Kelley Kronenberg - In The Know - First Party Property Appellate - April 2023

IN THE NOW

FIRST- PARTY PROPERTY APPELLATE EDITION

IN THIS ISSUE:

• Application of Section 627.7152, Florida Statutes

• Summary Judgment

• Prejudgment Interest

• Appraisal

• Limitation on Corporate Representative Testimony

FIRST-PARTY PROPERTY APPELLATE TEAM

ADMISSIONS

Florida • Georgia • United States Court of Appeal, Eleventh Circuit

SELECTED OPINIONS

For any questions, please contact:

Jeffrey M. Wank Chair of First-Party Property and Insurance Coverage

Fort Lauderdale

T: (954) 370-9970

jwank@kklaw.com

w Expert Inspections, LLC d/b/a ITest d/b/a Moldexpert.com a/a/o Pat Beckford v. United Property & Casualty Insurance Company, 333 So.3d 200 (Fla. 4th DCA 2022) (holding that an insurer cannot be required to follow the terms of an AOB contract where the insurer is not a party to that contract).

w The Kidwell Group, LLC d/b/a Air Quality Assessors of Florida a/a/o Maria Amadio v. Olympus Insurance Company, Case No. 5D21-2955 (Fla. 5th DCA July 22, 2022) (interpreting section 627.7152, F.S., as applying to AOB contracts executed after the enactment of the statute, finding the policy inception date irrelevant to the analysis).

Kimberly J. Fernandes Partner Tallahassee | Atlanta

T: (850) 577-1301

kfernandes@kklaw.com

w Saunders v. Florida Peninsula Insurance Company, 314 So.3d 592 (Fla. 3d DCA 2020) (interpreting the “faulty workmanship” policy exclusion to include the workmanship process as well as the finished product in affirming the insurer’s denial of a property damage claim).

w The Kidwell Group, LLC d/b/a Air Quality Assessors of Florida a/a/o Benjamin Kivovitz, Case No. 4D21-2843 (Fla. 4th DCA June 15, 2022) (enforcing the new section 627.7152, F.S., requirement of including a line-item estimate with an AOB contract at the time of execution)

ADMISSIONS

Florida • U.S. District Court, Northern District of Florida • U.S. District Court, Middle District of Florida

SELECTED OPINIONS

w Progressive American Insurance Company v. Glassmetics, LLC, No. 2D21-488, 2022 WL 1592154 (Fla. 2d DCA 2022) (“we reverse the trial court’s order and its conclusions (1) that the appraisal provision was against the public policy underlying section 627.428; (2) that the appraisal provision failed to provide sufficient procedures and methodologies; (3) that Progressive waived its appraisal right; (4) that the appraisal provision was unenforceable because Progressive failed to prove that the insured knowingly, voluntarily, and intelligently waived his rights of access to courts, to a jury trial, and to due process; and (5) that the appraisal provision contains an ambiguity.”).

Daniel Montgomery Partner Jacksonville

T: (904) 549-7700

dmontgomery@kklaw.com

w All Auto Glass v. Progressive American Ins. Co., Case No. 2018-SC-3126, 2019-33-AP (Fla. Seminole Cnty. Appellate Division.) (“reversing trial court, holding ruling of district court of appeal in jurisdiction other than where trial court is located is binding upon trial court absent conflict with another district court of appeal. )

w Progressive Am. Ins. Co. v Broward Ins. Recovery Ctr., LLC, 322 So. 3d 103 (Fla. 4th DCA 2021) (“reversing trial court, holding prohibitive cost doctrine inapplicable to appraisal”).

