Kelley Kronenberg - In The Know - First Party Property Appellate - December 2022

First Party Property Appellate Team

As the first-party property insurance industry has remained significantly litigious, Kelley Kronenberg has maximized its efforts to bring positive changes to the law for the benefit of all of its clients by establishing an expertise in appellate law. Our appellate team has a combined portfolio of more than 100 written court opinions impacting case law precedence across the state. At every stage of the process – deciding whether to appeal, determining the chance of success on appeal, preparing legal briefs, presenting oral arguments, and advising on the impact of appellate decisions – Kelley Kronenberg’s First Party Property Appellate Team provides clients with expert guidance and representation in all appellate jurisdictions.

ADMISSIONS

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

SELECTED OPINIONS

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).

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.”).

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

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).

ATTORNEY FEES

Attorney Fees

Allstate Fire And Casualty Ins. Co. V. Lymaris Jeanette Colomba Castro, No. 1D21-275 (Nov. 9, 2022)

KK TAKEAWAY:

Post-suit payment of previously withheld insurance benefits constitutes a confession of judgment entitling the insured to the recovery of fees under section 627.428, Florida Statutes.

KK TAKEAWAY:

Whether the carrier intended only to cure CRN and not confess is immaterial to whether or not payment was made after the suit.

KK TAKEAWAY:

A confession of judgment triggers the application of the offer of judgment statute for a basis for fee recovery.

BACKGROUND:

Allstate was the UM carrier for insured with limits of $25,000. Before the suit insured demanded $25,000. The insured filed suit for breach of contract. Allstate did not deny coverage but denied amounts owed due to PIP payments and collateral sources. The insured served an offer of judgment for $18,500, which was not accepted.

Subsequently insured filed a CRN, and AllState tendered the policy limits within a few days of the expiration of the cure period. Allstate claimed that its payment of limits cured the

CRN. The insured then sought a confession of judgment under section 768.79.

Allstate sought dismissal of the breach of contract action claiming that the issue was moot due to payment in full of policy benefits. The trial court denied the motion to dismiss and found that AllState confessed judgment. On appeal, the First District Court of Appeals held that AllState confessed judgment. Although Allstate claimed that it was only a cure to the CRN, the Court made clear that the reason for the payment was immaterial as to whether Allstate confessed. The sole factor to consider for a confession of judgment is whether the claim was paid. Noteworthy is that the Court did hold that section 627.428(8) excludes UM claims from recovery under the statute. However, the Court held that the exception to recovery for UM claims does not preclude the confession of judgment doctrine, a common law doctrine. This distinction is significant as it allows for the confession of judgment to be applied in the context of the insured’s offer of judgment. In this case, the confession exceeded the 75% triggering recovery under section 768.79, Florida Statutes (Offer of Judgment).

Challenges to Standing –Assignment of Benefits

The Kidwell Group, Llc D/B/A Air Quality Assessors Of Florida A/A/O Jatin Patel V. Asi Preferred Ins. Corp., No. 5D21-2946 (Nov. 22, 2022)

KK TAKEAWAY:

Carrier can challenge standing based upon deficient assignment of benefits.

KK TAKEAWAY: Deficient assignment is void as it is invalid and unenforceable contrary to arguments that it is only voidable.

BACKGROUND:

Insureds assigned benefits to Air Quality Assessors (“AQA”). AQA brought a breach of contract claim for insurance benefits for assessment services as carrier refused to pay AQA’s invoice for services. Carrier sought dismissal arguing that AQA’s assignment was noncompliant with section 627.7152. AQA responded that carrier did not have standing to raise argument as the arguments would only render assignment voidable rather than void.

The trial court dismissed the complaint. The Fifth District upheld the dismissal providing an interpretation of the terms “invalid” and “unenforceable.” In so doing the Fith District made clear that a non-compliant assignment was void consistent with the terms rather than voidable. The Fith District went further to illustrate that the legislature intended for carriers to be able to challenge validity of assignment.

Appraisal

KK TAKEAWAY:

Appraisal is governed by the terms of the policy and the court is not permitted to create additional duties.

KK TAKEAWAY:

The fact that appraisal exceeds the amount of dispute is immaterial to a party’s right to appraisal under the terms of the contract.

KK TAKEAWAY:

The prohibitive cost doctrine is not applicable in disputes in which the filing fee alone is greater than the cost of appraisal.

KK TAKEAWAY:

Appraisal does not violate the public policy behind section 627.428, Florida Statutes.

