Appraisal (Attorney fees)

Yosef Deitsch, Et. Al., v. Certain Undwriters Of Lloyds Of London, 3D22-128 (Jan. 11, 2023)

KK TAKEAWAY: Non-response to appraisal demand could trigger fees.

KK TAKEAWAY:

Raising coverage defenses could trigger fees.

BACKGROUND:

Within 20 days, the Insureds reported a loss involving water penetration through the roof. After eight months without a response from the Carrier, the Insureds retained counsel, who immediately invoked the policy’s appraisal provision. Carrier did not respond to the demand. Approximately 20 days later, the Insureds filed suit for breach of contract and sought declaratory relief. The following day, the Insureds sought to compel appraisal.

In response to the Complaint, the Carrier raised six affirmative defenses which excluded coverage and sought dismissal of the declaratory petition. None of the affirmative defenses admitted coverage. The day before the hearing on the Insureds’ Motion to Compel Appraisal, the Carrier agreed to appraisal. The Insureds had to seek court intervention as Carrier did not timely name an appraiser. Four days later, the Carrier named their appraiser. After the appraisal determination, Carrier reversed its position, admitted coverage, and paid the appraisal award. Upon receipt of payment, the Insureds sought attorney’s fees, arguing that the post-suit payment constituted a confession of judgment.

The Third District Court of Appeals held that the Insureds were entitled to fees. While the facts of the opinion were limited, the Court seems to focus on the fact that the lawsuit was a necessary catalyst to resolve the claim. The record shows that the failure to cooperate and assertion of coverage defenses in response to appraisal triggered the necessity of legal action.

People’s Trust Ins. Co. v. Lillian Lamolli, 4D21-2638 (Dec. 21, 2022)

KK TAKEAWAY:

Insured must notify the Carrier of a value of loss dispute before filing suit to trigger fees upon payment of an appraisal award.

KK TAKEAWAY:

The material issue is whether the suit served a legitimate purpose in resolving the claim.

BACKGROUND:

The Fourth District Court of Appeals overturned the trial court holding that no notice of dispute was provided to the Carrier prior to litigation. The Court specifically clarified that the right to fees is not contingent upon when the appraisal was invoked but on whether the filing of a lawsuit served a legitimate purpose.

Post-Loss Duties (Notice Analysis)

Alain Cordero and Mairine Cordero v. Florida Ins. Guaranty Assoc., 2D17-766 (Jan. 27, 2023)

KK TAKEAWAY:

Timeliness of Notice Is Usually a Question of Fact

KK TAKEAWAY:

Exterior cracks alone are insufficient to trigger the duty to notify painting. Insured testified that he painted over the cracks because he had no idea that the cracks were related to sinkhole damage. However, after observing cracks on the driveway and that the cracks were growing, he developed a concern that there was sinkhole damage. The Insured consulted an attorney and notified Carrier.

Carrier moved for summary judgment, arguing that the report one year after noticing the cracks was untimely as a matter of law. Insured argued that he reported as soon as he learned that it could relate to sinkhole damage. At the hearing, the Insured relied upon Mora v. Tower Hill for the proposition that a reasonable insured could identify cracks as a maintenance issue. The trial court did not entertain the argument but clarified that an insured has a duty to report a loss when there is the possibility of a covered loss, cracks certainly rising to that level. The trial court granted summary judgment in favor of the Carrier.

KK TAKEAWAY:

To meet the summary judgment burden, a carrier must show that cracks were sufficient to trigger reasonable insured to report.

BACKGROUND:

The Insured reported a sinkhole loss to Carrier 13 months after he initially noticed cracks on the exterior structure of his home while

The Second District Court of Appeal reversed, holding the Carrier’s failure to carry its summary judgment burden. The Court noted that Carrier did not produce any evidence regarding the extent of cracking on the date of observance or any evidence that the degree of cracking was such that a reasonable person would believe their policy was triggered. Without evidence that the Insured’s observations would have triggered a reasonable Insured to report a loss, there was insufficient evidence to establish untimely notice.

Post-Loss Duties (Prejudice Analysis)

Pedro Navarro v. Citizens Property Ins. Corp., 3D22-0032 (Jan. 18, 2022)

KK TAKEAWAY:

Prejudice is presumed with untimely notice.

KK TAKEAWAY:

Time limits to submit a hurricane claim do not conflict with the duty to notify.

BACKGROUND:

Insured reported Hurricane Irma’s loss two years and seven months after. After completing an inspection and receipt of a sworn proof of loss, Carrier denied coverage for failure to report the loss timely. The field adjuster who inspected the property opined that due to the passage of time, he could not determine if there were interior and exterior damages due to the hurricane. Additionally, the field adjuster found that he could not determine whether the damage resulted from a single incident or multiple events. During deposition, the Insured admitted that he noticed the interior leaking the day after the hurricane, attempting to conduct repairs. He also testified that he noticed leaks days, months, and years after, which he attempted to make repairs.

Carrier sought summary judgment, and the Insured opposed via affidavits from a public adjuster, roofing restoration representative, and a general contractor. All the affiants concluded that the loss was the result of Hurricane Irma. The trial court granted summary judgment in favor of the Carrier.

The Third District Court of Appeals held that the facts within the record were sufficient to establish that a reasonable insured would have known that the duty to report had been triggered. The Court, therefore, analyzed the presumption of prejudice.

The only evidence presented was the conclusion that Irma caused the loss. The Court determined this was insufficient to overcome the presumption of prejudice.

Next, the Court analyzed the Insured’s argument that the policy language regarding the timely submission of notice created ambiguity with their duty to provide notice:

A claim, supplemental claim, or reopened claim for loss or damage caused by the peril of windstorm or Hurricane is barred unless notice of the claim, supplemental claim, or reopened claim is given to us in accordance with the terms of the Policy within 3 years after the date the Hurricane first made landfall in Florida or the windstorm caused the covered damage.

Separately:

In case of a loss to covered property, we have no duty to provide coverage under this Policy if the failure to comply with the following duties is prejudicial to us. . . .

1. Give prompt notice to us or your insurance agent.

The Court made clear that there is no ambiguity between these provisions. The first provision, a blanket bar on any hurricane-related claim submitted beyond the three-year window, is silent as to the Insured’s duty to report the loss. A harmonious reading clearly shows that an insured had three years to file any hurricanerelated claim and, upon viable claims, act swiftly upon discovering damages.