ADMISSIONS

Louis Reinstein Partner Fort Lauderdale

T: (954) 370-9970

lreinstein@kklaw.com

Florida • District of Columbia

• United States District Court, Southern District of Florida

• United States District Court, Middle District of Florida • United States District Court, Northern District of Florida • United States Court of Appeals, Eleventh Circuit Supreme Court of the United States

SELECTED OPINIONS

w Taffe v. Wengert, 775 F. App’x 459 (11th Cir. 2019) (reversing the denial of summary judgment in the district court for the sheriff and finding the sheriff was not negligent in the hiring, supervision, or retention of deputy sheriff)

w Taffe v. Wengert, 140 S. Ct. 1106, 206 L. Ed. 2d 179 (2020) (Petition for writ of certiorari to the United States Court of Appeals for the Eleventh Circuit denied).

w Williams v. Tony, 319 So. 3d 653 (Fla. 4th DCA 2021) (holding the plaintiff inmate was not an intended third-party beneficiary of the contract between county sheriff and inmate medical services provider, and, thus, could not pursue a negligence claim against provider based on the contract).

w People’s Tr. Ins. Co. v. Progressive Express Ins. Co., 336 So. 3d 1207 (Fla. 3d DCA 2021) (holding the commercial automobile liability policy excluded coverage for property damage caused by improper operation of mobile crane mounted on a truck).

w Watkins v. Pinnock, 802 F. App’x 450, 454 (11th Cir. 2020) (holding that the plaintiff’s proposed amendments could not cure the deficiencies in the fifth amended complaint as the factual allegations did not support deliberate indifference by the nursing staff).

Application of Section 627.7152, Florida Statutes

Summary Judgment

FULL PRO RESTORATION,

TOTAL

CARE RESTORATION, LLC, a/a/o YOEL BERNAL v. CITIZENS PROPERTY INS. CORP., No. 3d22711 (Mar. 15, 2023)

KK TAKEAWAY: A generic price list is not a per-unit cost estimate.

BACKGROUND:

Total Care’s complaint was dismissed for failure to comply with section 627.7152, Florida Statutes. Specifically, the AOB did not contain an estimate. Specifically, it contained a document titled “Itemized per-Unit Cost Estimate.” However, the document only generally listed a unit price for each item. Citizens filed a motion to dismiss, arguing that the price list was not a per-unit cost estimate, and the trial court agreed, dismissing the case with prejudice.

The Third District Court of Appeal agreed with the trial court holding “[s]uch a generic menu of services available to any customer manifestly fails to comply with the itemized, per unit cost estimate…” required by section 627.7152(2)(a)(4).

a/a/o PLACIDO FERNANDEZ v. CITIZENS PROPERTY INS. CORP., 3D21-2312 (Mar. 15, 2023)

KK TAKEAWAY: The trial court is not required to continue summary judgment hearing where the non-moving party fails to respond to factual assertions.

BACKGROUND:

This is a Hurricane Irma claim in which coverage was denied due to wear, tear, and deterioration. Citizens hired an engineer who opined that the damage to the property was not the result of Hurricane Irma. The insured subsequently filed an amended complaint in June 2020 asserting the failure to pay the Full Pros roof invoice in full.

Citizens moved for summary judgment on two grounds:

1) The roof did not suffer a covered perilcreated opening which water entered, and Full Pro did not present evidence to the contrary; and

2) Full Pro failed to meet its burden of proof to establish an exception to the policy exclusion.

The summay judgment hearing was postponed by Full Pro several times due to the insured’s lack of cooperation in permitting a re-inspection for Full Pro’s expert. Full Pro decided to rely upon the deposition transcripts of Citizens’ engineer. During deposition, Citizens’ engineer opined that two shingles did appear to be blown off due to lack of adhesion. Still, it was unclear whether it was in conjunction with the hurricane.

During the hearing, an argument was raised that Full Pro could not rely on late disclosed evidence pursuant to the new summary judgment rule. Full Pro argued that Rule 1.510(c)(5)(e) permits the court to allow additional time to provide competing evidence. Citizens argued that the evidence Full Pro relied upon was clearly in the record, and they had ample time to rely on such if they chose. The trial court granted Citizens’s summary judgment and denied Full Pro’s request for a continuance.

The Third District Court of Appeals held that the trial court was within its discretion to deny continuance as Rule (5)(e) is discreatonary. While Rule 1.510(5)(c)(d) provides a further basis for continuance, the key issue is prejudice. The Third District relied upon the Second District’s opinion in Rice v. NITV, LLC for the factor test to evaluate prejudice on the denial of the continuance of a summary judgment hearing:

1) Whether the movant suffers injustice from denial of the motion;

2) Whether the underlying cause for the motion was unforeseen by the movant and whether the motion is based on dilatory tactics;

3) Whether prejudice and injustice will befall the opposing party if the motion is granted.