BACKGROUND:

Insureds assigned benefits to Hillsborough Ins. Recovery Center, LLC (“HIRC”). HIRC brought a breach of contract claim for insurance benefits under auto policies for windshield repairs. Before the suit carrier paid the undisputed amount and contemporaneously invoked the appraisal provision of the policy based upon payment less than invoiced. In response to the complaint, the insurer filed a motion to compel appraisal as a condition precedent to suit. HIRC responded that appraisal was economically unfeasible as the cost of appraisal exceeded the amount in dispute. HIRC also raised the prohibitive cost doctrine to render the appraisal provision unenforceable.

The trial court held an evidentiary hearing and struck the mandatory component of the appraisal provision for failure to negotiate in good faith. The trial court found that Progressive’s contemporaneous invocation

of appraisal with payment was a failure to come to a good-faith resolution with the insured. The trial court declined to extend the prohibitive cost doctrine as the filing fee was more than the amount in dispute and the cost of an appraisal. However, the trial court struck the mandatory provision of the appraisal clause as it rendered the insured’s ability to seek redress economically unrealistic.

The Second District overturned the trial court. In its reasoning, the Second District initially addressed that an assignee of benefits is subject to the appraisal condition of the policy. Next, the Second District held that Progressive was not required to go beyond a disputed value to establish a reasonable faith dispute to trigger appraisal. On the contrary, the parties must comply with the policy terms. In the case of appraisal, the only requirement was “if we cannot agree with you on the amount of a loss, then we or you may demand an appraisal of the loss.”

The Second District distinguished the duty to negotiate in good faith from the contractual duty to timely evaluate and pay benefits owed. A violation of the former can be redressed through a bad faith claim, while the second’s redress is a breach of contract. In this instance, the only thing at issue was the breach of contract.

Third, the Second District held that appraisal is a cost of doing business which is set forth by the policy unless the legislature determines to place that financial burden solely on carriers, the courts are subject to the terms of the policy.

Nci, Llc F/K/A Auto Glass Store Llc

A/A/O Dora Noe V. Progressive Select Ins. Co., 5D21-1282 (Nov. 4, 2022)

KK TAKEAWAY:

Dismissal is a proper remedy for failure to comply with appraisal when invoked prior to suit.

KK TAKEAWAY:

Appraisal is governed by the terms of the policy and the court is not permitted to create additional duties.

KK TAKEAWAY:

The prohibitive cost doctrine is not applicable in disputes in which the filing fee alone is greater than the cost of appraisal.

KK TAKEAWAY:

The attorney fee provisions of section 627.428, Florida Statutes does not reference appraisal.

KK TAKEAWAY:

Appraisal does not violate fundamental rights of access to courts and jury trial.

BACKGROUND:

Insureds assigned benefits to NCI, LLC F/K/A AUTO GLASS STORE LLC (“NIC”). NCI brought a breach of contract claim for insurance benefits under auto policies for windshield repairs. Before the suit carrier paid the undisputed amount and contemporaneously invoked the appraisal provision of the policy based upon payment less than invoiced. In response to the complaint, the insurer filed a motion to compel appraisal as a condition precedent to suit. NCI responded that appraisal:

(1) Appraisal provision was ambiguous as it made appraisal binding while reserving rights under the policy;

(2) Appraisal did not explain the procedure likening it to an unenforceable arbitration agreement;

(3) Violated section 627.428, Florida Statutes;

(4) Violated right of access to court, due process, and jury trial; and

(5) Violated the prohibitive cost doctrine.

The trial court held an evidentiary hearing and granted the carrier’s motion to dismiss. The Fifth District held:

(1) A reservation of rights within an appraisal provision specific to policy rights is reconcilable with an appraisal. Appraisal sets the amount of loss and does not determine coverage. Thus, a reservation of such allows the parties to address coverage concerns. To agree with NCI, appraisal would be eliminated

as either party could always resort to litigation.

(2) Appraisal does not require formal procedures but is meant to be informal.

(3) Appraisal does not violate section 627.428, Florida Statutes, as the appraisal is not contemplated within the attorney fee statute. Further, NCI’s argument is policy based in which the court is not a policymaker.

(4) Appraisal does not violate fundamental rights for the following reasons:

a. Insured relinquished right to the court system by agreeing to policy terms. NCI agreed to the same by assignment; b. Appraisal is valid and binding if properly invoked; and

c. The rights were not wholly relinquished, but the waiver was limited to the amount of loss. Thus, an insured still has access to courts, due process, and jury trial should an issue arise beyond the amount of loss.

(5) Prohibitive Cost Doctrine does not apply to the appraisal process.

The Fifth District also addresses that the carrier’s payment and invocation of appraisal created an appraisal issue. Further carrier took no action to waive appraisal. Thus appraisal was an enforceable right. factual issue cannot be resolved via a motion to dismiss.

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