• Fraud and Misrepresentation – AOB
• Appraisal
• Is engineer report a covered loss?
• Standing
• Notice of property insurance claim
• Evidence – Limits on CR testimony
• Burden of Proof – Excluded Collapse
• Bad Faith
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 CoverageFort 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”).
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).
SFR SERVICES, LLC a/a/o DONALD AND JANE MARSTON v. TOWER HILL SIGNATURE INS. CO., 6D2336 (June 30, 2023)
KK TAKEAWAY:
Assignee of benefits is subject to policy concealment and fraud provisions.
Insureds contracted with SFR to replace their roof and executed an assignment of benefits. SFR subsequently filed a lawsuit against Tower Hill after denying the claim. Tower Hill raised multiple affirmative defenses, including material misrepresentation. The jury found that although the property was damaged by Hurricane Irma, SFR misrepresented material facts and circumstances of the loss.
SFR argued on appeal that it is entitled to a directed verdict on the misrepresentation defense because an assignee is not subject to the concealment and fraud provision of the policy. SFR relied on the Shaw decision arguing that an assignee of benefits is not subject to duties under a policy.
The Sixth District analogized this to the recent holding from the Second District Court of Appeal, Webb Roofing & Construction, LLC v. FedNat Ins. Co., 191 So. 3d 961, 962 (Fla. 2d DCA 2021), which held that an assignee of benefits is subject to the appraisal provision. While this case did not address appraisal, the basis is the same; the concealment and fraud condition does not outline duties to be performed by an Insured, but rather the remedy for the carrier in the event of fraudulent conduct. Further, just like an appraisal, the provision would have no value if a party could escape such a condition by contracting to a third party.
FIRST ACCEPTANCE INS. CO., INC. v. AT HOME AUTO GLASS, LLC
a/a/o PETRA JAMES, 6D23-1192 (June 9, 2023)
KK TAKEAWAY:
An appraisal is a remedial mechanism to resolve disputes over the “scope and amount of loss.”
First Acceptance sought a non-final appeal for the trial court’s order denying appraisal. The Sixth District denied jurisdiction as to the basis for the order denying the motion to dismiss, but granted jurisdiction to review the motion to compel appraisal.
As background, At Home filed a breach of contract action as an assignee after a dispute over the value of the loss. During the claim, First Acceptance paid At Home for what it deemed to be the prevailing competitive price to repair. In response to the Complaint, First Acceptance filed a Motion to Dismiss, or in the alternative, Motion to Stay to Enforce Appraisal. At Home argued that appraisal was inappropriate since the extent of physical damage was not disputed.
The trial court interpreted the policy to limit appraisal to the scope of physical damage and denied the motion to dismiss and enforce appraisal. The Sixth District held this interpretation to be unreasonable, citing several cases holding that appraisal is utilized to determine the extent and cost of repairs. The Fifth District relied upon its previous decision in Mendota Ins. Co. v. At Home Auto Glass, LLC, 348 So. 3d 641 (Fla. 5th DCA 2022) to elaborate on the scope of appraisal. The Sixth District reversed the order and remanded for further proceedings consistent with the order.
PEOPLE’S TRUST INS. CO. v. THE KIDWELL GROUP, LLC d/b/a AIR QUALITY ASSESSORS OF FLORIDA a/a/o CLIFF WARREN, 4D22-1314 (June 28, 2023)
KK TAKEAWAY:
Assignee must establish its services were a cost to repair or replace.
Air QUALITY ASSESSORS (“AQA”) filed a one-count claim for breach of contract as an assignee of Insured Cliff Warren. Presuit, People’s Trust denied payment of the engineer invoice as there was no coverage under the policy since there was no relation to a physical loss or a repair cost. The trial court denied People’s Trust’s motion for summary judgment regarding AQA’s services having no relation to a cost to repair. The trial court found this was a factual dispute to be addressed by the jury.
In the opening statement, People’s Trust conceded that the weather event was a covered loss but advised that the engineer report was not covered under the policy. After closing the case-in-chief, People’s Trust moved for a directed verdict advising that AQA did not present any evidence to establish that the report was used to repair the roof.
Throughout the litigation, it was undisputed that the report was to repair. There was evidence to support that report was not made for repairs as it was unnecessary to complete roof repairs. As a result, a directed verdict should have been entered in favor of People’s Trust.
The Fourth District also found that allowing a jury instruction in the jury instruction and verdict form. The Fourth held error in that the verdict form did not ask the jury to determine whether the engineer report was a cost to repair or replace.
An insured’s assignment of benefits can be limited to services rendered or to be rendered by a third party. If not a complete assignment, the insured retains standing to file a lawsuit against the carrier for breach of contract for benefits outside the assignment or when a vendor does not complete work.
Insureds filed a claim with Tower Hill for Hurricane Irma damage. During the claim, Insureds submitted a direction to pay and assignment of benefits to Tower Hill, executed in favor of Mason Dixon Contracting. Mason Dixon’s repair estimate exceeded Tower Hill’s estimate, and Mason Dixon ultimately sued Tower Hill for benefits. While that case was pending, Insureds filed a complaint for breach of contract. Tower Hill sought and obtained an consolidation of both cases for discovery purposes.