19 So. 3d 1095, 1099 (Fla. 2d DCA 2009).

In this case, there was no evidence that a continuance would result in additional evidence creating a genuine issue of material fact. Where outstanding discovery is immaterial to the case’s dispositive issues, there is no abuse of discretion.

Prejudgment Interest

HAWKS NEST CONDOMINIUM, INC., etc. v. WESTCHESTER SURPLUS LINES INS. CO., No. 3D22-0102 (Mar. 15, 2023)

KK TAKEAWAY: Loss Settlement provision controls when benefits are due.

KK TAKEAWAY: Agreement to appraisal without previous denial of coverage is not a basis for prejudgment interest from the time of submission of proof of loss.

BACKGROUND:

The trial court entered summary judgment in favor of the insured for entitlement to fees and post-arbitration award interest but denied prejudgment interest for the covered loss. The insured claimed it was entitled to prejudgment interest because a carrier wrongfully denied its claim.

The policy required payment within 30 days if the insured has complied with all prerequisites for coverage and the parties either “reached agreement…on the amount of loss” or “[a]n appraisal award has been made.”

The insured claimed that Carrier violated that loss payment provision by failing to provide payment within 30 days of submission of the proofs of loss. The insured submitted its proof of loss, and Carrier did not respond.

Insured filed a petition to compel appraisal, and Carrier failed to respond, resulting in default. The carrier sought to vacate the default under excusable neglect. Carrier also filed several affirmative defenses, including applying the pre-existing loss exclusion. Subsequently, Carrier agreed to appraisal and issued an undisputed partial payment. An award was entered in favor of the Insured.

The Third District Court of Appeals held that this case differs from a scenario where the Carrier denies coverage. The denial of coverage would trigger entitlement to prejudgment interest. However, submitting the proof of loss would only trigger the right to payment if Carrier agreed with the amount of loss or if an appraisal award was issued. The appraisal was part of the contemplated process regarding loss payments, thus, payment was timely made.

Appraisal

BACKGROUND:

CERTAIN UNDERWRITERS AT LLOYD’S LONDON, etc., et al. v. GABLES COURT CONDOMINIUM ASSOCIATION INC., No. 3d22-436 (Mar. 1, 2023)

KK TAKEAWAY: If Citizens asserts that appraisal is premature due to failure to comply with post-loss duties, a trial court must hold an evidentiary hearing to determine whether an insured complied with his obligations.

The insured filed a complaint for breach of contract after Citizens refused to participate in the appraisal. Citizens opposed appraisal due to a failure to comply with post-loss duties. At the hearing to compel appraisal, evidence was not put on to show that Insured complied with his post-loss duties. Instead, Insured’s counsel made an argument that Insured complied. The trial court agreed with the Insured and compelled appraisal.

The Third District reversed the order compelling appraisal and remanded the trial court for an evidentiary hearing to determine whether the Insured complied with his postloss obligations.

KK TAKEAWAY: Counsel argument from briefs is not evidence.

Limitation on Corporate Representative Testimony

MARIA MESA, et. al. v. CITIZENS PROPERTY INS. CORP., No. 3d 22398 (Mar. 1, 2023)

BACKGROUND:

During the trial, Citizens elicited testimony from its corporate representative regarding the findings of the field adjuster. Material is that the field adjuster did not testify at trial, nor were his reports admitted into evidence before the corporate representative’s testimony. Before this testimony, the Insured’s counsel objected due to the corporate representative’s lack of personal knowledge. The jury returned a verdict in favor of Citizens based upon the exclusion for rainwater, part of the findings of the field adjuster.

KK TAKEAWAY: Corporate representatives can only testify to matters of personal knowledge.

KK TAKEAWAY: The discovery rule for corporate representatives is limited to discovery and does not override the evidentiary code requiring personal knowledge.

The Third District Court of Appeals reversed the final judgment and remanded for a new trial. The basis was that the corporate representative had no personal knowledge. Her testimony regarding facts and findings within the report was hearsay. The report and its findings were not introduced into evidence, thus, reference to such was hearsay and beyond the personal knowledge of the corporate representative.

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