins. Corp. v. Trapeo, 136 So. 3d 670, 676 (Fla. 2d DCA 2014) (noting general rule that

"statute in effect at the time an insurance contract is executed governs substantive

issues arising in connection with that contract" (id. at 675 (quoting Menendez v.

Progressive Express Ins. Co., 35 So. 3d 873, 876 (Fla. 2010) (internal quotation mark

omitted)))). In this particular case, however, the difference in statutory language has no

effect.

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So. 2d 519, 521 (Fla. 5th DCA 1990) (filing suit violates automatic stay in bankruptcy

and renders complaint void as to debtor). Likewise, Florida's medical malpractice law,

which mandates the giving of a presuit notice to the defendant, expressly provides that

"[n]o suit may be filed" during the 90-day presuit investigation period following the

notice. § 766.106(3)(a), Fla. Stat. (2014). The neutral evaluation statute contains no

such prohibition. The Curtises' mere filing of suit did not violate the stay provision in the

statute, and therefore, it did not violate the insurance policy. The summary judgment on

this basis was error.

As seen, the circuit court erred by granting summary judgment on the two

motions described. We must also discuss the motion that was denied. In a motion

captioned "Failure to Satisfy Post-Loss Obligations," Tower Hill asserted that the

Curtises breached the policy by failing to comply with a duty after loss and that this

breach negated any recovery under the policy. It advances this argument on appeal as

a right-for-the-wrong-reason rationale for affirming the summary judgment. See Dade

Cnty. Sch. Bd. v. Radio Station WQBA, 731 So. 2d 638, 644-45 (Fla. 1999) (stating the

"tipsy coachman" rule).

The insurance policy's Florida endorsement imposed on the insured

certain "duties after loss," including a duty to "show the damaged property" "as often as

[Tower Hill] reasonably require[d]."5 It is undisputed that the Curtises met this duty with

5Duties After Loss

In case of a loss to covered property, you must see that the

following are done:

a. Give prompt notice to us or our agent;

. . . .

d. Protect the property from further damage. If repairs to

the property are required, you must:

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respect to Tower Hill's engineer, but they did not cooperate with a contractor retained by

the insurer to estimate cosmetic damage to the home. Tower Hill has not contended

that the Curtises failed to comply with any other enumerated duty.

(1) Make reasonable and necessary repairs to protect

the property; and

(2) Keep an accurate record of repair expenses;

e. Cooperate with us in the investigation of a claim;

f. Prepare an inventory of damaged personal property

showing the quantity, description, "actual cash value" and

amount of loss. Attach all bills, receipts and related

documents that justify the figures in the inventory;

g. As often as we reasonably require:

(1) Show the damaged property;

(2) Provide us with records and documents we

request and submit to recorded statements and

examinations under oath, while not in the presence of

any other "insured", and sign the same.

Also, your representative, including any public

adjuster engaged on your behalf, must each submit to

recorded statements and examinations under oath,

while not in the presence of any other "insured", and

sign the same.

. . . .

h. Send to us, within 60 days after our request, your

signed, sworn proof of loss which sets forth, to the

best of your knowledge and belief:

(1) The time and cause of loss;

(2) The interests of the "insureds" and all others in the

property involved and all liens on the property;

(3) Other insurance which may cover the loss;

(4) Changes in title or occupancy of the property

during the term of the policy;

(5) Specifications of damaged buildings and detailed

repair estimates;

(6) The inventory of damaged personal property

described in 4.f. above;

(7) Receipts for additional living expenses incurred

and records that support the fair rental value loss;

. . . .

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The circuit court correctly denied summary judgment on this ground for

two reasons. First, Tower Hill did not show that it was prejudiced by the Curtises' lack

of cooperation, which is required before an insured may be held to have forfeited

benefits by materially breaching the insurance policy's cooperation clause. See Am.

Fire & Cas. Co. v. Collura, 163 So. 2d 784, 792-94 (Fla. 2d DCA 1964) (distinguishing

breach of notice-of-claim condition, where prejudice to insurer is presumed, from breach

of cooperation condition, where insurer must show it was substantially prejudiced by

material breach, notwithstanding that policy purported to classify cooperation condition

as condition precedent); see also Bankers Ins. Co. v. Macias, 475 So. 2d 1216 (Fla.

1985).

Second, the Curtises partially complied by cooperating with the

investigation by Tower Hill's engineer on the more significant aspect of damages. "[I]f

the insured cooperates to some degree or explains his failure to comply, whether the

insured materially breached the policy remains a question for the fact finder." Jyurovat

v. Universal Prop. & Cas. Ins. Co., 84 So. 3d 1238, 1241 (Fla. 2d DCA 2012); see also

Makryllos v. Citizens Prop. Ins. Corp., 103 So. 3d 1032, 1034 (Fla. 2d DCA 2012)

("Such partial cooperation can raise a fact question concerning whether the insurer

should be able to declare a breach of the insurance contract that precludes recovery.").

We reverse the summary judgment and remand for further proceedings.