Tower Hill subsequently sought summary judgment against Insureds, arguing that they assigned their rights under the claim to Mason Dixon and no longer had standing. The trial court agreed and granted summary judgment in favor of Tower Hill.
The Fifth District Court of Appeal reversed summary judgment, holding that an assignment can be limited to the services rendered by the assignee. The Fifth District also noted that an Insured retains standing when the assignee contractor does not perform the services. The Fifth relies upon Sidiq v. Tower Hill Select Ins. Co., 276 So. 3d 822 (Fla. 4th DCA 2019) for the position that an assignment of benefits for water remediation work was limited to just that and could not be reasonably interpreted to include the entire claim. The Fifth also relies upon Brown v. Omega Ins. Co., 322 So. 3d 98 (Fla. 4th DCA 2016) in which the Fourth District held an Insured had standing where the assignment was in exchange for services rendered, and the assignee contractor had not performed work under the contract.
KK TAKEAWAY:
Assignees of benefits are subject to fraud/ concealment/misrepresentation conditions of a policy.
Insureds submitted their first notice of loss on February 21, 2020, alleging a date of loss of September 10, 2017. Due to late notice, Citizens inspected the property and denied coverage on April 14, 2020. Insureds filed a lawsuit on July 10, 2020, and Citizens responded by raising two affirmative defenses:
1) Failure to provide prompt notice of loss; and
2) Failure to submit a timely sworn proof of loss
In response to a motion for summary judgment regarding untimely notice, the Insureds claimed that the property was a rental property, and the Insureds were unaware until February 2020, when the tenants vacated the property.
In review, the Third District expressly states that if notice is late, then insurers are entitled to a presumption of prejudice. This was an express conflict with the Fourth District Court of Appeals in Perez v. Citizens Prop. Ins. Co., in which the Fourth District held that policy language containing “if the failure to comply with the following duties is prejudicial to us” requires the burden of proof of prejudice to remain on the carrier, thus no presumption of prejudice.
Regarding the timeliness of notice, the Third District clarifies that “prompt notice” requires a standard of within reasonable dispatch and within a reasonable time in view of all the facts and circumstances. The obligation of notice is when an occurrence arises that would lead a reasonable and prudent person to believe that a claim for damages would arise. The Third District reversed summary judgment in favor of Citizens due to the factual dispute regarding reasonableness.
KK TAKEAWAY: Absent other supporting evidence:
• Corporate representatives can only testify to information personally known or within business records.
• Corporate representatives must establish a basis for personal knowledge of records themselves or of record-keeping practice.
• To establish mailing through business practice, records mailed require a corporate representative to know the mailing procedure.
BACKGROUND:
American Platinum filed a summary judgment motion regarding Insureds’ failure to submit a sworn proof of loss. The summary judgment was supported by an affidavit from American Platium’s corporate representative. The affidavit was nearly a certification of business record without any basis for the corporate representative’s knowledge. At the hearing, Insureds challenged whether:
1) The affidavit was a sufficient certification of business record
2) Corporate representative lacked personal knowledge of record-keeping protocols
The trial court found that the records spoke for themselves and that the corporate representative did not need personal knowledge but rather knowledge regarding the insurer’s record-keeping process was sufficient.
Insureds challenge the summary judgment entered in favor of American Platinum. The trial court found that the corporate representative had knowledge of records and how the insurer kept records, which was sufficient to allow entry of the attachments into the record.
The Fourth District held that affidavits or declarations must be made on personal knowledge. The affidavit was deficient as it provided no basis for personal knowledge.
There is no exception for personal knowledge regarding a corporate representative. A corporate representative seeking to introduce records must show his knowledge and or training regarding a record-keeping process. Additionally, even with personal knowledge of the records, there was insufficient evidence of issuing those records to the insured. To establish mailing, a witness must:
1) Have personal knowledge of the mailing;
2) Provide evidence of routine mailing practice; or
3) Provide records of mailing, such as a return receipt.
KK TAKEAWAY:
For a ceiling collapse claim, the burden is upon the insured to establish that the collapse resulted from a covered peril.
Insureds filed a two-count complaint for breach of contract: one from a 2016 ceiling collapse claim and one from a Hurricane Irma claim. During the trial, Universal’s counsel moved for a directed verdict arguing that the Insureds did not present evidence to establish that decay or insects caused the collapse. The trial court denied the motion for a directed verdict and the motion for judgment notwithstanding the verdict.
The only individual who testified to insect damage on behalf of the Insureds was their general contractor expert. However, his only testimony was that he found termite damage in 2021, nearly five years later. On crossexamination, however, he admitted that he was not an expert and could not state how long termites were in the home or the rate at which they caused damage.
Universal moved for a directed verdict to which the trial court acknowledged there was no evidence to show in 2016 or shortly after the loss there was any hidden damage. However, the trial court reserved a ruling. After the close of evidence, Universal renewed its motion for a directed verdict to which the trial court reserved ruling. This time Insureds’ counsel argued that the contractor testified to termite damage.
The jury found that termite damage caused the collapse and was hidden, specific to the 2016 claim. Universal filed a motion for judgment notwithstanding the verdict, which was denied despite the trial court’s inquiries regarding the lack of evidence regarding termite and hidden damage.
The Fourth District reversed and remanded with instructions to allow the verdict in favor of the Insureds for the 2021 claim. The Fourth District made clear that while the trial court likely reserved ruling on the motion for a directed verdict to allow for a verdict to be reached for purposes of appeal, however, given the deficiency of the evidence, once the verdict was entered, the trial court should have granted the motion for judgment notwithstanding the verdict.
KK TAKEAWAY:
Before a party can add a claim for punitive damages, they must show a sufficient proffer of evidence that the bad faith conduct was a business practice.
KK TAKEAWAY:
Bad faith conduct in one claim is insufficient proffer of evidence to establish a business practice.
Insured filed a claim for lighting damage to his property. Over 120 days passed before any payment was issued on the claim. The parties ultimately ended up in appraisal, and the award
was significantly greater than the payments tendered by FedNat. Insureds filed a complaint for bad faith under section 626.9541, Florida Statutes. Nearly three years later, the Insured sought to amend the complaint to add a claim for punitive damages.
Insured relied upon the deposition testimony of FedNat’s vice president of claims in an unrelated case in which the testimony was that the vice president was unaware of any written guidelines for resolving a claim after receiving a CRN. Insured also relied upon the deposition of the field adjuster, who testified that he was not aware of any guidelines for the adjustment of lightning strike claims. As such, Insured argued that a reasonable jury could find that this was a business practice.
The Fifth District Court of Appeals held that even if the aforementioned did prove a violation of section 626.9541(1)(i)(3), it does not demonstrate that such activity was done as a general business practice.
Kelley Kronenberg has been the recipient of numerous awards and honors both firm-wide and for a number of our practices, including individual accolades. Below is a select list of recognition and awards:
Jeffrey Wank is Chair of First-Party Property and Insurance Coverage focusing his practice on first-party property insurance Defense, including coverage and bad faith litigation. Jeffrey also handles the defense of a wide array of third-party insurance defense claims.
Jeffrey assists insurers in all aspects of coverage disputes, including responses to civil remedy notices of insurer violations, pre-suit investigations and coverage evaluations, declaratory judgment and bad faith litigation. He defends property insurers throughout Florida in first-party coverage matters, where many of the claims involve sinkhole, windstorm, fire, mold, theft and water losses.
In addition, Jeffrey serves as coverage and bad faith counsel in third-party actions, including monitoring the defense of litigation. As part of this role, he is often asked to draft detailed coverage opinions, reservation of rights letters, declinations, and prosecute declaratory relief actions.
Jeffrey also has experience in handling complex civil and commercial matters, including the defense of personal injury, premises liability, employment discrimination, medical malpractice, nursing home liability, homeowner and condominium association claims, and construction defect cases.
Jeffrey has been named a Florida Super Lawyer Rising Star since 2014. In 2011, he was elected to the Broward Bar Association Young Lawyers Section Board of Directors, where he served as Secretary on the organization’s Executive Board and moved up to President in June 2015. Jeffrey was also named the Chair on the Board of Directors of Legal Aid Service of Broward County & Coast to Coast Legal Aid of South Florida for the 2019 term and previously served as the Vice Chair for the 2018 term.
Jeffrey earned his Bachelor of Science in Political Science from Florida State University and went on to earn his Juris Doctor degree from Nova Southeastern University Shepard Broad Law Center.
Daniel Montgomery is a Partner at Kelley Kronenberg where he assists in handling matters related to first-party property insurance defense. Daniel handles all aspects of first-party property defense, including coverage disputes, pre-suit investigations, fraud investigations, and CRN responses. Additionally, our clients frequently engage Daniel to assist with the development of claims processes and procedures. Daniel’s practice is also focused on the highly-specialized areas of first-party property appeals and auto glass defense.
Prior to joining Kelley Kronenberg, Daniel worked as an Associate Attorney with an Am Law 200 firm, focusing his practice on first-party auto coverage and litigation, general liability litigation, and appellate law. Daniel also practiced as an Assistant State Attorney for Florida’s Fourth Judicial Circuit, in Jacksonville, where he litigated a variety of criminal proceedings through trial and served as a liaison for UVISA Certifications.
Daniel received his Bachelor of Science degree in Criminal Justice, summa cum laude, with a Certificate of Crime Scene Investigation, from Colorado Technical University. He then went on to earn his Juris Doctor degree from Florida Coastal School of Law, graduating cum laude.
Since Law School, Daniel continued his education by obtaining a Master of Science, summa cum laude, from Florida State University, with a Certificate in U.S. Intelligence. Daniel acquired an additional LL.M. in Executive Litigation Management from Baylor Law School.
During Daniel’s career he has served on several committees and groups continually working to develop awareness, knowledge, and best practices in a variety of areas including mental health, utilizing technology to drive efficiencies, special investigations, and litigation management best practices.
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